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Editorial: Workers Hurt By Bosses' Scandal

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A big break in the state of New Jersey's case against Birdsall Services Group, the Eatontown-based engineering consultant, came when the ex-wife of the company's former marketing director wore a wire during a discussion about money. According to state police, Philip Angarone told his ex that his compensation seemed larger than it was because part of it had to be used for campaign donations to state elected officials.

Angarone and one other marketing-department employee have pleaded guilty to breaking state ethics and campaign-donation laws in exchange for comparatively light sentences. The state attorney general, Jeffrey Chiesa, won indictments against the company itself and seven other key Birdsall executives, including its former chief executive and largest shareholder, Howard C. Birdsall.

Because such corruption is long-practiced in municipal and state government, the charges against Birdsall are familiar, yet they are shocking in their scale. In recent years, Chiesa charges, the company made hundreds of thousands of dollars in illegal donations to elected officials and in return received favorable treatment that allowed Birdsall to win many millions of dollars worth of contracts. A key tactic allegedly used by the firm, according to Chiesa, was to require employees to make donations of $299, exactly one dollar below the reporting threshhold for donations, and later to reimburse them through increased bonuses.

Impasse Resolved

If the charges are proven, there should be no sympathy for those who pay to play and defend themselves by citing the "everybody's doing it" rationale. On the other hand, we prefer that the court, not the New Jersey attorney general, determine the scale of the penalty applied to the accused individuals and the company.

Before arriving at an agreement that Birdsall would forfeit or set aside a total of $3.6 million, Chiesa tried to seize all of the firm's $41.6 million in assets. That would have shut down the firm and put all of its employees out on the street. The company tried to evade the forfeiture by filing for federal bankruptcy protection in Trenton.

It later furloughed 300 employees. About half of them reported to work the next day, apparently determined to continue their work on various projects.

The state attorney argued in the bankruptcy court that Birdsall's Chapter 11 filing was legal forum-shopping, a misuse of the bankruptcy code. We think the more serious immediate problem was the state attorney's zeal in labeling Birdsall a "criminal enterprise" worthy of treatment similar to an organized crime family or terror cell. The alleged crimes at Birdsall must be energetically prosecuted, but a judge or jury, not the state attorney, should decide any penalty that could hurt or kill off the company.

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