Investigation of the Waterfront Commission of New York Harbor

applicant’s prior criminal history. Question 15(h) of the application asks if the applicanthas ever been “arrested for, indicted for, or convicted of…Unlawfully possessing ordistributing narcotic or hallucinogenic drugs.” McDermott responded, “No” in responseto this question. In response to question 16(a) asking the applicant to list all arrests andinclude specific information such as the date, place, charge, court, and final disposition,McDermott indicated that he had been convicted of a municipal ordinance, but did notlist a separate arrest charge. In accordance with policy at the time, the WaterfrontCommission obtained a criminal history based on McDermott’s name, which, accordingto the Waterfront Commission, revealed only that McDermott had been convicted of alocal ordinance and did not list the original arrest charges.The Inspector General reviewed McDermott’s application and found a notation onthe margin stating, “Orig charg DWI - sub was parked D/G to Mun Ord.” The notationindicates that McDermott was arrested for driving while intoxicated, but was convicted ofa less serious municipal ordinance. The initials “JSD,” for Jon S. Deutsch, were writtenbelow the statement. McDermott’s file also contained a notation by Roy B. Kropp, theAssistant Director of Licensing at the time, stating, “12/19/02 Subject’s criminal recordreviewed by Div of Lic Jon Deutsch – OK to Issue Temporary Longshore Regis.”Shortly thereafter, McDermott was issued a temporary registration.Waterfront Commission records show that McDermott later submittedfingerprints for a full criminal background check. A full criminal history report wasreceived by the Commission on June 12, 2003, which revealed that McDermott had beenarrested on June 22, 1998, for possession of drugs and drug paraphernalia. 15 Althoughthe criminal history report exposed McDermott’s false statement on his application thathe had never been the subject of a drug-related arrest, this revelation did not promptfurther review of McDermott’s application at this time, nor was McDermott’s temporaryregistration suspended or revoked.After Deutsch assumed the role of General Counsel, McDermott’s file wasreviewed by then-Assistant Counsel Cecilia Bastos in 2004. The Commission waspreparing to revoke McDermott’s registration because he had not made himself availableto work the required number of hours needed to maintain his registration. Bastosinterviewed McDermott after discovering the drug-related arrest.According to an internal Waterfront Commission report dated February 14, 2005,McDermott informed Bastos on September 2, 2004, that he became aware of an availableposition from his brother and Jon Deutsch. McDermott stated that he grew up withDeutsch and that his father had a friendly and business relationship with Deutsch’s father.During the interview, McDermott twice informed Bastos that he had told Deutsch that hisarrest involved drugs. However, at the conclusion of the interview, McDermott statedthat he was unsure whether he had informed Deutsch of the drug charges. The internalreport also states that Deutsch acknowledged to then-Executive Director Thomas De15 “Possession of CDS [controlled dangerous substance] or analog in violation of N.J.S.A. 2C:35-10(a)(1)”and “Possession of Drug Paraphernalia in violation of N.J.S.A 2C:36-2.”15