The New Jersey state Supreme Court June 13 suspended Hoboken Mayor Ravi Bhalla for three months, ruling that the Indian American politician had engaged in “unethical behavior.”
The terms of the suspension were unclear at press time. The Hoboken City Council followed up shortly afterwards, passing an ordinance on a 7-2 vote that would require Bhalla to reveal all of his income from his work at the law firm Lavery, Selvaggi, Abromitis & Cohen, P.C. The ordinance also requires the mayor to reveal – on a quarterly basis – all clients and contracts related to the firm.
Bhalla is serving his first term as mayor of the city, after several terms on the City Council.
According to the Supreme Court ruling, in 2008 and the first half of 2009, Bhalla collected 10 percent of the paycheck of his associate Andrew Bentsen, which was to be put towards his retirement fund at UBS. Under the terms of Bentsen’s employment contract, Bhalla was to match Bentzen’s contributions by three percent.
Thus, for the year 2008, Bhalla should have withheld $6,000 from Bentsen’s gross income, deposited that amount in his UBS account, and contributed $1,800 to Bentsen’s IRA. But Bentsen’s UBS statement for December 2008 reflected a total of only $5,792.29 in contributions for the year, according to court papers. Of this amount, $2,042.29 was attributed to Bentsen’s contributions, and $3,750 was attributed to Bhalla. Thus, Bentsen’s retirement account was underfunded by $2,007.71, noted the Supreme Court.
In 2009, a total of $4,199.99 should have been contributed to Bentsen’s UBS account, $3,230.78 from the associate’s paychecks, and $969.21 from Bhalla’s match. But, according to Bentsen’s July 2009 UBS statement, no contributions had been made at all.
In total, Bhalla failed to remit to UBS $6,207.70 in IRA contributions for the years 2008 and 2009, noted the court.
According to court documents, Bhalla said he had hired the firm ADP to do his payroll. Prior to that, Bhalla was sending checks to UBS for “his firm’s IRA contributions,” but the checks did not stipulate whose account to fund and by how much. In court papers, the mayor said he thought ADP was making bi-monthly contributions to his employees’ retirement funds at UBS.
Bhalla also failed to fund Bentsen’s Social Security deductions, despite withholding the contributions from his paycheck, according to the Supreme Court’s findings. He corrected Bentsen’s Social Security contributions in 2013 or 2014, despite receiving notification from the IRS in 2008.
In 2016 and 2017, Bhalla reimbursed Bentsen for the IRA contributions.
The New Jersey state Supreme Court ruled that Bhalla had participated in “dishonesty, fraud, deceit, or misrepresentation,” and that he "failed to take any steps to ameliorate Bentsen’s financial issues" until after he was interviewed by the
Office of Attorney Ethics nearly seven years later.
Councilmen Ruben Ramos and Mike DeFusco said in a joint statement that Bhalla’s job at a private law firm, which is politically connected, “opens the Mayor’s Office to serious legal and ethical questions.”
“Mayor Bhalla has a history of perceived conflicts related to his former employment at another major law firm that represents entities that do business with the city, as well as a current ethics violation that he is appealing using taxpayer resources,” said Ramos and DeFusco.
In response to his critics on the council, according to a Hudson County View article June 22 Bhalla said he has only taken on one client since starting an ‘of counsel’ position February, adding that he is yet to earn a single dollar in commission from it.
“I have absolutely nothing to hide,” the report quoted Bhalla as having written in a memo to the governing body June 22. “Accordingly, in the spirit of transparency and collegiality, I am happy to disclose my client generation and commissions earned to date,” he added in the memo.