The New Jersey Office of the State Comptroller alleged that hundreds of the state’s local municipal and school board health insurance funds were “effectively taken over by a private, for-profit company” in an investigation report released Tuesday.

The state’s acting comptroller, Kevin Walsh, targeted insurance firm Conner Strong & Buckelew — tied to South Jersey Democratic philanthropist George Norcross — and an affiliate company, PERMA Risk Management Services, in the report. Walsh, appointed by Gov. Phil Murphy (D-NJ), alleges the companies violated conflict-of-interest rules and public contracting laws.

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Conner Strong & Buckelew, PERMA, and representatives of Norcross denied the allegations. In a press release, the insurance firm called the report “riddled with lies, falsehoods, and blatant inaccuracies.”

Dan Fee, a spokesman for Norcross, called the report “rife with factual inaccuracies and evidences a fundamental lack of understanding of the issues, here how insurance markets work,” in a statement. “The Comptroller sees improprieties despite state HIFs having undergone regular reviews and audits by both the Departments of Banking & Insurance and Community Affairs without issue for three decades.”

The comptroller’s investigation report focuses on three HIFs, which provide benefits to over 100,000 employees of New Jersey municipal governments and school boards: the Southern New Jersey Regional Employee Benefits Fund, the Schools Health Insurance Fund, and the Municipal Reinsurance Health Insurance Fund. The office reviewed contracts from the three HIFs from 2024 and 2025.

“What OSC found in reviewing these contracts was deeply concerning: violations of public contracting laws; improper efforts to steer contracts to preferred vendors; longstanding, undisclosed conflicts of interest; and the use of a fake public entity to attract business,” the report alleges.

Walsh’s report alleges that Conner Strong & Buckelew and PERMA presented as independent companies when they are “effectively the same business operating under two names,” as they share employees and leadership.

“In many cases, CSB and PERMA help write the rules for how a contract will be awarded—and then compete for and win that same contract. These are classic examples of conflicts of interest, in which a company both influences the decision-making process and stands to benefit from it by steering the contract to itself,” the report says.

“There is no clearer conflict of interest than when a company writes the [request for proposal], reviews the bids, and then steers the contract to itself,” Walsh said in a statement. “What makes this worse is that the vendor concealed from the State and its public entity clients that it was operating on all sides of contracting processes that are supposed to protect taxpayer funds.”

Conner Strong & Buckelew and PERMA put out a joint press release calling the investigation a “year-long, baseless assault” on the companies, their employees, and the HIFs.

“The OSC’s report falsely claims the Funds operate with little oversight, insulting the work of volunteer Fund Commissioners and exposing the OSC’s bias. What began as a routine review of RFPs for [third-party administrator] services secretly morphed into a full-scale fishing expedition, complete with fabricated interpretations of state law. Counsel for the Funds has repeatedly shown that OSC’s claims are false, yet they have been ignored,” the statement reads.

The chairpersons of six New Jersey HIFs, including those named in the report, also released a statement condemning the investigation. The chairmen call Walsh’s allegations in the report “false and unfounded,” further saying they “reflect a fundamental misunderstanding of how joint insurance funds operate and why they have been successful for New Jersey taxpayers.”

“At a time when more public entities are relying on health insurance funds to provide coverage, it’s critically important that the State ensure insurance funds and vendors who receive taxpayer money act ethically, avoid conflicts of interest, and comply fully with the law,” Walsh said.

The comptroller investigation is not the first round of allegations against the Democratic power broker.

Norcross is currently on a leave of absence from his role as Executive Chairman at Conner Strong & Buckelew, which he took after New Jersey Attorney General Matt Platkin indicted him and five codefendants on corruption and racketeering charges.

Platkin’s 13-count indictment alleged Norcross and the codefendants sought to exert influence over public officials to illegally obtain property rights on the Camden waterfront and collect millions in tax credits. The defendants denied the allegations.

Judge Peter Warshaw dismissed the charges against Norcross and the codefendants in February.

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Platkin appealed the case following Warshaw’s dismissal decision, saying in a statement that he “won’t back down.”

Regarding Walsh’s investigation, Deborah Gramiccioni, counsel for Conner Strong & Buckelew and PERMA, submitted a request for Murphy to appoint a special counsel to investigate the comptroller’s office under Walsh for integrity.