Hank Lyon shouldn't talk about debt and taxes

We like Hank Lyon and wish him well.  Hank is an ideological conservative.  But it is his back story -- how he achieved public office, how he has maintained office, and how he seeks to advance himself up the ladder of public office -- that makes us uneasy.

It's a story of debt... and taxes.

Everyone remembers how Hank Lyon won a seat on the Morris County Freeholder Board.  A late infusion of cash from a corporation controlled by his father -- an infusion allowed because of an election law loophole that says if a candidate still lives at home with his parents, their money is treated as if it was the candidate's own money.

D. Use of Personal FundsUse of a candidate’s personal funds on behalf of his or her campaign must be deposited into the campaign depository and must be reported as either contributions or loans to the campaign in the same manner as all other contributions or loans. If the candidate intends to be reimbursed fully or partially for personal funds used on behalf of his or her campaign, then the funds must be reported both as a loan and as an outstanding obligation to the campaign if still outstanding at the end of the reporting period. Once a candidate’s personal funds are reported as contributions, the funds cannot be later characterized as loans and be repaid to the candidate. There is no limit to the amount of personal funds a candidate may contribute or lend to his or her own campaign (except for publicly funded gubernatorial candidates). See Gubernatorial Public Financing Program Manual for more information.  Also, a corporation, of which one hundred percent of the stock is owned by the candidate, or by the candidate’s spouse, child, parent, or sibling residing in the candidate’s household, may make contributions without limit to a candidate committee established by that candidate, or to a joint candidates committee established by that candidate.

That infusion of cash is improperly reported.  A judge overturns a close election, followed by a lawsuit, and another judge who reinstates the election results. 

Lyon's father was his Freeholder campaign's treasurer and its principal financier.  The lawyer who won the case for him was an alumnus of the Brett Schundler for Governor campaign and a movement conservative.  They tried to screw him:

Lawyer seeks $162,000 from Morris County Freeholder Hank Lyon

Morris County Freeholder William “Hank” Lyon has been accused of owing his former lawyer $162,000 in unpaid legal bills while Lyon also is battling with the state over alleged campaign violations.

“What a worm,”  said attorney Sean Connelly about his former client, Lyon. “We never expected to be in this position. We won precisely how we said we would win.”

Lyon, a Montville resident, did not return several calls for comment and an email to his freeholder address.

Connelly and the law firm of Barry, McTiernan and Wedinger of Edison represented Lyon during a nine-month court battle that ended up with Lyon winning the freeholder seat.

Lyon had won the 2011 Republican primary by four votes over Freeholder Margaret Nordstrom of Washington Township.  Nordstrom sued and won, gaining her seat back.

Lyon appealed the ruling and a state appeals court ruled in his favor in February 2012 and removed Nordstrom from the position. Lyon later won the freeholder post at a special election in November 2012.

Connelly said that after Lyon refused mediation and other offers to settle, the firm finally filed the suiton June 13 in Superior Court in Middlesex County against Lyon and his father, Robert A. Lyon, both of Montville, and their organization, “Lyon for Conservative Freeholder.” Connelly said Lyon has asked the court to dismiss the lawsuit.

Connelly said that before the court action, he had told Lyon that the lawsuit would be very costly.

“They said they were going to fund this to the end,” Connelly said.

The legal effort included extensive court representations and $18,000 for transcripts.

“We filed motions upon motions upon motions,” Connelly said. “It tied up my practice for six months.”

Connelly said his firm has offered several discounts on the outstanding legal bills.  “They kept ignoring us,” Connelly said. “We offered them great terms to pay over time.”

Connelly also said he filed the lawsuit in Middlesex County in an effort to limit publicity in Morris County.

“I don’t want to embarrass him,” he said. “I want to get paid.”

Connelly said the freeholder avoided being served with the lawsuit summons, forcing him to hire a professional to serve him at Lyon’s freeholder office.

Connelly said he also named Lyon’s father, Robert, in the lawsuit because the elder Lyon initially had agreed to pay the legal bills.

Connelly said he believes Lyon and his family have significant assets, including real estate holdings and restaurants.

Lyon’s income includes $24,375 a year as a freeholder. He also works with his father in the family’s business, which owns four restaurants, including Qdoba Mexican Grill restaurants and Maggie Moo’s ice cream parlors.

Election Violations

The N.J. Election Law Enforcement Commission also has accused Lyon of four violations of campaign finance laws during the 2011 Republican primary. Each violation could result in a maximum $6,800 fine.

The same alleged violations were cited by Superior Court Assignment Judge Thomas Weisenbeck when he ruled against Lyon and in favor of Nordstrom.

The commission names Lyon and his father who was the campaign treasurer.

One alleged violation involves a $16,000 loan made to the campaign a week before the primary but not reported until July 8. The state says that because the contribution was more than $1,200, it should have been reported within 48 hours.

Another alleged violation occurred when Lyon and his father certified the information on the loan and campaign report was correct but that they changed it in a subsequent report. Initially, Lyons reported that he had made the loan but it was later changed to identify Robert Lyon as the contributor, the state said.

Additionally, the state claims the information about the contribution was submitted after the June 27 deadline.

Further, the complaint says that $16,795 in expenditures were listed on July 8 but were due on June 27.

(Editor Phil Garber, December 11, 2013, newjerseyhills.com)

The Lyon family operates a group of interconnected corporate entities out of the same office and same post office box they share with Hank Lyon's political campaign -- Post Office Box 193, 20 Indian Hill Road, Towaco, New Jersey.

We know this because a number of these corporate entities have filed for bankruptcy or have liens or judgments against them or owe taxes.

While serving as an elected Freeholder, at least three corporate entities operating from the same office and post office box as Hank Lyon's political campaign have filed for bankruptcy.  These are 275 Prospect Street Associates, LLC (Case #15-16683); High Prospects, LLC (Case #15-16684); and Zero Barnegat, LLC (Case #16-25213).  The creditors in the first bankruptcy cases included the following:

On the Zero Barnegat bankruptcy, the creditors included:


This is all very troubling for the career of such a young conservative.  And especially because his campaign has only grown more indebted to a corporate entity within this interconnected group.  Hank Lyon's corporate indebtedness jumped between October 15, 2013, and October 15, 2016:

Note the address of Imperial Management Company.  It is 275 Prospect Street in East Orange.  This is the property managed by another Lyon corporate entity, 275 Prospect Street Associates, the company that had to file for bankruptcy and owed debt to taxpayers and residents.  The principalsof this corporate entity are Hank Lyon's parents:

In addition to bankruptcy, 275 Prospect Street Associates, LLC, has only recently emerged from a state suspension:

There are two Lyon family controlled corporations that go by the name "Imperial Management" -- one is a corporation, the other is an LLC.  The corporation -- Imperial Management, Inc. --  is listed as the entity owed the debt by Hank Lyon's campaign.  Unfortunately for Lyon, the family corporation that his campaign is in debt to is currently under suspension by the state.

As for the other Imperial Management Company owned by the Lyon family, it has recently emerged from a suspension by the state:

This is an unholy mess and until Freeholder Lyon can sort it out and extricate his campaign from it, he has no business running for higher office.  Trying to move up the political ladder, with a campaign so deeply in debt to dodgy corporations who are in debt as well, is just crazy.   It is an open invitation to a well-financed Democrat, backed up by a free-spending gubernatorial candidate and super-PACs loaded with cash. 

There is also the matter of ideology to be cleared-up.  How can one claim to be a "conservative" when he is existentially wrapped around such a convoluted mess of debt, bankruptcy, and fiscal irresponsibility?  If you cannot keep from being suspended by the state or fined by NJELEC or having your rents garnished, then how can you hope to address the budget of the State of New Jersey?