So this is where our hard-earned toll money goes.
The same PA honchos who were fired earlier this year for accepting freebies from insurance-industry officials — including lavish meals and entertainment — have cost the agency up to $80 million by buying unnecessary or overinflated insurance policies, The Post has learned.
PA insiders say the wasted money is now pegged at a total of at least $50 million and as high as $80 million.
The senior PA officials used the money to purchase expensive insurance policies for nonconstruction projects that weren’t required to be underwritten by the PA.
Such policies included those for rehabbing the new JetBlue terminal at JFK Airport, the purchase of new PATH trains and two projects at PA facilities in Port Elizabeth and Port Newark, an official said.
“These were tenant programs not being done by the PA,” the official explained.
The money can’t be recovered because the agency received the insurance coverage it asked to buy, a source said.
“If you pay insurance for a $500,000 house that is worth less than $500,000, you still have to pay the higher premium,” one insider explained.
The PA wasted other money by buying insurance policies for agency-construction projects that had bloated premiums because they were computed with unnecessary “soft costs” tacked onto the budgets, including for consultants.
The agency was buying these unnecessary or bloated policies at the very same time superiors in the PA’s treasury department were accepting expensive meals and entertainment from insurance-industry honchos while on business trips in London and Zurich, according to a memo that PA lawyer Jeffrey Yuhasz wrote to higher-ups.
PA Treasurer Anne Marie Mulligan, who oversaw bond issuance and insurance, Assistant Treasurer Veronica Biddle and risk manager Jon Huxel have since been fired. None of the three could be reached yesterday.
PA officials say they have no evidence they engaged in a quid quo pro, in which they green-light the PA’s purchase of wasteful insurance policies in return for the gifts or considerations, but rather suspect they turned a blind eye to their responsibilities.
“We don’t believe this happened because someone bought these officials some meals and entertained them. It happened because they suck at their jobs,” said one angry PA higher-up.
PA officials say they’ve also tightened up lax internal protocols by requiring a more rigorous review of insurance-policy premium expenditures to prevent such abuses from continuing to take place.
“The inspector general has made recommendations that the Port Authority is following, and it is changing the way the PA is doing business within the insurance industry,” said Michael Nestor, director of investigators for the agency’s inspector general.
“We’ve made quite a few recommendations, and the chief financial officer and executive director are following them,” he insisted.