The lawsuit filed on Nov. 6 by the trustees seeks $5.5 million in damages.
Trustees for the Newark Watershed Conservation Development Corporation, which state investigators say bilked millions of taxpayer dollars from New Jersey's largest city, are suing 18 people for their roles in allowing the alleged mismanagement of funds -- one of whom is U.S. Senator Cory Booker.
Booker, a Democrat who was Newark's mayor from 2006 to 2013, has denied any wrongdoing and his attorney Marc Elias called the lawsuit "frivolous."
For 40 years, the non-profit agency received millions of dollars each year to treat and deliver water to 500,000 customers in North Jersey, as well as manage Newark's 35,000 acres of reservoirs.
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However, amid allegations from the state comptroller's office of rampant corruption, a federal investigation into the agency and calls for a legislative inquiry by two state senators, the watershed agency filed for bankruptcy in December.
The 43-page lawsuit filed by the NWCDC's trustees in Newark's U.S. Bankruptcy Court on Nov. 6 blames 18 people for the agency's liquidation, including its former executives, employees, contractors, accountants and trustees.
"The Newark Watershed trustees were appointed to complete the task of shutting down the corporation responsibly while protecting taxpayers," said Elias, an attorney with Perkins Coie. "Yet two years and over a million dollars in expenses later, they still haven't accomplished this task and are now filing a frivolous lawsuit against Senator Booker and seemingly anyone else who has ever been within 100 feet of the Newark Watershed."
The suit pulls heavily from a state comptroller's scathing report made public in early 2014, which accused the agency's former executive director and political ally of Booker, Linda Watkins-Brashear, of squandering millions of dollars of the city's money through severance, illegal payments and no-bid contracts.
According to the report, Watkins-Brashear also had a checkbook from agency, which her used to write herself unauthorized payouts totaling $200,000.
The bankruptcy trustee claims the defendants "caused the insolvency and demise of the NWCDC" through their alleged misuse of taxpayer money or negligent oversight of the agency from 2006 to 2012.
The trustees say that the board and the agency's accountants were "aware of or should have been aware" of the alleged mismanagement of funds, "yet did nothing to stop or reduce the damage."
As mayor, Booker served as the board of trustees' chairman.
"If the ordinary citizens of the Newark Water Group could uncover what was going on the mayor should have known," said Bill Chappel, a member of the citizen watchdog organization, Newark Water Group.
The suit also claims that Booker's push to create a municipal utilities authority to handle the city's water and sewer issues "inappropriately utilized the NWCDC" and its funds.
Between 2008 and 2010, the NWCDC spent almost $1.3 million on consultants and lawyers for planning Booker's failed municipal utilities authority.
"For years as mayor, Cory Booker waged a public battle to reform Newark's water system and improve oversight and accountability, but those efforts were repeatedly blocked by opponents," Elias said.
After the state comptroller's report, which chided the former mayor and his administration for their oversight, Booker called for legal action to address the wrongdoing at the watershed agency.
The suit seeks $5.5 million in damages and names an additional 10 businesses that allegedly received no-bid contacts.
Craig McCarthy may be reached at CMcCarthy@njadvancemedia.com. Follow him on Twitter @createcraig. Find NJ.com on Facebook.
