This story has been updated.
It hasn’t been a good week for New Jersey Gov. Chris Christie.
On the heels of damaging revelations about politically motivated lane closures on the George Washington Bridge — a scandal dubbed bridgegate — Christie faced another controversy today.
Christie was hailed as a hero for the way he dealt with Superstorm Sandy, but the ads that ran across the state and the country last summer featuring him and his family welcoming visitors back to the Jersey Shore are now part of a federal audit, and the advertising firm that didn’t get the bid is questioning why — especially since their offer was cheaper.
The feds are looking into whether money intended for Sandy relief was inappropriately used for the TV ads, sources said.
The winning bid, by advertising firm MWW Group, for the controversial “Stronger than the Storm” ads that featured Christie and his family, was more than $2 million more than the runner up, Sigma Group, the largest advertising firm in the state of New Jersey.
The ads were part of the $25 million federal recovery package.
Shannon Morris, the president of Sigma Group, said she still has no idea why their bid was not selected and it was “apples to apples” to the bid that was selected from MWW, but did confirm their pitch did not feature Christie.
“None of our creative included the governor at all,” Morris said. ”Our creative focused on featuring the people and businesses at the New Jersey Shore.”
Morris said she was called in as a finalist to present the campaign and the firm’s credentials. The Christie administration then came back to her and asked her to give Sigma Group’s “final and best offer,” according to Morris. She said she “reduced our prices quite drastically,” but did not get the bid. She thought it was because MWW Group under-bid them, which turned out not to be true.
“It was very eye opening because we met the same credentials,” Morris said.
“We are apples to apples and highly sought after, and it was just a big question mark why did they get the business,” Morris said. “As a tax paying citizen, I think the costs would mean value and they certainly did not go with the lower cost.”
The news of the bid discrepancy was first reported in August by the Asbury Park Press. Rep. Frank Pallone, D-N.J., first requested the federal probe in August, but was notified last week that the investigation was an official audit by the Department of Housing and Urban Development’s inspector general’s office. Pallone made it public today. The IG’s office also confirmed to ABC News today that is was performing an audit.
David Montoya, the Inspector General, released a statement later in the week clarifying it was an audit that was initiated last September and not an investigation and stressing it is “something that this office does routinely.”
“This is an audit and not an investigation of the procurement process,” Montoya said in the release. “We expect to issue our audit report expeditiously.”
A source within the IG’s office explains an investigation is done by the law enforcement side of their office while an audit is conducted by their audit staff.
The focus of the probe is that the ads were funded with “money from the Sandy package,” Pallone said. “There was federal dollars that were devoted to Sandy relief.”
The winning bid was $4.7 million vs. $2.5 million for the low bid, Pallone said, noting that the focus of the investigation is “whether or not it was proper for the Christie administration to choose the higher bid just because they essentially put him and his family into the ads during an election campaign.”
The Obama administration did approve the campaign and they are similar to ads that ran in New York after Sandy as well, though those did not feature Gov. Andrew Cuomo, as well as ads in the Gulf region after Hurricane Katrina.
Although the ads came under scrutiny from both Democrats and Republicans, including Christie’s possible 2016 rival Sen. Rand Paul, R-Ky., HUD Secretary Shaun Donovan noted at a November hearing on Capitol Hill that ad campaigns like these do help storm-ravaged regions.
“No one is suggesting that they shouldn’t have run an ad campaign and it is true that that HUD did give approval to the campaign,” Pallone said. “But to what extent HUD was aware of the difference between the lower and high bidder and whether or not they were aware that the governor was going to be in the campaign commercials — I mean, these are the things that the inspector general has to look at.”
HUD and the inspector general’s office are two distinct and separate entities.
The ads were controversial at the time with Democrats, who called them nothing more than campaign ads for both Christie’s 2013 re-election campaign, as well as a possible 2016 presidential campaign, on the taxpayer’s dime.
The winning firm, MWW Group, did not respond to request for comment today, but in an interview in May just as the ads first began to air, Shannon Eis with MWW, recounted for ABC News why they decided to go with Christie and his family as the face of the ads.
She said there were “no shortage of celebrities” that offered their services, but even before they pitched the idea to the governor’s office they did consumer research, which she said made it clear Christie would be the most effective choice.
“We had to think about who is the most effective person to … literally wave the flag that we are back,” Eis said, noting that research showed that even months later Christie’s call to “get the hell off the beach” is what people remembered.
“The governor’s voice came through loud and clear,” Eis said, noting they were fighting a “massive consumer perception” at the time that the beach is still closed due to the storm.
Christie spokesman Colin Reed said today that “MWW was the most qualified bidder of the agencies vying for the contract.”
“The Stronger Than The Storm campaign was just one part of the first action plan approved by the Obama administration and developed with the goal of effectively communicating that the Jersey Shore was open for business during the first summer after Sandy,” Reed said in a statement. “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.”
The New York Times reported in 2012 that the chief executive and president of MWW Group, Michael Kempner, was one of President Obama’s top fundraisers.
News of the investigation comes as the governor is facing the biggest scandal of his political career.
The bridgegate scandal erupted last week after a release of emails between close aides plotting to cause a four-day traffic snarl at the George Washington Bridge as political payback against the Democratic mayor of Fort Lee who declined not to endorse Christie.
Last week, in an almost two hour press conference, Christie apologized and denied having any knowledge of the political motivations of his staffers. He has kept a low profile since, but that will end Tuesday when he gives his annual State of the State address in the afternoon.
In a press conference today the Democratic state legislator leading the bridgegate probe, Assemblyman John Wisniewski, said the subpoenas against the two aides who sent damning emails, and possibly others, won’t be issued until Thursday, when a new legislative session begins.
Wisniewski said the first two “likely” people to be issued subpoenas, for both documents and to testify, are Bridget Ann Kelly and Bill Stepien.
He also announced that a special super-committee will be formed to continue to investigate the unfolding scandal and they are going to turn to outside counsel for help.
“Our concern is there was a massive abuse of power,” Wisniewski said, adding that firing four people isn’t enough. “We need to change the laws to make sure it doesn’t happen again. … The Port Authority and other agencies need a drastic overhaul.”
Wisniewski said it is “premature” to answer whether they will subpoena Christie or ask him to testify.
“It’s early to say who should be held accountable,” Wisniewski said. “We need to understand why and then we can talk about who can be held accountable.”
ABC News’ Elizabeth Kreutz, Josh Margolin, Jim Avila and Serena Marshall contributed to this report.