Emergency Managers — August 12, 2015 at 2:17 pm

Emergency Management: Ernst & Young cashes in on Atlantic City’s financial crisis


If we learned anything about Emergency Management in a major urban city here in Michigan (i.e., Detroit), it’s that it’s very expensive and some companies make a windfall, all paid for with our tax dollars. Now Atlantic City, NJ, which is under emergency management like Detroit was, is getting a taste.

Since Gov. Chris Christie appointed Emergency Manager Kevin Lavin in January, they have spent $1.7 million and they aren’t done yet. $1.25 million was paid to the audit firm Ernst & Young alone just “to develop a long-term recovery strategy” according to exclusive reporting by Reuters:

New Jersey is spending at least $1.7 million, more than twice as much as previously known, on professionals mainly from the audit firm Ernst & Young LLP (EY) to turn around distressed gambling hub Atlantic City.

The city’s tax base shrank by two-thirds in five years because of casino competition from neighboring states, prompting Governor Chris Christie, now a 2016 Republican presidential candidate, to appoint emergency manager Kevin Lavin in January.

Under Lavin, EY billed $1.25 million for its second phase of work, currently underway, to develop a long-term recovery strategy, according to documents obtained through a public records request. Costs could keep growing as consultants determine how to rebuild the city.

The level of spending on outside professionals for a distressed city is “unprecedented for New Jersey,” said Rutgers University senior policy fellow Marc Pfeiffer, who served for 26 years in the state’s local government oversight agency. […]

EY said it “does not have any additional insights to share at this time.”

Ernst & Young not having any “additional insights to share” isn’t all that surprising, I suppose. I mean what are they going to say except “KA-CHING!?