WASHINGTON (AP) – Two years after New Jersey Gov. Chris Christie privatized much of the state’s lottery operations, a big payoff remains out of sight.
Higher costs associated with the private company that Christie hired, Northstar New Jersey, have cut the state’s income for the second straight year, creating a $136 million shortfall in the state’s 2015 budget, according to internal documents obtained by The Associated Press. The results are poor enough that the state is entitled to fire the company if its performance doesn’t improve in the current fiscal year.
Now a 2016 presidential candidate, Christie didn’t immediately respond to questions from the AP. But he had said at the time the new arrangement would enable New Jersey to cut costs and create new sales. Christie’s office directed questions to the state’s Treasury Department, which praised the company’s “proactive and creative efforts” as the reason losses weren’t even higher. In a statement, the department said it was monitoring Northstar’s performance but declined to comment on whether the contract would continue.
The underperformance raises questions about the privatization strategy championed by Christie, who promoted lottery outsourcing as a way to shrink the government’s payroll and bring in more cash.
Christie’s push benefited some key political allies. During its ultimately successful pursuit of the state’s business, Northstar New Jersey hired the communications firm of Christie campaign strategist Mike DuHaime. The law and lobbying firm of former Port Authority chairman David Samson received $460,000 for lobbying on behalf of Northstar between 2012 and the end of last year.