Former Chubb COO Degnan Nominated as Chairman of Port Authority of N.Y.-N.J.

By and | April 30, 2014

John Degnan, a former chief operating officer of Chubb Corp., was nominated for chairman of the Port Authority of New York and New Jersey by New Jersey Governor Chris Christie, filling a vacancy brought on by the scandal over last year’s lane closings at the George Washington Bridge.

“John’s leadership ability and experience is universally respected,” Christie, a 51-year-old Republican, told reporters in Trenton yesterday.

Degnan, 69, from Chester Township, New Jersey, will replace David Samson, who resigned amid investigations by state lawmakers and the U.S. Attorney’s Office into politically motivated traffic jams at the bridge, run by the Port Authority.

Two studies in the past month have recommended changes at the agency, which operates some of the world’s busiest bridges, tunnels and airports, including John F. Kennedy, LaGuardia and Newark Liberty.

Christie said he and New York Governor Andrew M. Cuomo, a Democrat with whom he shares control of the agency, remain committed to a reorganization. Tension over spending and leadership goes back decades, he said. New York’s governor appoints the authority’s executive director and New Jersey’s names its chairman.

Degnan spent two decades at Chubb, the Warren, New Jersey-based insurer of businesses and luxury homes. He stepped down as vice chairman in 2010, having helped steer Chubb through the financial crisis, and received more than $20 million in compensation for his last three years at the company, according to a filing. He remains an adviser to Chief Executive Officer John Finnegan, Chubb spokesman Mark Greenberg said.

Mocked Rescue

Chubb remained profitable as rival American International Group Inc. posted losses that required the company to take a 2008 government rescue that swelled to $182.3 billion.

Degnan mocked the notion of taxpayer bailouts and said the government’s involvement distorted the marketplace.

“If consumers are unlikely to buy a car built by the government, why on earth would they want to buy an insurance policy underwritten and adjusted by folks who act more like bureaucrats than business people?” he said in a 2009 conference call. “We will compete vigorously against companies which are unsustainable but for government bailouts.”

A Harvard Law School graduate, Degnan became special counsel to Democratic Governor Brendan Byrne in 1977 and was confirmed as attorney general in 1978. He ran unsuccessfully in the Democratic primary for governor in 1981.

Degnan’s nomination is subject to approval by the state Senate.

‘Unquestioned Credentials’

“I want someone with unquestioned credentials, both politically from a partisan perspective and from, most importantly, the issue of integrity,” Christie said. “We need leadership at the Port Authority.”

Two reports have called for changes in the Port Authority. One, by the Rudin Center for Transportation Policy and Management at New York University, concluded that the 30-year-old business model is no longer sustainable. Another, by the New York City-based Citizens Budget Commission, a business-funded watchdog group, recommended transferring operation of the agency’s commuter rail line to New Jersey Transit.

“Much has been written about what is needed at the Port Authority and much of it sounds reasonable, but that is from the outside looking in, and all I can honestly say right now is that I am open to the best ideas we have,” Degnan told reporters in Trenton. “I have the governor’s mandate to be independent and open-minded about the task, for which I am very grateful.”

Changes Recommended

Samson resigned from the Port Authority last month after a report commissioned by Christie to probe the lane closings recommended changes at the agency.

Samson, himself a former New Jersey attorney general, was linked by e-mails to the September traffic jams at the foot of the bridge in Fort Lee, New Jersey, where the mayor didn’t endorse the governor’s re-election.

Christie said Samson was “74 years old and he’s tired” when he announced the chairman’s retirement on March 28. He said Samson had wanted to step down for a year.

Samson has been the subject of reports in the New York Times, the Star-Ledger of Newark and other newspapers about Port Authority votes on projects with ties to his law firm, Wolff & Samson.

Degnan’s $20 million-plus compensation from Chubb included about $7.5 million in 2010 when he got a salary of $874,500, more than $3 million in stock awards and about $1.8 million in incentive compensation. Chubb said in 2010 as he neared retirement that he would continue to help the company as a consultant for two years and get $500,000 annually.

With assistance from Craig Giammona in New York.

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