Feds to UMDNJ: Takeover or Criminal Prosecution

The U.S. attorney delivered an ultimatum to the troubled University of Medicine and Dentistry of New Jersey yesterday -- telling its governing board to accept a federal takeover of the school's financial operations or face a criminal prosecution that could shut it down.

In a stunning, surprise visit, Christopher Christie walked into the trustees' monthly meeting and, in a closed-door session, told them he had lost faith the state university could correct the recurring troubles that have sparked an investigation into alleged Medicare and Medicaid fraud going back six years.

Christie told the board he wants a federal monitor in place by Jan. 11 to oversee financial operations of the university, according to board members who were in the room. He gave the board members 36 hours to appoint an outside attorney who would work with his office to get the details of monitorship rolling.

Okay, that's all very well and good, but what does this have to do with politics? Read on:

http://www.nj.com/news/ledger/index.ssf?/base/news-4/113514585351280.xml&coll=1

UMDNJ has been under federal investigation for months. The probe focuses largely on improper Medicaid and Medicare billing dating back years. The investigation also is looking at millions in no-bid contracts awarded to consultants with political ties and other alleged sweetheart deals.

UMDNJ is the largest public university for health sciences in the country, with five regional campuses, more than 4,500 students, and a $1.6 billion annual budget. A takeover of the school -- even through the offices of a special monitor -- could have ripple effects throughout the university -- possibly affecting millions in federal research grants, the accreditation of its schools and enrollment.

http://www.nj.com/news/ledger/index.ssf?/base/news-4/113514585351280.xml&coll=1 Christie left the board with few options. An indictment of the institution would result in the cutoff of all Medicaid and Medicare reimbursement to UMDNJ's University Hospital in Newark, closing it down. No hospital can exist without federal reimbursement funds.

The two key elements here? "millions in no-bid contracts awarded to consultants with political ties and other alleged sweetheart deals.....in Newark."

Translation: Republican US Attorney Christopher Christie has just taken financial control of an institution which has been used by Sharpe James' political machine to bilk the federal government out of funds that are then used as a political slush fund, to improperly award contracts to entities whose only qualifications are their allegiance to Sharpe James, and he has already flipped the Chief Financial Officer. Most strikingly, as detailed in the Star-Ledger account, Christie also has the backing of acting Governor Richard Codey, who himself recently threw the Trustees of all NJ State Colleges and Universities into an uproar with a stringent new conflict-of-interest policy that may force as many as a third of the state's higher education trustees to resign their positions.

The upshot in North Jersey is that Mayor James, and the political organizations and consultants who have long given him cover, despite years of allegations of incompetence, corruption and self-dealing in his administration, are now likely to be pre-occupied with damage control and considerably less well funded as they go into a Fall 2006 non-partisan election in which James is expected to once again face challenger Cory Booker, who James beat with the slimmest of margins the last time they met, notwithstanding his aggressive use of city workers and agencies against businesses and citizens who publicly supported Booker.

Coming on the heels of Christies previous investigations of corrupt practices in Essex and Hudson Counties as well as Jersey City, the fallout from the UMDNJ scandal threatens to reshape New Jersey politics, ending the careers of some long-time fixtures on the political scene, as well as more than a few UMDNJ insiders.

As of yet, Governor-elect John Corzine has not released a public statement, but then he's been busy on the Senate Floor most of the day.....