U.S. Attorney releases Coniglio indictment

Former State Sen. Joe Coniglio has been indicted by a federal grand jury.

Coniglio, 65, faces nine counts of mail fraud and extortion relating to his work as a $66,000 per year consultant for the Hackensack University Medical Center (HUMC). He’s scheduled to appear at the Martin Luther King Jr. Federal Courthouse in Newark at 2 p.m., after which U.S. Attorney Chris Christie plans to hold a press conference.

“Trading personally on a position of public trust continues as an epidemic in New

Jersey,” said Christie in a press release. “The allegations against Senator Coniglio in this indictment paint a disgraceful picture of exchanging public tax dollars for personal gain. The public has had more than enough of this type of conduct.”

The indictment alleges that Coniglio’s employment with HUMC was ostensibly for “hospital relations,” but that its real purpose was to secure the hospital “Christmas Tree” budget items from the legislature and other state agencies. The arrangement resulted in millions of dollars of state payments to the hospital, according to the indictment.

“As a direct result of his corrupt consulting arrangement and influence as a state Senator, the hospital received millions of dollars from the State of New Jersey,” said an earlier press release issued by the U.S. Attorney’s office.

According to the indictment, Coniglio began talks about setting up a relationship with HUMC in January, 2004 -- almost immediately after he was appointed to the Senate’s budget committee. After meeting with John Ferguson, the hospital’s CEO, Coniglio sent him a follow-up letter saying that he “[looked] forward to making [HUMC] the best in New Jersey.”

The following month, Coniglio allegedly sent a letter to the hospital’s chief operating officer saying that his Budget Committee appointment would “certainly open to explore other areas that will attain the highest level of benefit to the Medical Center.”

The indictment says that Congilio then set up a shell company called VJC Consulting, LLC, the only client for which was HUMC. While the company -- whose two principals were Coniglio and his wife Valerie-- appeared to be a public relations firm, the indictment noted that Coniglio had no experience in htat arena.

“The position was inaccurately understood by unknowing third parties to be simply a “community outreach” or “public relations” job. In reality, defendant CONIGLIO’s true value to the hospital was in his position as a State Senator,” read the indictment.

Through VJC, Coniglio allegedly received payments of $5,000 per month from HUMC, enabling him to report the income as coming from his organization and not directly from the hospital.

During the two years that he consulted for the hospital, he allegedly steered four large government grants towards it: $900,000 for its cancer center; $250,000 for its children’s hospital the following August; $70,000 for a seatbelt study and $64,000 for a comprehensive stroke center. And after HUMC officials asked Coniglio for help in obtaining a grant for child abuse prevention programs, he’s accused of writing the Department of Health and Human Services (DHHS) on official legislative letterhead, “attempting to favorably influence” the request.

After receiving the first two payments, the hospital gave Coniglio a raise of $500-per-month.

The biggest alleged payout happened in 2005, after Coniglio met personally with the DHHS Commissioner, Ferguson and several other HUMC officials to discuss funding the hospital’s new cancer care center. Three months later, the DHHS awarded the hospital a $9 million grant.

The indictment also alleges that Coniglio’s staff, including his Chief-of-Staff Marc Shrieks, worked to expedite the payments to the hospital and solicited guidance from the Office of Legislative Services on its behalf.

The indictment goes on to allege that Coniglio tried to cover up the deal with HUMC by not fully revealing it on his public financial disclosure forms, misleading the news media about it and by not disclosing materials about the arrangement requested by the Joint Legislative Committee on Ethics.

Coniglio served in the Senate from 2002 until September, 2007 when, facing pressure from party leaders over the federal investigation, he abandoned his reelection bid.