Former Hudson County, N.J., Executive Robert Janiszewski testified last week that JayBooth, a municipal bond banker well-known in county Democratic politics, handed him$6,000 in cash kickbacks after being selected to manage two bond deals for the countyduring the 1990s.
Janiszewski also said Booth, currently a banker at Jersey City-based Red-HorseSecurities LLC, gave him $3,000 on behalf of a vendor who had received an engineeringcontract.
Janiszewski, the once-powerful Democratic Party powerbroker who struck a deal withprosecutors, gave the testimony last Friday at the corruption trial of Hudson CountyFreeholder Nidia Davila-Colon. She is facing charges of mail fraud and aiding extortionfor allegedly funneling $10,000 in cash payments to Janiszewski from a vendor whoreceived more than $2 million in county contracts.
Hank Scheinkopf, a spokesman for Booth, called that allegation spurious.
"Mr. Booth would never engage in such a practice, number one. Number two, Mr.Janiszewski and [Booth] were not political allies" and had a long-standing history ofanimosity, Scheinkopf said.
"The firms that Mr. Booth was involved with did their business by complying with the lawand with all appropriate regulations on the merits."
Booth's conduct as a municipal securities broker has come under scrutiny before.
Between 1988 and 1995, Booth was fined $60,000 by the National Association of SecuritiesDealers and censured for securities violations. In 1993, he was at the center of a stateinquiry into political influence and the selection of underwriters in New Jersey.
Although Scheinkopf said Booth and Janiszewski were political enemies for 15 years,Booth ran two small regional bond-underwriting firms in the late 1980s and early 1990sthat did frequent business with the county.
From 1988 through 1990, Jersey Capital Markets, which Booth operated, served as seniormanager on three deals for the county and on the Hudson County Improvement Authoritybond sale representing $40.1 million. The firm also served as co- manager on three dealsfor the same issuers valued at $283 million.
After regulators forced him to close Jersey Capital Markets in 1992, Booth's new firm,Tri-State Capital Markets, served as senior manager on a $12.5 million Hudson CountyImprovement Authority deal and co-manager on $309 million in bond sales by the countyand its improvement authority.
While on the witness stand, Janiszewski said that in the early 1990s, Booth gave him anenvelope containing $3,000 after Jersey Capital Markets was selected to serve as co-manager on a bond issue to finance the construction of the county's new jail.
Janiszewski also testified that around 1999, Booth visited him in his office and handedover an envelope containing $3,000. The kickback came after Hudson County selected M.H.Meyerson & Co. - the broker-dealer then employing Booth - to serve as lead underwriteron a county deal.
Scheinkopf said that Janiszewski, who controlled the board of the improvement authority,selected Booth's firm for authority bond issues despite their political animosity.
"It was done on the merits," he said.
On county deals, the freeholders - the elected board of commissioners - not Janiszewski,selected the underwriters, Scheinkopf said.
"You don't have to go lobby the county executive to get these things done, necessarily,"he said. Like Janiszewski, the county freeholders were all Democrats.
Martin H. Meyerson, the recently retired chief executive officer of M.H. Meyerson & Co.,refused to comment on Janiszewski's testimony.
As the first witness in the Davila-Colon corruption trial, Janiszewski testified hereceived so many cash-filled envelopes from vendors and consultants that he had troublehiding them all. The trial is the first to result from Janiszewski's undercover work forthe FBI, who videotaped him accepting a cash bribe in an Atlantic City hotel in 2000.Janiszewski agreed to cooperate with authorities and secretly recorded conversationswith public officials and contractors. He pleaded guilty to bribery charges last fall.
Booth has not been subpoenaed by the U.S. attorney's office in the Davila-Colon case,Scheinkopf said. He also said securities regulators have not contacted Booth.
Martha Mahan Haines, chief of the Securities and Exchange Commission's Office ofMunicipal Securities, was not in her office yesterday and could not return a callseeking comment. John Heine, an SEC spokesman, declined to comment.
Earlier this year, New Jersey selected Red-Horse Securities to serve as co-manager on a$333 million issue by the state's Transportation Trust Fund Authority. The majorityNative-American owned firmestablished in 2002, had never before underwritten a statebond deal.
The brief resume of Booth provided by Red-Horse to the state treasurer's office calledhim "a recognized innovator and producer in the field of public finance in New York andNew Jersey for the past 25 years."
While the resume reported that Booth holds Series 7, 24, and 53 licenses, it did notreport that he had been the subject of four regulatory actions by the NASD and onecustomer complaint.
In 1988, the NASD fined and censured Booth and Jersey Capital Markets $30,000 for aseries of violations, including numerous registration violations and failing to amendunderwriting agreements disclosing that the firm had previously paid $20,000 to anotherbroker.
In 1992, the NASD fined Booth $25,000 and suspended him as a general securitiesrepresentative for 180 days for allowing a disqualified broker to act as a registeredrepresentative, NASD records show. Later that year, the NASD censured Booth, fined him$2,500, and barred the defunct Jersey Capital Markets from reapplying for NASDmembership.
A year later, the president of the New Jersey Sports and Exposition Authority told alegislative committee investigating bond deals during the administration of former Gov.Jim Florio that Booth's firm at the time, Tri-State Capital Markets, had been includedin an exposition authority deal despite never having responded to a request forproposal.
In testimony to a legislative committee, authority president Robert E. Mulcahy saidthen-governor's counsel M. Robert DeCotiis had chosen Tri-State without consulting theauthority.
According to Scheinkopf, DeCotiis' decision was not unusual.
"All underwriters were appointed by the governor, as I'm told they are today," he said,adding that Booth earned a "colossal" $3,000 from the bond issue.
