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Feds investigate Christie's use of Sandy relief funds

By Chris Frates, CNN Investigative Correspondent
January 14, 2014 -- Updated 0040 GMT (0840 HKT)
STORY HIGHLIGHTS
  • Christie and his family starred in ads for New Jersey tourism after Sandy
  • New Jersey Democratic Rep. Pallone said he was concerned about bidding process
  • Christie fired two aides last week over the George Washington Bridge scandal
  • NEW: Christie's office says it worked with the Obama administration on marketing plan

Washington (CNN) -- Just days after dismissing two top advisers for their roles in the George Washington Bridge scandal, New Jersey Gov. Chris Christie faced questions over the use of Superstorm Sandy relief funds.

CNN has learned that federal officials are investigating whether Christie improperly used some of that money to produce tourism ads that starred him and his family.

The news couldn't come at a worse time for the embattled Republican, who is facing two probes in New Jersey of whether his staff orchestrated traffic gridlock near the country's busiest bridge to punish a Democratic mayor who refused to endorse his re-election.

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Rep.: Relief funds had much better use
Feds probe Chrisite's use of Sandy funds
Aides and appointees of New Jersey Gov. Chris Christie have been accused of closing lanes on the George Washington Bridge to punish Fort Lee Mayor Mark Sokolich, pictured, for not endorsing Christie for re-election. If true, this wouldn't be the first time an American politician was targeted with dirty tricks -- the practice goes back as far as running for office. Click through to see other examples of less-than-ethical campaign tactics. Aides and appointees of New Jersey Gov. Chris Christie have been accused of closing lanes on the George Washington Bridge to punish Fort Lee Mayor Mark Sokolich, pictured, for not endorsing Christie for re-election. If true, this wouldn't be the first time an American politician was targeted with dirty tricks -- the practice goes back as far as running for office. Click through to see other examples of less-than-ethical campaign tactics.
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Bridge scandal investigator speaks out

If the Sandy inquiry by a watchdog finds any wrongdoing, it could prove even more damaging to Christie's national ambitions. He's considered a possible presidential candidate in 2016.

His performance during and after the October 2012 storm just before the presidential election has been widely praised and is a fundamental illustration of his straight-shooting political brand.

In the new investigation, federal auditors will examine New Jersey's use of $25 million in Sandy relief funds for a marketing campaign to promote tourism at the Jersey Shore, New Jersey Democratic Rep. Frank Pallone told CNN

In an August letter, Pallone asked the Department of Housing and Urban Development inspector general to look into how Christie chose to spend the marketing money approved by the department.

The inspector general's office confirmed the investigation.

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Pallone wrote that he was concerned about the bidding process for the firm awarded the marketing plan; the winning firm is charging the state about $2 million more than the next lowest bidder.

The winning bid of $4.7 million featured Christie and his family in the advertisements while the losing $2.5 million proposal did not feature the Christies, Pallone said.

On Sunday, Pallone told CNN that the inspector general conducted a preliminary review and concluded there was enough evidence to launch a full-scale investigation into the state's use of federal funds.

The audit will take several months and the findings will be issued in an official report, he said.

Pallone, a 27-year veteran of the House and vocal Christie critic, said this is not about politics.

"This was money that could have directly been used for Sandy recovery. And, as you know, many of my constituents still haven't gotten the money that is owed them to rebuild their homes or raise their homes or to help," he said.

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Democrats slammed Christie over the summer for starring in taxpayer-funded ads as he was running for re-election in November, arguing it gave him an unfair advantage.

Christie aides said at the time that the winning bid provided more value.

In a statement on Monday, Christie's office said the "Stronger than the Storm" campaign was part of an "action plan" approved by the Obama administration and developed with the goal of showing that the New Jersey shore was open for business just several months after the storm.

"Federal agency reviews are routine and standard operating procedure with all federally allocated resources to ensure that funds are distributed fairly. We're confident that any review will show that the ads were a key part in helping New Jersey get back on its feet after being struck by the worst storm in state history," according to the statement issued in response to questions from CNN.

Last week, Christie dismissed two top aides for their apparent involvement in the closure of access lanes to the George Washington Bridge, which caused traffic nightmares for days in and around Fort Lee.

New Jersey legislators are investigating whether the aides -- a senior Christie staffer and a high-level appointee at the Port Authority of New York and New Jersey -- ordered the lane closures as political retribution. The U.S. Attorney in New Jersey also is looking into the matter.

Christie has said he didn't know about the alleged scheme and was "embarrassed and humiliated" by it.

Democrats in New Jersey and nationally have jumped on the scandal, saying it gives the nation a chance to see what they've said for years -- that Christie is a bully who governs by fear. His supporters say his swagger and frank nature convey confidence and have helped make him a successful governor.

But as bad as the bridge scandal is for Christie, any finding that he improperly spent Sandy aid would tarnish the signature achievement that has helped elevate his legacy and made him a serious potential challenger for the White House.

Sandy, a historic storm, pummeled coastal areas along the mid-Atlantic, knocking out power to millions, causing massive flooding and killing more than 100 people in the United States.

Parts of the New Jersey shore were devastated, but the state and local communities in many hard-hit areas rebounded surprisingly quickly and reopened their beaches last summer.

Christie and President Barack Obama toured one community in May to demonstrate the effectiveness of recovery efforts helped by billions in federal money that went to New Jersey and other states affected by the storm.

CNN's Scott Bronstein contributed to this report.

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