N.J. Commerce Sec'y Resigns Amid Scandal

Published July 14, 2004

| Associated Press

Commerce Secretary William Watley (search) resigned Wednesday amid reports that he funneled state money to businesses he owned and to family members.

"Despite the swirl of speculation and innuendo my departure may generate, I leave this office with my pride intact, confident in knowing that an objective evaluation of my tenure will confirm that I discharged my duties responsibly," Watley said in his resignation letter.

Gov. James E. McGreevey (search) accepted the resignation, saying in a statement that Watley "was in integral part of this administration's highly successful economic development strategy."

Watley had offered to resign four months ago, but McGreevey refused to accept the offer. In a statement, McGreevey said Watley had only agreed to serve for two years.

Recently Watley's business dealings have come under intense scrutiny.

An $11.5 million loan offer to a church affiliated with Watley was canceled by the state after it was determined he was part of a partnership that would have received the money.

State officials found that Watley and his former chief of staff did not indicate on financial disclosure forms that they held positions in a company connected to the church when the loan application was submitted to the Housing Mortgage Finance Agency.

The loan for construction at St. James AME Church in Newark where Watley is pastor had been approved by the HMFA earlier this year. But it came under scrutiny after state investigators raided the Commerce and Economic Growth Commission offices of Lesly Devereaux (search), Watley's former chief of staff, as part of a separate probe.

Devereaux also served as the commission's senior vice president before resigning earlier this month.

The state Division of Criminal Justice is investigating Watley's decision to award a no-bid consulting contract to Devereaux's sister.

Watley has said no laws were broken when Candace Harper was given the $2,000-per-month contract. Harper, who is on probation for felony embezzlement, eventually was paid $9,250 to compile a database for a program that helps small businesses win government contracts. She completed her work in March, commission officials said.

Questions were first raised about the contract earlier this year during a routine review of the agency by the state auditor. An assistant state auditor later complained that the commission was not being cooperative in turning over records. The audit is scheduled to be completed this summer.

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