N.J. AG corruption investigation focuses on George Norcross’ influence over Camden waterfront developments, sources say

South Jersey Democratic power broker George E. Norcross III has found himself under scrutiny from state and federal authorities repeatedly over the last two decades.

They’ve tapped his phones, had an informant record his conversations, and reviewed scores of documents.

But they’ve never filed criminal charges.

Now, prosecutors appear to be trying again — this time with a wide-ranging probe by the New Jersey Attorney General’s Office and the FBI, according to interviews with more than a dozen people familiar with their efforts.

Specifically, those sources said, investigators are focused on several real estate deals along the Delaware River waterfront in Camden — and whether Norcross, an investor in several properties, and his brother Philip, a prominent New Jersey lawyer and lobbyist, used their political influence to corruptly acquire them by muscling out rival developers.

The probe, which agents have been quietly pursuing since at least last year, has already cast a wide net. Authorities have issued subpoenas and interviewed a number of potential witnesses on matters ranging from construction costs to Philip Norcross’ involvement in regular economic development meetings with city officials, the sources said.

The deals under scrutiny involve some of the biggest names in real estate and business in the Philadelphia region, including Carl Dranoff, the Philadelphia developer behind such residential properties as Symphony House and Arthaus on South Broad Street; William P. Hankowsky, former CEO of Liberty Property Trust, which built both Comcast towers and redeveloped the Navy Yard; and Ira Lubert, a prominent real estate and private-equity investor.

Many of the transactions were hailed at the time by state and local officials as signs of a private investment-fueled turnaround in Camden, which has long struggled with poverty and crime. And George Norcross, 67 — a Camden native, insurance executive, philanthropist, chair of a major hospital network, former co-owner of The Inquirer, and prodigious political fundraiser — had been widely credited with those endeavors.

He’s said he and his business partners have invested more than $300 million in the city — much of it enabled by $245 million in tax incentives his firm and two other companies were awarded to build a new office tower, Triad1828 Centre, and bring jobs to Camden under New Jersey’s 2013 Economic Opportunity Act.

George Norcross now finds his legacy and the narrative he helped to build of Camden’s comeback — often promoted with the slogan “Camden Rising” — under threat from investigators looking to prove the city’s recent development boom was tainted by corruption.

The new investigation also comes as George Norcross says he is scaling back his political involvement and is now living primarily in Florida after a quarter-century in which he built the South Jersey Democratic machine into a political powerhouse. His efforts helped propel allies to all levels of government, including Camden City Council, the county board of commissioners, the New Jersey Legislature, and even Congress, where his brother Donald represents the city.

But in recent years that machine has taken significant hits, most notably the 2021 electoral defeat of longtime state Senate president Steve Sweeney, a childhood friend of George Norcross’.

For his part, George Norcross has denied any wrongdoing and noted that the tax incentives that enabled the developments now under scrutiny have been vetted by past criminal probes — none of which led to charges.

His lawyers have offered to cooperate with the new investigation by meeting with authorities on his behalf, Norcross lawyer Michael Critchley said. So far, investigators have declined the offer.

“There is no question the incentives have been a key part of the continued transformation of the city from America’s poorest, most violent city into a place where there is new hope and opportunity,” George Norcross’ spokesperson, Dan Fee, said in a statement. “Thousands and thousands of relocated workers now call Camden their home.”

State prosecutors, meanwhile, remain tight-lipped. A spokesperson for New Jersey Attorney General Matthew J. Platkin said she could not confirm or deny the existence of any ongoing probe. And it remains unclear the extent to which the matters currently under investigation overlap with prior probes of Norcross’ business dealings.

In 2019, prosecutors in the U.S. Attorney’s Office in Philadelphia issued subpoenas related to at least some of the real estate deals now under scrutiny but never brought charges, according to multiple sources familiar with that investigation.

Platkin’s predecessor, Gurbir Grewal, also issued subpoenas related to development in Camden.

And in 2018, the U.S. Attorney’s Office in New Jersey took the highly unusual step of notifying George Norcross’ lawyers that it had closed its own investigation into him and his procurement of tax credits. (Typically, federal authorities provide no such notice.)

Although officials involved in the new investigation remain reticent to acknowledge their efforts, the sources familiar with them — who spoke only on the condition of anonymity to freely discuss closely held details — said it started to quietly pick up about 18 months ago. About the same time Gov. Phil Murphy, a Democrat, nominated Platkin, his former chief counsel, as the state’s new attorney general.

Platkin has tangled with George Norcross and his allies in Trenton before. In 2019, a task force he helped create under Murphy found companies with ties to political insiders, including Norcross, may have made false representations to win tax credits from the state Economic Development Authority.

The task force questioned the propriety of credits awarded to companies including George Norcross’ insurance brokerage, Conner Strong & Buckelew, and Cooper Health System, the hospital network where he serves as board chairman.

In a dramatic 2019 courtroom showdown, George Norcross unsuccessfully sued Murphy over the task force inquiry, denying any wrongdoing and dismissing the task force’s work as a political hit job. Last year, Conner Strong and its business partners received their first installment of tax breaks, which are distributed over 10 years and can be used to offset tax liabilities or sold for cash.

» READ MORE: George Norcross firm and partners got N.J. tax credits for Camden offices, years after task force scrutiny

In recent months, the current attorney general-led investigation appears to have reached a critical phase.

At least one potential witness described being interviewed by more than a half-dozen agents and prosecutors during two meetings last fall. In March, prosecutors issued subpoenas to the City of Camden, which were earlier reported by NJ Advance Media. A city spokesperson said he couldn’t confirm or deny their existence.

Then, earlier this month, the Camden Redevelopment Authority hired a former Camden County assistant prosecutor as special counsel to “assist with a required document production project,” according to a June 14 agenda.

Investigators have also asked potential witnesses about lawyer William Tambussi’s role in George Norcross’ orbit, according to two sources. Tambussi has worked as Norcross’ personal lawyer, and his firm, Brown & Connery, is counsel to the CRA. He declined to comment.

So far, the sources said, investigators appear to have focused on three specific real estate deals during the development boom set off by the state’s 2013 tax credit law: the Norcross brothers’ role in a real estate dispute involving Philadelphia developer Dranoff, the acquisition of a parking lot by an investor group that included George Norcross, and a 2014 transaction involving a Camden office complex known as L3.

Dranoff has alleged in court filings tied to a long-running legal dispute with the City of Camden that he was forced in 2016 to give up potentially lucrative waterfront development rights amid a “shakedown” by George Norcross and his political allies.

Now, the Attorney General’s Office is investigating the allegations, which have been detailed publicly in depositions filed with the court.

» READ MORE: In legal brawl over Camden waterfront, developer alleges ‘shakedown’ involving power broker George Norcross

In the early 2000s, Dranoff redeveloped a former RCA Victor record factory into a luxury apartment complex, rebranded as the Victor Lofts — converting a blighted property into the first market-rate housing development in Camden in decades.

As part of the deal enabling that project, the city awarded Dranoff rights for other residential development along the waterfront and an easement that restricted how high other developers could build around the Victor building — ensuring that its views of the Philadelphia skyline would remain protected.

When Wayne-based Liberty Property Trust announced plans in September 2015 to invest $700 million to build office towers, shops, and apartments along the Camden waterfront, Dranoff said he was initially excited at the prospect that their plans could help transform the area around the Victor building. He sought to collaborate with the company.

But any potential partnership quickly went south, Dranoff has since said in deposition testimony, after Liberty insisted he take on George Norcross as a partner in any future residential developments using the rights his company had secured from the city.

Dranoff described the intervention as “kind of a shakedown.”

“[W]e were in a situation where we were being asked to participate in a partnership that we really didn’t want to participate in,” Dranoff testified in 2019.

Dranoff’s daughter, Julia Dranoff, said in her own 2019 deposition that it became clear that George and Philip Norcross “felt that they were entitled to our view easement for nothing,” and that they wanted to develop a residential building without Dranoff.

The elder Dranoff said that under pressure from Liberty and the Norcrosses, he sold his view easement and development rights to Liberty in late 2016 for about $1.5 million — what Dranoff considered “a very low number.”

George Norcross and his partners went on to develop an apartment complex, known as 11 Cooper, with the help of state tax incentives. His spokesperson has dismissed any notion that George Norcross played a role in muscling Dranoff out, saying the negotiations “were by and between Dranoff and Liberty Property Trust.”

In deposition questioning, Tambussi, the lawyer who has worked for Norcross and is representing the city in the Dranoff litigation, chalked up any pressure Dranoff may have felt to routine negotiations.

But not long after selling his view easement, Dranoff said, he hit roadblocks on other Camden projects, including efforts to change the zoning on a building known as Radio Lofts and a proposed $71 million sale of the Victor building to Denver-based real estate giant Aimco.

He’s blamed the resistance he encountered — including challenges getting meetings and phone calls with the mayor and other city officials — on George Norcross using his allies in city government to carry out “a vendetta” against him. Anthony Perno, a former executive at a Camden nonprofit that promotes development, testified that Philip Norcross told city officials not to meet with Dranoff, according to court records.

The Camden Redevelopment Agency ultimately sent a letter saying it was terminating Dranoff’s development option on the long-vacant Radio Lofts building. It later accused him of holding the rights “hostage” as leverage in negotiations over the sale of the Victor building.

The proposed Victor sale also fell through after the city did not transfer a tax agreement Dranoff had originally secured before developing the property to the potential new owners by a deadline they’d set for the deal to move forward. Dranoff says the city was obligated to approve the transfer under the terms of his original contract with the city.

City attorney Michelle Banks-Spearman has said in a deposition that Philip Norcross was regularly meeting with city officials and other “stakeholders” and suggested that the city slow down its review of that tax agreement.

It’s not uncommon for private interests to meet with government officials. But when asked in depositions who they understood Philip Norcross to be representing in those meetings, Camden officials couldn’t definitively say.

Banks-Spearman testified that she believed he was there representing developers. Then-Mayor Frank Moran testified he didn’t think Philip Norcross was representing private clients at all. Instead, Moran said, he believed he was acting as an adviser and “partner” to the city.

Regardless, Banks-Spearman denied that Philip Norcross’ request to slow down the review of the Aimco transfer influenced her decision-making and said that the $71 million sale price the company had offered Dranoff prompted her to question whether he had adequately compensated the city under the tax agreement.

Camden has since sued Dranoff, accusing him of hiding more than $9 million in profits the city says it is owed from his redevelopment of the Victor Building. The city has said its concerns grew out of Dranoff’s failure to submit annual financial reports that were required under the state’s tax exemption law — something officials said they first realized while reviewing the Aimco transfer request. In a 2021 ruling, the judge overseeing that case said that if Camden was correct — a conclusion Dranoff contests — the developer’s actions could potentially constitute “a fraud upon the municipality and its residents.”

That case is set to go to trial this fall.

In recent months, investigators with the Attorney General’s Office have contacted people involved in Dranoff’s 2016 negotiations with Liberty Property Trust, subpoenaed information stemming from his ongoing litigation with the City of Camden, and sought information about Philip Norcross’ discussions with city officials during the period, sources familiar with the probe said.

Another of the real estate deals currently under investigation, according to the sources familiar with the probe, occurred about the same time, not far from the Victor Building.

The centerpiece of Camden’s new waterfront vision was Liberty Property Trust’s plan to develop 16 acres with offices, shops, hotels, and apartments. But to move forward with the proposal, Liberty first needed to get government approvals and to sort out property rights and easements across several parcels owned by a number of entities.

In a series of complex transactions between 2016 and 2018, Liberty bought a three-acre parking lot across the street from Victor Pub, known as Parking Lot Nine, from the Delaware River Port Authority (DRPA) as part of a $1.3 million deal. Two years later, it sold the lot to a group of investors including George Norcross for $350,000.

Years before those sales, the site was designated as an end-point for an ill-fated proposal to build a tram connecting Camden to Philadelphia. Liberty agreed to pay the DRPA $800,000 for the lot. It offered $500,000 for the authority’s air rights for the potential tram, because its easement crossed a swath of waterfront central to Liberty’s planned development.

The Camden Redevelopment Agency also held a “reversionary interest” in the property — meaning it was scheduled to regain ownership of the lot if the tram hadn’t been built by 2026. The agency often uses such legal provisions to ensure that developers honor their obligations.

Investigators now appear to be focused on whether the DRPA and the CRA received fair market value for their interests in that property. They’ve sought information in recent months about the transactions and government approvals, which involved the DRPA, the CRA, Liberty Property Trust, and the Norcross investor group.

In 2015, an appraiser hired by the DRPA valued Parking Lot Nine at $2.3 million. He determined that the DRPA’s interest in the lot — accounting for the fact that it didn’t have a right to own the property in perpetuity — was worth only $800,000. But the air rights for the tram were worth $1.45 million — nearly three times the compensation DRPA accepted from Liberty, The Inquirer previously reported.

» READ MORE: How power broker George Norcross and friends got waterfront land for cheap

The appraiser also expressed doubt that any significant development could occur on the site without a potential purchaser also buying out the CRA’s reversionary interest in the property.

But before the sale to Liberty was finalized, the CRA voted to terminate its interest in the parking lot without seeking compensation. Ahead of that April 2016 vote, Philip Norcross’ law firm, which was representing Liberty in its broader development, helped craft the resolutions the agency approved to terminate its interest.

Tambussi’s firm, which was representing the CRA, told The Inquirer in 2019 that its reversionary rights to the parking lot were not intended to generate profit for the agency but rather to ensure that it would be developed in a way the agency had approved. Liberty’s development proposal — which included a new use for the parking lot — had won support not just from the CRA but also the state Economic Development Authority, the law firm said.

“Any implication” that the CRA conveyed property rights at less than fair market value was “fundamentally inaccurate,” it said.

As for the later sale to the investor group, a lawyer for George Norcross has previously said the $350,000 purchase price the investors paid Liberty for Lot Nine does not reflect the totality of the transaction.

To move forward with its plan, Liberty needed access to another parking lot leased by George Norcross’ investor group. The investors agreed to give up that lease if Liberty bought Lot Nine from the DRPA to provide the Norcross investor group with a substitute parking lot, the lawyer said. The Norcross group says it also spent an additional $450,000 on repaving and environmental issues related to Lot Nine that were not reflected in the $350,000 purchase price.

For its part, the DRPA maintains that its role was aboveboard and in a statement said the agency upholds “transparency and ethical practices in all our business dealings.” The authority has said it got as much money as it could, considering that its rights to Lot Nine were tenuous.

“DRPA always cooperates fully and transparently with all investigations, and to the best of our knowledge DRPA is not the subject of any ongoing investigations,” an agency spokesperson said.

In the end, Liberty never fully realized its vision for the proposed waterfront development. The company sold most of the parcels it had collected and in 2018 announced it was taking a $26 million hit on the value of its Camden venture.

The third real estate transaction now under investigation dates back a few years earlier — to the start of Camden’s tax credit-fueled development boom.

In January 2014, Camden nonprofit Cooper’s Ferry Partnership reached a $32.7 million agreement with the state Economic Development Authority to buy a 575,000-square-foot office complex — just blocks from Lot Nine and the Victor Building on Camden’s Market Street — named after its largest tenant, defense contractor L3 Communications.

Cooper’s Ferry saw buying the L3 building as an opportunity to secure a reliable revenue stream from rents paid by its tenants. At the time, the state tax credit law was expected to spur development and increase property values.

But records show the nonprofit’s leadership faced resistance to their plan.

Investigators are now probing whether Cooper’s Ferry was unfairly squeezed out of the deal and robbed of a potentially lucrative real estate investment, according to the sources familiar with their work.

» READ MORE: New Jersey tax credits turned a Camden office complex into a lucrative investment. Now the feds and state AG are investigating

In spring 2014, Philip Norcross and representatives of Cooper Health, which was seeking a lease in the building at the time, reached out to Philadelphia investor Ira Lubert and Howard Needleman — a prominent commercial landlord in South Jersey who had previously worked with Cooper Health — to gauge their interest in buying the property, according to the investors.

The hospital network says it became concerned that Cooper’s Ferry was planning to finance its purchase of the L3 building by overcharging Cooper Health for rent.

Philip Norcross, meanwhile, told Cooper’s Ferry CEO Anthony Perno that he and another executive were “persona non grata” with him and his brother and that they would lose their jobs if the nonprofit didn’t “get out of the real estate business,” according to contemporaneous notes by the nonprofit’s then-board chairman and Cooper Health CEO John Sheridan, which have been previously reported by The Inquirer.

Philip Norcross had no official role with Cooper’s Ferry. However, he is chairman of the Cooper Foundation — Cooper Health’s philanthropic arm. A spokesperson has said he was involved in the discussions as a “real estate expert,” offering his services pro bono.

Cooper’s Ferry ultimately acquired the property in December 2014 but conveyed it on the same day to Lubert and Needleman for the same price they paid the EDA, plus a $575,000 fee.

That same year, Cooper Health System won approval for $40 million in tax credits to move jobs to the L3 building, using those credits to pay its rent. A subsidiary of Cooper Health later acquired a 49% stake in the property from Lubert and Needleman.

One question investigators are now trying to answer is whether Cooper’s Ferry received fair market value.

A December 2014 appraisal by Lubert and Needleman’s mortgage bank, previously reported by The Inquirer, valued the office complex at $54 million — an increase of more than $20 million over the original sale price fueled, in part, by rising demand for large office spaces as a result of the tax credit program. The appraisal also cited new leases for tenants — negotiated by Lubert and Needleman — in the building as a reason for the higher valuation.

A spokesperson for Lubert and Needleman has said Cooper’s Ferry overestimated potential revenue and underestimated the substantial costs of the transaction.

The deal proved financially lucrative for Cooper Health, which continues to occupy the L3 building with 525 employees and, through its ownership stake, will save $30 million that will be used to improve patient care, a spokesperson for the hospital network said.

Cooper Health ultimately received all of the tax credits it was awarded by the state to move into the building and the hospital network “has not been contacted [by law enforcement], by subpoena or otherwise, about L3 since 2020,” the spokesperson said.

A spokesperson for Norcross has previously said neither George nor Philip Norcross personally profited from the deal.

If George Norcross is feeling pressure from the new scrutiny his real estate dealings are receiving, he hasn’t let that show in public.

He’s remained active in New Jersey politics — even as the investigation into his business dealings has intensified and despite his statements in a May interview with Politico that “it’s time for others to lead” the Democratic Party.

The same day that interview was published, he hosted a fundraising event for brother Donald, the congressman, according to a copy of the invitation and a person who was there.

The next day, George Norcross led a meeting of the South Jersey Democrats’ delegation to the state Legislature, according to two people familiar with the matter.

And ahead of this month’s primary election, a political action committee backed by George Norcross sent mailers to Republican voters in New Jersey’s 4th Legislative District attacking a state Senate candidate — an apparent attempt to boost a rival seen as a weaker general election candidate.

Norcross and his brother Phillip have also announced plans to host the Cooper Foundation’s annual “Red Hot Gala” in September.

Invitations indicate the event will be held at Norcross’ office tower — on the Camden waterfront.