U.S. Sen. Andy Kim has denounced Goldman Sachs’ claim that it had a "fiduciary" duty to sell the Trump administration a Roxbury, New Jersey warehouse that the Department of Homeland Security plans to convert into one of the largest immigration detention centers in the country.
“That's a phrase that often companies hide behind to try to defer their responsibilities for the actions that they're taking. I certainly don't buy that,” Kim said in an interview with Gothamist.
Goldman Sachs and its partner, Dalfen Industrial, sold the facility to the federal government last month for $129.3 million, more than double its official value listed on tax records. ICE plans to hold as many as 1,500 people at the site as part of President Donald Trump’s mass deportation effort. In a statement, the bank said the property had sat vacant for two years and that it had an obligation to its investors to sell it.
The sale was opposed by residents and politicians across the political sphere, including local Republicans that control Roxbury Township. Kim has introduced a bill in Congress seeking to prevent the deal from going forward, though he admitted no recourse against it is “guaranteed.”
Goldman Sachs spokesperson Ylan Mui declined to comment on the criticism levied against the bank by Kim and other New Jersey politicians.
Senator Andy Kim
Roxbury Township’s all-Republican council had passed a resolution in January against ICE’s plans for the site, which is the size of eight football fields, saying it would be an unmanageable burden on local infrastructure and water resources. But more recently, those local lawmakers have suggested that their ability to fight it may be limited.
In a statement last week, Deputy Mayor Mark Crowley said he and Mayor Shawn Potillo and Councilmember Jim Rilee participated in a call with the Department of Homeland Security where they determined local legislation would not effectively block the federal government from moving forward.
“This development places the township in a challenging position under the Federal Supremacy Clause of the United States Constitution. As a result, local actions such as modifying ordinances or adopting a moratorium would not prevent the federal government from proceeding,” Crowley said.
Dalfen has sought to deflect its own responsibility in the controversy. Days after Gothamist broke the news that the Trump administration purchased the property, Nathan Rhea with Red Banyan PR, a communications firm hired by Dalfen Industrial, said the company held a minority stake in the warehouse facility and that Goldman Sachs was the majority partner in the transaction.
Dalfen spokesperson Kara Schmiemann referred a request for comment on Goldman Sach’s insistence that it had a fiduciary duty to sell the property to DHS back to the bank.
“The Dalfen team is not able to provide further comment at this time,” she said in an email.
Schmiemann did not respond to a question about how much money the company will receive as part of the deal.
Protestors in Roxbury Township, New Jersey.
New Jersey state Assemblymember Katie Brennan, of Jersey City, echoed Kim’s frustration with Goldman Sachs' position. She said the bank had “every opportunity” to walk away from the deal.
“Goldman sold us out and now they’re looking for legal language to hide behind. There’s no fiduciary obligation on Earth that requires you to sell your property to any buyer who walks through the door,” she said.
Attorney David Broderick, a lawyer representing activist group No Ice Jails in Northern NJ, said the project will leave a “black mark” on the bank’s reputation.
“I happen to have spent 40 years practicing corporate law. I'm very familiar with the idea of fiduciary duties to investors. There are limits. What they seem to be saying is, ‘No matter the social impact, no matter the environmental impact, no matter the impact on our reputation throughout the nation and internationally — no matter what, we have to get the highest and best price for our investors.’ And that is not the law,” he said in an interview.
Goldman Sachs is no stranger to controversy. Following the 2008 financial crisis, federal investigations found that the bank had structured and sold mortgage-linked securities while also taking positions in the financial markets that allowed it to profit from the collapse of the U.S. housing market.
More recently, the company’s top lawyer, Kathy Ruemmler, a former White House counsel to President Barack Obama, announced her resignation after newly released emails between her and the convicted sex offender Jeffrey Epstein showed she had described him as an "older brother" and downplayed his sex crimes.
A memo released by DHS in February states that the Trump administration plans to have a host of new detention centers up and running by Nov. 30 of this year.
The Rev. Sara Lilja, executive director for the NJ Coalition of Religious Leaders, said Goldman Sachs is on the “wrong side of history” in Roxbury.
“[Goldman’s] investments are not investments in the wellbeing of our economy and not investments in the wellbeing of our people,” she said. “There needs to be a light shined on it [to] make that clear that those who are part of the problem, need to understand there's consequences to that. And that if you want to continue to be an influencer in our state, you need to understand the moral consequences of your decisions.”
New Jersey Gov. Mikie Sherrill sent a letter last month to now-fired DHS Secretary Kristi Noem threatening to use “every tool at the state’s disposal” to block the Roxbury detention center, though Sherrill’s warning lacked specifics on what actions her administration would take.
Last month Gothamist revealed that at least one vendor with preapproval from the federal government to staff medical personnel at new ICE detention facilities said it would not work with the agency at any of its facilities across the country.
Kim expressed skepticism that the Trump administration would be deterred by any pushback from him and other elected officials.
”I am absolutely — and the people of Roxbury are absolutely concerned that they're going to continue to rush and cut corners,” he said.
