Charges Dropped for Officials Involved in OSI State Contract Dispute

A New Jersey Superior Court judge has dismissed corruption charges against six state Treasury Department employees in a case stemming from a contract dispute with collection agency Outsourcing Solutions, Inc. (OSI). The judge also cleared two former OSI employees of charges.

In August of last year, New Jersey charged the the six treasury workers and two former OSI employees with misconduct for their roles in an alleged quid-pro-quo scheme where the OSI employees lavished gifts upon the state workers in exchange for favorable collection contracts. OSI had been working under a contract to collect back taxes for the department.

The alleged scheme involved the government employees accepting gifts such as Broadway show tickets, spa treatments, and golf outings in exchange for what state investigators said was a willful ignorance of alleged overbilling on the part of OSI.

In a decision released Wednesday, Judge Thomas P. Kelly of the Superior Court in Trenton, said, “There is … no direct evidence that indicated the gifts were made in exchange for a benefit to the vendor who gave them.”

Kelly explained in his decision that he was drawing a distinction between unethical behavior and criminal activity. "They are acts, that if proven, should be appropriately punished by the appropriate method. However, attempting to transform these acts of the accused into crimes does not serve the interest of justice,” he said. The state employees have been on unpaid leave since the indictment last year.

One former OSI employee, Sandra Bielanski, was cleared of ten charges but still faces six counts of offering unlawful benefit to a public official. OSI fired the employees named in the indictment when an investigation into the matter was launched in 2004. When charges were brought in August 2006, OSI said in a statement, "When OSI’s management first learned of the allegations, it immediately hired outside counsel and conducted an extensive internal investigation. OSI has taken aggressive steps to strengthen and restate its policy against the granting of business courtesies to any employee of any governmental entity.”

OSI declined to comment on Kelly’s decision.

In February of this year, OSI agreed to pay nearly $2 million to the state to settle charges of overbilling and to avoid criminal prosecution in the case ("OSI to Pay Nearly $2 million to Settle New Jersey Collection Contract Dispute,” 2/7).

Various media outlets in New Jersey have reported that the state Attorney General’s office is not pleased with the decision. A spokesperson for the office said Wednesday, "We disagree with the decision and intend to appeal."