New Jersey Gov. Phil Murphy is being sued by one of the nation’s only black-owned investment firms, which alleges he has failed to address years of racist proprietary theft that began before Murphy took office.
Murphy is named in an amended lawsuit filed by Blueprint Capital Advisers that levels broad charges of “blatant, aggressive, and unapologetic racist abuse” from New Jersey state government.
Blueprint Capital claims that New Jersey “fraudulently misappropriated a proprietary investment program BCA had developed” and delivered it to another investment firm, BlackRock Alternative Advisers.
The suit alleges that Blueprint developed an investment model it called “FAIR Alternative Management,” one that was “tailored for public pensions that would dramatically lower their asset management expenses and improve their returns.”
Officials with New Jersey’s Department of Investment initially showed significant interest in the model and said the state would be interested in investing hundreds of millions of dollars in the company, the suit alleges. After extensive negotiations, however, one state official allegedly began demanding significant changes to previously agreed-upon terms, while another allegedly “began raising internally a phalanx of pretextual issues and objections” to the state’s investment in the firm.
The state eventually opted to invest funds with BlackRock. The plaintiffs allege that the rival investment firm “learned in detail the nature and scope of BCA’s proprietary commercial information that formed the basis for the FAIR program, and appropriated it for its program.”
Murphy “endorsed” abuse, lawsuit claims
The bulk of the malfeasance alleged in the suit took place prior to Murphy’s becoming governor in January 2018. Still, the suit claims that state officials, including Murphy, failed to mount a “single, even modestly, meaningful or effective response.”
The suit states that, in addition to Blueprint’s complaints, numerous “religious, community, and business leaders have … brought the abusive treatment of BCA to Murphy’s attention.” Among those is the National Urban League, which in a September 2020 letter urged Murphy to address Blueprint’s racial discrimination case.
“[W]e ask you,” the League wrote, “to carefully look into this matter and do what is necessary to rectify what is clearly an act of discrimination and retaliation that involves the State of New Jersey even as it may have occurred prior to your term as Governor.”
In an August 2020 letter, meanwhile, the NAACP expressed hope that Murphy would “be able to bring [the controversy] to resolution.”
“We are asking you to investigate this matter,” they wrote, “and if it is determined that an injustice has occurred, we are asking you to do what you can to ensure equity and justice.”
And in July 2020, dozens of New Jersey clergy signed a letter demanding Murphy provide “a response from you and your team” regarding the lawsuit.
“We are less interested in statements disavowing racism, and keenly interested in proof that your policies are anti-racist in both intent and impact,” they said.
Reached via email, Murphy spokeswoman Alyana Alfaro told Just the News: “The Governor’s Office does not comment on pending litigation.”
Michael Bowe, an attorney with Brown Rudnick LLP representing Blueprint, told Just the News in a statement: “Blueprint’s extensive and detailed complaint depicts the very definition of institutional discrimination and retaliation against this black-owned asset manager.”
“And this institutional abuse extends all the way to the Governor’s staff who have not only permitted the abuse, they have orchestrated it,” he continued. “Phil Murphy likes to talk about how much he cares about the Black community, but his treatment of Blueprint shows all that talk is just a bunch of empty words from a politician.”
In a statement, a BlackRock spokesman said the company “had no knowledge of what, if any, discussions Blueprint might have had with New Jersey prior to approaching us last year threatening a lawsuit, four years after the New Jersey mandate was awarded to BlackRock.”
“A review of Blueprint’s allegations by BlackRock and an outside law firm found nothing inconsistent with our standards nor anything suggesting any wrongdoing by BlackRock,” the company added. “Nor have we found any evidence that BlackRock improperly received any materials or other information regarding Blueprint’s plans or proposal as alleged.”
Blueprint originally brought the lawsuit in June of last year against the state of New Jersey itself. The firm quietly filed its amendment suit naming Murphy in November.
Demanding a jury trial, the plaintiffs in the suit are asking for, among other things, a return of proprietary information allegedly possessed by BlackRock, “formal credit” for that firm’s program with the state of New Jersey, “compensat[ion] … for all monetary and/or economic damages,” and “such other and further relief as the Court may deem just and proper.”
Blueprint’s involvement in New Jersey’s government came as the state was struggling to meet its obligations for public retirement benefits, a struggle that continues today.
New Jersey’s “post-employment benefit liabilities” for its state pension program total just over $100,000,000,000, according to a February 2021 analysis by the Reason Foundation.