Majority of Hoboken City Council Calls for Investigation into Allegations Against Bhalla

HOBOKEN, NJ - Five Hoboken City Council members have called for state and federal law enforcement authorities to investigate quid-pro-quo allegations made against Mayor Ravi Bhalla by a former City Director.

Former Director of Health and Human Services Leo Pellegrini made a series of first-hand allegations, accusing Bhalla and others of unethical and corrupt actions in a wrongful-dismissal lawsuit he filed last week in the Hudson County Superior Court.

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Pellegrini, who led the City's response to the Covid-19 pandemic, resigned in May last year after the City informed him he would otherwise be fired for “unlawful and corrupt conduct.”

Among the allegations in Pellegrini’s lawsuit are ethical concerns from January 2022 involving a lunch meeting he was at in which Bhalla allegedly said he agreed to quash the approval of cannabis dispensary Nature Touch to open, despite it meeting requirements, after being pressured to do so by Jersey City Mayor Steven Fulop.

The lunch meeting took place on January 14th, 2022, and was also attended by John Allen, the Corporation Council at the time, and Vijay Chaudhuri, the Mayor’s Chief of Staff, according to Pellegrini’s lawsuit.

Fulop was allegedly "extremely upset and very angry" in a phone call with Bhalla regarding the approval of Nature Touch. The lawsuit reports that Bhalla said he was subsequently going to quash the approval of Nature Touch.

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This was allegedly intended in the interest of approving Story Dispensary instead, a cannabis dispensary to be located at a property on 14th Street in Hoboken co-owned by Jaclyn Fulop, Steven Fulop's wife.

The lawsuit also alleges that Fulop offered to provide Bhalla’s law firm he worked for at the time, Schenk Price Smith and King, with contract work in exchange for this favor.

A Jersey City Redevelopment Agency resolution from April 2022, seen by TAPinto Hoboken, shows that a $50,000 contract for legal services was awarded to Schenk Price Smith and King. The resolution includes a clause stating “Special Legal Services are professional services exempt from public bidding,” indicating that the contract was not secured through a competitive bid process.

Pellegrini, who served on the Cannabis Review Board along with Councilman Russo and Business Administrator Jason Freeman, claims he was pressured and intimidated into seeing through the approval of the Story Dispensary.

“Mayor Bhalla dismissed Plaintiff’s concerns and in an intimidatory and pressuring manner told Plaintiff that the City needed to move forward with approving the application,” the lawsuit states.

The Story Dispensary was approved at the Cannabis Review Board meeting on its February 24th, 2022 meeting.

Fulop allegedly stood to profit substantially from this approval because of his wife’s co-ownership of the 14th Street property which would be leased to Story Dispensary.

Property records in the Hudson County Register show that Jaclyn Fulop and Drew Nussbaum signed an agreement for a commercial mortgage worth $1.8 million in November 2021 to purchase the property at 51-53 14th Street at a value of $2.4 million.

A litigation brief filed by the Condo Association against Story Dispensary and Fulop and Nussbaum, shows that the lease for the 14th Street property between the landlords and the tenants included a purchase option worth $3.5 million once the property was granted approval to license as a cannabis dispensary.

Selling the property to Story Dispensary would therefore have netted Fulop and Nussbaum a $1.1 million profit on it.

Fisher told TAPinto Hoboken that she sent this information to the state Cannabis Regulatory Commission (CRC) and asked them to refer the Story Dispensary application to the Attorney General's office. Fisher said she was informed last week by the CRC that it had done so.

Steven Fulop has denied having financial interest in a dispensary as well as having pressured Bhalla.

“I never called Ravi. And importantly, my family has no economic interest in any dispensary. It’s a retained space. It’s no different than renting it to McDonald’s. The lease is not contingent on approvals and the zone is by right,” Fulop told a reporter at Politico .

At a press conference on Wednesday, Ramos, Fisher, Giattino, and Presinzano stood on the steps of Hoboken City Hall and called for the Attorney General and federal authorities to open a formal investigation into the allegations. Russo was not at the press conference, but he is also in favor of the investigation.

“We are here today to call for the Attorney General and the federal authorities to investigate the allegations against Hoboken Mayor Ravi Bhalla and potentially other Hoboken elected officials and government officials as well,” Ramos told reporters at the press conference.

The Council members released a joint statement afterward, saying: “The alleged misconduct raises concerns about potential conflicts of interest and the misuse of public office for personal gain.”

“The implications of these allegations are troubling, warranting a thorough and transparent investigation by state and federal law enforcement agencies to maintain public trust in our city's governance,” they added.

In response Baer said: “[Pellegrini] resigned after being notified he was going to be terminated based upon an investigation, conducted by former State comptroller Matt Boxer, which found reasonable cause to believe the director engaged in unlawful and corrupt conduct in the course of his city employment.”

“In fact, this matter was referred to and is being investigated by the FBI and we anticipate that law enforcement will be taking the appropriate action in the near future,” added Baer.

The Council members have said that they support a thorough investigation of Pellegrini, but added the claims made against Bhalla “stand on their own as substantial.”

They said certain aspects of the allegations are “corroborated and adequately supported” and that they therefore merit further investigation by higher law enforcement authorities.

Another Bhalla spokesperson, Rob Horowitz, also said the allegations were baseless and political.

“The timing of this media conference less than three weeks before the primary was obviously political.  Three-out-of-the-four Council participants are supporters of Representative Rob Menendez Jr., Mayor Bhalla's primary opponent,” said Horowitz.

“These baseless allegations are based on a frivolous lawsuit with meritless claims by a disgruntled former employee who lost his job because of serious allegations of wrongdoing, identified by respected former federal prosecutor Matt Boxer, and who is currently under criminal FBI investigation,” he continued.

Horowitz also asserted that the Jersey City contract provided to Schenk Price Smith and King was done properly.

“The well-qualified law firm--where Mr. Bhalla serves as of counsel--has a proven track record representing different local government entities throughout New Jersey and was selected in a competitive process by the Jersey City Redevelopment Agency—and Mr. Bhalla has received not a dime in compensation as a result of that selection,” he said.

Horowitz concluded by dismissing the allegations relating to the Cannabis Review Board.

“Additionally, the selection process for Hoboken cannabis dispensaries was handled professionally and according to all legal and ethical requirements.”

Councilman Phil Cohen, a Bhalla ally, said the lawsuit was meritless and accused his Council colleagues of attempting to "sully the Mayor's good name."

"My Council colleagues have launched a politically motivated attack three weeks before the Mayor’s Congressional election, based on a meritless lawsuit of a former employee, who, according to the City, is being investigated by the FBI. Three of my four colleagues have endorsed Rob Menendez, and the fourth ran for Hoboken Mayor against Mayor Bhalla in 2017 and came in 4th," said Cohen.

He added: "Their goal is clear - sully the Mayor’s good name and damage his political prospects. I am confident that the people of Hoboken will see this political stunt for what it is.”

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