A company that plays a critical role in New Jersey's corrections system, running halfway houses as large as prisons, has had such severe financial difficulties that it contemplated filing for bankruptcy in 2010, the New York Times reports. Senior executives at Community Education Centers feared they might not have enough money to pay workers. Community Education's senior vice president, William Palatucci, is one of Gov. Chris Christie’s closest friends and political advisers, and Christie has long championed the company.
The state, while paying the company tens of millions of dollars a year for its services, has not closely examined Community Education's financial standing or operations. A collapse of Community Education could significantly disrupt New Jersey's corrections system, and if the company remains financially hobbled, its halfway houses in New Jersey could continue to suffer. Documents submitted in federal court in Newark in an employment lawsuit brought against Community Education by a former executive portray a company that has been in crisis and trying to fend off creditors, even as it has mounted a robust lobbying and public relations campaign. The Times has detailed extensive problems in New Jersey's halfway houses, including escapes, violence, and drug use.