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www.northjersey.com

This special reprint section of The Record explains how the

dogged efforts of investigative reporters exposed pay-to-play
political corruption in New Jersey. Their efforts and the federal
investigations that followed those efforts brought down
a governor, brought prison sentences for two of the governors
key fund-raisers and led to the first fundamental political
reforms in the history of New Jersey, a state plagued
by systemic political corruption for more than a century.
Published Sunday, Aug. 22, 2004

Sex, money, power,

betrayal, and ruin
How Charles Kushner and Golan Cipel
helped Jim McGreevey rise, then fall

By ELISE YOUNG and JEFF PILLETS

STAFF WRITERS

Thou art dust the priest recited,

smudging Jim McGreeveys forehead
with the holy sign on Ash Wednesday,
2002.
The Catholic rite was tucked into the
governors day. His schedule was
crammed with meetings, limousine rides
and a special presentation for Charles
Kushner, a very generous campaign
donor. Charlie, as he was known to the
governor, had controlling interests in 216

real-estate companies. His reward would

be a seat on the board of the Port
Authority of New York and New Jersey,
just as it was starting to redevelop lower
Manhattan.
McGreevey had others to satisfy that
day, journalists who were raising a fuss
about his budget cuts. A reporter asked
whether his administration planned to go
ahead and spend $6 million on digitized
drivers licenses, considered essential to
security after the Sept. 11 attacks.
We actually brought on a security
adviser from the Israeli Defense forces,

probably the best in the world not

probably, they do do the best in the
world, he answered. So we are examining bid specifications.
McGreevey went to bed that night
unaware that his 28th day in office was
the high point of his administration. It
was the day he appointed two men who
had come looking for power and prestige. He used them for what they had to
offer in return.
Businessman, confidant, politician.
Thats how these three wanted to be
See RISE Page 3

2 THE RECORD

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ESTABLISHED JUNE 5, 1895

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Vivian Waixel
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Arthur Lenehan
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JANUARY 2005

The Records fight to reform

corrupt campaign finance
he fall of New Jersey
Gov. Jim McGreevey
was a national spectacle in the summer
of 2004. It played
out on television as
a sex scandal. But
McGreeveys problems were deeper.
His top fund-raiser, billionaire
Charles Kushner, had been exposed in
The Record as a manipulator of campaign finance regulations. Another key
fund-raiser, David DAmiano, had implicated McGreevey in connection
with a corrupt land deal linked to campaign finance. McGreevey was the architect and chief beneficiary of New

Jerseys pay-to-play campaign finance cartel. When he quit, his entire

organization was unraveling, under
pressure from federal investigations
that followed newspaper stories.
The Record has conducted a massive and unrelenting investigation of
pay-to-play. Over the course of 2
years and five major investigative projects, the staff filed thousands of requests for public records on campaign
finance and government contracts. Information on those requests was fed
into a lattice of databases and correlated with hundreds of interviews. One
analysis after another illuminated different aspects of the systemic corruption.

This work produced profound reform. Jim McGreeveys last days in office were days of contrition and regret.
He denounced his own fund-raising
methods. His last important official act
was to ban pay-to-play by executive
order, an order with the force of law.
His successor, Senate President
Richard J. Codey, has asked the New
Jersey Legislature to enact a statute
that would make the ban permanent.
The stories on these pages explain
how all of this unfolded. The first story
is a narrative published a week after
Governor McGreeveys resignation.
The rest run chronologically, retracing
events as they originally unfolded in
the pages of the newspaper.

Jim McGreeveys rise and fall

Sept. 16, 1997 Jim McGreevey, a state senator and the mayor of Woodbridge, who is running for governor, meets with Charles A. Kushner, a multimillionaire real estate magnate, Jewish
philanthropist, and contributor to Democratic
and Republican causes. A day later, four people
all with the last name Kushner, and all who list
their employer as a Kushner company donate
a combined $8,200 to McGreeveys campaign.
McGreevey would go on to lose the race by 1
percentage point to incumbent Christie Whitman.
Dec. 5, 1997 Kushner makes the first in a series of political contributions that eventually will
attract the attention of the Federal Election Commission. During 13 days this year, he gives a total
of $554,000.
Feb. 9, 1998 McGreevey forms the Committee for Working Families, a federal political action committee. Through mid-2001, when the organization was shut down, Kushner and his
business partners supply $140,000, or more
than 35 percent of its revenues. Among the
PACs covered expenses are McGreeveys two
trips to Israel.
Feb. 18, 1999 The state Assembly passes a
bill to require potential candidates to report their
finances and put a limit on contributions they accept. The legislation is known around the State
House as the McGreevey bill because it would
affect his well-financed Committee for Working
Families.
Feb. 14, 2000 Dina Matos, a hospital publicrelations executive from Newark, accepts McGreeveys marriage proposal over dinner in a
Woodbridge restaurant.

ment. Fifteen days later, he is hired as a vice

president at MWW, a public relations company in
East Rutherford. He leaves after four weeks, and
for the next several months he takes a series of
similar jobs.
Nov. 24, 2002 Six lobbyists in Trenton tell The
Record that they had been approached by the
Democratic State Committee and offered meetings with the governor for contributions of
$25,000.

Dec. 7, 2001 The McGreeveys daughter, 4pound, 5-ounce Jacqueline Matos McGreevey, is
born at St. Peters University Hospital in New
Brunswick, a month premature. The same day,
McGreeveys incoming senior staff meets Cipel
for the first time.
Jan. 15, 2002 McGreevey takes office. Without any kind of announcement, he makes Cipel a
homeland security adviser a job that comes
with an $80,000 salary, an office at the State
House and two assistants.
Feb. 1, 2002 The new governor, a guest at the
Peter Shields Inn in Cape May with his wife,
breaks his leg during a nighttime walk on Poverty
Beach. In the coming weeks, a rumor circulates
in Trenton: McGreevey had been walking with
Cipel, not his wife.
Feb. 13, 2002 McGreevey names Kushner to
the board of the Port Authority of New York and
New Jersey. The position is potentially lucrative:
Kushner has interests in 216 real estate companies at a time when the Port Authority is to start
redeveloping the World Trade Center site.

Dec. 4, 2002 Republican lawmakers send the

U.S. attorney a letter asking for an investigation
into Democratic fund-raising practices.
Feb. 26, 2003 Kushner resigns from the Port
Authority board. In a statement he says his only
motivation to serve was merely to perform public service with nothing in return except the opportunity to make a positive impact on peoples
lives. He makes no mention of his serious legal
problems: In 2002 he had been sued by
his brother and a former Kushner Cos.
bookkeeper, who claimed the developer
diverted $3 million to finance his favorite
politicians. Moreover, Republican lawmakers suggest that Kushners controlling
interest in a Livingston bank precludes
him from donating to candidates for public office.

lian to indicate that state officials could deliver on their promise to preserve the farm.
July 14, 2004 Kushner is charged in an unseemly plot allegedly designed to interfere with
the federal investigation into his business practices. The U.S. Attorneys Office accuses him of
hiring two prostitutes to seduce his brother-inlaw and accountant, setting up a video camera to
record the encounters, and using the tapes to
blackmail the men. In an unrelated development,
Commerce Bancorp closes its municipal bond
underwriting business. Commerces earlier political contributions had come under scrutiny by The
Record.
Aug. 8, 2004 Under the influence, a sevenpart series by Staff Writers Herb Jackson and
Benjamin Lesser, explains how organized labor,
real estate and construction companies, and
scores of other special interests give generously
to campaigns and are richly rewarded with
contracts, tax breaks and favorable legislation.

May 21, 2003 A Record series, Banking on your money, examines how fastgrowing Commerce Bancorp wields
heavy influence over some of New Jerseys most powerful politicians.

June 7, 2003 Rajesh

Roger Chugh, a McGreevey appointee, reMarch 2000 McGreevey, in Israel on a trip
signs as the third-ranking offiFeb. 21, 2002 The Record
sponsored by the United Jewish Federation of
cial in the New Jersey Departreports that Cipel whom
MetroWest, is introduced to Golan Cipel.
ment of State. His departure
McGreevey called his eyes
comes four days after a
and ears on security issues
Record reporter confronted
July 28, 2000 McGreevey files papers with the
has little experience in counhim with court documents restate Election Law Enforcement Commission to
terterrorism. His specialty is
lated to his former career as a
launch his run for governor. Kushner releases a
CHUGH
public relations, and he is a
travel agent. The records
statement: Im thrilled by this announcement
published poet. The governor
chronicle
a
history
of writing bad checks and
and I will be tireless in my efforts to elect Jim Mcdeclines to make Cipel availleaving air carriers with $319,000 in losses.
Greevey. Less than two weeks later, eight peoable for interviews, and legislaple all with the last name Kushner, and all who
tors start to question his creCIPEL
list their employer as a Kushner company doAug. 17, 2003 McGreeveys man in Little Indentials.
nate a combined $16,800 to McGreeveys pridia, a report by Staff Writers Jeff Pillets and Clint
mary campaign.
Riley, chronicles how Chugh preyed on fellow
March 7, 2002 Cipel resigns as security advis- South Asian immigrants to raise more than $1
er after McGreevey acknowledges that his status million for McGreeveys campaigns.
September 2000 Kushner
as a foreign national made him ineligible for highpays $3.4 million for Highview
level intelligence clearance. The governor,
Planning, a Woodbridge insurDec. 28, 2003 A twononetheless, gives him another job and a
ance company partly owned
part series in The Record,
$30,000 raise. Cipels new title is special advisby Gary Taffet, a onetime chief
He plays, you pay, reer, his salary, $110,000.
of staff to then-Mayor Mcveals how a Teaneck law
Greevey. Taffet would go on to
firm earns more than $10
April 5, 2002 The McGreeveys move into
become a Kushner employee
million per year in no-bid
Drumthwacket, whose $590,000 renovation
and later, the governors chief
contracts with the state
overseen by the private, non-profit Drumthwackof staff. He would leave poli and how the firms
KUSHNER
et Foundation is complete. In all, 41 individutics in 2003 amid an investigaemployees give nearly
tion of his involvement with a billboard advertis- als, companies and firms contributed to the reno$500,000 per year to poing company from which he earned at least $2.4 vation of the 1835 mansion built by Charles
litical campaigns.
Smith Olden. At least four of those companies
million.
are controlled by Kushner.
Jan. 18, 2004 The
Oct. 1, 2000 McGreevey and Matos marry.
Record chronicles how
May 30, 2002 The Senate Judiciary Commita deceased lawyer was listed as a
tee unanimously approves Kushner for Port Aucontributor to political campaigns. The story
September 2001 Cipel moves to New Jersey thority board membership. Afterward, several
highlights serious problems with laws adminison a work visa sponsored by Kushner. Mcsenators concede they are unfamiliar with Kush- tered by the states Election Law Enforcement
Greevey, the Woodbridge mayor, instructs a
ner and his vision for the Port Authority.
Commission.
Township Hall staffer to find Cipel a car and a
place to live which turns out to be a town
June 16, 2002 The Record
house a block from McGreeveys home in
July 7, 2004 David DAmipublishes Paying for power, an
Woodbridge. Cipel accepts two jobs: The
ano, a former Democratic
examination of how Kushner
Democratic State Committee pays him
fund-raiser, is indicted on
by now McGreeveys choice for
$30,000 per year to serve as McGreeveys licharges of extortion, bribery
chairman of the Port Authority
aison to the Jewish community, and Kushner
and fraud. The court papers re had given millions of dollars
pays him $24,461 per year to write brochures
fer to an unnamed state official
to politicians before his nomiand news releases at the corporate offices in
McGreevey who had met
nation. Four days later, the
Florham Park.
with DAmiano to discuss the
state Senate approves Kushfuture of a 75-acre farm whose
ners nomination.
owners
are fighting condemnaDAMIANO
Nov. 6, 2001 McGreevey, whose campaign
tion.
The
indictment includes a
fund includes more than $1 million donated by
bizarre detail: During the meeting, McGreevey is
Aug. 14, 2002 Cipel reKushner, defeats Republican Bret Schundler to
alleged to have used a code word Machiavelsigns from state governbecome New Jerseys 51st governor.

Aug. 12, 2004 McGreevey gathers the media

outside his office, where he discloses he is a homosexual who had committed adultery. As a result, he says, the governors office is vulnerable
to rumors, false allegations and threats of disclosure, and he chooses to resign effective in
mid-November. Although he doesnt publicly
name his former lover, several sources identify
him as Cipel and say he had threatened to sue
the governor for harassment.
Aug. 15, 2004 The Record reports that Cipel
had wanted McGreevey to help open a medical
school in New Jersey for Touro College. Among
the schools trustees is Kushner.

Aug. 18, 2004 Kushner pleads guilty in the

plot to blackmail his brother-in-law and accountant. He also admits to lying to officials with the
Federal Election Commission and filing false tax
returns. The plea agreement stipulates he will be
imprisoned for up to two years.
Sept. 16, 2004 DAmiano admits he extorted
$40,000 in campaign contributions from a Middlesex County farmer seeking favorable treatment in a land dispute. He faces up to 30 months
in prison.
Sept. 23, 2004 Making reference to his own
human weakness and temptation, McGreevey signs an executive order to curtail the
pay-to-play system that rewards campaign contributors with government contracts.

JANUARY 2005

THE RECORD 3

Published Sunday, Aug. 22, 2004

Golan was the worst of the bunch, says one senior Democrat who worked in the campaign.
He set up his own little empire. He put his own people on the payroll. He tried to set up
political events that turned into disasters. His existence showed the worst side of Jim McGreevey
he made so many side deals with guys like this that we could not keep them all straight.

Rise
From Page 1
known. The truth is very different.
Separately, each man demonstrated a prodigious arrogance and a
brand of personal recklessness
that left their friends and associates bewildered and breathless.
Together, they were unstoppable,
their circle drawing tighter with
each passing year. Together they
were doomed.
They rose and fell together in a
political system that smiles on
greed, abets arrogance, and fosters
recklessness.
Only eight days after McGreevey bragged about his bestin-the-world hire, his specialist
emerged as Golan Cipel no security expert, but an amateur poet
and publicist who held a mysterious power over the governor. He
has retreated to Israel, where he
asserts he is a victim who was
sexually harassed by the governor.
Within weeks of his own appointment, Kushner found himself publicly denying his business
partners claims of shady dealings
claims that ultimately would rip
apart his family and lead to a
guilty plea in federal court. He is
facing 18 to 24 months in prison
for defrauding the IRS, violating
campaign laws, and tampering
with witnesses in an unseemly
plot involving videotaped sex with
a prostitute.
As for McGreevey, his political
life is over, his personal life in tatters. A career politician elected
governor by 15 points will leave
office early, an exposed betrayer
of the publics trust. A twice-married father of two will continue life
as an uncloseted gay man, an
adulterer who publicly acknowledged an adult consensual affair
with a man he has not named but
widely believed to be Cipel.
On that Ash Wednesday, the
governor was on crutches. He maneuvered with care, mindful not
to disturb the pins fusing his left
femur, which he had shattered in
a spill on the beach in Cape May
that has become the subject of rumors. He presented himself to a
priest who anointed his forehead
with ashes the symbol of mortality and began the ancient
blessing.
The priest ended: unto
dust thou shalt return.

SIPA PRESS

Golan Cipel, left, and then-Woodbridge Mayor Jim McGreevey sharing a bottle of wine on March 8, 2000, in Israel.

Friends from that era remember that it wasnt unusual for the
mayor to drive his townshipowned car the wrong way down a
one-way street and laugh about
it. Around town they talked about
Jimmy the crazy driver. There he
goes, one hand on the wheel and
the other on his cellphone. There
he goes, one hand on the wheel
and the other on an electric razor,
erasing a five oclock shadow. The
car became a heap of bent fenders
and scraped tires.
We were buying new hubcaps
on a regular basis, one close associate recalled.
Then there were the stories
about an exotic nightlife. McGreevey was running around with

a mysterious blonde, the wags

James E. McGreevey and said. McGreevey had been with a
Charles A. Kushner cemented prostitute. McGreevey was gay.
their $1.5 million partnership in a
McGreevey seemed to hear
September 1997
none of it. He was
meeting.
going to be goverEditors note
Kushner, who
nor no matter
lives in Livingston, In the preparation of this ar- what. For that he
is the son of Holo- ticle, a team of reporters
needed big bucks.
caust
survivors from The Record conduct- For big bucks, he
who founded the ed interviews with more
needed Kushner.
Kushner Cos., a $1 than a score of political inThey sat down
billion real-estate siders, most of whom
Sept. 16, 1997. The
conglomerate built spoke on condition they not next day, accordon garden apart- be identified. Our reporters ing to state camments, condomini- also reviewed documents
paign finance reum developments, and notes from stories pub- ports, Kushner and
high-rises, and of- lished during Governor Mc- his family put
fice complexes. As Greeveys tenure.
$8,200 into his
head of the empire, The article incorporates re- new pals camKushner has made porting by Clint Riley, Herb paign fund. It was
his mark as a phil- Jackson, Mike Kelly,
the first trickle in
anthropist for Jew- Martha McKay, John Bren- what was to beish and other caus- nan, Brian Kladko, Scott
come a torrent of
es and one of the Fallon, and Andrew Glazer. campaign cash.
countrys biggest
Three weeks latfund-raisers for Democratic can- er, McGreevey had another close
didates.
friend: President Bill Clinton, who
Frank Lautenberg, the Democ- shared a ride in an armored limratic U.S. senator, once likened ousine to the Florham Park headthe Kushner philanthropic and quarters of the Kushner Compabusiness legacy to that of the nies. Seventy-five people turned
Rockefellers and the Kennedys.
out for a reception there. So did a
Kushner once told The Wall delegation of students from the
Street Journal: I want to be one Joseph Kushner Hebrew Acadeof the largest owners in the coun- my in Livingston.
try.
The school was named for
He doesnt talk to the press Kushners father, the founder of
about how he spends his millions the family business a man
on politics. Reporters had to comb whose values for honesty and inthrough public campaign records tegrity are all the qualities that are
to learn that, through the years, important to teach children,
Kushner has given $1.5 million in Kushner once said. Here, Mccontributions to McGreevey and Greevey proud product of St.
the committees that benefited him. Josephs High School in
Before he was governor, Mc- Metuchen found a new base of
Greevey was a Democratic state support for this campaign and fusenator and mayor of Wood- ture ones.
bridge. And the guy was a piece of
Come the gubernatorial elecwork.
tion in 1997, McGreevey lost to
His desk was tidy. His hair was Christie Whitman. But Kushner
trimmed. His suits were pressed. certain the Democrats here and in
He owned more than 100 white Washington, D.C., were future
dress shirts, dropping off 80 at a winners continued giving. By
time at the cleaners. It took stern the end of the year he had donatpolitical advisers to steer him from ed $554,000. And on Dec. 5,
the uniform of dark suit and sus- 1997, he started a pattern of giving
penders to something less rigid. that ultimately would attract the
The man simply couldnt relax in attention of the Federal Election
khakis and a polo shirt. He went Commission. Years down the
along with the new outfits so vot- road, the FEC would fine Kushers got the image of a man who ner $508,900 for writing checks in
could kick back like anyone else. the name of his business associThe longer he spent running for ates without their consent.
governor, though, the more his
McGreeveys friends said he
advisers worried about his behav- had been running for governor
ior.
since age 3. By 1998, he had had

BETH BALBIERZ/STAFF PHOTOGRAPHER

Dina Matos McGreevey holding her infant daughter, Jacqueline, in

2002 while her husband addressed a joint session of the Legislature.
McGreevey was single. When
he was mayor, he had worked
hard to keep the public from finding out that his first wife, Kari
Schutz, had left him, moving with
the couples daughter back to her
native British Columbia. Their divorce had not yet become final
when he started dating Dina
Matos, a hospital public-relations
executive from the Ironbound, the
Portuguese section of Newark.
McGreevey wanted to keep the
romance quiet, but the pair were
hard to miss. On election night
1997, hours after McGreevey conceded defeat in the governors
race, police on patrol outside the
Woodbridge Sheraton pulled up
behind the couple, necking in a
car. Matos noticed the cops and
ran, Woodbridge insiders recalled.
Now McGreevey wanted to tell
the world that he loved this
woman. He proposed on Valentines Day of 2000. She said yes.
A month later, McGreevey
joined the United Jewish Federation MetroWests Mega Mission
trip to Israel. It was there, during
a reception at an arts center in a
city called Rishon Letzion, that
McGreevey met Golan Cipel, a
32-year-old spokesman for Mayor
Meir Nitzan.
Cipel bright, well-spoken,
and absolutely fascinated by
American politics was a veteran

of Israels compulsory military,

The Nineties were over. The putting in five years with the navy
calendar said 2000. Time for and another five in the reserves.
change.
He had a communications degree
put one race behind him and
started on the next. He set up a
lobbying group called the Committee for Working Families.
Kushner was good for $140,000 in
donations, or more than 35 percent of its revenues.
The group paid for radio spots
in which McGreevey argued for
HMO reform. It paid for McGreevey to travel to Poland, Ireland, and Israel. It paid for its
staffs health-club memberships
and medical coverage. It paid the
salaries of a board that included
Paul Levinsohn, Gary Taffet, and
other McGreevey friends from
Woodbridge a group that would
become the future governors inner circle at the State House.
The Committee for Working
Families was barely a year old
when McGreevey launched another campaign for Woodbridge
mayor; he won reelection with 86
percent of the vote.
Kushner, too, remained active
in politics, giving $292,000 mostly
to Democrats. Some of it came
back: a check for $57,000 from
the fund-raising committee for
New York Mayor Rudolph Giuliani. Kushner had given more
than the law allowed. Still, 1999
ended well for him: Ernst &
Young, the accounting firm,
named him Entrepreneur of the
Year in its real-estate category.

from the New York Institute of

Technology. He had worked in
the United States and Israel in a
variety of jobs, including aide and
television reporter in the Israeli
parliament. Rishon Letzion was
his hometown. He grew up there
among descendents of the Jews
who had immigrated from Russia
to grow oranges in the sandy
groves, build apartment houses,
and bear children to a newly
founded Israel.
The mayor assigned Cipel to
lead McGreevey and others on a
day trip that included a visit to a
Holocaust memorial and to a
neighborhood called Romat Eliahu, where some low-income
apartment buildings were being
remodeled. The two were photographed by an Israeli newspaper
having a conversation over a bottle of wine.
McGreevey returned to the
States, and by the summer he was
back in touch with Cipel. Would
he like a job on his campaign for
governor? Cipel went to Nitzan
for advice.
He said he thought it was a
promotion for him and that it was
important. So I said: Go, Nitzan
recalled.
McGreevey filed papers to
launch his second run for governor. Charlie Kushner, his friend
the developer, also hopped
aboard.
Jim McGreevey has always let
it be known that his energy, his vision, and his heart were committed to running for governor,
Kushner wrote in a statement released by his office. I will be tireless in my efforts to elect Jim McGreevey. The best interests of
the people of New Jersey will be
served.
On one day in August 2000,
eight people with the last name
Kushner all of them listing a
Kushner-owned company as their
employer donated $2,100 each
to McGreeveys campaign. That
done, Kushner turned his attention to the candidates associates.
In September, Kushner paid
$3.4 million for Highview Planning, a Woodbridge insurance
company partly owned by Gary
Taffet, McGreeveys onetime chief
of staff in Township Hall. Kushner also gave him a new job: president of Vantage Financial and Insurance Services, the insurance
arm of Kushners business empire.
By Christmas, McGreevey and
Matos were celebrating their first
Christmas as a married couple together they had wed Oct. 1 at a
hotel in Washington, D.C.
And Kushner had an achievement to add to his corporate biography: The National Conference for Community and Justice
had named him Humanitarian of
the Year.

They began 2001 with one goal:

Elect McGreevey governor.
Kushner had a few distractions.
Two candidates for New York
City mayor, Mark Green and Alan
Hevesi, were forced to give back
about $40,000 they had accepted
from Kushners companies. Once

again, Kushner had donated more

than the law allowed. Then in
September, his brother Murray
Kushner sued him, demanding an
accounting of all revenues and
disbursements since 1997.
Things were going better for
Cipel. With a work visa sponsored
by Kushner, he reported for work
on April 18, 2001, at the Florham
Park office of Kushner Cos., making $24,461 a year to write news
releases and do marketing projects. Five months later, he added
a second job, making $30,000 as
candidate McGreeveys liaison to
the Jewish community.
McGreevey was running hard.
At the same time, he seemed preoccupied with getting Cipel settled, directing an aide to help him
find a place to live, sources said.
He wound up a block from the
home of McGreevey and his pregnant wife, renting a one-bedroom
apartment in a complex owned by
the developer David Halpern, another Democratic fund-raiser. Initially, Cipel was paying about
$900 a month rent, Halpern recalled.
And after a few months, he
didnt pay rent, Halpern said.
We had to put him in court, and
then he paid up his rent.
A friend of McGreeveys said
it became painfully obvious that
McGreevey had too much interest
in Cipel. Yet McGreevey seemed
oblivious to the nature of his own
behavior.
He convinced himself he
could control the situation, said
the friend. It became too painfully public, but he ignored that.
All the while, Cipel was developing a reputation among fellow
campaign workers.
In the summer and fall, the
workers say, a crew that became
known inside the campaign as
McGreevey groupies started
more or less setting up voter-outreach operations and answering
solely to the future governor.
One of them was Rajesh
Roger Chugh, the Punjabi emigre who later became the subject
of an expose in The Record and a
federal fund-raising probe. Another was Efrain Feliciano, the Camden County political operative
who was angling for a job in the
front office.
Golan was the worst of the
bunch, says one senior Democrat who worked in the campaign.
He set up his own little empire.
He put his own people on the
payroll. He tried to set up political events that turned into disasters. His existence showed the
worst side of Jim McGreevey he
made so many side deals with
guys like this that we could not
keep them all straight, said the
Democrat.
Cipels former colleagues on
the campaign all say that the
young Israeli was a peculiarly vain
and ambitious man. He dressed in
the finest clothes, drove nice cars,
and sought out the most beautiful
women.
They said Cipel often assumed
a haughty, self-important air. On
See POWER Page 4

4 THE RECORD

JANUARY 2005

Published Sunday, Aug. 22, 2004

Golan obviously had something on the governor, one former official said. He knew something. Looking
back now, I get the shivers thinking about how reckless Jim McGreevey was, and how desperate he must have
been. Think about it: He works his entire life for one goal, the governor's office. And when he finally gets there,
he has this time bomb around his neck. And it's a bomb of his own making. He made it. He hung it there.

Power: Kushner, Cipel, and McGreeveys rise and fall

From Page 3
Sept. 11, for example, he was one
of many campaign officials who
gathered at Democratic Party offices on the top floor of a Woodbridge skyscraper that had a clear
view of the World Trade Center
towers. With arms crossed and his
brow furrowed, Cipel paced the
floor propounding on the effect
the terror attacks would have on
U.S.-Mideast relations.
You had to laugh, said one
former colleague.
The last week of the campaign
was intense. Four days before voters went to the polls, McGreeveys
wife, Dina seven months pregnant with the couples daughter
was hospitalized in premature labor. On election night, a victorious McGreevey accepted congratulations without his spouse at
his side.
The next day, most campaign
workers could relax. But not
Cipel.
During the 10 weeks before
McGreevey took office, Cipel
made it known that he had a special relationship with the governor-elect. Staffers who came to
work in the transition office in
Trenton walked gingerly around
the young Israeli.
On the first day I came to
work, I was told there were a couple people I absolutely could not
piss off. One of them was Golan
Cipel, said one former senior administration official. Pretty soon,
I found myself running important
stuff by Golan for approval, even
though I outranked him. Cipel
told stories. He and Jim had done
this or that together, he said. Jim
had told him thus and so.
According to another former
McGreevey staffer, Cipel often
ended arguments with a declaration: Well, I know what Jim likes
and what he doesnt like, so were
doing it my way. After a while,
we always did it Golans way. It
just saved time, said the staffer.
On Dec. 5 with Dina McGreevey days from giving birth
McGreevey addressed a AFL-CIO
conference in Las Vegas. Sources
say Cipel went along.
I want you to know that when
I take office in six weeks, were going to take on the sweatshops,
McGreevey told 1,000 delegates
in the ballroom of the Paris/Ballys hotel. Were going to provide
for tougher enforcement of labor
laws. Youre going to have a
governor who stands shoulder to
shoulder with the AFL-CIO.
McGreevey made it back in
time for the arrival of his daughter,
4-pound 5-ounce Jacqueline
Matos McGreevey, on Dec. 7. The
same day, his future senior staff
met in a conference room at Rutgers University. Cipel was there,
bossier than ever.
At one point, staffers recalled,
Cipel tried to assert control over
the governors inaugural speech,
spending whole evenings making
notes and crafting purplish prose.
That rankled the team of professional speechwriters and communications consultants.
This guy got more arrogant
every day, said one staffer. He

Rasmussen said Cipels role

within the administration has
been widely misunderstood by
the media. He suggested that
Cipels real role was one of liaison
and communicator for McGreevey on security issues, not
one of counter-terrorism expert.
In a recent interview with an Israeli newspaper, Cipel described
his $110,000 role as that of a
scheduling secretary.
I was not, under any circumstances, responsible for internal
security, Cipel was quoted as saying.

actually thought he could control

that speech. And the stuff he
wanted to put in was horrible
the worst kind of garbage. The
speechwriters overruled Cipel, but
not without trepidation.
There was a real sense that
Golan had power and you did not
cross him lightly, said a third
staffer.

Ambition. Hard work. Reward.

For McGreevey, Cipel, and Kushner, it all came together as never
before in 2002. By the end of the
year, it all started unraveling.
McGreevey was days from his
inauguration on Jan. 9 when Paul
Levinsohn the campaign finance chairman who was about
to be named chief counsel
wrote a letter to the federal Immigration and Naturalization Service. Cipel, a foreign citizen, was
coming to the state Department of
Law and Public Safety, he wrote.
He would need a work visa.
A day later, Kushner gave
$5,000 into McGreeveys inaugural fund. On Jan. 15, McGreevey
was sworn into office at the Trenton War Memorial. He told reporters he would arrive at his
State House office the next day at
7:30 a.m. sharp.
McGreeveys first big misstep
came on a beach in Cape May on
Feb. 1, 16 days into his tenure.
The governor and his wife, guests
at the Peter Shields Inn, took a
late-night walk on the beach. He
stepped off a ledge, falling 4 feet
onto the sand and cracking his left
femur. Or so the story went.
McGreevey underwent surgery,
and for the next several weeks he
was in a cast and using crutches.
Like all devout Catholics, he observed Ash Wednesday the start
of Lent, the Churchs holiest season. The sign of his faith on his
forehead, he carried out his official duties for the rest of the day.
For Kushner, that meant the
appointment to the Port Authority board and eventually, McGreevey promised, the chairmanship. The post carries a huge
amount of prestige and the power to control millions of dollars in
contracts.
Sooner or later, the chairman
sits down with anybody who is
important in the world of development, politics, and high finance, said Republican lobbyist
Hazel Gluck for a Record story
about Kushner. The chairman
can make more contacts than he
ever dreamed of.

Cipel was doing well, too. He

moved out of McGreeveys neighborhood in Woodbridge, and
bought a Princeton condominium
for $190,000. When The Record
reported Feb. 21 that an unknown
Israeli named Golan Cipel had
been appointed a homeland security adviser, though his credentials
seemed inadequate, McGreeveys
staff was thunderstruck, according
to three former members of the
administration.
We knew Golan advertised
himself around as having some security knowledge, but we never
knew he was the governors hand-

BETH BALBIERZ/STAFF PHOTOGRAPHER

Governor McGreevey, accompanied by a nurse, leaving Robert Wood Johnson University Hospital in New
Brunswick on Feb. 4, 2002, following surgery on his broken leg.
picked adviser, said one official.
I remember reading that first story and saying over and over to myself, Holy s---, holy s---, holy s---!
What the hell is Jimmy thinking?
The day that the story appeared,
McGreevey himself came unhinged. He summoned one of the
reporters to his office and carried
on for a good half-hour, screaming much of the time.
It was bad enough The Record
had exposed his handpicked security expert as a mere public-relations man and amateur poet.
Worse, he claimed, the story exaggerated Cipels role in planning
his inaugural parade. But what really hurt, he said as tears welled in
his eyes, was the bit about Cipels
being called the governors traveling companion. He and Cipel

were together only in large groups,

he said, never alone.
You implied something was
there that is not! the governor
screamed.
For many of McGreeveys
staffers, the story was a revelation.
Golan obviously had something on the governor, one former official said. He knew something. Looking back now, I get
the shivers thinking about how
reckless Jim McGreevey was, and
how desperate he must have
been. Think about it: He works
his entire life for one goal, the
governors office. And when he finally gets there he has this time
bomb around his neck. And its a
bomb of his own making. He
made it. He hung it there. Suddenly, McGreevey staffers were

asking other questions: What really happened on that beach in

Cape May? Was the governor
with Golan that night, instead of
his wife? These were questions
that would not go away, even
though everyone McGreevey,
his wife, a chef who came to the
injured governors side denied
the tale.
Neither Kushner nor Cipel answered numerous requests for
comment last week. McGreevey,
after the Aug. 12 declaration of his
homosexual affair, has declined to
answer any questions about Cipel.
Micah Rasmussen, the governors press secretary, took issue
with the portrayal of McGreevey
as an arrogant and reckless politician. This governor has been
anything but arrogant, he said.

By early March, Republican

legislators had heard enough
about Cipel. William L. Gormley,
chairman of the Senate Judiciary
Committee, threatened to block
all of McGreeveys political appointments until Cipel went before the panel and submitted to
questioning about his job. And
that wasnt all. Gormley said he
would hold up McGreeveys nomination of Kushner to the Port Authority.
Gormley managed to do what
McGreeveys own staff couldnt
do: Cipel was reassigned. Because
McGreevey had a new job for
him: special counsel, with a second-floor office in the State
House, one flight above the governors inner sanctum. The suite
swarmed with young staffers who
wrote press releases, arranged the
governors schedule, and worked
on constituent issues.
On the occasions when Cipel
showed up, several colleagues
said, he did little of substance. He
had two aides, who earned a combined $80,000 for what amounted
to collecting newspaper clippings
about Jewish businessmen. Cipels
salary of $110,000 was significantly higher than those around
him.
It became a huge morale problem for the office, said one former administration official.
For news reporters, Cipel continued to be a story. What were
his official duties? Why wouldnt
Cipel speak to the press? McGreeveys perplexed senior aides
complained directly to their boss,
but he waved them off. Cipel was
misunderstood, he told them. The
media will lose interest.
Part of the problem was this
deep contempt and misunderstanding for the press, said one
member of McGreeveys Cabinet.
He thought he could get away
with stuff he got away with in
Woodbridge. The stonewalling of
requests to interview Cipel became part of a larger campaign of
secrecy, said the cabinet member.
As critical stories multiplied, McGreevey ordered press aides
throughout the executive branch
to forward daily lists of all reporters calls and the nature of
their inquiries.
The governors daily schedule
was not published. The press was
not always told when the governor was leaving the country or going out of town, according to the
Cabinet member and several public information officers.
See FALL Page 5

Scandal-touched school could retaliate with lawsuit

By ANDREW GLAZER
and SCOTT FALLON
STAFF WRITERS

Their institution finds itself at the center of the scandal over Governor McGreevey's gay affair. And now Touro
College representatives say they are considering a lawsuit against the man who
might have put them there.
McGreevey aides say representatives
of Golan Cipel demanded millions of
dollars and a charter for a Touro College
medical school in New Jersey in exchange for keeping quiet about the alleged affair. Cipel, whom they have identified as the governors ex-lover, worked
as a consultant for Touro for three
months last fall in its bid to establish the
medical school.
But Touros lawyer, Franklyn Snitow,
said Touros board of trustees never authorized Cipel to negotiate on the colleges behalf. He said the board was
mulling a lawsuit against Livingston
lawyer Timothy K. Saia if it can confirm
he made the charter demand for Cipel,
as McGreevey aides have said he did.
Nobody involved with Mr. Cipel had
any authority to use Touros name, Snitow said. Touros relationship with Mr.
Cipel ended almost a year ago. Mr. Cipel
would not have had information to make
such a request.
Saia did not return repeated calls for
comment and a reporter last week was

escorted from the Livingston office of the

firm where he is partner Morgan, Melhuish, Monaghan, Arvidson, Abrutyn &
Lisowski.
Cipel claims he is not gay and that he
was the victim of unwanted sexual advances by the governor. One of his
lawyers, Allen M. Lowy, said he tried to
reach a settlement with McGreevey before the governor announced that he
would resign on Nov. 15. Lowy said he
didnt talk about Touro College during
the 20 days he tried to negotiate a settlement with McGreevey.
Lowy said he knows Saia, but was surprised when he appeared at a negotiating
conference in Manhattan with McGreeveys attorneys. Lowy said he did
not know who invited Saia to the conference; a confidant of McGreevey said
Saia was Cipels friend, but declined further comment. Touro College was not
discussed at the session, Lowy said.
Published reports say Saia called a
member of McGreeveys circle 10 minutes before the governors news conference announcing his resignation. Saia reportedly said that Cipel would not go
public with the sexual harassment allegations if McGreevey granted a charter
to Touro College to build a medical
school.
Lowy said he did not know of Saias
last-minute contact with the governors
office until it was printed in newspapers.
I dont understand where its coming

from, Lowy said. We didnt deal with

that.
But many including some Touro officials said the demand for the charter
and web of connections between the college and powerful New Jersey players are
too strange to ignore. A fund-raiser for
Jewish charities likened the demand for
a charter to a hostage-taker demanding
a helicopter, a million dollars, and a
peanut butter and jelly sandwich.
At the time of Cipels hire, Touros
board included McGreeveys top fundraiser, Charles Kushner, a developer who
last week admitted to hiring a prostitute
to seduce his brother-in-law on tape in
retaliation for cooperating with a federal
probe into his finances. Kushner had
been a patron to Cipel since September
2001, helping sponsor his immigration
from Israel and hiring him to do public
relations for his company.
Developer David Halpern, whose father Sam also was on Touros board
when Cipel was hired, rented Cipel his
first apartment in New Jersey, at the request of the governors office. Halpern
said it was customary for his company to
extend state employees that courtesy, but
added that Cipel had been charged rent
like any other tenant.
Another Touro trustee is Rabbi Menachem Genack, the politically connected head of the body that certifies products as kosher for some 4,500 food production facilities in 68 countries. Genack

founded Norpac, which among of the

countrys largest pro-Israel political action committees. He delivered an invocation at McGreeveys inauguration and
also wrote speeches for the governor
when he appeared before Jewish audiences, according to an associate.
Genack also is close with former U.S.
Sen. Robert G. Torricelli he edited the
ex-senators anthology of quotations and
traveled to Israel with the senator two
years ago. Torricelli also served as consultant for Touro in its efforts to establish
the Garden States first private medical
school. Torricelli declined repeated requests for an interview.
Genack refused to say whether he
knew Cipel or had anything to do with
his employment as a consultant at Touro.
The Englewood rabbi said, however, that
he was as shocked as anyone when he
read in newspapers that Cipel had included Touros charter in his demands.
Touro College was dismayed as anybody else about these reports, Genack
said Tuesday. We dont understand it at
all.
Snitow said the school hired Cipel because he knew New Jersey and not for
any connections the Israeli had with
trustees. He said Cipels consulting job
ended after the board determined it was
not a relationship we wanted to proceed with.
Jeanne Oswald, executive director of
the New Jersey Commission on Higher

Education, said Touro College has inquired about opening a medical school
in the state on several occasions starting
in the early 1990s. The most recent inquiry came in 2003 when college
founder and president Dr. Bernard Lander contacted the commission, she said.
Oswald said Lander was directed to
the proper agency, the states Board of
Medical Examiners, but nothing ever
came of it.
We tried to facilitate a meeting but
Touro didnt follow through, she said.
A spokeswoman for the states Division of Consumer Affairs, which oversees the Board of Medical Examiners, refused to say who represented Touro in
the talks or when they occurred.
According to its Web site, Morgan,
Melhuish, Monaghan, Arvidson, Abrutyn & Lisowski which also called itself
The Morgan Law Firm has a client list
that comprises several dozen insurance
companies and public entities, including
Essex County, the Turnpike Authority,
Rutgers, and the state of New Jersey. The
state paid the firm $4,280 last year, a
treasury spokesman said.
The firm has donated tens of thousands of dollars to New Jerseys Republican Party. Saia has donated money to
the states Democratic Party, including
$2,000 last year.
Staff Writers Patricia Alex and Brian Kladko
also contributed to this article.

Yellow

Red

Blue

Black

Bergen Record

JANUARY 2005

THE RECORD 5

Published Sunday, Aug. 22, 2004

The rumors go on. One of the most persistent is that Kushner orchestrated Cipels action against the governor, a charge that
Kushners lawyers dismiss. Weve had no contact with Cipel for at least 2 years, said Benjamin Brafman.

Fall: A tale of sex, money, power, betrayal and finally ruin

From Page 4
Bills were being signed, appointments were being made, all
without any announcement whatsoever, said the Cabinet member.
This was beyond bad government. And it started with Golan.
That set the pattern for everything
else to come. By late spring and
summer of 2002, the governors office did begin to e-mail daily
schedules and lists of appointments to the State House media
and editors across New Jersey.
Newspaper stories about Cipel
kept coming, however. A reporter
from Gannett New Jersey traveled
to Israel in an attempt to research
Cipels past.
Talk radio hosts began to openly joke about Little Golan the
meaning of the term was nebulous
and openly questioned McGreeveys sexuality. A reporter for
the Associated Press asked the
governor directly if he was gay,
and McGreevey denied it, claiming that all governors are the victims of unsubstantiated rumors.
Everyone was talking: the press,
politicians, state troopers, the gay
community, government employees, and now the public at large.
Legions of reporters revisited
the Cape May incident in which
McGreevey broke his leg. Several
news organizations requested logs
of State Police helicopter flights to
confirm the First Ladys whereabouts that night. (The rumor held
that she had been rushed to Cape
May after the incident.) Newspapers also requested guest logs for
McGreeveys beach house and
records of overnight guests at
Drumthwacket, the governors
mansion in Princeton.
Ultimately, The Record decided
to inquire about McGreeveys alleged homosexuality only when it
appeared there might be some impact on his official duties. The
newspapers policy was an informal one, and it was shared by the
State House press in general.
Outwardly, McGreevey appeared to be a happily married
man. He, his wife, and child
moved into Drumthwacket, the
governors official residence which
had just undergone a $590,000
renovation funded in part by contributions from Kushner.
The governors office had other
problems. The AFL-CIO the labor group with whom McGreevey
had pledged to stand shoulder to
shoulder was protesting Kushners appointment, saying he had
not used union labor on some of
his development projects. Sharpe
James, the state senator and mayor of Newark, said he wasnt going
to support Kushners appointment, either. James was in a snit
because McGreevey had done
fund raising for James opponent
in the Newark mayoral election.
In late May, Peter Harvey, then
the first assistant attorney general,
summoned Kushner to Trenton
for a two-hour interview about his
business practices and political
contributions. Apparently Harvey
who was to become McGreeveys attorney general
found nothing alarming. For all
the talk about holding up the appointment, the Senate Judiciary
unanimously approved Kushner
for the Port Authority job. Ultimately, so did the full Senate.
For McGreevey, the glow of
that victory didnt last long. His
family was deeply hurt by the homosexual rumors, sources said.
I think that was the moment
that McGreevey knew he had to
finally dump Golan, said the Democrat.

And so it was done. On Aug. 14,

2002, Cipel handed in his resignation with one stipulation. He demanded unlimited access to the
governor once he left, according to
a former senior aide.
He basically wanted to be able
to walk into the front office anytime he wanted, the former aide
said. He was so arrogant that he
didnt even care what damage he
was doing to the governor.
Again, McGreevey took care of
Cipel, associates said, recommending him for a $120,000 job at
MWW Group, the East Rutherford public relations and lobbying
firm. Its clients include Kushner
and the Mills Corp., which is
teaming with the developer MackCali to build the $1.3 billion, McGreevey-blessed Xanadu project
at the Meadowlands.
We had an opening for someone with Israeli ties, an MWW
employee said. This is a large firm
with a major international practice, and he sounded like a PR guy
who would be perfect.
But just as in state government,
Cipel was rarely seen around the
office. He complained about driving to the Meadowlands from

THOMAS E. FRANKLIN/STAFF PHOTOGRAPHER

Charles Kushner, center, heading for the federal courthouse in Newark, was one of McGreevey's biggest fund-raisers.
Mercer County.
He went through a very thorough hiring process, and he
seemed to be bright, capable, and
quite qualified for the job we had
to fill, said MWW executive Bob
Sommer. But very quickly, we
learned that he didnt seem to
want to fulfill those requirements.
The U.S. Attorneys Office is investigating the Cipel affair. A
source close to the investigation
said that the probe will seek to determine, among other things, if
MWW and others who employed
Cipel received anything in exchange from the McGreevey administration.
State records show that the administration awarded two multiyear advertising contracts to
MWW after Cipel was hired. Matt
Golden, a Treasury Department
spokesman, said the contracts,
which were awarded in an openbidding process, are worth $24
million and include money to buy
television commercials.
MWW officials said they got
nothing back from the government for hiring Cipel. Besides giving Cipel a recommendation, the
administration has said that it
made no promises to MWW in exchange for hiring the controversial
Israeli.
Cipel quit MWW after four
weeks to take another job, with a
pay increase, at Trenton-based
State Street Partners, a lobbying
firm owned by Rahway Mayor
James Kennedy, who is one of McGreeveys closest friends.
Kennedy did not return calls
seeking comment for this story.
But The Record has learned that
the hire came after McGreevey
spoke to both Kennedy and another lead partner, Rocco Iossa.
Members of the firm, however,
soon began to resent Cipel. In
three months, he had brought in
no new clients. Executives started
to talk about Cipels attitude of
entitlement, according to someone with knowledge of his tenure.
It was becoming an old story:
Golan is hired, does not work, gets
fired, said the source.
Kushner and McGreevey,
meanwhile, were having serious
troubles of their own.
Kushner found himself served
with a new lawsuit. A complaint
filed in Superior Court by his former accountant, Robert Yontef,
claimed that Kushner had unjustly fired Yontef and was improperly diverting company funds to
help political candidates.
In the summer, a McGreevey
appointee named Roger Chugh
one of the McGreevey groupies
from the campaign days stepped
down from his job at the Department of State as The Record prepared to run a report examining
his business practices. In the fall,
McGreeveys state police superintendent, Joseph Santiago, resigned
amid rumors he had ties to organized crime and had obstructed a
criminal investigation. Most troubling, six lobbyists told The
Record that the Democratic State
Committee was offering meetings
with McGreevey for a fee of
$25,000.
The governor, just 12 months in
office, ended 2002 in a sorry state.
Republican lawmakers were asking the U.S. attorney to investigate
Democratic fund-raising practices.

ity bank owners to make political

contributions.
On Feb. 26, Kushner tried to
stop the bleeding. He resigned
from the Port Authority board,
maintaining he had had only noble intentions: My motive was
merely to perform public service
with absolutely nothing in return
except the opportunity to make a
positive impact on peoples lives.
As for the lawsuit, in August
2003 he arranged for prostitutes to
tempt his worst enemies, who happened to be his brother-in-law and
his former accountant. The prostitutes were to be set up in a camera-rigged room at the Red Bull
Inn in Bridgewater, and told
whom to seduce. The plot halfworked. On Dec. 5, Kushner had
video of his brother-in-laws romp.
Yontef, however, resisted the
womans offers.
Kushner had little time to revel
in his coup. Two days before
Hanukkah, the FBI arrived at the
office of one of Kushners accountants and the home of a former employee. They left with boxes of evidence.

ASSOCIATED PRESS

McGreevey with his daughter Jacqueline at the Democratic Convention, barely two weeks before his shocking announcement.
And the man who had promised
to stamp out business as usual in
Trenton had a dismal public-approval rating of 37 percent.

What was bad in 2002 became

a full-blown crisis in 2003.
No one was happy.
Where was Cipel? While working for State Street Partners, he
took a second job consulting for
Touro College, an Orthodox Jewish school that had Kushner as a
board member. The college had
approached a McGreevey Cabinet
member about opening a medical
school in New Jersey.
Franklyn Snitow, a Touro attorney, when questioned last week
about Cipels employment, said he
had been hired because he knew
New Jersey and not because of
his connections with any Touro
trustees. Of Cipels departure from
Touro, he would say only it was
not a relationship we wanted to
proceed with.
By April, Cipel was gone from
State Street, too. But he found another job, this time with Shelley
Zeiger, who developed the Marriott Lafayette Yard hotel in Trenton with substantial state backing.
Golan just walked into my office one day and asked for a job,
Zeiger said. I knew who he was,
of course. But he seemed like a
smart and ambitious kid, so I hired
him. But Cipel was not interested
in the project he was assigned to,
dealing with Russian investors on
a venture at the Mercer County
Airport, and he was gone by
March 2004, Zeiger said.
It just didnt work out, said
Zeiger, who acknowledged that he
perhaps should have checked
Cipels previous employers before
hiring him. I really needed him to
focus, and he did not do it, for
whatever reason. Where was McGreevey? Way down in the Quinnipiac University opinion polls.

Voters no longer were attributing

his missteps to the first-year-in-office learning curve. He started
2003 with a 40 percent approval
rating, slipped to 38 percent, then
35 percent. Late in the year after
The Record chronicled how his
fund-raiser Rajesh Roger Chugh
systematically shook down fellow
Asian Indians for campaign contributions McGreeveys approval rating stood at an inordinately low 34 percent.
Where was Kushner? Lying
low. Very low.
His old accountant Yontef was
back with another lawsuit, filed
this time in federal court. The
claims were astounding: Kushner
had redirected $2 million to pay
$3.4 million for Gary Taffets insurance
company,
diverted
$675,000 to pay celebrity guest
speakers at his home and synagogue, taken $115,000 to build a
Jewish ritual bath, used millions of
dollars from his partners accounts
to make charitable donations in
his own name, and mishandled
$3.2 million among personal and
business accounts.
Bill Gormley, the pesky Republican senator, was back, too. As
Kushner approached confirmation
as Port Authority chairman,
Gormley wanted answers about
Kushners business ethics. Asked
to appear before the Senate Judiciary Committee, Kushner said he
was not legally obligated.
The two problems the lawsuit
and the Port Authority chairmanship made for a hellish February.
Federal prosecutors issued subpoenas related to Yontefs claims.
And Republican legislators released letters suggesting that Kushner was lying about the ownership
of NorCrown Bank. One letter
said Kushner was the owner; another said his family was. The control of the bank was noteworthy
because New Jersey forbids major-

ed using the code word Machiavelli, which DAmiano had said

would indicate a deal was on track.
McGreevey said his use of the word
had been a coincidence and denied
doing anything improper.
Three days later, Kushners associates received letters from the
U.S. Attorneys Office saying they
were targets of a federal grand-jury
investigation. Kushner met again
with the two men who had hired
the prostitutes in December. On
his word, one of the men mailed
the videotape to Kushners brother-in-law. When it arrived at his
home May 10, he turned it over to
federal prosecutors.
The summer brought no relief.
On June 30, the Federal Election Committee leveled one of its
largest fines ever against Kushner,
forcing him to pay $508,900 for
making illegal campaign contributions in the names of his business
associates. And on July 7, DAmiano was charged with extortion,
mail fraud, and bribery.
Less than a week later, Kushner
turned himself in to the FBI and
appeared in federal court in
Newark, where he was accused of
conspiracy, obstruction of an investigation, and promotion of interstate prostitution. Kushner
son of Holocaust survivors, hero
of the Democrats, Entrepreneur of
the Year, Humanitarian of the
Year was facing 25 years in
prison and $750,000 in fines.
The next day, McGreeveys
commerce secretary, William Watley, resigned amid accusations that
he had sought state funds for his
own business interests.
Before the month was out, McGreevey knew the game was up.
His office was locked in discussions with Allen M. Lowy, a
lawyer for Cipel, who said his
client was accusing the governor
of sexual harassment.
In the coming days, McGreevey
confronted what he later called
my own identity, a secret that
had nagged at him in high school,
a secret that he tried to keep from
his parents, his wives, his friends,
his employees, and his voters.
McGreevey had nowhere left to
hide.
In a six-minute speech delivered
in his office on Aug. 12, he proclaimed himself a gay American
who had strayed outside his marriage with another man. He said
he would resign Nov. 15.
He did not name Cipel, but his
aides did.
The next day, Lowy read a statement saying Cipel was not romantically involved with the governor,
but rather a victim of his sexual advances. Cipel, who had been living
in a fancy New York City highrise, returned to Israel, to Rishon
Letzion, where he had first met
McGreevey.
All his life, Golan wanted a job
that was involved in politics, Guy
Horesh, a 34-year-old friend of
Cipels, told The Record in an interview in Rishon Letzion.
Horesh said he stayed with
Cipel in the United States in 2001,
even attending a McGreevey political rally. Cipel was happy then.
During another trip two years later, Horesh said, Cipel seemed bitter. McGreevey phoned several
times during the visit, Horesh recalled, his phone number showing
up on Caller ID. Cipel answered
just once, giving one-word answers. Cipel never told Horesh
what the call was about.
On Aug. 18, Kushner stood before U.S. District Judge Jose
Linares and pleaded guilty to
cheating on his taxes, filing false
campaign finance reports, and interfering with a witness. He will
serve 18 to 24 months in prison,
and he will be sentenced two
weeks after McGreevey leaves office.
The rumors go on. One of the
most persistent is that Kushner orchestrated Cipels action against
the governor, a charge that Kushners lawyers dismiss.
Weve had no contact with
Cipel for at least 2 years, said
Benjamin Brafman, an attorney
for Kushner.
But Einat Oren, a public relations consultant hired last week by
Cipel, said it is clear that Cipel has
real anger for Kushner. She declined to say why, instead offering
this cryptic assessment: With
strong people, it seems you can get
into the circle, but you cant go
out.
Even in his hometown, however, Cipel will have a reminder of
Charles Kushner. Earlier this year,
Israeli newspapers reported that
Kushner was building a large
apartment house in the Tel Aviv
suburb.

Another year brought another

mess in the governors office.
For the first part of 2004, McGreevey found himself defending,
of all things, his Catholic faith. On
Jan. 12, he signed the domesticpartnership law, making New Jersey the fifth state to recognize homosexual unions.
That, combined with his outspoken support of abortion rights
and stem-cell research, proved too
much for Bishop John M. Smith,
head of the Roman Catholic Diocese of Trenton. In a sermon delivered March 27 at St. James
Church in Red Bank, the bishop
said of the governor: When he
refers to himself as a devout
Catholic and supports legislation
and programs that are contrary to
the teaching of the Holy Father
and the bishops, he is not a devout
Catholic.
A month later, a top Vatican official, Cardinal Francis Arinze, said
politicians who support abortion
rights are in grave sin and therefore unfit to take Holy Communion. In New Jersey, the Rev.
Joseph Gelante, on the eve of his
installation as bishop of Camden,
said he would give McGreevey his
blessing, but he cant go to Communion.
The priests were condemning
McGreevey for what he talked
about in public. What they did not
know was McGreevey was an active homosexual a lifestyle condemned by the Roman Catholic
Church.
McGreevey did not ignore the
criticism. In public, he said he
would continue to go to Mass and
refrain from receiving the Eucharist. The decision and, perhaps, the delivery of property taxrelief must have resonated with
voters, because by early June McGreeveys approval rating was 41
percent, its highest in 20 months.
The popularity was not to last,
for a new scandal was about to
erupt. On May 4, McGreevey fundraiser David DAmiano was indicted, charged in federal court with
extorting bribes from a Middlesex
County landowner. The court papers revealed a weird detail: McGreevey, in a meeting with the E-mail: younge@northjersey.com
landowner, had been tape-record- and pillets@northjersey.com

6 THE RECORD

JANUARY 2005

Published Friday, Feb. 15, 2002

Governor names contributor to PA board

Magnate gave generously to campaign

By ADAM LISBERG and JEFF PILLETS

STAFF WRITERS

Governor McGreevey, who promised to change

the way Trenton does business, has emulated his
predecessors by naming one of his largest political
donors to the board of the Port Authority of New
York and New Jersey.
Livingston real estate magnate Charles Kushner,
47, has been one of the states most prominent political donors for several years, steering more than $1
million to favored candidates.
In many cases, he has used a little-known loophole in campaign finance law that allowed him to
donate hundreds of thousands of dollars under other peoples names.
Kushner and companies connected to him gave
more than $225,000 to McGreeveys campaign and
political action committee in 1999 and 2000 alone.
Campaign finance watchdogs, who have sifted
millions of records over the years to track Kushners
contributions, were not surprised that one of McGreeveys most generous donors would also receive
one of his most prestigious appointments.
Im not sure what there is in the background of
Mr. Kushner, other than giving a lot of campaign
contributions, said Larry Makinson, a senior fellow
at the Center for Responsive Politics in Washington,
D.C. One would hope there would be something

besides political contributions that would recommend him for this position.
Paul Aronsohn, a McGreevey spokesman, said
Kushners extensive business experience and close
working relationship with the governor eminently
qualified him for the unpaid post. He denied that political money played any role in the governors decision.
In all his nominations, Jim McGreevey is bringing the best and the brightest to serve New Jersey,
Aronsohn said. He has no doubt that Charles
Kushner is the best man for this position.
A spokesman for Kushner said he would detail
Kushners credentials for the post at the appropriate time, but denied that campaign donations were
a factor.
Absolutely not. But critics, what else are they going to say? asked spokesman Steve Solomon. He
has a very strong track record as a corporate executive and as a philanthropist.
The appointment is for a six-year term.
The Port Authority, which is controlled by the
governors of New York and New Jersey, is struggling
to recover from its staggering losses at the World
Trade Center. The agency owned the complex, op-

erated its headquarters in the ruined skyscrapers,

and lost 75 employees from rookie police officers
to the executive director when the buildings were
destroyed Sept. 11.
Kushners relationships with politicians and his
experience as a real estate developer in New York
City and New Jersey could help the Port Authority,
supporters said. The agency is trying to plan the future of the World Trade Center site, rebuild a damaged section of the PATH subway line, and safeguard its tunnels, bridges, and airports against future
terrorism. Solomon declined to comment on the
widespread speculation that Kushner is being
groomed to become chairman of the Port Authority board. He noted that Kushner has not accepted
the nomination to the board, and said it was too early to consider whether his real estate holdings would
pose any conflicts of interest.
If Kushner accepts the appointment, as expected,
he will take the seat formerly held by Bergen County Clerk Kathleen A. Donovan, a GOP candidate for
county executive. Donovan, appointed in 1994 by
Gov. Christie Whitman, stepped down in December.
Serving on the board of a high-profile agency
such as the Port Authority is likely to pose new chal-

lenges for the publicity-shy Kushner, however. He is

used to guarding his privacy, keeping his financial
details of the family business under wraps and
speaking to the media only when it involves real estate.
He is best known as a donor to Democrats, and
once arranged a $2.1 million fund-raising event in
Newark for Sen. Robert G. Torricelli, D-N.J., that
had President Bill Clinton as the featured speaker.
Yet he also steered $62,000 to the abortive Senate
campaign of former New York Mayor Rudolph Giuliani, a Republican.
Kushners political giving can be difficult to track,
because of a loophole that allows him to donate
large sums in small amounts, listed under the names
of other people who invest in his real estate ventures.
A favored candidate will typically receive a bundle of checks, all written for identical amounts on
the same day, attributed to dozens of other investors
who all list the Kushner address in Florham Park.
Kushners giving has led to ethical questions in
the past. In 1999, Giuliani was forced to return
$57,000 raised by Kushner because some of it exceeded campaign finance limits.
Last year, New York mayoral candidates Alan G.
Hevesi and Mark Green returned $51,000 of Kushners donations because they were above the allowable limits.

Published Thursday, Feb. 21, 2002

McGreevey picks Israeli as adviser on security

By JEFF PILLETS and CLINT RILEY
STAFF WRITERS

Governor McGreevey has tapped a foreign national and former campaign aide
with limited experience in U.S. domestic
security as his closest adviser on counterterrorism.
Golan Cipel, 33, an Israeli citizen, occupies a second-floor State House office
where he works as special counsel to the
governor on homeland security. He was
appointed to the newly created position
without an official announcement or the
extensive background checks that are routine for most top state officials.
I didnt feel that kind of check was
necessary, McGreevey said Wednesday.
I know Golan and have worked with
him closely. Hes a super-bright and super-competent individual who brings a
great wealth of knowledge on security.
Cipel is a former Israeli sailor and parttime poet with a background in public relations and politics. For the last 10 years,
he has worked in a variety of jobs, including stints as a television news reporter and
spokesman for the Israeli Consulate in
Manhattan.
The states new domestic security adviser is a newcomer to New Jersey. Last
year, he moved to New Jersey to take a
full-time paid position with the state Democratic Committee. During the 2001 gubernatorial race, Cipel served as McGreeveys liaison to the states Jewish
community and as an informal adviser on
security matters. His other duties included planning McGreeveys inaugural parade through the streets of Trenton.

Calls ex-campaign aide a super-bright individual

Cipel, a Lawrenceville resident, will
make $110,000 a year. McGreevey says it
is money well spent.
In an hour-long interview, the governor
called Cipel his eyes and ears on security issues. He said the Israelis experience
in the terror-stricken Middle East, coupled with his communication skills,
makes him a valuable asset to New Jersey
in the post-Sept. 11 era.
If weve learned one thing since Sept.
11, its that homeland security is all about
communication, McGreevey said.
Weve got all these agencies out there but
weve got to make them work together.
Its all about coordination. Its all about intelligence.
McGreevey said Cipel was not available for an interview Wednesday.
The governor said he met Cipel nearly
three years ago when he visited the Israeli
city of Rishon Le Zion, where Cipel was
the spokesman for the mayor. He said he
was immediately impressed with Cipels
intelligence and grasp of security issues.
The Israelis live with terror every day.
Their very survival depends on being prepared, McGreevey said. Golan has
served in the Israeli military. He is uniquely qualified to point out weaknesses.
Democrats close to the administration
say McGreevey and Cipel have struck up
a close friendship and frequently travel together. When the FBI issued a terrorist
alert last week, it was apparently Cipel
who first contacted McGreevey, not New

Jerseys newly appointed terror czar, Assistant Attorney General Kathryn Flicker.
Even before McGreeveys election in
November, administration sources said,
Cipel toured the state visiting refineries,
nuclear plants, bridges, and seaports to
make an inventory of security needs. McGreevey said Cipel has already offered
invaluable insights into a variety of security matters, both large and small.
Hes someone who thinks with a different set of eyes, and that is very hard to
find, McGreevey said.
Sources close to the task force said
Cipel also played a key role in persuading
McGreevey not to tap former FBI chief
Louis J. Freeh to head the states Domestic Security Preparedness Task Force,
which was created in October. Officials
who served in the administration of former acting Gov. Donald T. DiFrancesco
said Freeh had agreed to take the unpaid
post if McGreevey approved.
McGreevey declined to comment on
Freeh. Several Democrats said Cipel had
argued strongly against the choice, pointing out that the former FBI director would
be a part-time volunteer when the governor wanted a full-time terror czar.
Louis Freeh is without a doubt the nations leading expert on counterterrorism
and homeland security, said one top law
enforcement source. Even as a part-time
adviser, he would be a spectacular asset
for the state.
Cipel was born in Tel Aviv in 1968, a

year after Israel ended its Six-Day War

with Egypt. He spent his childhood in Rishon Le Zion, Israels fourth-largest city.
By his late teens, he had become an accomplished poet. His book of poetry, The
Road of Thorns, was honored by the Israel Institute of Art in 1987.
But as with most young men in Israel,
more serious duty called and Cipel joined
the military. He served in the Navy Patrol
Boat Unit in the Israel Defense Forces for
five years.
When his naval tour ended he became
a reservist, where he served as a platoon
commander after attending the Army Officers Academy. He remains a lieutenant
in the Israeli military reserves.
According to a release issued by the
governors office, Cipel also received training in intelligence analysis and emergency
response to terror attacks during his reserve career. More recently, the release
says, he studied the Israeli Homeland Defense System during a course on military
and emergency communication.
People who know Cipel said his real
love is politics. He came to New Jersey,
they say, to get a firsthand look at an
American political campaign.
He wanted to come over here and
work for McGreevey, said David Malick,
an official with United Jewish Federation
of MetroWest, a New Jersey non-profit
group.
At age 24, after leaving the Navy, Cipel
was appointed to serve on Rishon Le

Zions Committee for Culture. Two years

later, he was appointed to the citys Committee for Higher Education. He later
worked as an aide at the Knesset, Israels
Parliament.
By 1996, Cipel had become one of the
Israeli governments top spokesmen in the
United States.
While working in New York, Cipel attended New York Institute of Technology. He earned a bachelor of fine arts degree in communication arts from the
school in 1998, school officials confirmed.
McGreeveys office said Cipel holds a
masters degree in communications from
the school, a fact school officials could not
immediately confirm.
McGreevey said Cipel is already working smoothly with other key officials in the
states burgeoning domestic security apparatus. Last month, the governor signed
an executive order creating the Office of
Counterterrorism and named Flicker, a
career state prosecutor, to head the new
agency.
Flicker, former director of the states
Division of Criminal Justice, is also chairwoman of the states domestic security
task force, which was formed by the Legislature less than a month after the terrorist attacks.
But it is Cipels, not Flickers, name that
appears on the federal Office of Homeland Security Web site as the person the
governor appointed as New Jerseys
homeland security contact. Flicker was
not available for comment Wednesday.
Well, Golan is not the official representative, but hes my representative, McGreevey said.

Published Friday, March 8, 2002

Israeli quits as security adviser to McGreevey

By CHARLES STILE
TRENTON BUREAU

Will keep $110,000 salary in special counsel job

Israeli citizen Golan Cipel resigned as

Governor McGreeveys security adviser
Thursday amid a controversy over his
qualifications that threatened to engulf
the two-month-old administration in an
ugly political battle.
At a late-afternoon news conference,
McGreevey said the 33-year-old Cipel, a
former campaign aide, has been reassigned as special counsel to the governor at the same pay, $110,000. The governor declined to say what matters Cipel
will consult on, but said his duties will be
determined on an as needed basis.
McGreevey said Cipel repeatedly requested over the past 2 weeks to be relieved of his state security duties. The
governor said he reluctantly agreed after it became clear that Cipels Israeli citizenship barred him from handling sensitive security information.
McGreevey said it was unlikely that

Cipel also would be executive director of

the New Jersey-Israel Commission.
Sources close to the commission said last
week that McGreevey was considering
Cipel for that post. Cipel had served McGreevey as a liaison to Jewish groups
during last years campaign.
McGreeveys decision came one day
after state Sen. William L. Gormley
co-chairman of the powerful Senate Judiciary Committee threatened to block
all future McGreevey appointments unless Cipel testified before a legislative
committee about his job and background. Gormley, R-Atlantic, said he
would back off his threat if Cipel were
given a different post.
Reached last night, Gormley sounded
more conciliatory.
It sounds as though he has made a
reasonable step to take away what had
been an untenable predicament, Gorm-

ley said, referring to the governor. One

of the criticisms I had was how can you
have someone handling security matters
who cant get a security clearance.
Other Republicans took a similar view.
He [Cipel] appears to be well qualified to be a communications expert, said
state Sen. Henry P. McNamara, R-Wyckoff, referring to Cipels public relations
background.
Im glad that the governor finally read
his resume.
Gormleys threat capped nearly two
weeks of complaints about Cipel.
The cascade of criticism began when
details about Cipels job and background
were reported in The Record.
A former Israeli sailor and a published
poet, Cipel was chief information officer
for the Israeli Consulate in New York in
the late 1990s. He moved to Lawrence
Township last year, when he took a full-

time paid position with the state Democratic Committee. During the gubernatorial campaign, he was an informal adviser on security matters and a liaison to
Jewish groups in New Jersey Lawmakers
criticized McGreevey for giving Cipel a
sensitive security position without first
requiring him to undergo the background
check that is routine for top administration officials.
They openly questioned whether Cipel
was qualified, arguing that, as an Israeli
citizen, he would not be eligible for the
security clearances he would need to
gain access to top-level intelligence.
Opponents of the original appointment questioned why McGreevey needed a special adviser on security, particularly after he appointed veteran prosecutor Kathryn Flicker as the states anti-terrorism czar.
The opponents denounced Cipel as a

patronage hire that belied McGreeveys

call for fiscal austerity amid a state budget crisis.
The Cipel controversy had threatened
to cast a shadow over the future role of
Charles Kushner, a Florham Park real estate magnate and a major Democratic
Party contributor.
Kushner is widely viewed to be McGreeveys choice for chairman of the
Port Authority of New York and New
Jersey.
Cipel reentered the United States in
early 2001 under a work visa sponsored
by Kushner.
A Kushner spokesman said Cipel then
worked in Kushners corporate office,
earning $30,000 a year for part-time
work writing press releases and
brochures.
Trenton Bureau Correspondent Charles
Stiles e-mail address is stile@northjersey
.com. Staff Writer Herb Jackson contributed to this article.

JANUARY 2005

THE RECORD 7

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Sunday, June 16, 2002

Paying
power
for

How Charles Kushner funneled millions

to politicians and became the governors
choice to lead the Port Authority
By JEFF PILLETS and CLINT RILEY
TRENTON BUREAU

A thousand well-wishers filled the

Grand Ballroom of New York Citys historic Puck Building on short notice three
months ago for the bris of Charles
Kushners 8-day-old grandson.
Rudy Giuliani was there. Former U.S.
Sen. Frank Lautenberg came. New
Jerseys Governor McGreevey even managed to hobble in on crutches.
The high-wattage turnout at the gala
Jewish circumcision ceremony was no
surprise to political insiders. Although far
from a household name, the 48-year-old
Kushner a multimillionaire New Jersey
real estate developer is renowned as a
generous donor. He already plays a
prominent role in the administration, as

one of the governors inner circle of trusted advisers and his nominee to the powerful Port Authority of New York and
New Jersey.
A close review by The Record of
Kushners donations in the last five years
shows just how grand his largesse really
is: In that time, Kushner, his family, and
business associates funneled at least $3.1
million to political committees and politicians.
Kushners four children gave almost
$300,000, some even before they were
old enough to vote. On a single day in
March last year, Kushners contribution
network gave $237,000 to the state
Democratic Committee.
While businesses and corporations of
all stripes traditionally use campaign contributions to advance their own special
interests, Kushners record shows he has
taken political giving to an extreme,
exploiting loopholes in the very state and
See HARD-NOSED Page 8

8 THE RECORD

JANUARY 2005

Published Sunday, June 16, 2002

Hard-nosed deal maker runs empire

From Page 7
federal campaign laws designed
to limit the influence of powerful
individuals and corporations.
No single politician has benefited from Kushners open wallet
more than McGreevey. Since
1997, the Kushner network has
contributed more than $1.5 million to political funds benefiting
McGreevey.
Now the Livingston developers investments in a rising political star are paying off: One
month after taking office, McGreevey named Kushner to the
Port Authority with the intention
of making him chairman. The job
would give him enormous influence over real estate development decisions in the New York
metropolitan area, including rebuilding of the World Trade Center site.
When people start throwing
that kind of money into the political process like Kushner is doing, thats a whole lot more than
access, said Craig Holman, a political scientist at New York Universitys Brennan Center for Justice and a leading voice for government ethics.
He could buy access by just
hosting cocktail parties with various governors. When he is
throwing that kind of money into
it, I view it as a commercial enterprise. He expects return on his
dollar, and it appears he is getting
it.
The Port Authority plum appears to be just one return on
Kushners investment.
Today, other people Kushner
assisted with big checks or lucrative business deals are key players
in McGreeveys administration
including the chief of staff, the
head of the New Jersey Turnpike
Authority, and the commissioner

of the Community Affairs Department overseeing regulations and government subsidies

that touch every layer of the vast
Kushner empire.Charlies become an unofficial member of
the Cabinet always there with a
helping hand, said one leading
Democrat, who asked not to be
identified because the governor is
sensitive to criticism of Kushner.
The donations to McGreevey
and other politicians paralleled a
rapid expansion of Kushners
business. Since the late 1990s, it
has grown into one of the nations largest privately held real
estate companies, which owns
22,000 apartments and employs
more than 1,000 people.
Kushner makes no secret of
his ultimate goal: I want to be
one of the largest owners in the
country in the next 10 years,
Kushner told The Wall Street
Journal in September 2000.

A private man
Lautenberg, who has known
Kushner for more than 20 years,
compares the developers family
to legendary American families
who have made their mark, such
as
the
Rockefellers
and
Kennedys. Like them, Lautenberg said, Kushner aggressively
promotes his philanthropic and
political causes while advancing
his business and personal interests.
Why does Charlie give so
much money? Lautenberg said.
Well, he sincerely believes its
his duty to promote the causes he
believes in. But he also knows he
has to protect his business. Its really part of a great tradition in
this country.
Unlike the Kennedys and the
Rockefellers, highly visible fami-

lies who carried on a long tradition of public service, Kushner is

an intensely private man who has
never held any government post.
Tapped for the unsalaried Port
Authority post in February,
Kushner has yet to publicly discuss his vision for the bi-state
agency as it faces a host of critical
security, transportation, and development issues. Kushner denied repeated requests for an interview for this story, deferring all
questions to the governors office
and two personal public relations
consultants.
In May, Kushner sidestepped a
potentially embarrassing public
appearance before the state Senate Judiciary Committee, which
was considering his nomination
to the Port Authority.
Some senators on the committee had concerns about Kushner
business practices and associations detailed in media reports.
Two Democrats told The Record
that McGreevey brokered a deal
to have Kushner report to the Attorney Generals Office for an informal, closed-door inquiry into
his background, rather than appear before the committee.
Kushners nomination was
unanimously cleared by the committee without debate. The full
Senate may vote on his nomination as soon as Thursday. He is
expected to be approved.
Howard Rubenstein, one of
his spokesmen, said Kushner has
very definite ideas about what
he wants once he becomes Port
Authority chairman, but cautioned that it would be inappropriate to discuss them before he
takes the job.
Hes taking this position very
seriously, said Rubenstein, who
strongly denied that Kushner was
nominated for the job because of
his political contributions. This
is not a ceremonial post for Mr.
Kushner. He plans to give everything he has for this job, and that
is considerable.
The Record made multiple attempts to talk with McGreevey
about his nominee. Approached
Thursday afternoon after an appearance in Princeton, the governor declined an interview.
New Jerseys governors have a
tradition of nominating top contributors and fund-raisers to the
Port Authority. Former Gov.
Christie Whitman named Lew
Eisenberg, an investment banker
who was one of her major fundraisers, as chairman the job traditionally held by a New Jerseyan, while New York fills the
executive directors post.
Kushners supporters say his
negotiating skills, business acumen, and knowledge of real estate markets make him a natural
choice. As Port Authority chairman, Kushner would have a vital
role in overseeing a $4.5 billion
annual budget, three airports, the
PATH trains, and all major river
crossings in the metropolitan
area.
Hazel Gluck, a prominent lobbyist and Republican fund-raiser
who served on the Port Authority board for six years, said the
chairmanship carries a huge
amount of prestige within political circles and the business community.
That person influences the
awarding of construction jobs
across the region and millions of
dollars in consulting contracts
that go with them, she said.
Sooner or later, the chairman
sits down with anybody who is
important in the world of development, politics, and high finance, said Gluck, also a former
state Transportation commissioner. The chairman can make
more contacts than he ever
dreamed of.

Thinking big

JERRY LUCIANI/STAFF ARTIST

Friends and business associates of Kushner describe him as a

complex and fascinating amalgam of contradictory traits. A

Developer Charles Kushner, right, is no stranger to political figures at the state and national level. Kushner at a recent benefit with former Sen. Frank Lautenberg, left, and former President Bill Clinton.
noted philanthropist, Kushner is
also described as a hard-nosed
deal maker, a calculating and
egotistical businessman who
works extraordinarily long hours
studying the real estate markets
and assessing his next move.
A 1976 graduate of New York
University, Kushner earned his
law degree from Hofstra University and an M.B.A. from NYU
three years later. He practiced tax
and real estate law in New Jersey
and New York before joining the
family business in 1985.
Charles Kushner and his older brother, Murray, inherited a
real estate empire built from
nothing by their late father,
Joseph, a Russian survivor of the
Holocaust who came to the United States as a construction worker in 1949. The fortune Joseph
Kushner bequeathed to his sons
had been painstakingly amassed,
one garden apartment at a time,
by conservative cash acquisitions.
Big risks and leveraged deals
were not part of the family business philosophy.
But Kushners aggressive style,
as evidenced by the dramatic expansion and diversification of the
family holdings, suggests that
when it comes to business he is
anything but his fathers son.
In less than a decade and a
half, he has leveraged his inheritance to make Kushner Companies one of the nations fastestgrowing private real estate companies. With a single $280 million deal in 1999, Kushner significantly increased the size of his
empire by adding 8,000 apartments in Delaware, Pennsylvania, New Jersey, and Maryland.
The 22,000 units he controls are
spread over nine states. His
North Jersey holdings include
properties in Bergen, Passaic, Essex, and Morris counties.
Kushner has branched far
from garden apartments. His rapidly expanding portfolio includes
a title company, an insurance
business, a telecommunications
firm, and the Livingston-based
NorCrown Bank chain. Court
documents and information on
Kushners Web site show that, all
told, he controls more than 100
companies and real estate partnerships, including firms in
Canada and Israel.
As the companys suburban
portfolio has grown, Kushner has
increasingly looked to invest in
New Jerseys cities. In 1999, he
bought the landmark Mutual
Benefit Life Insurance Co. building in Newark for $10.5 million
and immediately engineered a
profitable refinancing,, prompting real estate analysts to marvel
at his ability to spot opportunity.
Charlie has a nose for value,
said Ara Hovnanian, the nations
ninth-largest home builder and a
partner with Kushner on many
projects in New Jersey.

HOLLY MONTALBANO/STAFF ARTIST

Kushner is now vying for a

chunk of the $1.2 billion reconstruction of Asbury Parks fabled
oceanside. In Perth Amboy, he is
the lone developer for a $600
million project that promises to
transform that dilapidated waterfront.
But as the company expanded,
the family divided. Murray Kushner sued his brother last September, demanding an accounting of
all revenues and disbursements
since 1997.
He alleges that Charles Kushner kept part of his partners
profits, ignored key partnership
agreements, and withheld basic
accounting information about
company real estate investments.
The brothers agreed in March to
have a court-appointed arbiter
resolve their dispute in secret.
Despite the bitter dispute between brothers, Kushners friends
say he is a devoted family man
he and his wife, Seryl, have four
children and a generous contributor to philanthropies of all
kinds, especially Jewish charities
across New Jersey.
Kushner is a trustee for Hofstra, his alma mater, where the
law school campus includes the
Seryl and Charles Kushner Hall.

He serves on the boards of more

than half a dozen other educational, medical, and Jewish organizations, including the Joseph
Kushner Hebrew Academy and
Kushner Yeshiva High School in
Livingston, which he founded in
his fathers memory.
For Charles Kushner, giving is
a way of life.
Charlie is revered in philanthropic circles and rightfully so
hes everywhere, said Alan
Steinberg, a leading Republican
in Essex County.
Its as natural and necessary
for him as breathing, Lautenberg said. It doesnt really matter
if its philanthropy or politics if
Charlie believes in something he
puts his money down.

Willing to spend
Kushner clearly has faith in the
Democratic Party and a few
well-positioned Republicans. In
the last five years, Kushners political contributions have exploded, especially in New Jerseys last
two gubernatorial elections. In
1997, the first time McGreevey
ran, the Kushner network donated $555,000 to Democrats. Last
year, it contributed nearly $1.2
See DEVELOPER Page 9

Kushner maneuvers money, influence through legal labyrinth

By JEFF PILLETS
and CLINT RILEY
TRENTON BUREAU

A bewildering array of federal

and state campaign finance laws is
designed to do one thing: limit the
political influence of any one individual or corporation.
But a sophisticated donor like
multimillionaire developer Charles
Kushner can use the complexities
and weaknesses in the law to magnify his influence in the political
system.
Through a network of family
members, business associates, and
affiliated companies he controls,
Kushner managed to funnel more
than $1.5 million to political funds

that benefited James E. McGreevey during the five years he

was campaigning for governor.
Unlike 21 states, New Jersey allows corporations to give cash directly to politicians and political
parties in some cases up to
$37,000. Despite years of trying,
reformers in New Jersey have been
unable to take corporations hands
out of the political process.
Frederick M. Herrmann, the executive director of the New Jersey
Election Law Enforcement Commission, said the Legislature has
ignored the commissions recommendation for a corporate money
ban every year since 1988.
Another weakness in New Jerseys law involves a type of busi-

ness entity known as limited liability companies, often formed by

developers for individual projects.
Until Jan. 1, 2001, New Jersey law
permitted LLCs to make contributions without disclosing who controlled them. This allowed individuals like Kushner, who controlled
dozens of such companies, to get
around contribution limits.
Yet even after the ban went into
effect, state regulations were vague
about what constitutes a violation,
and loopholes still permit the individuals who control multiple LLCs
to give multiple times.
Laws in other states are more
direct. In New York, for example,
managing members or general
partners who oversee multiple

companies and partnerships may

contribute to a candidate only
once. Last year, New York City
mayoral candidates Alan G.
Hevesi and Mark Green were
forced to return $51,000 in contributions from the Kushner network
because of that regulation.
New Jersey law permits minors
14 years or older to make campaign contributions if the money
comes from their earned income
and they and their guardian submit sworn statements that a decision to contribute was solely the
teenagers.
Kushner found that clause, too
at least two of his children were
still teenagers when they donated
tens of thousands of dollars to

state and federal candidates from

New Jersey and New York.
The Campaign Reform Act that
President Bush signed in March
will, among other reforms, prohibit anyone 17 or younger from contributing to a federal candidate or
political party. The law takes effect
after the November elections if it
weathers several constitutional
court challenges.
Clive S. Cummis, a lawyer hired
by the developer to review all campaign contributions made by
Kushner interests since 2000, said
all contributions made by Kushners children followed the law.
I have been advised that those
children have very substantial incomes, and it was from their in-

comes that they made the contributions, Cummis said.

This year, Common Cause of
New Jersey asked state regulators
to adopt clearer rules regarding
limited liability companies.
The advocacy groups recommendations also include a proposal to limit deep-pocketed federal
party committees from influencing
New Jersey gubernatorial elections. Such a provision would
have prohibited the Democratic
National Committee from redirecting $500,000 contributed by
Kushner last year to campaign accounts benefiting McGreevey.
Herrmann said ELEC anticipates issuing a new set of recommendations to improve the system.

JANUARY 2005

THE RECORD 9

Published Sunday, June 16, 2002

Developer within McGreeveys circle

From Page 8
million, almost all to Democrats.
About half of all the Kushner
contributions went directly to
candidates. The other half socalled soft money donations
went to political parties and political action committees. Soft
money cant be used to advocate
for the election of a specific candidate, but it can be used for
party building, get-out-the vote
efforts, and attack ads against
opponents.
Listed as contributors in the
Kushner network are 85 family
members and business partners
in companies the developer controls.
Kushners four children have
given to the same causes as their
father. His son Jared, a 21-yearold college student, is listed as
making more than two dozen
contributions totaling $82,000.
Jareds 17-year-old brother,
Joshua, gave $44,000, while 19year-old Nicole gave $67,000. On
Nov. 1, 2000, Nicole and Joshua
each wrote checks to the state
Democratic Party for $30,000
and $20,000.
Kushners mother, Rae, is listed as contributing $72,000.
Kushners brother-in-law and
business partner, Richard Stadtmauer, and five members of
Stadtmauers family have given
$199,200 since 1997 to various
Democrats and the aborted U.S.
Senate campaign of former New
York Mayor Rudolph Giuliani.
That total included $80,000 to
McGreevey or to political committees that benefited him.
Sometimes, it seemed that
Kushner and the people around
him could not write checks fast
enough.
On March 25 of last year, the
Democratic State Committee
made this haul: two checks for
$37,000 each from Kushner and
his mother; $17,000 from Jared
Kushner; $27,000 from his elder
sister, Dara; and $27,000 from
brother Murray even though he
generally aims his donations at
Republicans. Five other Kushner
partners and their family members also kicked in checks, to
push the total take to $237,000.
In the weeks before a June
2000 state committee fund-raiser
titled, A Special Evening in
Honor of Mayor James E. McGreevey, Kushner and Stadtmauer wrote three checks totaling $50,000 part of $3 million
raised for the Woodbridge mayor
that evening.
Even though Kushner made
contributions to the national Democratic Party, McGreevey still
appeared to benefit from the donations. For example, campaign
finance records show that companies controlled by Kushner
contributed $220,000 on a single
day Sept. 27, 2001 to the
Non-Federal Victory 2001 account of the Democratic National Committee. Five days later, the
DNC sent $546,000 to the New
Jersey Democratic State Committees 2001 election fund, an
account that helped finance the
campaigns of McGreevey and
legislative candidates running
with him.
Kushner has also opened his
checkbook to the regions most
powerful lawmakers in Washington. His network was the largest
contributor to U.S. Sens. Hillary
Rodham Clinton, in 2000 and
2001, and Robert G. Torricelli, in
1999 and 2001. It was the biggest
contributor to Lautenberg in
2000, before he decided not to
seek reelection. It even managed
to become the second-largest
contributor to New Jerseys junior senator, Jon Corzine, the former Goldman Sachs chairman
who spent $60 million of his own
money on the election.
Kushners generosity allows
him to rub elbows with political
luminaries. President Clinton
campaigned for McGreevey in
1997 at Kushners Morris County headquarters. In June 1999,
Vice President Al Gore addressed 600 students, teachers,
and parents at Kushners school
in Livingston. In September
2000, vice presidential nominee
and U.S. Sen. Joseph Lieberman
spoke at a $1,000-a-head fundraiser at Kushners headquarters.
Kushners level of political giving rivals that of such huge concerns as Enron, which gave $3.8
million to hundreds of federal
candidates and political party
funds in the same period.
Advocates of good government say the sheer volume of political contributions from Kushners family and companies makes
a mockery of laws intended to
curb the influence of individuals
and powerful corporate interests.
Leadership of an agency as vital
as the Port Authority, they say,
should not simply be awarded to
the highest bidder.

After Sept. 11, the Port Authority has a whole lot more to
worry about than collecting
tolls, said Larry Makinson, a
senior fellow at the non-partisan
Center for Responsive Politics in
Washington, D.C. You would
hope the top jobs would be given to the best people, not the
contributor with the deepest
pockets.
Kushner, Makinson said, is
nothing less than a modern-day
political boss.
New York Universitys Holman said Kushners ability to
systematically buy his way into a
position of vast influence illustrates how the cash-crazy electoral system has failed voters.
What hes doing here is
frankly astonishing, Holman
said after reviewing a computerized database of Kushners contributions compiled by The
Record. This kind of coordination is obviously an attempt to get
around legal contribution limits.
The bottom line is that public
policy is being made not by principle, but by payment up front.
Rubenstein, the developers
spokesman, denied that Kushners political investments are
purely business decisions or that
the multimillionaire orchestrates
any set program of political giving among his family and employees.
Kushner company executives,
Rubenstein said, make all their
political contributions willingly.
There is no arm-twisting. Everything is above board, he said.
Rubenstein acknowledged,
however, that Kushner makes
some contributions in the executives names without first informing them how much or to whom
the money is given. Kushner informs the executives about the
contributions, Rubenstein said,
either contemporaneously or afterwards.
While it is illegal for an individual or a company to make political donations in someones
name without their knowledge,
the law is less clear in situations
where partners have a written or
verbal agreement to allocate partnership money for campaign
contributions.
Clive Cummis, a prominent attorney and major Democratic
fund-raiser in his own right, said
Kushner retained him in 2000 to
review every federal, state, and
local campaign contribution
made by Kushner interests to
make sure they comply with applicable laws.
They have followed the law,
Cummis said. We review every
contribution they make to politicians. As far as we are concerned,
Charlie Kushners contributions
are legal.

Cabinet connections
Direct donations to the governor and other politicians is but
one layer of Kushners financial
dealings with government officials.
Kushner was also the major
underwriter of a political action
committee for McGreevey that
employed several top Woodbridge officials who went on to
key posts in the governors administration. The federally registered Committee for Working
Families accepted $140,000 from
Kushner and his business partners, an amount that covered
more than one-third of the committees expenses before it went
out of business last year. The
committee allowed McGreevey
to remain active in state politics
by spreading donations around
the state to county committees,
legislators, and local candidates.
Among the PACs paid employees were Lucille Davy, now
the governors special education
adviser and the wife of James M.
Davy, another close McGreevey
adviser; Paul Levinsohn, finance
chairman for McGreeveys 2001
campaign and now the governors chief counsel; and Gary
Taffet, McGreeveys 2001 campaign manager and now his chief
of staff.
Others in the McGreevey administration with connections to
Kushner:
Former Cherry Hill Mayor
Susan Bass Levin received campaign donations from Kushner
and his partners, then $20,000
for her unsuccessful congressional bid in 2000. She is now commissioner of the Department of
Community Affairs, which oversees all housing and development
issues. Bass Levin and Kushner
serve on the U.S. Holocaust
Memorial Council, both appointed by former President Bill Clinton.
Former Union County Manager Michael Lapolla accepted
$10,000 from Kushner and his
companies during his failed congressional campaign in 2000. He

is now executive director of the

New Jersey Turnpike Authority.
Attorney General David
Samson, New Jerseys top law enforcement officer, did extensive
legal work for Kushner and his
companies before joining the administration. Arthur Goldstein,
an attorney with Samsons firm,
is defending Kushner in the financial dispute with his brother.
Kushner has especially close
ties to Taffet, who as chief of staff
is the first person McGreevey
telephones each morning. In
2000, Kushner bought Highview
Planning, Taffets Woodbridge insurance business. Neither Kushner nor Taffet will say how much
the deal was worth, but Taffet, on
a recently filed ethics disclosure
form, said he had received at
least $350,000 from Kushner.
After buying Taffets company,
Kushner made Taffet president of
Vantage Insurance, an affiliate of
the Kushner Cos. Taffet left Vantage last year to join the McGreevey administration, in the
same role he had played in McGreeveys first term as mayor.
Taffet is not the only administration official Kushner once employed. Last year, Kushner hired
Golan Cipel, a 33-year-old Israeli
who had worked in McGreeveys
campaign as outreach coordinator to Jewish voters. He put Cipel
to work writing press releases at
company
headquarters
in
Florham Park.
Cipel made headlines this year
when McGreevey appointed him
to a $110,000 job as special
counsel for homeland security,
then had to remove him after
lawmakers from both parties
protested that Cipels only expertise in counter-terrorism came
from routine training in the Israeli Navy.
Cipel has remained in the administration at the same salary
with the post of special counsel. The governors office has declined to specify Cipels new duties.
Spokesmen for Kushner and
the administration say the developers contributions and relationships with government officials have not resulted in special
treatment for him or his companies.
The idea that Mr. Kushner is
trying to buy his way inside the
administration for personal or financial gain is just wrong,
Rubenstein said. That is not the
kind of man he is. That is not
how he operates. His business
does not depend on favors coming from elected officials.
McGreevey spokesman Paul
Aronsohn insisted that Kushners
dealings with administration officials are insignificant. He said
many Cabinet officers and all
other top officials had the kinds
of careers in which they were
bound to come in contact with
Democratic contributors.
Cabinet officers dont live in a
vacuum, said Aronsohn. Just
because they had business dealings with someone in the past
does not mean they cannot serve
in an ethical way. Charles Kushner is not getting any special
treatment.

McGREEVEY

TORRICELLI

CLINTON

CORZINE

LAUTENBERG

SCHUMER

Kushner cash machine

Real estate mogul Charles Kushner, his family, companies, and business associates have contributed
$3.1 million to federal and state political funds since 1997. The bulk of the money has benefited New
Jersey's and New York's most powerful and influential politicians, men and women with a say in how
the region develops. U.S. Sen. Robert G. Torricelli, D-N.J., U.S. Sen. Hillary Rodham Clinton, D-N.Y.,
and New Jersey's Governor McGreevey all count Kushner and his companies as their biggest political
donors. Others who received donations include Sen. Charles Schumer, D-N.Y.,Sen. Jon Corzine, DN.J., and Frank Lautenberg, former Democratic senator from New Jersey. The following is a list of the
beneficiaries:

Democratic National Committee

Schumer

DNC Services Corp.-DNC

DNC-Non-Federal General/2001
DNC-Non-Federal Victory 2001
DNC-Non-Federal-Corporate
Total

Schumer '98
Friends of Schumer
Total

$406,000
$200,000
$300,000
$160,000
$1,066,000

NJ Democratic State Committee

$661,000

McGreevey
James E. McGreevey 1997
James E. McGreevey 2001
James E. McGreevey Inaugural 2002
James E. McGreevey,
Committee for Working Families
James E. McGreevey,
Election Account of Mayor
Total

$70,000
$152,650
$5,000
$141,000
$50,700
$419,350

Democratic Senatorial Campaign

Democratic Senatorial
Campaign Committee
DSCC-Non-Federal Mixed
Total

$110,000
$50,000
$160,000

Torricelli
Torricelli for U.S. Senate Inc.
Torricelli Legal Defense Fund
Total

$60,000
$65,000
$125,000

Clinton
Hillary Rodham Clinton
for U.S. Senate Committee Inc.
HillPAC
Total

$74,000
$50,000
$124,000

Corzine
Corzine 2000 Inc.
Corzine Committee Inc.
Total

$80,000
$8,000
$88,000

Lautenberg
Lautenberg 2000 Committee
Lautenberg Committee 1994*
Lautenberg for U.S. Senate Committee
Total

$32,000
$13,000
$32,000
$77,000

$40,000
$26,000
$66,000

Other contributions
Friends of Giuliani
Exploratory Committee
$64,000
Gore 2000 Inc.
$41,000
Bill Bradley for President Inc.
$30,500
Union County Democratic Committee $30,000
New Millennium PAC
$27,500
Menendez for Congress
$22,000
Doria Democratic Leadership Fund
$20,000
Susan Bass Levin for Congress
$20,000
Pascrell for Congress Inc.
$16,500
Lapolla for Congress Inc.
$10,000
Senate Democratic Majority 2001
$6,600
Hudson County Democratic Organization $5,000
Liberal Party of New York State
$5,000
New Jersey United Federal PAC
$5,000
Somerset County Democratic Committee $5,000
Senn 2000
$3,000
Patricia Sebold
$2,500
Richard J. Codey
$2,500
Garry J. Furnari
$2,200
Bob Franks for U.S. Senate Inc.
$2,000
Bret Schundler
$2,000
Dear 2000 Inc.
$2,000
Dear for Congress Inc.
$2,000
Kerry Committee
$2,000
Joseph S. Suliga
$1,800
Bonnie Watson Coleman
$1,000
Jeff Van Drew
$1,000
John O. Bennett
$1,000
Joseph Coniglio
$1,000
Joseph L. Fiordaliso
$1,000
Assoc. for Commercial Real Estate
American Development PAC
$500
*contributions came In 1997
Sources: New Jersey Election Law Enforcement Commission,
Federal Election Commission, Clerk of the U.S. Senate.

A moment in history
If the Senate approves Kushners Port Authority nomination,
he will join a powerful organization with a 40-year history of taking on big projects that have benefited the public and, sometimes,
a few well-connected boosters.
No project better showcases
the bi-state agencys boldness
than its decision more than 30
years ago to finance the construction of the World Trade
Center.
The Twin Towers the Port
Authoritys signature image
were the vision of David Rockefeller, then-chairman of Chase
Manhattan Bank, and his brother, Nelson, the governor of New
York and a former executive at
Chase.
The Rockefeller family held
vast real estate interests in lower
Manhattan. The brothers used
their combined financial and political power to push through the
project.
The Rockefellers stacked the
Port Authority board with loyalists and used the powerful agency
to condemn the 16 square blocks
and finance construction of the
towers and an interconnecting
transportation network.
The redevelopment of lower
Manhattan into the worlds financial center rejuvenated New
York City, along with the Rockefellers real estate holdings.
New Jersey politicians, historians note, were initially opposed
to the World Trade Center, but
found themselves virtually powerless against the potent, sophisticated sway of the Rockefellers.
To this day, New Jersey officials

complain that the Garden State

has failed to get its fair share from
the Port Authority partnership.
Now, with the destruction of
the trade center, the Port Authority and those who control it
are once again at a critical juncture, with a responsibility to mold
the metropolitan regions financial, rail, and real estate landscape for decades to come.
This time, New Jerseys governor has employed his own power

broker to help shape the regions

future.
State Transportation Commissioner Jamie Fox told lawmakers
earlier this year that New Jersey
needed a force of personality
like Kushner on the Port Authority to get the states fair share of
the billions of dollars in public
money that flow through the
agency.
I believe he is a leader who
represents our interests well,

Fox said.
Still, precisely what those interests are and will be in the future may largely be determined
by Kushner himself, suggested
former Port Authority member
Gluck.
Every day, he will be out
there as chairman, shaking
hands, making deals, all as the
representative of New Jersey,
she said. If that isnt power,
what is?

10 THE RECORD

JANUARY 2005

Published Sunday, Nov. 24, 2004

Governor woos substantial donors

By JEFF PILLETS
TRENTON BUREAU

Intimate access available for

a price, lobbyists say Governor
McGreevey has become the star
attraction in a series of intimate,
invitation-only fund-raisers catering to select lobbyists and their
clients a unique role for a sitting
governor.
Six of Trentons most influential lobbyists, speaking last week
in separate interviews with The
Record, said their firms had recently been approached by the
Democratic State Committee and
told the governor was available to
attend small gatherings of lobbyists and their clients if they agreed
to contribute money.
The price was $25,000, said
one longtime Democratic lobbyist
who received a call from the state
committee in early October. I
was floored. They were asking for
a command performance. The
governor was involved. Its awful
hard to say no to something like
that.
All six of the lobbyists said calls
came from Stephanie Babek, the
Democratic State Committees finance chairwoman. Babek, they
said, told them she was attempting to arrange intimate gatherings
at which contributors would be
assured of having one-on-one
time with the governor. Babek did
not return calls or e-mails last
week.
When my clients heard they
would be one of only about a
dozen or so people sitting down
with the governor, checkbooks
started opening, said another Democratic lobbyist who attended a
recent fund-raiser in Newark.
Officials for McGreevey and
the Democratic State Committee
said they would not release a list
of fund-raisers the governor has
attended, although his spokesman
acknowledged that McGreevey

Intimate access available - for a price, lobbyists say

has attended three or four small
events in recent weeks.
Kevin Davitt, the governors
press secretary, said McGreevey
attended the affairs because he
was invited, just like a wedding.
McGreevey, he said, is dedicated
to building the Democratic Party,
but not at the cost of selling influence to special interests.
Money does not buy influence
with this governor, Davitt said.
Attending a fund-raiser does not
mean youre for sale.
Davitt said it was highly
doubtful that the state committee
was explicitly offering access to
McGreevey in exchange for money. These lobbyists who are complaining are the ones in the influence-peddling business, not us,
he said.
Rich McGrath, a spokesman
for the Democratic State Committee, declined to talk about
specifics of the committees fundraising program. He said all contributions to the party have been
reported to the state Election Law
Enforcement Commission.
We have nothing to hide, McGrath said. This governor wont
take a cup of coffee for free.
McGrath said that while the
governor finds fund raising distasteful, he feels a strong duty to
uphold Democratic policies and
principles.
Jim McGreevey resurrected
this party on his shoulders. McGrath said. Hes got the political
responsibility to keep it strong.
But lobbyists who attended the
fund-raisers said McGreeveys
participation in such intimate settings went far beyond the traditional party-building role of a sitting governor.
On Oct. 25, McGreevey met
with about a dozen contributors

in a small room at the Nassau Inn

in Princeton. Several lobbyists
who were in attendance said the
governor stayed for more than 90
minutes and had private chats
with everyone in the room.
One lobbyist who paid more
than $2,500 to attend the meeting
said he told McGreevey about a
number of specific problems his
clients were facing.
He didnt make any promises,
but I got the feeling he was sympathetic, said the lobbyist, whose
firm represents commercial and
industrial interests throughout
New Jersey.
It is not unusual for sitting governors on both sides of the political aisle to lend their names to
fund-raisers that benefit the state
party. Former Republican Gov.
Thomas H. Kean created a special
Governors Club for top contributors who attended quarterly
dinners with him.
Fellow Republican Christie
Whitman carried on the tradition,
attending an annual dinner for
100 to 120 high contributors who
also went on an annual trip to
Washington, D.C., to meet with
members of the states congressional delegation.
Robin Visconi, who was Republican Party finance chairwoman during the Whitman administration, said the Governors
Club was open to people who
contributed $25,000 in a calendar
year. She said the state committee
never offered private meetings
with Whitman at fund-raisers.
She went once a year to a dinner that was highly publicized.
Everyone knew about it. The papers covered it, Visconi said.
The lobbyists, veterans of both
parties, say McGreevey is proving
to be a far more formidable party

builder than any of his immediate

predecessors. They say the governor and his state committee are
quietly but aggressively canvassing
lobbyists and law firms for dollars
in a systematic way.
At the same time, they say, the
McGreevey administration is
pressuring the states marquee
lobbying firms, typically headed
by partners from both major parties, to end all but token contributions to the Republicans.
Two lobbyists say that John
Lynch, the former Democratic
state legislator and influential McGreevey backer, called several
firms to pressure them into giving
more to the Democrats. Lynchs
office did not return phone calls
Friday.
I was told in no uncertain
terms that splitting my contributions 50-50 between the parties
was no longer good enough, said
one Democratic lobbyist whose
firm represents dozens of clients.
The new rule is more like 80-20,
or even 90-10. Im a loyal Democrat, the biggest partisan youve
ever seen. But Ive never been so
angry.
The strategy appears to be paying off. The Democratic State
Committee has raised $8.2 million
since the beginning of the year,
compared to the $3 million raised
by their Republican counterparts,
state election records show.
All the lobbyists who spoke to
The Record did so on condition
that their names not be used.
I cant be identified in any
way, any way at all, or Im dead
meat, said one Republican who
is a partner at a prominent Trenton firm. My clients will be shut
down in a second. Access, contracts, boom, just gone. Said another lobbyist: Look, all gover-

Contribution reports filed by

the Democratic State Committee
show that both principals of the
law firm and six other partners
gave $2,500 apiece. A number of
calls placed to the law firm and
several partners were not returned.
At one point, the governor disappeared and I was told that he
was having closed-door meetings
with certain contributors, said
another lobbyist who was at the
Newark Club. I guess I didnt
give enough for a private session.
Officials of several government
watchdog groups condemned the
fund-raising program and said
they were particularly troubled by
the state committees apparent offer of access to the governor in exchange for a specific dollar
amount.
Its almost an advertisement
for a quid pro quo, said Bill Allison, a spokesman for The Center
for Public Integrity, a non-partisan group in Washington, D.C.
Theyre literally telling lobbyists,
Hey, heres your chance to influence public policy for $25,000.
Larry Makinson, a senior fellow at
the nonpartisan Center for Responsive Politics, said McGreeveys invitation-only fundraisers remind him of the Clinton
administrations infamous coffees,
in which the White House marketed time with the president in
exchange for contributions.
People in New Jersey have got
to be asking themselves who is really making the laws, Makinson
said. The only reason lobbyists
exist is to influence policy. By
promising access at a specific dollar price, the party is sending the
unmistakable message that government in New Jersey is for sale.
That is a terrible message to
send.

nors raise money for their party.

But this is no Governors Club
ball. This is a shakedown and the
message is clear: Pony up, or else.
There is nothing illegal about a
sitting governor or any other
politician appearing at a political
fund-raising event. State election
officials point out that the governor can raise as much cash as he
wants for a political party, as long
as he does not use taxpayer money in the process.
There really are no limits, said
Fred Herrmann, executive director
of the state Election Law Enforcement Commission. About the
only restriction is that he cannot
conduct a fund-raiser on state
property or use a state phone to
solicit money.
Lee Moore, a spokesman for
the state Department of Law and
Public Safety, said Friday that he
would have to consult the governors office before answering
questions about the state fundraising laws. Moore did not respond to subsequent calls.
Several lobbyists who spoke to
The Record said it was clear that
the governor would not attend if a
contribution minimum of $25,000
were not promised. Lobbyists
were encouraged to round up a
small number of their clients,
whose contributions would meet
the goal. For example, a lobbyist
could invite 10 people at $2,500
each, or five at $5,000 each.
One Democrat who attended
an Oct. 11 fund-raiser with about
25 contributors at the Newark
Club said all his clients at the dinner were given private sitdowns
with McGreevey.
The event was organized by
McManimon & Scotland, a
prominent bond counsel firm in Jeff Pillets e-mail address is pillets@northjersey.com
Newark.

Published Thursday, Feb. 27, 2004

McGreeveys rich patron quits PA seat

Kushner legal woes grow
lems threatened to erode further
TRENTON BUREAU
McGreeveys sagging standing
with voters, as reflected in recent
Charles Kushner, the Democ- polls.
ratic sugar daddy who staked
The voters are clearly skeptiGovernor McGreeveys political cal about this governor, one Deambitions to the tune of $1.5 mil- mocrat close to the administralion, resigned from the Port Au- tion said. Kushner is just another
thority on Wednesday amid con- big headache Jim doesnt need.
cerns that his growing legal prob- Kushner leaves the public stage as
lems would sink the govfederal investigators look
ernor to new depths of
into allegations that the
public skepticism.
49-year-old Livingston
Kushner walked away,
resident, who aspires to
calling the allegations
be one of the nations
against him senseless,
biggest landlords, bilked
and said he was just a
millions from his business
public servant seeking to
partners and made illegal
make a difference in peo- KUSHNER
campaign contributions
ples lives.
to McGreevey and others.
My motive ... to serve on the
The allegations stem from lawPort Authority was merely to per- suits filed by Kushners brother
form public service with absolute- and a former Kushner Cos. bookly nothing in return except the op- keeper, who claims that the deportunity to make a positive im- veloper diverted $3 million from
pact on peoples lives, Kushner his tenants security deposits to fisaid in a prepared statement.
nance his favorite politicians.
Our system unfortunately disRepublican lawmakers in Trencourages qualified business peo- ton also believe that Kushners
ple who can make a difference controlling interest in a Livfrom doing public service, he ingston bank disqualify millions in
added. That is truly a shame. donations he made to New Jersey
McGreevey named North Cald- politicians, who are barred from
well resident Anthony R. Coscia taking bank cash.
to replace Kushner on the Port
An inquiry by the U.S. AttorAuthority of New York and New neys Office into the lawsuits alJerseys 12-member board of com- legations gathered momentum
missioners. Coscia, the widely re- this week as federal agents prespected chairman of the New Jer- pared to question several individsey Economic Development Au- uals with knowledge of Kushner
thority and an economic adviser Cos. operations.
to McGreevey, is expected to beThe government has already iscome chairman of the bi-state sued subpoenas for evidence
agency in April.
gathered in a sealed lawsuit
In a brief statement, Mc- brought against Kushner last year
Greevey called Kushners resigna- in state Superior Court in Jersey
tion regrettable and said the de- City.
veloper was among the most exState Attorney General Peter
ceptional individuals I have ever C. Harvey will also look into
had the honor of knowing and Kushners contributions. On
calling friend. His integrity, de- Wednesday, McGreevey chief of
cency, and commitment to the staff James P. Fox asked Harvey
highest ethical standards are be- to issue an opinion on Kushners
yond reproach, McGreevey said. joint status as a major campaign
But administration sources said contributor and controlling
the governor and his closest ad- trustee of NorCrown Bank.
visers were relieved that Kushner
In a letter to Harvey, Fox asked
left and acknowledged that Mc- the attorney general to determine
Greevey did not hesitate to accept whether political contributions
his resignation. The sources said made by Charles Kushner from
Kushners mounting legal prob- March 4, 1996, through Dec. 31,

By JEFF PILLETS

1997, were appropriate given the

ban on contributions from bank
owners.
Documents released Wednesday by the state Department of
Banking and Insurance reveal
that Kushner became the incorporator, director, and majority
shareholder of NorCrown bank
on March 26, 1996. He continued
in that role until Jan. 1, 1998, the
documents show, when ownership of the bank was transferred
to a trust Kushner created for tax
and estate-planning purposes.
State elections records show
that the Democratic State Committee accepted $140,000 from
Kushner and his real estate companies during the time when
Kushner was listed as the majority shareholder of NorCrown
Bank.
On Oct. 8, 1997, the committee
accepted $130,000 in checks from
11 companies owned and controlled by Kushner. Also on that
date, Kushner himself wrote a
$10,000 check to the state committee.
Title 19 of the New Jersey legal
code, a provision that goes back
to 1911, states that a majority
owner of a bank cannot make political contributions.
A spokesman for McGreevey
said it was too early to say if the
governor would order the state
committee to return the contributions.
Theres a determination being
made on the legality of those contributions well have to wait
and see, McGreevey press secretary Micah Rasmussen said.
This is not the first time McGreevey has sought legal advice
on questionable contributions
from Kushner. Rasmussen said
that in the summer of 2001, a
team of attorneys working for McGreeveys campaign flagged donations from Kushner after learning of his connection to the bank.
Rasmussen said that a campaign attorney questioned Kushner and his lawyer and decided
that the contributions were legal.
He said he could not identify the
campaign attorney who did the
review. However, at the time,
Paul Josephson was listed as the
campaigns legal counsel.
Josephson, who is now Mc-

Kushner timeline
1985: Kushner becomes chairman of Kushner Cos., a land development firm in Florham Park
founded by his father.
June 1996: Kushner acquires
Livingston-based NorCrown
Bank after it is shuttered by federal banking regulators for having too few assets. The bank expanded from a single branch to
a $500 million bank with 13
branches since Kushner took
control.
February 1997: Kushner begins
his ascent as a leading campaign contributor to James E.
McGreevey,
who makes his
first run for governor that year.
Over the next
five years,
McGREEVEY Kushner, his
family, and his companies contribute $1.5 million to McGreevey accounts.
1999: Former Mayor Rudolph
Giuliani's U.S.
Senate campaign is forced
to return
$57,000 in campaign contributions from
Kushner and his
GIULIANI
family members, because they exceeded

Greeveys chief counsel, did not

return calls Wednesday.
Rasmussen said the brief investigation gave the campaign a
green light to accept further donations from Kushner and his
companies.
But campaign records show
that all contributions from Kushner to McGreeveys campaign
stopped in early August. And a
source familiar with the internal
probe of Kushners contributions
said campaign officials ordered a
stop to the acceptance of all
Kushner contributions at the
time.
The campaign wanted to protect itself, the source said. There
was a feeling that this was, potentially, something that could really

contribution limits.
February 2002: A month after
his inauguration as governor,
McGreevey nominates Kushner
to become a member of the Port
Authority of New York and New
Jersey. The governor makes no
secret that Kushner is his choice
to become chairman of the
agency at a later date.
Early 2002: Kushner is sued by
his brother, Murray, and another
business partner. Both allege
that Kushner kept part of the
partners' profits, ignored key
partnership agreements, and
failed to give his partners basic
accounting information about
company real estate investments.
June 2002: The Senate approves Kushner's nomination to
the Port Authority board.
November 2002: Kushner's former bookkeeper, Robert Yontef,
sues Kushner in Superior Court
in Newark, alleging he diverted
funds to finance his favored
politicians and to enrich himself.
Kushner denies the allegations
and his spokesman describes
Yontef as a "disgruntled, unfaithful, former employee."
January 2003: Yontef files a
federal lawsuit, accusing Kushner of funneling $2 million from
his business partners to buy a
fledgling insurance company

damage us if it got out. Howard

Rubenstein, a spokesman for
Kushner, referred all questions
about campaign contributions to
Kushner attorney Clive Cummis.
Cummis, who has served as Kushners adviser on contributions
since 2001, did not return phone
calls Wednesday.
In an interview this week,
Cummis said he advised Kushner
that all contributions he made as
NorCrowns controlling trustee
were legal because he is not technically the owner of the bank. It is
not clear, however, if Cummis reviewed the $140,000 in contributions Kushner made during the
19-month period when he was
the bank owner.
The law refers to bank own-

owned by Gary
Taffet, a close
friend and former chief of
staff to Governor McGreevey.
A spokesman
said the purTAFFET
chase was an
"appropriate, private transaction."
February 2003: U.S. Attorney's
Office issues subpoenas seeking documents from Murray
Kushner's lawsuit. Federal investigators begin interviewing
former Kushner Cos. employees.
Feb. 25: Republican lawmakers, led by
Sen. William
Gormley of Atlantic County,
demand probe
of Kushner's
GORMLEY
campaign contributions, claiming that he may
have violated a ban on principal
bank owners from making contributions to state campaigns.
Kushner officials say most of the
bank is owned by a trust, not by
Kushner.
Feb. 26: Kushner resigns from
the Port Authority. McGreevey
nominates ally Anthony Coscia
to replace him.

ers, not beneficiaries of bank

trusts, Cummis said. So all those
contributions he made were free
and clear. If he was the majority
owner of the bank, that would be
an entirely different story. Meanwhile, the nomination of Coscia,
a longtime McGreevey ally
known for his administrative
skills, was widely hailed.
Tony knows numbers, and he
knows New Jersey, said George
Zoffinger, executive director of
the New Jersey Sports and Exposition Authority and a longtime
friend of Coscias. Hes very methodical, and hes one of the
smartest guys I know.
Staff Writer Clint Riley contributed
to this article.

JANUARY 2005

THE RECORD 11

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Wednesday, May 21, 2003

Jersey is a businessmans State; business men and their lawyers have ruled
it always, and the laws they have made permit a business man to hold office and engage
in private business, almost any office and almost any business.
LINCOLN STEFFENS, MCCLURES MAGAZINE, 1905

Banking on
your money
Fast-growing Commerce counts on political ties
By CLINT RILEY
STAFF WRITER

With help from taxpayers and government

deregulation, Commerce Bancorp has expanded
into one of the nations fastest-growing suppliers
of financial services and New Jerseys most
impressive political benefactor since the
Pennsylvania Railroad controlled politicians and
public policy a century ago.
Few of the thousands of new customers flocking to Commerces big red C realize that this
$17.7 billion-a-year financial powerhouse is run
by a corporate syndicate whose members wield
an astonishing breadth of influence over New
Jerseys elected officials, the public policy they
make, and the taxpayer dollars they spend.
No other bank, bond underwriter, or insurance
broker operating in New Jersey has doled out
more campaign cash, received more no-bid government contracts, or employed more of the
states politically

connected figures in the last five years.

At least five county political bosses, a former acting governor, two former state Senate presidents,
and dozens of state and local public officials have
received both personal income and campaign contributions from Commerce Bancorp.

Critics of the banks practices say Commerce has

shrewdly exploited regulations that allow banks to
peddle insurance and buy and sell securities for
any client including government and has taken advantage of fragmented oversight of financial
institutions and public officials in New Jersey.
CEO Vernon W. Hill II and his associates insist
they are breaking no laws, that their courtship of
politicians is inevitable in the natural course of
community-oriented business. They boast that
Commerces remarkable growth is the result of innovative banking practices, attention to customer
service, and investment in local communities.
In an interview with The Record, Hill defended
the banks political activities as vital to community involvement.
We care about public issues. We are a giant employer in this state, he said. We feel it is our obligation to be involved in the political process in
towns where Commerce has branches.
But three weeks ago, amid questions about
Commerce business practices raised by investors
and reporters, the bank curbed that political involvement. On April 29, Hill told investors that
Commerce would suspend political donations in
New Jersey until legislators decide whether to stiffen regulations on contributions from government
contractors like the bank.
The announcement came as federal regulators
scrutinize the bank, and as watchdog groups and
See COMMERCES Page 12

Vernon W. Hill II (center, red tie) built Commerce Bancorp

with the help of New Jersey business and political leaders
such as former acting Gov. Donald T. DiFrancesco (to Hill's
left), George E. Norcross III (to Hill's right), and Joseph E.
Buckelew (behind Norcross, red tie), all among the bank's
13-member board of directors.

12 THE RECORD

JANUARY 2005

Published Wednesday, May 21, 2003

At a glance
Commerce Bancorp
Founded: 1973
Headquarters: Cherry Hill
Stock symbol: CBH
President and CEO: Vernon
W. Hill II
Employees: 6,875
Branches: 225
Total assets: $17.7 billion
Total liabilities: $16.6 billion
Total deposits: $14.7 billion
Subsidiaries: Commerce
Bank, National Association;
Commerce Bank/Shore;
Commerce Bank/North;
Commerce Bank/Delaware;
Commerce Bank/Pennsylvania; Commerce Bank/Harrisburg; Commerce Bank Leasing LLC; Commerce Capital
Investments Inc.; Commerce
Capital Markets Inc.; Commerce Insurance Services
CHRIS PEDOTA/STAFF PHOTOGRAPHER

Going for the juggler: Jay Koo entertaining at the March opening of a Commerce branch at Warren and State streets in Trenton, two blocks from the steps of the State House.

Commerces political ties

From Page 11
banking rivals claim that Commerces success is due at least in
part to its generosity toward wellplaced politicians and an impressive array of interlocking relationships with government insiders.
Their concerns are supported by
the results of an eight-month investigation by The Record, which
found that the corporations aggressive business practices and
pursuit of political connections
give its leaders extraordinary influence over billions of dollars in public money.
Consider:
Commerces employee political action committee, Compac NJ,
distributed almost $1.65 million to
New Jersey candidates for state
and local office over the last five
years, much of it pumped into political funds in counties and towns
where Commerce then reaped
millions of dollars in banking,
bond, and insurance business.
Some donations appeared to skirt
federal securities rules intended to
block influence over municipal finances.
Commerce is unusually enmeshed in local finances. At the
end of 2002, it held $1.8 billion in
New Jersey taxpayer money. That
sum is almost 20 percent of the
$9.5 billion in government deposits held by private banks; the
$9.5 billion is separate from the
states $11 billion cash management fund, which is held in a Morgan Stanley Dean Witter trust.
Commerce is involved in government insurance contracts in nearly every municipality. And it has
become the dominant player in
buying and selling government
debt, last year underwriting onethird of all bonds issued in the
state. The remaining bond business was split among 44 other
banks and investment houses.
In New Jersey counties and
municipalities where party bosses
and local political leaders have financial ties to the bank, Commerce obtains a sizable portion of
government banking, underwriting, and financial advisory work
without formal competitive bidding.
Last year, two-thirds of all longterm bonds underwritten primarily by Commerce were not put out
for bid, compared with less than
half of those handled by its nearest
competitor, Wachovia Securities.
Commerce was the primary underwriter in 64 negotiated bond
deals (out of 94 deals), a total more
than four times the 15 no-bid deals
underwritten by Wachovia (out of
33 deals). The Commerce no-bid
deals were worth $1.5 billion; Wachovias were worth $392 million.
New Jersey is fertile soil for suppliers of bonds, bank accounts, insurance, financial advice, and other government services. Every time
one of the 21 counties, 566 municipalities, 614 school districts, or
dozens of quasi-governmental authorities such as the Bergen County Utilities Authority opens a bank
account, borrows money for

streets or schools, or seeks insurance for its workers, it must find a

provider and draw up a contract.
In a competitive banking market such as New Jerseys, many financial experts say formal bidding
can help lower costs. New Jersey
jurisdictions, however, show little
consistency in how they award
contracts. Some local officials who
opt for no-bid or negotiated contracts argue that taxpayers are better served when trusted local professionals arrange the deals. Others say certain deals are professional services and thus are exempt from bidding under New Jersey public contract law.
It is amid this unevenness that
Commerce thrives, its interlocking
political and financial relationships giving the bank an overwhelming edge in negotiating government work.
Hill says Commerce is just doing what its many governmental
customers want.
Its not our choice whether the
municipalities go competitive or
non-competitive, he says. Its

theirs. Whoever makes the call,

taxpayers typically end up paying
higher fees in no-bid deals, especially when the contracts go to
suppliers that make political contributions, says Robert B. Lamb, a
professor at New York Universitys Stern School of Business.
The cost is added into the pricing, says Lamb, author of such finance industry standards as Municipal Bonds and Handbook of
Municipal Securities and Public
Finance.
Your money buys you a seat at
the table for a negotiated deal.
Whoever has the politicians either
gets the deals that would have
gone to other firms at a cheaper
price, gets deals more often, or
they establish relationships for future deals.
The uneven playing field rankles rival bankers from Cape May
to Bergen County. They voice respect for Hills banking innovations but are uneasy with some of
his more bruising methods, such as
offering a $5,000 bonus to any
manager responsible for shutting

down a competing branch. Their

concerns were such that none
would be identified by name, fearing Hill would turn his political
and financial might against them.
In polite society, says one
banker in South Jersey, we compete with our fellow bankers, and
if we lose, we accept the share of
the market that we are left with.
Not Genghis Khan Hill. He has
to have it all.
There is no sense of fair play in
the way Vernon plays the game,
echoes a North Jersey banker.
Hes way out of the box. Vernon
thinks he can do whatever he
wants. They may not say it in the
open, but most bankers think Vernon and Commerce are protected.
Hill dismissed such comments
as whining. He also challenged
recent media emphasis on Commerces political connections and
its share of government-related
business, arguing that such business is but a small fraction of the
banks entire portfolio.
You should be writing about

this as a New Jersey success story,

he declared.
But to some veteran political
observers, Commerce Bancorps
swelling influence is worthy of
public attention.
This is remarkable even for
New Jersey, says Larry Sabato,
the nationally known director of
the Center for Politics at the University of Virginia. It is about as
much raw power that can exist under the rule of law in 2003.
Sabato, author of Dirty Little
Secrets: The Resurgence of Corruption in American Politics, says
such a concentration of power
should concern New Jerseys citizens.
Its important that people have
faith that their government is representing them and not just the
elite, he says. When private
money and government power
gets concentrated in the hands of a
few, we end up with government
of, by, and for the powerful.
That was the situation almost
100 years ago when muckraking
journalist Lincoln Steffens report-

Lobbyists
adept at
playing
the game
One of Commerce Bancorp's
best assets may be the team of past
and current political wheeler-dealers it employs to lobby on its behalf.
The bank's lobbying firm of
choice is Princeton Public Affairs
Group of Trenton, whose cofounder, Dale J. Florio, sits on the
Commerce/Central board of directors and is chairman of the Somerset County Republican Committee.
As Commerce lobbyists, Florio
and his partners have urged lawmakers and state bureaucrats to
consider numerous proposals that
could benefit Commerce, including legislation requiring the state to
deposit millions of dollars in New
Jersey banks.
As Somerset County Republican chairman, Florio helps select
political candidates for local offices and finances their campaigns.
That gives the lobbyist, and Commerce board member, inside
knowledge when public officials
seek bond underwriters, banking
services, or insurance policies all
services that Commerce provides.
Princeton Public Affairs Group
earned $6.1 million in 2002. Commerce paid the company
$234,444.69 to lobby Trenton lawmakers and bureaucrats, a total 91
percent higher than what it paid in
2001.

ASSOCIATED PRESS

Commerce executive George E. Norcross III, center right, at the State House Annex with two well-connected members of Princeton Public Affairs Group, William Pascrell III, left, and John F. Russo Sr., right.
For perspective, the Commerce
payment was only slightly less
than what Princeton Public Affairs
Group earned from each of two
big clients with contentious issues
in the state: tobacco giant Philip
Morris and the New Jersey Coalition for Auto Insurance Competition.
Commerce executives say the
lobbying dollars help forward the
bank's interests in New Jersey, its
home state. Yet in comparison,
FleetBoston Financial Corp.
Commerce's biggest banking
competitor in New Jersey - reported no expenditures for political lobbying in New Jersey last
year and spent $135,000 on lobbying in its home state, Massachusetts.
Apart from registered lobbyists,

however, companies are not required to publicly disclose the activities of others they employ to
contact public officials, who is paying them, or how much they were
paid.
One of the newest members of
Princeton Public Affairs Group is
former Assembly Speaker Jack
Collins, R-Salem, who signed on
in January 2002, just days after retiring from 16 years in the Legislature.
Collins is designated a "senior
counsel" at the firm, and his interaction with government officials is
not regulated.
His duties include providing
consulting services to Commerce,
which contributed frequently to
political funds Collins controlled
and/or benefited.

Princeton
Public
Affairs
Group's roster also includes former state Senate President John F.
Russo Sr., a Democratic fund-raiser from Ocean County who lobbies for Commerce; Bradley Brewster, a former executive director of
the Assembly Republicans and a
friend of former acting Gov. Donald T. DiFrancesco; and William
Pascrell III, Passaic County counsel and son of Rep. Bill Pascrell Jr.,
D-Paterson.
In addition, Jamie Fox, Governor McGreevey's chief of staff, was
managing partner of the lobbying
firm's Washington arm, Winning
Strategies, until joining the McGreevey administration as transportation commissioner early last
year.
Clint Riley

ed that businessmen and their

lawyers had turned New Jersey
into a great commercial concern.
His McClures magazine expos,
New Jersey: A Traitor State, singled out the Pennsylvania Railroad
Corp. for using financial and political might to make lapdogs of legislators and local politicians who
helped protect its rail monopoly.
Perhaps not since those robber
baron days has one corporation
managed to employ more political
chiefs, state and local public officials, and politically connected
lawyers for private business in
New Jersey than Commerce Bancorp.
To hear Hill tell it, Commerces
business ambitions are not much
different than the railroads.
We want 100 percent of every
deposit in every town, every
county, every school district, he
says.

Building a political
banking machine
Commerces stunning growth
two-thirds of its 225 branches in
New Jersey, New York, Pennsylvania, and Delaware did not exist
six years ago is a tribute to Vernon W. Hill II.
In 1973, the 27-year-old business graduate of The Wharton
School at the University of Pennsylvania opened a single office
along a Burlington County highway and made himself a banker.
Today, Hill says he doesnt consider himself a banker. Hes a retailer, he says, the same as WalMart and Burger King. And like
Sam Walton and Burger King, Hill
who co-owns at least 42 Burger
King franchises builds look-alike
bank branches at a breathless
pace. In 1996, Commerce had no
branches in the northern counties
of Bergen, Passaic, Morris, Essex,
Union, Monmouth, Middlesex,
Somerset, Hunterdon, and Mercer. Today, it has 78, with more on
drawing boards.
Commerce bills itself as Americas Most Convenient Bank. It is
open seven days a week and offers
such services as door-greeters and
coin-counting machines.
In the last five years, Commerce
has grown by more than 500 percent.
Commerce had fewer than 800
employees a decade ago. Now it
employs more than 6,800 people
in four states. In 2002 alone, Commerces total assets grew from
$12.3 billion to $17.7 billion, making it the 44th largest banking institution in the nation.
This is the most successful, different bank model in America,
Hill says. Were retailers who
happen to sell bank products.
Commerces success has made
Hills company a Wall Street darling. Over 10 years, Commerce
stock rose more than 1,200 percent, more than such corporate behemoths as General Electric and
Microsoft, although the share price
has leveled off recently amid inSee COMMERCE BANK Page 13

JANUARY 2005

THE RECORD 13

Published Wednesday, May 21, 2003

The players
In the complicated game of state money, a look at how the banker, the politician, and the businessman are connected:

The Executives

Vernon W.
Hill II
President
and CEO;
stock
worth estimated
$139 million
Founder, Site Development Inc.
(commercial real
estate); partner in
fast-food franchises
Fund-raiser, both
major parties
Trustee, Prosperity New Jersey

The Board Members

George E.
Norcross III
CEO,
Commerce Insurance Services;
member of
board; $40 million
est. stock
U.S. Vision
board
member; vice
chairman, Cooper Health System;
partner with
Roberts and
Schwartz
Adviser to
Governor McGreevey; former chairman,
Camden County
Democrats
Trustee,
Prosperity
New Jersey

Joseph E.
Buckelew
President,
Shore division;
member of
board; $26 million
est. stock
Real estate developer, with
Zaro
Former chairman, Ocean
County Republican Finance
Committee; Republican fundraiser
Commissioner and
former chairman, N.J. Sports
and Exposition
Authority; former
chairman, N.J.
Highway Authority

The Board Members

John P.
Ferguson
North division director
Member, Hackensack Economic
Development
Commission;
president, CEO of
Hackensack University Medical
Center; UMDNJ
board member

From Page 12
vestor concerns about bank expenses, large insider loans, and
questionable political donations.
Only a few months ago, it
seemed Commerce could do no
wrong. In November, its stock was
trading $8 higher than the current
share price, and bank executives
were often found shoulder to
shoulder with the states prominent political figures.
At the New Jersey State League
of Municipalities annual meeting
in Atlantic City in November,
Commerce executives threw a lavish dinner party at Caesars Hotel
Casino. The guests included Governor McGreevey and Assembly
Speaker Albio Sires. After dinner,
Hill joined 3,500 state and local
government officials and their
families at an invitation-only
Beach Boys concert put on by the
bank.
Although it is common practice
for bankers to court politicians,
few banks have amassed the kind
of politically connected team that
now serves Commerce in its executive suites and on assorted boards
of directors.
Hill, 57, has forged political
contacts with the same speed and
verve he uses to build bank
branches.
Many of the men gathered
around him are a reflection of Hill
himself: part Republican, part Democrat, and all business.
Hill is a registered Republican.
But in the late 1980s, chafing at
the influence of North Jersey power brokers in Trenton, he became
one of Democrat Jim Florios
biggest fund-raisers when the
South Jersey congressman sought
the governorship.
Geography is more important
than philosophy, Hill explained
14 years ago in New Jersey Success magazine.
Now, some of Florios closest
backers are Hill allies, helping him
expand Commerces financial and
political empire in many directions. Some of the key relationships, now grown tangled and
overlapping, can be traced back to
the corridors of Commerces
gleaming six-story headquarters in
Cherry Hill.
During the Florio years, one of

John Jack
Tarditi Jr.
Vice chairman,
Commerce Insurance
Services
Democratic
fund-raiser
Haddonfield
commissioner, former
mayor; chairman,
Camden County
Municipal Joint
Insurance Fund

Donald T.
DiFrancesco
Commerce Bancorp director; (wife, Diane, is account
executive with
Commerce Insurance Services);
$329,000 est.
stock
Partner,
DiFrancesco,
Bateman, Coley,
Yospin, Kunzman, Davis &
Lehrerlegal services to Commerce
Oversaw Republican
Leadership
PACs
Former acting
governor, former state
Senate president

Robert C.
Beck
Commerce Bancorp director, board
secretary; $15
million est. stock
Partner,
Parker,
McCay &
Criscuololegal
services to Commerce, advice to
local governments on bond
deals

Jack
Collins
Consul
tant
Senior
counsel,
Princeton
Public Affairs
Group
Republican
fund-raiser
Former Assembly
speaker

John F.
Russo Sr.
Lobbyist
Princeton
Public Affairs
Group
Runs Friends
of John Russo PAC
Former state
Senate president, Democrat

William A.
Schwartz Jr.
Commerce Bancorp director; $3 million
est. stock
President,
U.S. Vision; business partner with
Norcross and
Roberts

John A.
Lynch
Central division director
Democratic
fund-raiser;
adviser to
McGreevey; cochairman, New
Directions PAC
Trustee, Prosperity New
Jersey; former state Senate
president; former
mayor, New
Brunswick

Dale J.
Florio
Central division director
Cofounder,
Princeton
Public Affairs,
Commerce's lobbyist
Chairman,
Somerset
County Republican Committee; Republican fund-raiser

Harvey A.
Holzberg
Central division director
Outgoing
chairman,
University of
Medicine and
Dentistry of New
Jersey; president,
Robert Wood
Johnson University Hospital

Key

Commerce
connection

Business ties /
Commerce
interests

Political
involvement

Public
positions

The Associates

Jerold L.
James J.
Zaro
Mancini
Shore diShore division division director
rector
Real esOcean Countate develty freeholder;
oper, with
mayor, Long
Buckelew; partBeach
ner, Ansell, Zaro,
Grimm & Aaron,
which represents
Commerce
Democratic
fund-raiser
Chairman,
N.J. Highway
Authority

Commerce Bank

James R.
Napolitano
President,
North division
Co-founded Independence
Bank with Hill
Republican
fund-raiser
Vice chairman, Hackensack Economic Development Commission

Joseph J.
Roberts Jr.
Stock
holder
Principal
partner,
U.S. Vision; business
partners with
Norcross and
Schwartz
Former chairman, Democratic State
Committee; oversees PACs
Assembly
majority
leader

the buildings tenants was Keystone National Insurance, owned

by George E. Norcross III, then
chairman of the Camden County
Democratic Committee, one of the
states biggest sources of cash for
Democrats. Another building tenant was the law firm Parker, McCay & Criscuolo, whose managing
director is Norcross brother
Philip, one of the states top government bond lawyers.
A turning point for Hills ambitions came in 1996, after lawmakers and the U.S. Supreme Court allowed banks to sell insurance. On
Nov. 15 of that year, Commerce
bought both Keystone National
Insurance and Buckelew & Associates, a Toms River insurance
agency owned by Joseph E. Buckelew, then chairman of the Ocean
County Republican Committee.
Barely two years later, Commerce was transformed. The addition of two huge subsidiaries,
Commerce Insurance Services and
Commerce Capital Markets, made
it much more than an average
bank.
Today, George Norcross, 47,

Wayne
Bryant
Partner,
Zeller &
Bryant,
which represents
Commerce in
bond deals
State senator
(Democrat,
Camden
County); cochairman, Senate
Appropriations
Committee

and Buckelew, 74, sit on Commerce Bancorps main 13-member

board of directors and are two of
the companys largest stockholders. Norcross is also chief executive officer of Commerce Insurance Services, and a top adviser to
McGreevey and other prominent
state Democrats. Buckelew, a major Republican fund-raiser, is president of the banks Shore division.
Philip Norcross, meanwhile, is
Commerce Bancorps campaign finance lawyer, and Robert C. Beck,
his partner at Parker, McCay, is
secretary of Commerces board of
directors.
Last year, Parker, McCay counseled dozens of towns, school districts, and government authorities
in bond deals worth $340 million,
a portion of which had Commerce
as underwriter or financial adviser.
The 1996 purchase of George
Norcross and Buckelews insurance companies - and the installation of the two political heavyweights in Hills executive suites gave Commerce an immediate
one-two political punch. Overall
spending by Compac NJ exploded,

Philip
Norcross
Campaign
finance
lawyer
Managing
partner,
Parker,
McCay &
Criscuolo; U.S.
Vision board
member
Democratic
fund-raiser
Legal counsel
to numerous
municipal
governments

to almost $654,000 last year from

$72,000 in 1996.
Compac NJs donations, however, are only a fraction of the
campaign dollars connected to
Commerce. Since 1997, bank executives, board members, lobbyists, and consultants on Commerces payroll have conservatively helped raise an additional $10
million for New Jersey politicians
through dozens of political funds.
An example is First Jersey PAC,
headed by George Norcross. In
one recent 18-month period, First
Jersey PAC gave $408,500 to
county parties and candidates and
$489,400 to candidates running
for the Assembly and state Senate.
A review by The Record of political donations by other banks
operating in New Jersey shows
that none has come close to Commerce.
In 2002, for example, Compac
NJ gave more than $250,000 to
politicians and funds in New Jersey. By comparison, employee
PACs for competitors such as First
Union/Wachovia and the Trust
Company of New Jersey each gave

Jeffrey T.
Michaels
Consul
tant
Board
member,
N.J. Casino
Reinvestment
Development
Authority; former
chief of staff to
acting Gov.
DiFrancesco

Melvin Randy
Primas
Former
managing
director,
Commerce Capital Markets
State-appointed overseer of Camden; former mayor, Camden; former commissioner, Department of
Community Affairs

about $25,000.
All but $20,000 of Compac NJs
2002 donations were at the county and municipal levels, vital to the
rapidly expanding Commerce because thats where it obtains zoning variances to build new branches and the bulk of its billions in
government deposits, insurance,
and bonds.
Indeed, Commerces expansion
has run on a parallel track to the
banks political donations. Since
1997, Commerces total assets
have grown from $2.9 billion to
$17.7 billion by the end of 2002.
Its overall government deposits
have risen from less than $500 million to more than $2.5 billion.
More than $1.8 billion of those
government deposits belong to
New Jersey taxpayers.

Public business,
private business

John
Currie
Former
community outreach coordinator
Chairman,
Passaic
County Democrats; deputy
vice chairman,
Democratic State
Committee
Member,
Passaic
County Board
of Elections

is a business partner with two

Commerce board members,
George Norcross and William A.
Schwartz Jr.
In March 2002, Commerce provided a $32.5 million line of credit to an investment group controlled by Roberts, Schwartz,
George Norcross, and Philip Norcross, the banks campaign finance
lawyer. That enabled the partners
to buy U.S. Vision, the nations
sixth-largest retailer of eyeglasses
and contact lenses, where
Schwartz is CEO.
The Securities and Exchange
Commission is reviewing, among
other things, whether Commerce
shareholders should have been
told about the insider loan and potential conflicts between the bank
and the investment group, according to federal sources familiar with
the review.
Arthur Makadon, a lawyer who
represents Commerce Bancorp
and George Norcross, says there
was nothing improper about the
credit or how the bank disclosed it.
At the time of the U.S. Vision
transaction, he says, national
banks were exempt from securities
law that required publicly traded
companies to tell shareholders
about insider loans. Congress has
since banned such insider loans
except for national banks.
Furthermore, Makadon says,
his clients have not been informed
of any review or inquiry. An SEC
spokesman says agency policy is to
neither confirm nor deny the existence of any inquiry.
In March, critics attacked
Roberts for using his authority
over the legislative agenda to push
a bill that could have benefited
U.S. Vision. The bill would have
allowed optometrists to perform
laser eye surgery. Roberts vowed to
sell his 17 percent stake in U.S. Vision if the company ever got into
laser surgery, but the bill was withdrawn before a vote.

The foundation of Commerces

power is capital both the monetary and political varieties and
the ability to grant access to it.
Simply put, Commerce and its
leaders have what others crave.
Politicians want campaign dollars,
lawyers need billable hours, and
developers seek financing and subsidies for the sewers and highway
ramps that will help their projects
sell.
Commerces
extraordinary
reach allows its executives and
board members to bring politicians, lawyers, and developers together for mutual benefit.
For watchdog groups, however,
the interlocking political and financial relationships between policymakers and Commerce executives and board members, including private business deals, raise a
vital question: Can officeholders
with ties to both the bank and the
public be counted on to make decisions on behalf of the people
they represent, rather than to benefit those who supply them with
campaign cash and personal inThe public appointments:
come? A sampling of the kinds of
New Jersey has 8 million resiCommerce connections that are dents. So what are the odds that
raising concern among rivals, reg- three of its most prominent public
ulators, and public advocates:
bodies would each be headed by a
BETH BALBIERZ/STAFF PHOTOGRAPHER
Commerce board member last
The business deal:
year?
Former Assembly Speaker Jack Collins, left, and former acting Gov. Donald T. DiFrancesco entering Board Commerce board member
Assembly Majority Leader
walk Hall for Commerce's invitation-only Beach Boys concert during last November's New Jersey State
League of Municipalities convention in Atlantic City. The prominent pair entered through a side door as Joseph J. Roberts Jr., D-Camden, is Harvey A. Holzberg was appointhundreds of invited municipal officials were turned away at the front door because of space limitations. a Commerce shareholder. He also See COMMERCE BANK Page 14

14 THE RECORD

JANUARY 2005

Published Wednesday, May 21, 2003

Real estate titan
Donald Trump,
left, with Vernon W. Hill II at
a Sept. 6, 2001,
event promoting
the opening of
two Commerce
Bank branches
in New York
City.

Genghis Khan
of N.J. banking
Empire builder started young

GETTY IMAGES

By CLINT RILEY
STAFF WRITER

Vernon W. Hill II, CEO and

founder of Commerce Bancorp,
rewards those loyal to him and
tries to crush those who oppose
him.
He offers $5,000 bonuses to
Commerce bank managers who
close down competing branches.
He hires the politically connected
and awards handsome stock options to top associates.
He brashly declares he wants
100 percent of every government
deposit, corporate deposit, and
consumer deposit. No wonder
some rattled rivals liken him to
Genghis Khan.
Hill, not bashful about his tactics, sometimes adopts the nickname himself.
Hill started empire-building early. At age 20, he was a bank vice
president while attending The
Wharton School at the University
of Pennsylvania. William G.
Rohrer, founder of First Peoples
Bank in Camden County, saw
promise in the fledgling financier
and placed him in charge of his
banks mortgage department.
But Hill had learned from his
real-estate developer father that he
would get richer as his own boss.
Within two years, Hill had started
a commercial site development
company in South Jersey. His first
client, in 1969, was McDonalds
founder Ray Kroc, who was on the
prowl for new locations in New
Jersey.
Many businesses have copied
Krocs cookie-cutter retail model,
but Hill was the first to apply the
concept to banking, building a
multibillion-dollar corporation
and a personal fortune estimated
at $250 million.
In 1973, Hill, then 27, persuaded a group of skeptical South Jersey businessmen to invest $1.5
million in his first Commerce
Bank branch in Burlington County. Two years later, he joined a
dozen young Bergen County businessmen who were investing in

COURTESY OF COURIER-POST

Villa Collina, the 45,000-square-foot Moorestown mansion of Vernon W. Hill II and his wife, Shirley, has eight reflecting pools.
the start-up Independence Bank
of New Jersey in Allendale. Only
Hill had banking experience.
Vernon was a dominant presence on the board, and I think a
lot of people looked to Vernon for
guidance, says William L. Griffin
Jr., Independence Banks first president. Vernon had goals, and he
was not shy about telling you what
he wanted to do.
But not even Griffin could predict how Hill would go about
achieving his goals. His business
model has turned banking tradition on its ear: Commerce strives
to increase its liabilities, in the
form of deposits, rather than to
grow its assets, in the form of loans
that are paid back with interest.
And while other banks have
closed branches, Hill continues to

build new ones.

In January 1997, Commerce
bought out Independence shareholders and replaced the marquees with big red Cs. The acquisition, coming less than four
months after Commerce Bancorp
began trading on the New York
Stock Exchange, marked the start
of Hills aggressive expansion beyond South Jersey.
Today, he controls a vast business empire that includes the financial conglomerate, real estate,
and fast-food franchises. An accomplished golfer, Hill also is principal owner of the exclusive Galloway National Golf Club near Atlantic City.
He commands his domain from
the corporate headquarters in
Cherry Hill or from the 45,000-

square-foot mansion he and his

wife, Shirley, finished building last
year in Moorestown, Burlington
County. Villa Collina, Italian for
Hill House, is 10,000 square feet
smaller than the White House, but
boasts eight reflecting pools, a
greenhouse, and 44 acres of
woods.
Villa Collina is assessed at $6.4
million. The Hills could have
bought two such mansions with
what they collected from Commerce Bancorp in 2001. That year,
Commerce compensated Vernon
Hill, Shirley Hill, and companies
the couple own or are partners in
with at least $13.8 million.
Last year, Vernon Hill earned a
$1.5 million salary and a $750,000
cash bonus, plus 150,000 Commerce stock options. He also

earned $170,500 in other compensation. Real estate companies

in which Hill is a partner with other Commerce board members collected $1.1 million in rent from 17
Commerce branch sites. And there
was an additional $451,000 for use
of the Galloway links.
Commerce also paid millions to
InterArch Inc., a Mount Laurel interior design firm owned by
Shirley Hill, for architectural design, facilities management, and
furniture procurement. Last year,
Wall Street analysts, members of
the financial press, and certain investors voiced concerns about
some of the insider practices at
Commerce, particularly the hefty
payments to Shirley Hills company. In 2002, Commerce paid InterArch $8.1 million for help in

Commerce Bank

Money in the banks

From Page 13
ed by McGreevey as chairman of
the University of Medicine and
Dentistry of New Jersey, which
oversees the states medical education and has ties to more than 200
hospitals and health-care institutions.
Commerce board member
Jerold L. Zaro was appointed by
McGreevey as chairman of the
New Jersey Highway Authority,
the $200 million agency that oversees the Garden State Parkway.
Commerce board member
Joseph E. Buckelew was chairman
of the New Jersey Sports and Exposition Authority, the agency
overseeing the $1.3 billion redevelopment of the Meadowlands
sports complex. He was appointed
by McGreeveys predecessor, acting Gov. Donald T. DiFrancesco.
Buckelew, a Republican fundraiser, and Zaro, a Democratic
fund-raiser, served seven years together on the Highway Authority
board until DiFrancesco tapped
Buckelew for the Meadowlands
post. They also are partners in several commercial real estate development ventures around the state.
DiFrancesco, whose political
funds received $20,600 from Compac NJ while he served as Senate
president, joined Buckelew, Zaro,
and Holzberg at Commerce less
than three months after he left the
governors office.

Among the top five banks holding taxpayer dollars outside the $11 billion State of New Jersey Cash Management Fund, Commerce Bancorp
holds a disproportionate share for its size. Commerce also provides much more political capital in New Jersey than its much larger rivals.
FleetBoston
Commerce
First Union/
PNC Financial Valley National
Financial Corp.
Bancorp
Wachovia Corp. Services Group
Bancorp

Financially (in billions, as of Dec. 31, 2002)

Total assets
Total deposits
Total govt deposits
N.J. govt deposits
% N.J. govt deposits of overall deposits
Bank's share of all N.J. govt deposits

Politically (2002 PAC expenditures)

New Jersey
Federal campaigns
Total

$186.1
$130.7
$13.2
$1.9
1.5%
20.6%

$17.7
$14.7
$2.5
$1.8
12.4%
19.1%

$325.4
$199.4
$8.7
$1.0
0.5%
10.0%

$62.2
$46.2
$2.0
$0.9
2.0%
9.5%

$9.0
$6.7
$0.5
$0.5
7.1%
5.0%

$78
$102,197
$102,275

$653,364
$61,367
$714,731

$25,897
$296,701
$322,598

$250
$288,612
$288,862

$0
$0
$0

Sources: Federal Deposit Insurance Corp.; N.J. Department of Banking and Insurance; Federal Election Commission; N.J. Election Law Enforcement Commission; Pennsylvania Department of State

most prominent developers to attend a meeting with Hackensack

city officials. The letter began Re:
Redevelopment Opportunities
Hackensack.
In particular, the City would
like to know what you envision
Hackensacks current residential
market to be and the type of rezoning and redevelopment assistance that you believe would be
necessary, Napolitano wrote.
The stationery identified him as
the banks regional president.
Nothing in the letter indicated his
role with the Hackensack Economic Development Commission.
Contacted this month, Napolitano said he didnt recall the letter
or see a reason to question his
The pitch to developers:
multiple interests. I sit on lots of
James R. Napolitano wears boards and I do it to help out the
three hats.
community, Napolitano said.
He is an attorney with DeCotiis, Fitzpatrick, Cole & Wisler, a
The pay-to-play bond deals:
Teaneck firm that handles busiPay to play is how much of
ness for dozens of local govern- New Jerseys government business
ments and state agencies.
gets done. In pay to plays most baHe is vice chairman of the sic form, entities that depend on
Hackensack Economic Develop- government work give campaign
ment Commission, whose nine ap- contributions to people who might
pointed members assist the citys help them get those contracts.
Planning Board with zoning and
Widespread acceptance of the
redevelopment issues.
practice has become ethically corAnd he is president of the Com- rosive and economically costly,
merce Bank/North division, based says Harry Pozycki, executive diin Ramsey.
rector of Common Cause New JerA year ago, Napolitano appar- sey.
ently became confused about just
Its legalized bribery, says
which hat he was wearing. In May Pozycki, a former chairman of the
2002, writing on Commerce Bank Middlesex County Democratic
letterhead, complete with the red Committee. The pay-to-play sysC, he invited some of the states tem has infected our government

in New Jersey. The players have

become so addicted to it.
Commerce is only one of many
players, but its leaders are among
the masters.
Consider bond deals struck in
three counties Gloucester, Mercer, and Ocean in the space of
eight months last year.
In his successful 2001 campaign
for state Senate, Democrat
Stephen Sweeney already director of the Gloucester County
Board of Freeholders raised $1.8
million, a state record for a legislative race. His opponent, incumbent Raymond Zane, raised just
under $711,000.
The man behind much of
Sweeneys money was his boyhood friend, George Norcross.
In February 2002, barely four
months after Sweeneys victory,
Gloucester County and the
Gloucester County Utilities Authority each completed no-bid
agreements with Commerce Capital Markets to refinance bond
debts of $11 million and $4.7 million, respectively.
On the county bond issue,
Commerce shared a $68,000 underwriting fee with Salomon
Smith Barney. It made approximately $30,000 on the utilities authoritys bond.
The same month, Compac NJ
contributed $9,250 to the Gloucester County Executive Committee.
Furthermore, each bond deal
was legally blessed by a law firm
with close allegiances to Commerce. Parker, McCay & Criscuo-

lo whose lead bond lawyer,

Philip Norcross, is Commerces
campaign finance lawyer made
$26,500 on the county deal. Blank
Rome LLP, Commerces corporate counsel, made $40,000 on the
utilities authority deal.
Both law firms contributed
heavily to political funds benefiting
county Democrats and Sweeney.
From 1998 through 2002, Parker,
McCay gave $52,500 to the
Gloucester County Democratic
Committee, and Blank Rome gave
$41,500. Parker, McCay gave
$9,800 to Sweeneys 2001 campaign, and Blank Rome contributed $7,500.
Sweeney did not return a reporters call seeking comment.
Zane, the man Sweeney defeated, was not shy when drawing
conclusions about his opponents
backers. In an interview after his
loss, Zane said, This business of
raising a million dollars for a
$49,000 legislative seat is nonsense. This was a major investment
by people who look to gain personally.
Commerce also was active in
Mercer County.
From February 2000 to April
2002, Compac NJ donated $9,650
to the campaign fund of Hamilton
Township Mayor Glen Gilmore.
In late 2001, Gilmore, a Democrat, and the all-Democratic council repealed an ordinance that prohibited giving no-bid contracts to
firms that contribute more than
$2,500 to local politicians and political parties, saying the ordinance

was unconstitutional.
On March 4, 2002, the township completed just such a no-bid
deal, refinancing $7.4 million in
debt with Commerce Capital,
which was paid a fee of almost
$40,000.
The mayor defends the ordinance change. Noting that most
law firms, engineers, and other
vendors are big political contributors in Hamilton Township and
Mercer County, he says that without the change, I would suspect
there would be many professional
organizations that would not have
been permitted to do business with
the township. The third example
occurred in October 2002, when
Ocean Countys all-Republican
Board of Freeholders refinanced
$55.5 million in long-term debt.
The no-bid deal earned Commerce
Capital, which handled almost half
the bonding, a good share of the
$150,000 in underwriting fees.
Less than a week later, Compac
NJ mailed two checks totaling
$10,500 to the Ocean County Republican Finance Committee,
whose chairman is George
Gilmore, head of the Toms River
law firm that represented Commerce in the bond deal. He is not
related to Hamilton Townships
Glen Gilmore.
I would emphatically deny
theres a connection between campaign contributions and government work in Ocean County,
George Gilmore says. They
[Commerce] have been very successful because of their friendly

opening 40 branches. Late in the

year, a committee of Commerce
Bancorp directors decided that her
companys design services had
added value to Commerce for 25
years and should continue on a
more limited scale.
Some financial experts have no
problem with the way Hill and
Commerce operate.
The close relationships and political activity of company executives, board members, and employees do not concern Anthony
R. Davis, a Ryan, Beck & Co. analyst who has consistently given
Commerce high marks.
This is an industry that has always been locally rooted, Davis
says. I dont see that they are doing anything legally or ethically
that is out of line with what other
banks are doing.
In fact, he adds, Commerce
has been pretty damn good at giving back to communities.
Other Wall Street watchers,
however, urge investors and the
public to pay closer attention.
It doesnt square with a regular
publicly traded company. There is
way too much self-dealing, says
Arne Alsin, an Internet financial
columnist who has reviewed Commerces filings with the Securities
and Exchange Commission and
other documents.
Alsin, founder of Oregon-based
Alsin Capital Management, cited
the contracts with Shirley Hill and
the banks real estate ventures involving Vernon Hill and other
board members.
In addition, says Alsin, Commerce Bancorps stock is highly diluted because of the generous way
Commerce has awarded stock options to employees and board
members in recent years. He says
that could hurt shareholders in the
long run.
Alsin says Commerces true value and strength as a company will
emerge when its growth slows.
All companies that are growing this quickly eventually hit the
wall, he notes. Its not a matter
of if, its a matter of when.

service. With Gilmore, that

friendly service extends to a personal level as well: If I need any
insurance, Im going to call Joe
Buckelew. Theres a comfort level
there. Assemblyman David Russo, R-Ridgewood, says Commerces activities around the state
appear even to surpass traditional
pay to play.
This is not exactly pay to play,
says Russo, who a decade ago advocated tighter regulation of companies entrusted with public funds.
Why would you have to pay? Its
like theyve made everybody a
partner. Theyre all stakeholders.
The door to the governors office:
In Trenton, access is everything.
Two Commerce insiders have
enjoyed access of the most prized
variety. State House employees say
theyve seen George Norcross and
John A. Lynch enter McGreeveys
office through a restricted private
entrance. In the past year, Norcross and Lynch also have attended private political strategy meetings at Drumthwacket, the governors official residence.
The three men knew each other
well before McGreevey became
governor.
Lynch, a former mayor of New
Brunswick and former state Senate president, is McGreeveys longtime political mentor, the force
who helped guide McGreevey into
the governors office. Lynch has
served on the regional Commerce/Central board since at least
2001.
A sizable chunk of the $68.2
million campaign war chest that
helped McGreevey gain office was
raised by George Norcross, who
also delivered key South Jersey
votes. He became a Commerce executive in 1997, and joined Commerce Bancorps main board of directors in March 2002.
Every insider conversation in
Trenton starts with those two
names, says political scientist
David Rebovich, director of The
Rider Institute for New Jersey Politics. Lynch and Norcross helped
make Jim McGreevey a viable
statewide candidate.
Trenton insiders consider Norcross and Lynch the Democratic
bosses of South and Central New
Jersey, respectively, and its no seSee COMMERCE BANK Page 15

JANUARY 2005

THE RECORD 15

Published Wednesday, May 21, 2003

STAFF PHOTOS BY BETH BALBIERZ

An office near you: Commerce locations include, from left, 102 South Paramus Road, Paramus; 63 West Allendale Ave., Allendale; 540 River St., Hackensack; and 1100 Lake St., Ramsey.

Branching north in a big way

Government deposits
up 2,407 % since 97
By SHANNON D. HARRINGTON
and JOSH GOLKE
STAFF WRITERS

It took Commerce Bancorp several years to march north, but the

Cherry Hill-based company wasted no time after establishing a
beachhead in 1997.
That year, Commerce trained its
sights on Independence Bancorp,
a tidy eight-branch operation
based in Ramsey. Commerce CEO
Vernon W. Hill II knew the bank
well; he helped found Independence in 1975.
In the six years since Commerce
acquired Independence, Commerces growth has been explosive. Thirteen new branches have
opened in Bergen and Passaic
counties. The bank expects to have
25 by the end of the year.
Total deposits consumer,
business, and government in
Commerce Bank/North have ballooned 380 percent, from $350
million at the end of 1996 to $1.7
billion in December 2002, according to Federal Deposit Insurance
Corp. reports.
But that overall growth pales in
comparison with the speed with
which Commerce has amassed
government financial business in
North Jersey in both bank deposits and bond underwriting.
Since the start of 1997, the
amount of taxpayer money deposited in Commerce Bank/North
branches has surged from $8.4
million, or 2 percent of all deposits, to $211 million, or 12 percent of all deposits.
Looking at Commerces success
another way, its North Jersey consumer and business deposits increased 348 percent in six years,
but its taxpayer-based deposits increased by 2,407 percent.
One-third of the Bergen County governments deposits are now
with Commerce.
They really bend over backward for us, says Bogota Mayor
Steven Lonegan, whose town
switched to Commerce last year
after its old bank, Summit Bancorp, was purchased by FleetBoston Financial Corp. Lonegan
says Summits representative went
to work for Commerce.
They actually send a courier to
us to pick up our tax checks,
Lonegan says. Theyre really an-

Commerce Bank
From Page 14
cret they can get the governors
ear. Even after the 2001 election,
Lynch and Norcross continued to
advise McGreevey, even on whom
he should appoint to key posts,
prompting the governors office to
make several public denials of
their influence. Both men were
known to have attended key meetings on such sensitive matters as
replacing Sen. Robert G. Torricelli and state police Superintendent
Joseph Santiago.
This is the worst-kept secret in
New Jersey politics, which has led
folks to wonder whether the governor is really calling the shots,
Rebovich says.
Norcross, who attended the interview at The Record with Hill,
declined to characterize the nature
of his association with McGreevey. Lynch did not return a
reporters phone call. Micah Rasmussen, the governors spokesman, also declined to describe the
two mens relationship with McGreevey.
Norcross, Lynch, and Commerce CEO Hill are among 36
business leaders appointed by McGreevey to Prosperity New Jersey,
a state-funded group that brings
together public and private sectors
to discuss how government can assist business.
Trustees include the governor,
his top Cabinet officers, and such
business heavyweights as the presidents of Johnson & Johnson,
Continental Airlines, Pfizer Inc.,
and Merck & Co. Commerce is
the only company with more than

gling themselves to get government business.

Commerces growth in bank deposits has paralleled its rising share
of the regions bond market. Last
year, Commerce Capital Markets
underwrote more than one-third
of all debt issued in Bergen County; 17 other institutions split the
rest.
Commerce also won the job of
underwriting more than $67 million in bonds to consolidate
Bergen County and municipal
debt obligations to the state pension system. The county negotiated exclusively with Commerce
and did not invite other banks to
bid.
In Passaic County, Commerce
handled no bond sales from 1993
to 1998 but has since underwritten
one-third of county bond deals,
worth $107 million. All were competitively bid.
Passaic County Auditor Steven
Wielkotz says the bank simply offered the best deals.
Its only been in the last five or
six years that Commerce has become a major player, Wielkotz
says. Its the most rapidly expanding bank in all of New Jersey.
I think its been more aggressive
than other institutions.
Still, the rate at which Commerce has developed government
business has prompted public officials, government watchdogs, and
banking competitors to ask
whether its vast political connections are playing too great a role.
Those connections are forged
through campaign donations and
lucrative professional relationships.
Since the banks emergence in
Bergen County, its political action
committee has distributed $41,000
to Republicans and Democrats.
Overshadowing that sum is the
money poured into campaign coffers from fund-raising machines
controlled by Commerce executive George E. Norcross III and
one of the banks regional board
members, John A. Lynch.
Lynch and Norcross helped
bankroll last years $4 million
campaign that enabled Democrats
to take control of Bergen County
government.
What you are seeing in politics
is what you would call unfair competition, says Assemblyman Matt

Ahearn of Fair Lawn. The commercialization of government and

politics is undermining the democratic process from top to bottom.
There are no checks and balances
in place to protect the interests of
people in local communities. Disgusted with the Bergen County
Democratic Organization, Ahearn
quit the party four months ago and
became a Green Party representative.
Professional service deals have
proven mutually beneficial to
Commerce and to the countys political elite, including select municipal officials.
In 2001, Commerce hired the
law firm of Kaufman, Gelbert &
Bern to help it win Planning
Board approval for a new branch
in Fort Lee. A few months after the

building site was approved, neighboring Leonia whose mayor,

Paul Kaufman, is a partner in the
law firm moved 85 percent of its
deposits to Commerce.
Kaufman insisted that one relationship had nothing to do with
the other. In fact, he says, Leonias
finance officer made the decision
to pursue a new bank. During
council discussion, Kaufman left
the room, and he abstained from
voting. Leonias business administrator also went out of his way to
announce that the mayor was not
involved in the switch.
In Ramsey, a public outcry
arose last year when Commerce
asked the Planning Board for permission to build a helipad beside
its regional headquarters. The
bank, it turned out, had been land-

one representative.
Campaign cash in North Jersey:
Bergen County Democrats spent
more than $4 million last year to
win control of county government.
It was the most expensive county
executives race in New Jersey history.
The biggest portion of that money can be traced directly to the
Central and South Jersey fundraising machines controlled by
Commerce Bank insiders Norcross and Lynch.
The money enabled Dennis McNerney, a municipal finance
banker, to overwhelm state Sen.
Henry P. McNamara, a retired car
dealer, in the race for county executive.

McNamara has a theory why so

much outside money flowed to his
opponent: McNamara had fiercely opposed proposals to build a
$355 million sports arena in
Newark and redevelop the Meadowlands plans pushed by virtually every power broker in the
state, including Democrats Norcross and Lynch and Republicans
Buckelew and DiFrancesco.
McNerney
opposed
the
Newark arena in private but enthusiastically embraced Meadowlands redevelopment, which could
pave the way to build a new arena.
Both projects would offer Commerce and other financial services
providers opportunities to make
millions of dollars in fees from de-

velopers, contractors, engineers,

and, of course, government.
The public has to start becoming aware of what is happening
when any party will spend $4 million for a $100,000 job, McNamara says. They didnt make that
kind of investment without looking for a return. The man who ran
McNerneys campaign dismisses
the notion that campaign contributors were making business investments.
People contributed to the
Bergen County Democrats and
Dennis McNerney because they
shared his vision for the county,
says Bill Maer, now a consultant to
the county Democrats. They
thought he would bring young, re-

DON SMITH/STAFF PHOTOGRAPHER

James R. Napolitano, president of the Commerce Bank/North division, attended the grand opening of the branch on Palisade Avenue
in Fort Lee on Nov. 23, 2002.

Sources: Federal Deposit

Insurance Corporation,
Commerce Bank

R.L. REBACH/STAFF ARTIST

Top 10 bond underwriters

In 2002, New Jersey, its municipalities, and its authorities issued $7.45 billion in long-term government
debt through negotiation, rather than competitive bidding. A look at the leading financial services companies and their long-term bond deals:
Total bond value
Share of
Total
Underwriter
Rank
(in millions)
no-bid bonds
issues
Salomon Smith Barney*
1
$2,026.4
27.2%
10
Commerce Capital Markets*
2
1,466.2
19.7%
64
UBS PaineWebber Inc.
3
$950.0
12.8%
14
Merrill Lynch & Co.
4
$577.0
7.8%
10
Lehman Brothers
5
$412.9
5.6%
4
Wachovia Securities Inc.
6
$392.0
5.3%
15
Morgan Stanley
7
$355.4
4.8%
5
Goldman, Sachs & Co.
8
$338.0
4.5%
4
Windsor Financial Group
9
$181.9
2.4%
12
Bear, Stearns & Co.
10
$134.3
1.8%
2
* Commerce Capital Markets and Salomon Smith Barney (recently renamed Citigroup Global Markets Inc.) co-managed New Jersey's
$1.8 billion no-bid tobacco settlement bond last year. They split the fees for putting the deal together, but industry rankings gave Salomon full underwriting credit for the deal. If the rankings had reflected the actual shared management, Commerce would be the state's
top underwriter of no-bid, long-term government debt.
Source: Thompson Financial Securities Data

ing helicopters in a nearby office

park for 15 years without required
approval from the Borough Council or state transportation officials,
and despite occasional calls to police from the public.
One police report from 1999
describes how an officer relayed a
helicopter complaint to James R.
Napolitano, president of the Commerce Bank/North division.
Napolitano told the officer that
Mayor John Scerbo had granted
permission for the landings. Scerbos son, Ryan, is an associate attorney at the Teaneck law firm Decotiis, Fitzpatrick, Cole & Wisler,
where Napolitano does occasional work. Contacted last year,
Napolitano called the police report totally incorrect, and the officer could no longer recall a conversation with Napolitano.
Scerbo and the Ramsey Council
maintained ignorance of illegal
helicopter activity. A slate of Democratic challengers made an issue of the helicopters and in November defeated Scerbo and two
councilmen, Joseph Pojanowski
and Paul R. Harris. Commerce
withdrew plans for the helipad.
Less than two months after his
term ended, Pojanowski was
working directly for Commerce,
representing the bank in its effort
to place a branch in Clifton.
It seemed like Commerce
Bank was getting special treatment
from our governing body, says
Mayor Richard Muti, who defeated Scerbo.
Muti says the borough is soliciting proposals from other banks for
its $10 million in deposits, most of
which remain with Commerce.
Its my intention to try and

spread that business around, Muti

says.
In 1998, an even bigger uproar
accompanied the Passaic County
governments decision to do business with Commerce, and resulted
in calls for federal and ethics investigations.
Shortly after Democrats took
over county government, the
Board of Freeholders voted to
open three new Commerce accounts with about $10 million,
more than 15 percent of the countys deposits.
The sudden movement of money prompted questions from the
Republican minority.
They noted that Commerce had
multiple links to the people who
had just taken over. County Democratic Chairman John Currie
was the banks North Jersey community outreach coordinator.
County Counsel William J.
Pascrell III is a partner in Princeton Public Affairs Group, Commerces lobbying firm. In 1998, the
bank had donated $5,000 to the
reelection campaign of Pascrells
father, Rep. Bill Pascrell Jr., the
countys top Democrat.
The younger Pascrell says he
has never lobbied personally for
Commerce and has nothing to
do with decisions about the countys banking.
Those were baseless accusations that never panned out, he
says. Nothing ever came of it.

freshing leadership to county government. From Main Street to

Wall Street, taxpayers and investors are losing patience with the
insider privileges enjoyed by the
politicians they elect and the companies in which they invest.
The public is OK with winning
and losing as long as everyone is
playing by the rules and the rules
arent being manipulated, says
Frank Narvan, a consultant to the
non-profit Ethics Resource Center
in Washington, D.C.
The role of government is to
serve the public interest. What the
public wants to know is, are the
public officials making decisions in
my best interest? In one poll this
year, 77 percent of New Jerseyans
believed there was political corruption in the state. Respondents
also believed that about half the
states politicians were corrupt.
A second survey, dealing with
corporate governance, found that
almost 75 percent of respondents
felt they could not trust corporate
CEOs.
Facing ever-tougher questioning
about company practices, Hill
tried to reassure investors gathered
last month at the Waldorf-Astoria
hotel in New York.
As no one has ever tried to
build a major bank this way before,
dont be surprised if we make a
few errors, a few falls, a few stumbles along the way, Hill said.
He acknowledged that the climate is changing for political giving by government contractors.
What meets the law may not
be the current accepted practice,
Hill said.
The governor and legislators

have promised strict new laws for

campaign financing, government
contracts, and ethics, but critics
complain there are few signs that
anyone is willing to expend the political capital necessary to make
real reforms.
As it stands, the officeholders
Commerce woos can legally hold
multiple public positions, limit
their disclosure of potential conflicts of interest, and hand out contracts without competition.
And the critics say the lawmakers who might toughen standards
have little reason to challenge a
system that benefits insiders both
politically and financially.
Some business and political
leaders believe if its legal and the
rules dont prohibit it, it must be
OK, Narvan says, adding that he
considers such conduct the lowest level of behavior individuals
should be following.
Former state Sen. William
Schluter, who once headed the
Legislatures Joint Committee on
Ethical Standards and now teaches reform politics at Rutgers University, says he is appalled that
New Jersey lawmakers and the
public are permitting Commerce
to wield such influence.
I am outraged that government
is being taken away from people
and the public be damned,
Schluter says. This is power. It is
raw power and it is the determining factor in government decisions.

Staff Writers Clint Riley and Brian

Aberback contributed to this article.
Shannon D. Harringtons e-mail address is harrington@northjersey
.com. Josh Gohlkes e-mail address
is gohlke@northjersey.com.

Staff Writer Shannon Harrington

contributed to this article. Clint Rileys e-mail address is riley@northjersey.com

16 THE RECORD

JANUARY 2005

Published Wednesday, May 21, 2003

Playing on the edges of political giving

A generous donor
A snapshot of where Compac NJ provided political contributions in
New Jersey from 1997 to 2002.
Organization
Amount
Camden County/Democrats
$279,685
Burlington County/Republicans
$229,980
Ocean County/Republicans
$187,596
Gloucester County/Democrats, some Republicans
$134,850
Middlesex County/Democrats
$103,500
New Jersey Democratic State Committee
$93,000
Mercer County/Republicans, urban Democrats
$77,085
New Jersey Republican State Committee
$72,250
Senate Democratic Majority Leadership PAC
$60,000
Essex County/Republicans, Democrats
$56,600
Monmouth County/Republicans, Democrats
$50,590
Salem County/Republicans
$46,800
Atlantic County/Republicans, Democrats
$44,700
Bergen County/Republicans, Democrats
$41,000
Somerset County/Republicans
$39,650
Assembly Republican Majority Leadership PAC
$32,500
Cape May County/Republicans
$27,500
Union County/Republicans
$21,375
Cumberland County/Democrats, Republicans
$17,850
Donald T. DiFrancesco Gubernatorial Campaign
$11,100
Senate Republican Majority Leadership PAC
$8,500
Morris County/Republicans
$5,000
Hudson County/Democrats
$3,000
Passaic County/Democrats
$1,950
Republican Senate President's Committee
$1,000
Hunterdon County/Democrats
$500
Total
$1,647,561
Source: Compiled from New Jersey Election Law Enforcement Commission data

By CLINT RILEY
STAFF WRITER

Repeated money transfers between political funds controlled

by Commerce Bancorp have allowed some Commerce employees to sidestep laws intended to
limit political donations from
those who profit from government bond deals, a financial
analysis by The Record shows.
Since 1994, federal securities
rules have prohibited any bank,
investment house, or employee
involved in underwriting state
and local government debt
known as municipal bonds
from contributing more than
$250 either directly or indirectly
to politicians who can influence
the awarding of bond business.
Additional federal and state
election laws also limit the size of
contributions and the way that
money from individuals and regulated industries such as banks is
given to politicians and political
funds.
Commerce Bancorp is a major
player in government bonds. Its
securities subsidiary, Commerce
Capital Markets, is the nations
23rd biggest underwriter of longterm government debt, and last
year underwrote one-third of all
bonds issued in New Jersey.
The Records review, begun last
year, discovered that as much as
$182,338.22 obtained from 39
current and former employees of

Commerce Capital Markets

found its way into a political fund
that directly benefits candidates
with the power to determine who
gets local bond business.
Commerce has two employee
political action funds, one state
and one federal. Compac NJ has
distributed more than $3 million
to local, county, and state political
funds in the Northeast since 1997,
including $1.65 million in New
Jersey.
In the same period, Commerce
Bank-FED raised an additional
$264,955 through employees,
most of it from current or former
municipal finance professionals
covered by the 1994 securities
rules. Only $159,250 of those federal contributions, however, has
actually gone to support candidates running for federal office.
Municipal finance professionals, such as those employed by
Commerce Capital Markets, may
donate to federal campaign PACs
but are prohibited from contributing more than $250 to state
PACs that direct money to local
and state officials.
Federal and state campaign
records show that Commerce
Bank-FED
has
loaned
$182,338.22 to Compac NJ since
1998, the year Commerce Capital
Markets expanded. For years,
state campaign finance records
show, Compac NJ did not pay
back the principal on the loans,
instead merely adding to them

and changing repayment dates

from one year to the next.
That is clearly playing on the
edges. It is clearly playing in the
gray areas, says Larry Noble, former longtime Federal Election
Commission general counsel and
now executive director of the
Center for Responsible Politics in
Washington, D.C.
Compac NJ repaid all the outstanding loans on March 13, two
weeks after The Record requested
an interview with Commerce officials about the banks compliance
with rules limiting campaign contributions by municipal finance
professionals.
Commerce CEO Vernon W.
Hill II told a gathering of investors last month that the banks
political donations had been in
total compliance with the law.
Hill reiterated the banks position in an interview with The
Record last week.
Everything we have done with
our PACs is approved by our attorneys, he said.
Despite that, campaign records
show that Commerce last year
may have violated a state election
law limiting contributions. The
law allows a federal or state PAC
to contribute only $7,200 a year
to a state PAC, and Commerce
Bank-FED made two loans totaling $13,000 to Compac NJ in
2002. Loans that are not repaid in
the year in which they are made
are considered contributions un-

der election law. The $13,000 was

part of the money repaid in
March 2003.
On Monday, Philip Norcross, a
campaign finance lawyer for
Compac NJ and Commerce
Bank-FED, declined to discuss
the PACs activities or the relationship between the bank and
his law firm, Parker, McCay &
Criscuolo. Mr. Norcross cannot
comment on any relationships
with clients of the law firm, his
assistant said.
The Records analysis of campaign records also shows that at
least $23,250 in Compac NJ contributions that bank officials say
went to six campaign funds do
not show up in the six funds
records. Compac NJ reported the
contributions were made to county and local funds for both Republicans and Democrats from
Sept. 26, 2000, to May 13, 2002. It
is unclear why the contributions
were not recorded.
Christopher Kit Taylor, executive director of the Municipal
Securities Rulemaking Board, declined to address specifics of
Commerces political giving.
But he did say any company
that underwrites government debt
is prohibited from making even
indirect campaign contributions
to funds benefiting officials responsible for issuing the debt.
You may not do indirectly
what you are forbidden from doing directly, he says.

DiFrancescos parting act helped Commerce

Bill expanding
bridge authority
benefited bank
By CLINT RILEY
STAFF WRITER

At the time, it looked like an insignificant stroke of the pen by a

lame-duck governor. But that
scribble will tax citizens for at least
the next 20 years.
On Jan. 2, 2002, in his waning
days as acting governor, Donald T.
DiFrancesco granted new powers
to the Burlington County Bridge
Commission, an obscure agency
that operates two small toll bridges
over the Delaware River.
Now, in addition to painting the
bridges and collecting tolls, the
commission has the ability to fund
county economic development by
issuing government debt, in the
form of municipal bonds.
So far, one of the biggest beneficiaries is Commerce Bancorp, the
financial services company whose
board DiFrancesco joined less than
three months after leaving office.
The Republicans journey through
the revolving door of New Jersey
government reflects how influential political leaders whom Commerce supports, both in and out of
office, have been in a position to
shape public policy in Commerces
favor.
Commerce Capital Markets, a
Commerce subsidiary, underwrote
the first two municipal bonds the
bridge commission issued with the
new powers DiFrancesco granted.
Those deals had a combined public debt of $134 million. As prime
underwriter on the first deal and
one of four underwriters on the
second, Commerce received a majority share of $642,500 in banking
fees.
Taxpayers will be paying off
those fees with interest, plus
$350,000 in legal and miscellaneous processing costs, over the
next 20 years. Neither bond deal,
nor the professional work needed
to put them together, was put out
to competitive bid, so there is no
way to know whether taxpayers
were unduly encumbered.
And there was nothing illegal
about DiFrancesco, while a public
official, making Commerces payday possible, despite his current fiduciary position on Commerces
board. No New Jersey law prohibits a former lawmaker or a former governor from immediately
working for a company or an organization that can profit from legislation he or she sponsored, voted
upon, or signed at any time before
leaving office, with the exception of
casinos or associated businesses.
DiFrancesco was serving dual
roles as state Senate president and
acting governor as the bridge commission measure moved through
the Legislature. That meant he
could put the legislation to a vote
and sign it into law.
The Record called DiFrancesco
to ask about the legislation and his
move to Commerce. The call was
returned by Jeffrey T. Michaels,
DiFrancescos former chief of staff.

BETH BALBIERZ/STAFF PHOTOGRAPHER

Donald T. DiFrancesco broke no laws when he signed a bill that benefited Commerce, whose board he joined after leaving the governorship.
He really wasnt that involved
in the legislative process that much.
His role really took shape when
the bills passed both houses, said
Michaels, now a consultant on
government matters for several private companies, including Commerce Bancorp.
Michaels said no discussions
about Commerce or any other
company the legislation might benefit took place in the governors office, and DiFrancescos conversations with Commerce about joining the board of directors did not
begin until after he left office.
While DiFrancesco was in office, he and his family received
substantial income and political
contributions from Commerce.
The
corporation
employed
DiFrancescos wife as well as his
law firm. Diane DiFrancesco is an
account executive at Commerce
Insurance Services.

Some citizen advocacy groups

find the overlapping financial interests troubling.
The Burlington County Bridge
Commission is a blatant example
of pay-to-play and political and financial back-scratching that has
become the norm, says Harry
Pozycki, executive director of
Common Cause New Jersey. The
result, often hidden from the public, is more expensive and lower
quality government services.
Even before DiFrancesco expanded its ability to borrow money, the Burlington County Bridge
Commission had a reputation as a
Republican Party patronage mill.
The three bridge commissioners
who annually approve millions of
dollars in public contracts are appointed by the countys all-Republican Board of Freeholders. The
freeholders, in turn, rely on funding
from the Burlington County Re-

publican Committee to stay in office.

Year after year, the county committee is the biggest GOP fundraiser in New Jersey. In 2002, it
raised $1.6 million for Republicans
throughout the state.
The man who headed the
Burlington County Republican
Committee from 1974 to 1990,
millionaire cranberry farmer J.
Garfield DeMarco, has been chairman of the bridge commission
since 1989. The current chairman
of the county Republicans is Glenn
Paulsen, one of DeMarcos attorneys and a longtime legal and political adviser to DiFrancesco.
The bridge commissions recent
transformation into a county improvement authority began Oct. 3,
2001, when state Sen. Martha W.
Bark, R-Burlington, proposed a
bill expanding the powers of a
county bridge commission. Iden-

tical legislation was introduced in

the lower house by her county running mates, Assemblymen Francis
L. Bodine and Larry Chatzidakis.
Supporters said expanding the
commissions borrowing powers
would spur redevelopment and
lower the cost of issuing debt for
individual
municipalities
in
Burlington County, one of six New
Jersey counties without its own local improvement authority.
The bill got a big push from local
officials. The bridge commission
paid a Trenton lobbying firm more
than $100,000 from tolls collected
at the Burlington-Bristol and
Tacony-Palmyra bridges. What
never came up in legislative debate
was that towns without countysponsored, pooled-debt financing,
such as those in Burlington County, already have access to a cost-effective borrowing program run by
the New Jersey Economic Devel-

Ending pay to play is easier said than legislated

By CLINT RILEY
STAFF WRITER

Trenton has no shortage of proposals to curb conflicts of interest

and end the widespread practice
of pay to play, in which contractors who make political contributions such as Commerce Bancorp can be rewarded with taxpayer-funded government work.
The problem is, no one quite
agrees who should answer to the
new rules.
In March, the state Senate
passed a Republican-sponsored
bill that exempts legislators from
some provisions.
Assembly Democrats countered
by introducing a package of 10

bills that includes legislators but

leaves out municipalities.
Governor McGreevey dislikes
both efforts, and promises to unveil a tougher plan including legislators and municipalities.
Reform advocates take a dim
view of the entire effort, suggesting
the governor and the Legislature
are merely floating progressive
ideas in an election year, with no
intention of passing any law that
would choke off the flow of campaign money from big contributors
such as Commerce Bancorp.
For his part, Commerce CEO
Vernon W. Hill II says he just
wants a level playing field. I want
a clear set of rules so that everybody understands the accepted

practice, he says. Tell me what

the accepted practice is, and we
will follow it.
The Senate bill, which passed
36-0 in March, would limit campaign contributions from businesses and professional service firms
that receive more than $17,500 a
year in work from the state, its authorities, counties, and municipalities. It would also limit the funds
that county political committees
may give to other counties, to no
more than $7,200 per election.
The latter provision was inspired by last years race for
Bergen County executive, in which
the Bergen County Democratic
Organization received $187,000 in
donations from Democrats in

Camden County, $150,000 from

Middlesex County, and $110,000
from Hudson County.
The Assembly bills would prohibit political donations from any
entity doing business with the state
or a county, but does not address
local governments.
McGreeveys proposal would
require lawmakers to reveal more
about their business interests and
prohibit lawmakers from seeking
government favors for people who
are clients of their private firms.
Lobbyists would have to report
political donations, and any person seeking to influence contracts,
executive orders, and permits
would be required to register as a
lobbyist.

opment Authority. Aside from having much more experience than

the bridge commission, the state
EDA can offer lower interest rates
because it usually gets a higher
credit rating. With an in-house
staff, the EDA also can handle larger, more complex bond deals without relying entirely on outside legal
and financial advisers.
The bridge commission did turn
to outsiders for help with both
bond deals. Professional Financial
Management, a Philadelphia-based
financial advisory firm with an office in Moorestown, was paid
$150,000 for financial advice.
Capehart & Scatchard, a Burlington County law firm, earned an additional $191,000 for legal advice.
Capehart & Scatchard, Professional Financial Management, and
Commerce Bancorp are all large
campaign contributors to the
Burlington County Republican
Committee, whose chairman,
Paulsen, is a partner with Capehart
& Scatchard. Professional Financial Management employs family
members of the bridge commissions executive director and its
bond counsel.
Paulsen says he backed expansion of the commissions bonding
power and reviewed the legislation
in his job as the Senate Republicans legal counsel. But he says he
does not recall speaking directly to
DiFrancesco about the bill.
This was designed to spur revitalization of the Route 130 corridor, Paulsen says. I think it is
good government. I know it is
good government.
So far, the county, nine municipalities, and a sewage authority
have used the new bonding authority to refinance old debt, finance new government buildings,
and buy police and fire equipment.
No private companies have yet
publicly approached the commission to obtain the low-cost financing it now offers for redevelopment
projects.
Paulsen, Bark, Michaels, and
George Nyikita, the bridge commissions executive director, each
denied that the intense effort to
pass the legislation was connected
to campaign contributions or the
fact that the measure would benefit certain firms.Bark expressed surprise when told how much money
private companies that benefited
from her bill had given to Burlington County Republicans since
1997: more than $225,000 from
Commerce; more than $125,000
from Capehart & Scatchard; and
at least $68,000 from Professional
Financial Management and its
predecessor.
She also says she had no idea
that on the same day she introduced the bill, Commerce Bancorps political action committee,
Compac NJ, sent a $1,000 check to
the Election Fund of Bark, Bodine,
and Chatzidakis. In the next
month, Compac NJ sent an additional $11,200 to Barks political
fund and the county Republican
committee.
I guess I dont pay much attention to who sends the checks,
Bark says. I guess I should read
the [campaign finance] reports, but
I would prefer not to know.

JANUARY 2005

THE RECORD 17

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S E R V E S

www.northjersey.com

Published Saturday, June 7, 2003

McGreevey aide steps down

Top fund-raiser had a troubled past
Roger is very good very, very good at
winning the sympathies and support of people he then takes advantage of, Sabharwal
Rajesh Roger Chugh, a top fund-raiser said. There are a lot of people who feel befor Governor McGreevey and the third-rank- trayed.
ing official in the New Jersey Department of
State, resigned Friday after administration of- A trail of debt
An examination of Chughs financial backficials became aware of details about his trouground reveals a troubled history as a busibled past as a businessman.
Chughs decision to step down comes four nessman.
In addition to the debts incurred by the
days after a reporter from The Record confronted the McGreevey administration with collapse of his travel agency, Chugh has left
federal court documents describing how a trail of unpaid bills and angry creditors, inChugh was booted from the travel industry in cluding banks, casinos, hotels, credit card
the mid-1990s for writing $50,000 in bad companies, and print suppliers.
Court documents reviewed by The Record
checks and sticking Air India and other carshow Chugh and his various companies genriers with $319,000 in losses.
Chugh, who canceled a pre-arranged in- erated almost $361,000 in court judgments,
terview with The Record this week at the be- tax liens, and other legal claims over the last
hest of top administration officials, could not decade. New York City marshals posted nobe reached for comment Friday. He released tices in The New York Times to sell off
a copy of a resignation letter that he submit- Chughs office furnishings to satisfy debts he
ted to Secretary of State Regena Thomas and owed to Federal Express.
Chughs fledgling printing business in Mida separate statement that made no reference
dlesex County collapsed when creditors
to his business dealings.
As has been my intention for some time, seized his presses. A company that leased
I have decided to tender my resignation, the him printing equipment won a $43,000 judgstatement said. Recognizing the politics of ment against him in 2001, and just three
public service, I would never do anything to months ago, a businessman filed court papers
cast a negative perception upon myself, the claiming Chugh never repaid $125,000 he
department for which I proudly serve, nor borrowed to start the printing business.
Chugh, 48, was born and raised in New
this administration.
In his letter, Chugh said he had intended Delhi before coming to the United States in
to serve only one year as the assistant com- 1974. He says he worked as an accountant,
missioner, a position in which he oversaw the cabdriver, manufacturing executive, and
ethnic outreach efforts for the administration. restaurateur before he started his travel
Chugh held the $85,000-a-year position since agency, Landmark Travel, in Queens and
Manhattan in 1987, according to his official
McGreevey took office in January 2001.
But Micah Rasmussen, an administration biography.
But Chughs biography made no mention
spokesman, acknowledged that Chugh had
offered to resign Wednesday after adminis- of Chugh losing his accreditation as a travel
tration officials discussed the travel agencys agent or the bad checks and hundreds of
problems with him. Rasmussen said Chugh thousands of dollars that Air India says he
offered to resign when told that he might cost it.
Signs of the imminent collapse of Landcause a perception problem for the govermark Travel first surfaced on Aug. 2, 1994, in
nor and himself.
Rasmussen said Chugh did not discuss his a flurry of telex traffic among Air India executives in Bombay and New York. The telexplans to resign with the governor.
Chughs resignation is the latest in a series es were submitted as evidence in a federal
of appointments that have gone bad for the employee discrimination lawsuit, filed in
Manhattan by a former Air India employee.
governor.
In the lawsuit, former Air India employee
His first superintendent of state police,
Joseph Santiago, was forced to quit in Octo- Edward Macedo alleges that he was unfairly
ber amid mounting questions about his ethics blamed for Landmarks collapse. Also inand allegations that he was friendly with cluded as evidence are internal Air India docmobsters. The governor reassigned homeland uments, including the results of an internal
security adviser Golan Cipel after The company investigation of Landmark and
Record reported that the Israeli native did Chugh.
The first batch of telexes alerted top Air Innot have clearance to handle classified infordia officials in Bombay that the Airlines Remation. Cipel later resigned.
And developer Charles Kushner, Mc- porting Corp. an industry-owned agency
Greeveys top fund-raiser, resigned from the that certifies and oversees travel agents was
Port Authority in February amid questions declaring Chughs company in default.
Chugh had been selling plane tickets on
about his fund-raising and business dealings.
several airlines without forwarding the proAn early warning
ceeds to the carriers, the telexes said. Airlines
Prominent members of New Jerseys Asian Reporting Corp. officials were so alarmed
Indian population said they had warned Mc- that they immediately sent representatives to
Greevey when he was mayor of Wood- Chughs offices in Manhattan and Queens to
bridge and after he became governor that seize advance ticket stocks and ticket-enChugh might cause him problems. Chugh dorsing equipment.
was a paid political adviser to McGreevey
Several days later, Chugh offered Air India
during his mayoralty, and an important fund- two personal checks for $25,000 each to covraiser since 1997.
er his debts, post-dated Aug. 4 and Aug. 11
Why he remains in office is a mystery to and drawn on Landmark Travels account at
us all, Pradip Peter Kothari, president of Habib American Bank in Queens, court docthe Indian Business Association in Middlesex uments say. According to the court papers,
County, said of Chugh last week.
he repeatedly assured the airline the checks
Kothari was once an avid McGreevey would clear and that he would soon remit the
backer who even traveled to India with the remaining sale proceeds.
then-Woodbridge mayor. He said he had
Both checks came back marked insuffispoken at length with McGreevey in 2001 cient funds, according to the court records.
about Chugh, complaining that many local A few days later, Air India cashed in a
Indian-Americans were troubled by Chughs $100,000 letter of credit Chugh was required
growing influence.
to deposit when he became an official agent
I think Mr. McGreevey well understood for the airline in 1992.
the reservations many of us have with Roger,
In the court documents, airline officials talespecially the way he controls access to offi- lied the net losses for Air India and other carcials and the government, Kothari said.
riers at more than $319,000. Air Indias share
Other leading Indian-Americans in New came to $261,000, which was offset when
Jersey and New York have said they were they cashiered the $100,000 bank letter.
shocked by Chughs rapid rise in political cirAlan Muten, a spokesman for the Airlines
cles. They said his prominence in the Mc- Reporting Corp., confirmed the amount in a
Greevey administration was an embarrass- recent interview and said Landmark was
ment to their community.
stripped of its accreditation, ending Chughs
P. Singh Sabharwal, a New York City de- tenure in the travel business.
veloper who has built shopping malls in
Queens and elsewhere, says he helped intro- Million Dollar Agent
The collapse of Chughs travel agency was
duce Chugh to McGreevey in the mid-1990s
and was instrumental in getting Chugh a paid a corporate embarrassment for Air India,
position with the mayors political action which had honored Chugh as a Million
committee. Now he regards Chugh as a sad, Dollar Agent. Airline tallies show Landmark Travel was averaging $2.6 million to
sad story.

By JEFF PILLETS
TRENTON BUREAU

BETH BALBIERZ/STAFF PHOTOGRAPHER

Rajesh Roger Chugh, a top fund-raiser for Governor McGreevey and third-ranking official in
the New Jersey Department of State, quit after administration officials learned about his troubled past as a businessman.
$4 million in monthly sales before the default.
Air India flew a team of investigators to
New York after the default, and they uncovered irregularities and lapses dating back two
years earlier.
Chugh had been selling tickets from unauthorized locations, selling more tickets than
he had been allotted, and selling unauthorized tickets at unauthorized prices, according to court documents.
Chugh, the investigators found, was also
doctoring monthly sales reports and selling
tickets out of sequence to make it harder for
the airline to trace irregularities.
The investigators discovered that at least
one other airline had already severed its relationship with Chugh. In March 1993, Gulf
Air, an Arab-owned airline that serves the
Middle East, southeast Asia, Africa, and Europe, withdrew its ticket stock from Landmark Travel because of what Air India described as serious lapses committed by the
agent.
The Air India report scolded company employees for not recognizing warning signs
that Chugh may have been diverting airline
funds to finance other businesses. It noted
that Chugh had recently opened a pizza shop
and a printing press in Queens and had even
invited Air India officials to the latters grand
opening.
These ventures on the part of the Mr.
Chugh ... probably by diverting his funds
from travel business, could have aroused reasonable doubts regarding the financial stability of his travel business, said the report,
written by Ravi Sinha, the airlines senior vigilance officer.
The report concluded there was prima facie evidence that three Air India employees
conspired together with Chugh to defraud
Air India.

Drew FBIs attention

It is not known whether Air India took
any further action against Chugh. Air India
did not return repeated calls for comment.
But letters between Air India officials and
their Washington, D.C., law firm show the
problems attracted the attention of the FBI.
In a June 1, 1995, letter, under the heading
Air India Ltd-Landmark Investigation, attorney Marshal Sinick informed Air India
Regional Director Neela Talcherkar that he
had complied with an FBI request for information on Landmark.
I wanted to report to you that the FBI
agent assigned to this investigation called to
thank us for our, to use his words, complete
documentation, accompanying road map,
and list of former Landmark employees,
Sinick wrote.
Sinick declined last month to discuss the
collapse of Chughs travel agency and its connection to Air India with The Record.
Two weeks after the Sinick letter, Brian J.
McHugh, another attorney in Sinicks firm,
wrote to FBI Agent Steven A. Cocco to provide Chughs address, then in suburban Pelham, N.Y.
We are still trying to determine how
many of the travel documents for which
Chugh misappropriated the sales proceeds
were used for Air India flights, McHugh
wrote to Cocco.
Last week, Cocco did not answer several
phone messages, and an assistant in his office
said it was unlikely that he would be able to
comment on the case.
In addition, a document search turned up
no public record of an indictment or criminal
complaint lodged against Chugh stemming
from Landmark Travel.
Staff Writers Josh Gohlke and Charles Stile
contributed to this article.

18 THE RECORD

JANUARY 2005

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Sunday, Aug. 17, 2003

MONEY, POLITICS & POWER

McGreeveys man
in Little India
How ex-cabby Roger Chugh used threats and promises
of political favors to raise big bucks for his boss
the 55,000 Indians living in Middlesex County. Later, as governor, McGreevey rewarded Chugh with a
high-level state job.
Jim McGreevey sat by as one of his top fund-raisInterviews with more than 50 Indian business
ers, a fast-talking ex-cabby named Rajesh Roger
owners and Democratic officials, coupled with a reChugh, cut a swath of suspicion and fear in New
view of state and local records, show how Chugh
Jerseys Asian Indian community while raising an
a 49-year-old Punjabi migr and former errand boy
estimated $1 million for the future governor.
leveraged his friendship with Jim McGreevey to
Key Democrats and prominent Indians say they
intimidate the immigrant community and become
repeatedly warned McGreevey, then the mayor of
the virtual lord of Little India.
Woodbridge, that Chugh was a widely reviled maThe Record has learned that:
Chugh attempted to extract campaign contrinipulator with a long history of preying on his felbutions from business owners who had been cited
low South Asian immigrants in the township and
for code violations or were seeking zoning varielsewhere.
ances. During McGreeveys tenure as mayor, busiIn all, six individuals interviewed by The Record
ness owners who called Woodbridge town hall with
said they expressed their concerns about Chugh to
complaints or questions about code enforcement
McGreevey or to state party officials as long ago as
said they often received visits soon after from
1997. Among those who issued the warnings were a
Chugh. One woman who had been cited for erectvice chairman of the Democratic State Committee,
ing an illegal wall in her store said Chugh came by
a Democratic congressional candidate, and the
the same day and told her he would take care of
head of the nations leading Asian Indian group.
the problem for a $3,000 contribution.
I told Jim that this Chugh had done many
Chugh offered illusory appointments in a future
wrongs to our people, that he should not be held up A private snapshot of fund-raiser Roger Chugh with
McGreevey administration to wealthy members of
as the personal representative of a man who wants
Governor McGreevey.
the Indian community in exchange for political
to be governor, said Ramesh Patel, president of the
contributions. Prominent community members said
National Federation of Indian Associations, who
Chugh to a $10,000-a-month consulting position
Chugh enticed prospective contributors with offers
cornered McGreevey during a 1997 fund-raiser.
with the state committee and pronounced Chugh
of everything from Wall Street job interviews to
the captain of the community in the Little India
McGreevey just nodded and said he would take
care of it.
section of Woodbridge, a square-mile cluster of sari judgeships.
stores, sweet shops, and gold dealers that cater to
Despite the warnings, McGreevey promoted
See CHUGH Page 19

By JEFF PILLETS and CLINT RILEY

STAFF WRITERS

Roger Chugh assisted developer Vinod Kalra in securing

approvals for the Mahatma Gandhi Plaza in Woodbridge,
below, while Jim McGreevey was mayor. Within three
months of the project's approval, Kalra, his real estate
company, and a business run by Chugh contributed
$60,000 to the Democratic State Committee, which helped
McGreevey win the 2001 gubernatorial election.

STAFF PHOTOS BY CHRIS PEDOTA

Rajesh Dharia, above,

once ran a shop at
Gandhi Plaza. He says
of Chugh: I knew he
was Kalra's right-hand
man, I knew the game
he was playing with all
the tenants I
wouldn't even look at
him I was furious
that this guy would
even show his face.

JANUARY 2005

THE RECORD 19

Published Sunday, Aug. 17, 2003

Indians unsure whether to trust political system

Leaders say potential
to wield power exists
By CLINT RILEY
and JEFF PILLETS
STAFF WRITERS

Hanging inside the homes and

businesses of some of the South
Asian Indians who have pumped
millions of dollars into the campaigns of New Jersey politicians are
the meager spoils of their generosity.
A photograph of a donor with a
smiling Bill and Hillary Clinton. A
newspaper clipping listing names
of politicians who attended an Indian festival. Proclamations extolling a donors deeds, signed by
Governor McGreevey or some
other well-known leader.
Indians love pictures and
proclamations, said Paul R. Rajan,
an Iselin attorney and Democratic
contributor. They love the picturetaking opportunity, and they dont
mind contributing money.
Those glossy group photos, however, belie a deep ambivalence
within the Indian community
about the American political system.
On the one hand, they are a rapidly growing, affluent, and ambitious population capable of throwing lavish fund-raisers for politicians, headlined by Indias most
popular Bollywood movie stars.
Increasing numbers of business
and community leaders recognize

that politicians, exalted as celebrities in the Indian community, can

provide a path to personal prominence in the United States. Others
just want to rub elbows with political celebrities and are willing to
pay for the privilege.
Yet there also remains a cultural
disdain of politics and a distrust of
authorities shaped by experience in
India, where government officials
are often viewed as corrupt ward
heelers who help only those who
pay in cash. As a result, many Indian immigrants shun public life,
preferring to deal with officials
through back channels.
As a rule, the Indian community does not get involved and go into
politics because of the way it works
in India, said Rita Mehta, the
owner of a Middlesex County
check-cashing business.
Into this cultural divide stepped
Rajesh Roger Chugh, a former
New Jersey Department of State official and one of McGreeveys top
fund-raisers. Chugh was forced to
leave the administration in June after The Record presented details of
his troubled past as a businessman.
Chugh, a savvy political operative who became a trusted innercircle confidant of McGreevey,
tapped scores of wealthy and ambitious Indian donors eager for political access and recognition. He
did so by presenting an inflated im-

age of himself as the Indian communitys middleman who would

solve their problems with minimal
involvement or interference from
authorities they so distrust.
But Chughs repeated broken
promises became a source of embarrassment. Many prominent
New Jersey Indians, frustrated with
his failure to deliver, came to view
Chugh as a political charlatan, who
used his post for personal and political gain.
Some leading voices are relieved
that Chugh stepped down from his
post at State, where he served as
McGreeveys liaison to the entire
Asian community.
Its sad you have someone like
Roger Chugh representing us to
those outside of the Indian community, said Anil Srivatsa of

North Brunswick, host of the

countrys largest syndicated weekly South Asian radio talk show.
Its hurt our community in the
long-term. Its tainted everyone
who is legit.
Chughs departure is the latest
public relations setback for the
wider Asian-American community,
which was already scarred by the
high profile campaign finance
scandals of the 1990s involving
John Huang, a controversial Chinese-American who illegally funneled contributions into the national Democratic Party, and later
by David Chang, a Korean national from Cresskill, who was a central
figure in the fund-raising investigation of former U.S. Sen. Robert G.
Torricelli.
Those scandals erupted, in part,
after leaders from both parties recognized Asian-Americans, including the South Asian Indians, as a
rapidly growing and plentiful supply of campaign cash.
In New Jersey the South Asian
Indian population has doubled
over the last decade, to 170,000.
Census figures show they are welleducated and increasingly affluent
the median South Asian Indian
household income is $76,000,
which exceeds the states median
income by more than $19,000.
Here is a group that has
achieved economic parity in this
county, but not parity in other areas, said S. Mitra Kalita, author of
Suburban Sahibs, a soon-to-be
published account of three IndianAmerican families from Middlesex
County.
In the wake of the scandals, na-

tional Asian-American political action groups have fought to force

both political parties to pay attention to their issues and concerns,
not just their wallets, if the politicians want their votes.
Other groups, such as the Indian-American Leadership Initiative,
have tried to identify potential political leaders in their community
and support them for public office.
Many accomplished Indians have
shied away from entering politics
or government policy work because traditional Indian culture
grants more prestige and respectability to jobs in medicine or
computer science.
In the past 10 years, our parents generation has started paying
more attention to the political
process, but they have frankly been
outsiders looking in. As a result, for
many, the only way they have
known to get involved is to write a
check, said Raj Kumar, a secondgeneration Indian-American who
has served as both a McGreevey
campaign adviser and a member of
President Bill Clintons advance
team.
It is now the second generation
of Indian-Americans that feel more
plugged-in to the way politics
works and are actively participating at all levels of government and
politics, Kumar said.
But many barriers to true political empowerment remain. South
Asian Indians, much like AsianAmericans in general, are from
many different cultures, speak
many different languages, and tend
not to vote as a bloc like AfricanAmericans or Hispanics. Asians

also are among the nations most

recent immigrants and are hesitant
to become involved in the political
process.
Cy Thannikary, a Freehold resident who served as the highestranking Indian official in former
Gov. Christie Whitmans administration, said his communitys unwillingness to get involved in politics can be maddening.
If we acted together, as a unified voting bloc, we would have a
lot of clout, Thannikary said. But
it is very hard to convince Indians
that the political process can actually help their lives. In India, people do their best to avoid government authorities.Not only do they
not vote, observers say, IndianAmericans often do not demand
anything for the community in exchange for the large amounts of
money they contribute to political
campaigns. Those who win access
to political decision-makers often
are satisfied with token recognition
or individual favors that may benefit them or their immediate family personally.
As a result, many important issues that affect the Asian Indian
community immigration, racial
discrimination, pockets of hidden
poverty have not become part of
the political debate.
Our community needs to demand more and I dont think that
is happening, Srivatsa said.
Many of those who are emerging as [political] leaders are doing
so by default, Srivatsa added. The
problem is everyone wants to be
king instead of remaining kingmakers.

Chugh: McGreevey connection equals power in Little India

From Page 18
During the 2001 gubernatorial campaign, the Democratic State
Committee temporarily suspended
Chugh to investigate his fund-raising practices and business background. Two key staffers at the
committee who spoke on condition of anonymity said that about
one-third of all contributions
raised by Chugh were rejected by
the committee because they were
considered irregular or illegal.
As Chugh pressed businessmen for political contributions, he
was pursuing his own business interests. Documents in Woodbridge
town hall show that Chugh had an
interest in an Oak Tree Road strip
mall that was built in 2000 after receiving crucial zoning variances
from township planners. Chugh
and his associate in the strip mall
wrote $60,000 in checks to the Democratic State Committee within
10 weeks of the projects approval.
In June, Chugh resigned from
his job as an assistant commissioner in the New Jersey Department of State. He quit less than a
week after The Record approached the McGreevey administration with documents showing
that he had been booted from the
travel industry after his agency
wrote $50,000 in bad checks and
stuck Air India and other carriers
with $319,000 in losses. Other
documents showed that Chugh
and his companies were the target
of $361,000 in tax liens, court judgments, and other legal claims over
the past decade. In the mid-1990s,
Chughs business dealings in the
travel industry came under review
by the FBI.
Kathy Ellis, the governors director of communications, said at
the time of Chughs resignation
that the governor had no knowledge of Chughs troubled history or
of the FBI review. If the governor
knew that Roger had done anything illegal, or even anything unethical, he would have acted, Ellis said in a June 3 interview.
Neither Chugh nor his attorney
responded to requests for interviews. Chugh has told community
members he is seeking a job with
the national Democratic Party.
McGreevey declined to be interviewed. In an interview last
week, Ellis and press secretary
Micah Rasmussen said they did
not know enough about Chugh to
address specific questions.
I dont think we do have the
answers, said Ellis. And Im not
sure what we gain by sitting the
governor down to answer the
questions. Rasmussen acknowledged that Chughs aggressive style
had stirred up a lot of detractors.
But he insisted that Chugh has an
equal number of supporters, including many who feel he helped
give Asians access to Trenton, especially in his outreach role at the
State Department.
Some felt Roger was providing
an outlet to people who would not
otherwise have access to the political process, Rasmussen said.
Many South Asian immigrants
say their experience with Chugh
has deeply undermined the com-

A hard worker
and a smooth talker

STAFF PHOTOS BY CHRIS PEDOTA

Oak Tree Road, center of the Indian community in the Iselin section of Woodbridge, serves as home for hundreds of businesses.
munitys faith in McGreevey and
in an American political system
they once admired from afar.
Chughs critics argue that, by
playing on the Indian communitys
well-known fault lines its craving
for status, its lack of cohesiveness,
and its suspicion of government
authority he drove Little India
apart and denied it the strong new
voice McGreevey had promised.
For the governor, who has
plummeted to record lows in public-opinion polls, revelations about
Chugh only reinforce a growing
perception that he showed stunningly poor judgment in selecting
his friends and political allies. McGreeveys 20 months as governor
have been marked by repeated ethical embarrassments, failed appointments, and controversial resignations from his inner circle. Two
of those who quit are now under
investigation by the FBI for business deals made in the weeks before McGreevey came into office.
The furor over Chugh mirrors
other McGreevey administration
controversies that find their roots
in the quest for campaign dollars
and the governors dealings with
the political power brokers who
helped him get elected. Top Democrats say Chugh brought in so
much money McGreevey felt he
had no choice but to award him a
job in the administration.
Hes got this crazy loyalty thing
and sometimes it gets him into
trouble, said one member of the
McGreevey team.
For Indians, McGreeveys motivation in selecting Chugh as the
gatekeeper for their traditionally
Democratic community remains
nothing less than a complete mystery.

Chand Kewalramani is suing Rajesh Roger Chugh to recover

$120,000 in debt.
All of us have a question: Why
this character? said Rita Mehta, a
South River shopkeeper. Why
was this guy ever representing the
Indian community? The governor
could have done so much better.
Kiran Desai, an accountant and
the vice chairman of the Democratic State Committee, said everyone including the governor and
other top party leaders knew
about Chughs troubled history in
New York and track record of broken promises in New Jersey. Desai
said he warned McGreevey about
Chugh.
Chugh had long been persona
non grata among the Indians, said
Desai, but some within the party,
including McGreevey, thought he
was a god. It was a situation of,
well, if this is what the governor
wants, we can hold our nose and
go along with it, Desai said. But
why McGreevey wanted it, Ill never know.

Meeting changes
Roger Chughs life
At the time he met Woodbridge
Mayor Jim McGreevey in the summer of 1997, Roger Chughs life
was at a low point.
Only three years earlier,
Chughs once-booming travel
agencies in Queens and Manhattan were forced to close after airlines discovered he was manipulating his books and pocketing the
proceeds from ticket sales. Investigators from Air India later concluded that Chugh was probably
diverting money to other ventures,
according to federal court documents.
That same year, Chugh had
sought bankruptcy protection for
one of those ventures, a Long Island print shop called Chugh
Printers.
By 1996, Chugh, a former cabby
who had hustled fares in the

Bronx, was working as a courier

and personal assistant to P. Singh
Sabharwal, a prominent New
York developer and founder of the
now-defunct Indian publication
Asia Online.
He was suffering. He repented
before me and he wanted to be a
good person, said Sabharwal, a
devoted Hindu who said he decided to hire Chugh as an act of charity. I believe everyone deserves a
second chance.
Chugh proved to be a good gofer for Sabharwal, but soon he was
begging for more work.
So Sabharwal, who had already
hosted two fund-raisers for McGreeveys spring 1997 primary
campaign, took Chugh to New Jersey to meet the mayor of Woodbridge at the King Chefs Chinese
restaurant in the Iselin section of
the township.
Both Sabharwal and another
prominent Indian who was at the
meeting, Middlesex County commodities trader Arbinder Sahni,
said they later told McGreevey that
Chugh was an enterprising go-getter who had to be watched very
carefully because of his prior financial problems.
I warned him at every stage,
said Sahni, one of McGreeveys
oldest friends in the Indian community.
Jim McGreevey knew exactly
the kind of man he was getting,
and he seemed comfortable with
that.
Four days later, Chugh became
a paid staffer with Democratic Finance 97, the joint fund-raising
arm of the New Jersey Democratic
State Committee and the Jim McGreevey for Governor organization.

From the beginning, Chugh was

something of an enigma to McGreevey campaign staffers and the
regulars in the state Democratic
organization.
Tom Giblin, who was chairman
of the Democratic State Committee in 1997, said he had little interaction with Chugh and was not
even sure who hired him. Giblin
said Chugh claimed to have a lot of
high-level contacts in the Indian
community as well as a tight relationship with President Bill Clinton.
Doug Heyl, McGreeveys campaign manager in 1997, said he
had no idea that McGreevey had
hired Chugh and rarely saw him at
Woodbridge campaign headquarters.
I dont remember him ever
having a desk, a phone, or being
on the payroll, Heyl said. He was
never in any meeting I was in.
Chugh worked hard to impress
his new Democratic bosses and
soon had a reputation for being
fiercely loyal to Gary Taffet, Paul
Levinsohn, and others close to
McGreevey. Members of the Indian community, as well as Democrats who worked with him, said
the smooth-talking Chugh had an
uncanny ability to show up where
the rich and powerful were meeting.
Acquaintances said Chugh
would insist on introducing himself with deep bows and flamboyant gestures of greeting, addressing
his fellow Indians as my dear,
dear brother or dearest sister.
Sometimes, he would even fall to
his knees before fellow immigrants
and gently place his fingers on
their feet an ancient posture of
supplication known in Hindi as
pair panda.
Flamboyance was his specialty, said Jagdish Patel, a Colonia
resident who is president of the
Federation of Indian Associations.
It was his special way of ingratiating himself, of showing that he was
a good servant, and it worked.
Chugh was quick to lavish gifts on
fellow Indians and treat them to
dinner. Woodbridge Township
employees say he often sent lavish
bouquets to McGreeveys secretary. They say he was particularly
attentive to Taffets mother, Marilyn, who is a township employee
and served as treasurer of McGreeveys mayoral campaigns.

A reliable money man

for Democratic Party
Chughs efforts paid off. Less
than two months after his arrival,
he had already staged three fundraisers that netted $110,000 for
McGreevey and the Democrats.
He cultivated friendships with successful Indian businessmen on
both sides of the Hudson.
H.R. Shah, an owner of the
Krauszers mini-mart chain and the
Edison-based TV Asia television
network, became a close friend
and generous contributor, giving
See FUND-RAISER Page 20

20 THE RECORD

JANUARY 2005

Published Sunday, Aug. 17, 2003

CHRIS PEDOTA/0STAFF PHOTOGRAPHER

Indian fashions on display at a store in the Iselin section of Woodbridge. Little India caters to the 55,000 Indians living in Middlesex County.

Fund-raiser: Makes a scene at Gore visit

From Page 19
more than $20,000 to McGreevey
and the Democrats between 1997
and 2001.
Another friend was Albert
Jasani, an uneducated immigrant
who grew wealthy hosting lavish
Indian weddings at his Royal Albert Palace in the Fords section of
Woodbridge. Jasanis banquet hall
became a favorite gathering place
for Middlesex County Democrats
and a staging ground for Chughs
fund-raising forays.
Chugh became one of the partys most reliable money men in
both the 1997 and 2001 elections.
A $750-a-head floating fund-raiser
for McGreevey on the Hudson
River took in more than $50,000
for the 1997 campaign. More than
1,200 Democrats paid from $500
to $1,000 to attend a Woodbridge
event last year that netted
$100,000 for state Democrats.
The events honoree, Democratic National Committee Chairman
Terry McAuliffe, sparked an ovation with the words Lets hear it
for Roger Chugh. But members of
the Indian community say Chugh
was at his best in intimate fundraisers, small klatches of five to 10
contributors attended by McGreevey and others in the inner
circle of the future governor.
Chand Kewalramani, an Iselin
businessman who is suing Chugh
to recover a $120,000 debt, says
Chugh brought McGreevey and
Levinsohn to his home for a breakfast meeting with five other businessmen. The meeting netted more
than $10,000 in contributions. Kewalramani said he handed a blank
check to McGreevey.
[McGreevey] turned around,
handed the check to Levinsohn
and asked Can we accept this?
Kewalramani said. According to
him, Levinsohn said they could, so
long as the amount ultimately written on the check did not exceed
the $2,600 legal contribution limit
set down in state election law.
McGreevey and Chugh kept
asking me if there was anything
they could do for me, or if I had
any needs or concerns, and all I
wanted was the picture with my

daughter, he said.
Soon, Democratic staffers were
privately referring to Chugh as
McGreeveys money machine.
Party officials said Chugh and the
future governor grew very close
and often traveled together to
events in New Jersey and New
York, including several affairs
staged by the Indian community in
Manhattan and Long Island.

Chughs image begins

to show some cracks
But even as his ties with McGreevey grew stronger, Chugh was
alienating members of the Indian
community, who came to see him
as a bully and braggart. His fellow
immigrants say Chugh often made
promises to wealthy contributors
and other community members,
but rarely followed through.
Paul Rajan, a Democratic attorney and fund-raiser who helped
found the Asian Indian Chamber
of Commerce in Iselin, said Chugh
floated rumors that Indians would
receive judgeships from the McGreevey administration and that
Rajans name was on a list of future nominees. I told Roger to
stop spreading that kind of stuff
around, he said.
Rajan said Chugh bragged that
he wanted to be appointed chairman of the Port Authority of New
York and New Jersey, a coveted
post from which he would have
controlled hundreds of jobs and
contracts. He said people in the
community even started playing up
to Chugh in hopes of getting a job.
He told everyone that he
would have this immense power in
the McGreevey administration
and people believed him, Rajan
said.
Members of the community said
many of Chughs promises, in retrospect, were absurd.
Sam Shah, an Iselin businessman, said Chugh bragged about his
friendship with U.S. Sen. Jon
Corzine and promised contributors interviews at Goldman Sachs,
the finance house formerly led by
Corzine.
Roger was a Democratic ac-

tivist who was involved in many

campaigns for several years, but if
he was going around making
promises for job interviews he was
just
lying,
said
Corzine
spokesman David Wald.
Dr. Arvind Kumar, a widely respected South Plainfield oncologist
who gave nearly $19,000 to McGreevey and state Democrats between 1997 and 2001, said Chugh
caused havoc at a July 2000 fundraiser at his Scotch Plains home.
The event, in honor of Vice President Al Gore, had been scheduled
for an Edison television studio
owned by Chugh confidant and
McGreevey contributor H.R.
Shah. It was moved to Kumars
back yard when Gores advance
team discovered Shah owed the
government more than $1 million
in back taxes.
Chugh, who played no role in
the fund-raiser, barged in and insisted that he be allowed to place a
ceremonial garland around the
vice presidents neck. Chugh was
so obnoxious, Kumar said, that the
garlanding ceremony was moved
inside his house so Chugh could be
shut out. Roger angered many
people that day, it was an embarrassment to the community, said
Kumar.

Merchants view of
Chugh: A buffoon
In the crowded and colorful Indian shops strung along Oak Tree
Road in Iselin, it seems everyone
knows Roger Chugh. When his
name is mentioned, some shopkeepers just laugh and roll their
eyes. A buffoon who paraded
around the market like a king, I
know him, said Gagan Patel, a
video store manager.
Others gravely nod or frown at
the mention of the name. Taken
together, their stories paint a portrait of a menace who brandished
his friendship with McGreevey
and other Woodbridge officials
like a weapon.
Rukmini Pollepalli, the owner of
a jewelry store in the busy Subzimandi Plaza just off Oak Tree
Road, said Chugh visited her shop

Rajesh Roger Chugh: A partial rsum

1986 - New York City cabdriver.
1987 to 1994 - President of Landmark Travel &

Tour Inc. in Manhattan/Queens, N.Y., a failed travel

agency that is stripped of its accreditation by the
Airlines Reporting Corp. when Air India and other
carriers fail to receive hundreds of thousands of
dollars for advance ticket sales handled by Chugh.
1993 to 1997 - A principal in the New Yorkbased Chugh Printers, he seeks bankruptcy protection in 1995 and the company is dissolved in
September 1997 just after Chugh becomes a McGreevey fund-raiser.
1996 to 1997 - Personal assistant and driver for
P. Singh Sabharwal, a prominent New York
landowner and publisher of now-defunct Asia Online.
July 1997 to November 1997 - Salaried fundraiser for Democratic Finance '97, the joint fundraising arm of the N.J. Democratic State Committee and Jim McGreevey for Governor. The ninemember team is overseen by Gary Taffet, a former
Woodbridge chief of staff and McGreevey's first
gubernatorial chief of staff.
1998 - Fund-raiser with Bobby Kumar, then-vice
chairman of the GOP in Nassau County, N.Y.; they
host fund-raisers for former Sen. Al D'Amato and
N.Y. Attorney General Dennis Vacco, and others.
1995 to 1999 - President and CEO of New York
Image Printing Press, which moves from Queens,
N.Y., to Middlesex County in mid-1999. All of the
failed company's equipment is repossessed
and/or auctioned off by Dec. 2, 1999. Six months

later, the N.J. Democratic State Committee receives a $10,000 campaign contribution in the
name of New York Image Printing Press.
1998 to December 2000 - Director of Asian Affairs for the Committee for Working Families PAC,
a federal political action committee set up by McGreevey and run by Taffet and Paul Levinsohn,
campaign treasurer of McGreevey for Governor
2001 and later chief counsel to the governor.
January 2000 - Business associate of strip-mall
developer Vinod Kalra of New York, who won approval for the Mahatma Gandhi Plaza in the congested "Little India" section of Woodbridge when
McGreevey was mayor.
December 2000 to December 2001 - A $10,000a-month fund-raising consultant to the N.J. Democratic State Committee. Chugh also claims the title
of Asian Affairs outreach coordinator for the McGreevey campaign.
January 2002 to June 2003 - Assistant commissioner in New Jersey's Office of the Secretary of
State. Chugh falsely claims to the Indian press he
holds the Cabinet-level post of first assistant secretary of state. The governor's office later terms it
an "honest mistake."
June 6, 2003 - Chugh resigns from the $85,000
post less than a week after The Record confronts
the McGreevey administration with federal court
documents detailing Chugh's problems during the
mid-1990s in the travel industry. Chugh and administration officials release statements claiming
Chugh resigned "to pursue other opportunities."

in the fall of 2000 on the same day

a Woodbridge building inspector
cited her for erecting an illegal
glass wall inside her establishment.
Within a few hours of the inspector being in here, this Chugh
comes in and says he can take care
of everything, said Pollepalli. He
said the cost would be $3,000.
Pollepalli said Chugh told her
that the money would be used for
a political contribution. She said
she wrote out a $3,000 check and
handed it to Chugh, although she
could not recall whom Chugh
asked her to make the payee of the
check.
State campaign contribution
records show that McGreeveys
primary election campaign received a $2,100 check in the name
of Pollepallis store on Dec. 20,
2000. A week later Pollepalli was
granted a permit for the wall,
records show, even though she
had yet to pay a $250 fine that
came with the citation. The fine
was paid the following April.
Pollepalli, like many of her fellow immigrants along Oak Tree
Road, was reluctant to talk about
the incident because she said she
did not want to have any trouble
with the authorities.
It was just easier to pay, she
said.
Larry Esoldo, the township construction official who signed the
Pollepalli violation, said in an interview last week that he did not
recall inspecting the jewelry store.
Although he acknowledged knowing Chugh as a name-dropper who
often came into town hall to apply
for building permits, he said he had
never heard that Chugh had pressured merchants.
That would be against the law,
he said.
Several other current Woodbridge officials said they had never heard of any complaints about
Chugh strong-arming members of
the Indian community or promising special treatment from the
township on planning, zoning, and
code enforcement matters.
The townships acting business
administrator, John Mitch, its longtime Planning Board chairman,
Raymond R. Miller Sr., and other
current township officials said they
cannot believe anyone would do
such a thing.
I have never heard of this person [Chugh], said Miller, who has
served on the township Planning
Board for 12 years, including the
last four as chairman.
Kevin McCabe, who was the
townships chief code enforcement
officer before taking a job as the
deputy labor commissioner in the
McGreevey administration, did
not return calls seeking comment.
Several business owners said
Chugh and McCabe, who was also
the townships Democratic chairman, often were seen walking together through the Indian business
district in the Iselin section of
Woodbridge.
Another businessmen who described a run-in with Chugh was
Bharat Kotak, who does a brisk
business selling homemade cookies and Indian fast food from his
sweet shop off Oak Tree Road.
Business was so good at the little
corner store, Kotak said, that his
landlord wanted to expand and
build a second story.
Kotak said that Chugh heard of
plans to expand the store and
came in one day in 2002 in an attempt to get a political contribution from the landlord.

There was a big fight with the

landlord, said Kotak, who said he
witnessed the confrontation.
Chugh said we had to give money
to the Democrats if we wanted the
expansion. But the landlord wanted nothing to do with it. He
screamed at Chugh and ran him
out of the store. Kotak recalled
that as Chugh left the store, he
threatened that it would be 100
million years before the township
granted any approval to expand
the store. An application seeking a
variance that would have cleared
the way for the expansion was denied, Kotak said. Woodbridge
planning records show that the expansion, which had been opposed
by some neighbors, was denied for
lack of adequate parking.
The landlord of Kotaks store,
an Iselin man named Ashok Patel,
declined to be interviewed for this
story, saying he did not want to
get involved with any controversy. Four other businessmen in the
neighborhood shared similar stories of being pressured by Chugh
for contributions. But the four
were unwilling to allow their
names or details of their stories to
be published. All said they feared
reprisals by Chugh or landlords
who remain friendly with him.
Some of the four said they have
project applications pending in the
township and fear interference.
Chugh may be gone, like you
say, but he has powerful friends
and this is my life, this is all I have,
said a 52-year-old shopkeeper who
emigrated from the western Indian
state of Gujarat in 1974. Chugh,
the shopkeeper said, came into his
store three times seeking money in
1999 and 2001.
On two occasions, the shopkeeper said, Chugh said he heard
the store was considering an expansion and he could help things
along with a contribution.
I asked him how he could be
so sure of himself and he said Because I am best friends with the
mayor and he does favors for me
because I do favors for him, said
the shopkeeper. He said he made
no contribution and has not applied to expand his store.
While collecting contributions,
Chugh was promoting his own
business interests along Oak Tree
Road.
One successful businessman
who owns shops in Iselin and
three other North Jersey communities said Chugh frequently
stopped at his centrally located
Oak Tree Road store and pressured him to sell. Chugh, he said,
wanted to buy the property for
himself and the neighborhoods
most powerful landlord, Vinod
Kalra. Kalra owns two mini-malls
in the Little India marketplace.
He came in on several occasions and asked me to sell to him
and Kalra, the businessman said.
He would say that I had to sell because I could never get anything
approved without them. Kalra

says he was a close friend to

Chugh and liked to dine with him
and walk around the marketplace
talking politics, a fact confirmed by
dozens of business owners who
said the pair were frequently seen
together.
He denied any knowledge of
Chugh pressuring business owners
to sell or make political donations.
I do know he collected money,
but I never heard of shaking down
anybody, Kalra said.
Kalra also denied being partners
with Chugh. We had no business
interests together, Kalra said.
But Woodbridge records show
that Chugh appeared before the
township Planning Board to tout a
strip mall project the Mahatma
Gandhi Plaza presenting himself as a partner, you can say in a
way with Kalra. After Chughs testimony at the April 5, 2000, meeting, the board approved the project
along with seven variances.
Within three months of the projects approval, Kalra wrote two
checks totaling $50,000 to the Democratic State Committee, according to state records. Chugh
also gave $10,000 in the name of
his printing company, New York
Image Printing Press Inc. The company had ceased operations more
than six months earlier, after creditors and auctioneers had sold its
equipment.
The state committee later returned Chughs check with no explanation, records show. But the
committee kept the money from
Kalra and his real estate company.
Between 1997 and 2001, campaign records show, Kalra and his
companies contributed almost
$84,000 to McGreevey and the
Democratic Party.
Kalra said he would write
checks and give them to Chugh.
Sometimes, he said, he walked into
campaign headquarters in Woodbridge and handed money directly to Levinsohn, McGreeveys
campaign-finance manager. He
said the contributions were not
linked at all to the approval of the
Gandhi Plaza or another controversial strip mall he built in 1997,
Subzimandi Plaza.
Several business owners say
Chugh, with Kalra at his side,
walked around the plazas acting
very much like he was both owner and chief code enforcement officer for the town. Rajesh Dharia, a
software designer and merchant
who says Kalra forced him out of
the Gandhi Plaza, says he kicked
Chugh out of his store when
Chugh came in to introduce himself.
I knew he was Kalras righthand man, I knew the game he
was playing with all the tenants
I wouldnt even look at him I
was furious that this guy would
even show his face, Dharia said.
Jyoti Patel, the operator of two
clothing stores that she rents in
Kalras malls, says she chased
See CRITICS Page 21

JANUARY 2005

THE RECORD 21

Published Sunday, Aug. 17, 2003

Critics: Some Indian merchants ridicule Chugh, others fear him

From Page 20
Chugh out of her store one day
when he came in to talk to her.
I knew enough about him that
I didnt want him in here, I wanted
nothing to do with him because I
had heard the stories from the other owners, Patel said, who added
that she would not have been
afraid to call the police if he entered her store again.
All these store owners around
here are afraid to speak up. But I
say for what? Why be afraid? We
are not in India. This is America.

A gatekeeper
to McGreevey
As a newcomer, Chugh had a
limited role in McGreeveys unsuccessful 1997 gubernatorial
campaign. But by the time McGreevey ran again in 2001, community members say, Chugh had a
stranglehold over Little India.
Chughs control caused frustration
for many who saw him as a powerful gatekeeper, to the township
government as well as to the future
governor.
Rajan, of the Indian Chamber of
Commerce in Iselin, said McGreevey fostered Chughs gatekeeper status. Rajan recalled approaching McGreevey at the Indian Heritage Festival in Atlantic
City shortly before McGreevey became governor. He said he invited
McGreevey an acquaintance of
15 years to a Chamber of Commerce anniversary event. Rajan
was surprised when McGreevey
told him to talk to Roger.
Girijha Roy, a veterinarian and
staunch McGreevey backer, said
Chughs ascent was galling to
many Middlesex County Indians.
Chugh was a New Yorker with no
previous ties to New Jersey Democrats. Chugh, in fact, did not
change his domicile from Pelham,
N.Y., even after being appointed to
his State Department post.
Chugh also had deep ties with
the New York Republican Party,
ties that he never completely cut.
In 1998 and 1999, while working
as a staffer for McGreeveys political action committee the Committee for Working Families
Chugh was also helping raise money for Republicans with an old
friend, Nassau County GOP Vice
Chairman Bobby Kumar.
Here was this interloper from
out of state suddenly trying to take
credit for everything in New Jersey,
and he comes from the New York
Republican machine, said Roy.
Complaints about Chugh grew
widespread within the Democratic political community.
Prakash Shah, a Raritan businessman who raised more than
$300,000 for Democratic presidential
candidate
Michael
Dukakis in 1988, said he told party leaders that he was sitting out
the 2001 gubernatorial election because he felt Chugh was a dangerous character. When Shahs
old friend, former Gov. Jim Florio,
approached him to ask why he
was not getting involved in the
election, Shah said he confessed
his misgivings about Chugh. Florio, he said, had heard complaints
about Chugh and expressed hope
that McGreevey would do something to straighten things out.
Knowing Roger and his past and

how he operated, I thought it was

best to just stand aside in 2001,
said Shah, adding that he made his
concerns known to the Democratic State Committee. They were
aware that people werent happy.
Florio said he does not remember
having a conversation about
Chugh with Shah, He may have
said something, but I dont recall.
Maryanne S. Connelly the
former Democratic mayor of Fanwood who was narrowly defeated
by Republican Mike Ferguson in
the 2000 election in the 7th Congressional District said she was
approached by several leading Indians who were deeply concerned
about Chughs background and his
proximity to McGreevey.
I think the community by that
point felt so stymied by Chugh that
they were desperate to be heard,
Connelly said.
Connelly said the Indian leaders
asked her to distribute copies of an
Indian newspaper that recounted
a string of sordid and completely unsubstantiated allegations
against Chugh and Kumar.
Connelly said she distributed
dozens of copies of the report to
Democratic leaders at a May 2001
party convention in Atlantic City.
When I ran for Congress I developed very close ties with the Indian community and it was plain
they were deeply troubled by
Chugh, Connelly said. I distributed the newspaper as a favor to
them because it was clear something was wrong and the party had
to do something about this guy.
During her congressional race,
Connelly said, McGreevey had
promised to raise $50,000 for her
in what was certain to be a close
contest with Ferguson. But with
the election nearing, she said, McGreevey proved elusive as she tried
to cash in on his promise.
I finally ran into him at an
event one day and he said, Oh,
dont worry about the money, just
call Roger and hell take care of
it, Connelly said. I was floored. I
mean, what role did Chugh have
in raising money for other candidates? And I already had tapped
out the Indian community for contributions. Connelly said she tried
to contact Chugh repeatedly in the
ensuing weeks, but he did not return her calls. At other times when
she reached him on his cellphone
Chugh would pretend he could
not hear her, she said.
It was a complete joke, this guy
saying hello ... hello ... hello on
the other end, she said.
Connelly said she did eventually contact Chugh, who later raised
only about $12,000 of the $50,000
promised by McGreevey.

Chughs methods
called out of control
Complaints about Chugh
reached a crisis point in the
months leading up to the 2001
election. At the time, Chugh was
being paid $10,000 a month as a
fund-raising consultant to the state
committee.
According to two leading
staffers who worked for the Democratic State Committee, Levinsohn and Taffet told Chugh to temporarily suspend fund-raising activities while they checked out the
complaints. As part of the in-house

CHRIS PEDOTA / STAFF PHOTOGRAPHER

Iselin business leader Pradip "Peter" Kothari supported the GOP in 2001, partially in protest over Roger Chugh's influence with then-gubernatorial candidate Jim McGreevey.
inquiry, the staffers said, Levinsohn was supposed to look into allegations about Chughs background.
One staffer said that about one
third of all contributions brought
in by Chugh appeared to be irregular or illegal. Chugh, the
sources said, would hand-deliver
suspicious-looking money orders
from third parties money orders
made out in sequence along
with checks made out in his own
handwriting. Sometimes, they
said, Chugh could not provide
complete information about a
contributors address or occupation, as is required by state election law.
There was at least one occasion,
the sources said, when Chugh attempted to submit a contribution
from a foreign national illegal in
this country.
From our point of view, trying
to run a clean campaign, Chugh
was a complete nightmare, said
one staffer. He was out there offering jobs and contracts to contributors. He was making wild
promises. It was sickening, out of
control. The staffers said they did
not know what Levinsohns inquiry found out about Chugh or if
any disciplinary action was ever
taken against him. They said they
were certain McGreevey was
made aware of the irregularities.
I cant say what they found out
in this inquiry or whatever happened to Roger. All those kind of
decisions were made directly by
Gary [Taffet] or Paul [Levinsohn], said one of the staffers. All
I know for sure is that Roger was
out there working the community
to the end of the campaign.
A third Democratic campaign
official also speaking to The
Record on condition of anonymity
said there were discussions
about firing Chugh among the

campaigns top managers.

There were some people who
clearly wanted to get rid of the
guy, said the Democrat. But
Roger was kept around, I guess,
because he was a friend of McGreevey. Bob Long, a Democrat
who worked as a contribution
compliance officer in the 2001
campaign, said Chugh was sat
down and talked to by Taffet and
Levinsohn. Long said he did not
believe Chugh was ever officially
suspended or disciplined in any
way.
I never heard any complaints
directly, but there was controversy, Long said.
Long added, however, that
Chughs strong personality and
prominence as link to the fractious Indian community made
him a lightning rod for criticism
that was not always valid. By his
tally, Long said, Chugh gave McGreeveys campaign only a handful of bad checks no more or
less than the other fund-raisers.
He said he had no knowledge
about the number of Chughs
checks that were rejected by the
Democratic State Committee, a
separate entity that also supported
the campaign.
Roger might have made enemies because of his strong personality, Long said. But fund raising
was his business, he took it seriously, and was good at it. That
doesnt mean he did anything
wrong.

McGreevey wins,
$85,000 job follows
Like dozens of other loyal McGreevey campaign workers,
Chugh was awarded a job in the
new administration, an $85,000-ayear post as assistant commissioner in the Department of State.
There, Chugh functioned main-

ly as a liaison to the states Asian

community. Apart from attending
meetings and serving on the states
Asian American Heritage Commission, it was never clear what
Chughs job was. The State Department said Chughs position
does not have an official job description.
New Jersey Indians say that
Chughs elevation to public office
only served to cement his role as
McGreeveys gatekeeper to their
community. Many said it became
impossible to get a word in with
the governor. Some who said they
were old friends with McGreevey
suddenly found that the former
Woodbridge mayor was not returning their calls. Even more
maddening, some calls to McGreevey were now being returned
by Chugh.
Pradip Peter Kothari, a travel
agent and longtime leader of the
Iselin business community, broke
with McGreevey and switched to
the Republicans in 2001, partly in
protest over Chughs increasing influence. On inauguration day,
Kothari said, he approached McGreevey in the hopes of patching
things up.
He looked at me and said,
Talk to Roger. Kothari recalled.
I was stunned. I was so furious I
could barely speak. It was very
clear from that moment on that
Rogers grip on our community
would never be broken. During
his campaign and in the months
after he was elected, McGreevey
often said that his administration
would be about opening government for everyone, about changing the way Trenton does business. This is the community I
love and cherish, the governor
said during a May 2002 speech to
the Asian Indian Chamber of
Commerce in Princeton. Dont
look at the administration as

something far away and which you

have nothing to do with. This administration is your own and all of
you are part of it.
To shop owners in Little India,
McGreeveys rhetoric could not
ring more hollow.
Many say the community, never
known for its cohesiveness, is now
more divided than ever. Suspicion
of the government and indifference to the political process are
stronger than ever. That, they say,
will remain Chughs and the
governors real legacy.
Jim held out a lot of promise to
us but after he became governor
he just disappeared, said Atul
Soni, owner of an electronics store
on Oak Tree Road. How could
he really say he cared about us
when he gave his confidence to
guys like Chugh and let them run
things? In the end, said Soni and
many others, doing business in
Woodbridge really proved to be
not much different than doing
business in the marketplace back
in India, where corruption is rampant.
What good are the laws and
the protections supposedly guaranteed by the American political
system if someone like Roger
Chugh can come in and take over
everything for his own good and
the people he is working for? said
Sylvester Fernandez, an Indian
businessman with Portuguese
roots.
The sad thing is everybody got
what they wanted except the people who really needed it, said Fernandez. McGreevey got his contributions. Chugh got the status
and power he wanted. The big
contributors got access. But what
did the little guy get, except more
disappointment?
E-mail: pillets@northjersey.com and
riley@northjersey.com

AN EDITORIAL
Published Tuesday, Aug. 19, 2003

New McGreevey scandal

How top fund-raiser pressured contributors

VERYBODY KNOWS that

money talks in politics. But if you
missed the recent article in The
Record about Roger Chugh, a top fundraiser for Governor McGreevey, you
probably had no idea just how corrosive and corrupting campaign money
can be.
The story details how a political operative with a dubious past was able to
insinuate himself into Mr. McGreeveys
inner circle and use that connection to
pressure the Asian Indian community
to make huge donations.
The story, by Staff Writers Jeff Pillets
and Clint Riley, also details the repeated warnings about Mr. Chugh that Mr.
McGreevey received, to the point
where its impossible to imagine why
Mr. McGreevey stuck by his star fundraiser for so long unless the future
governor was totally blinded by the
huge amounts of money pouring into
his campaign.
Mr. Chugh, a former cabby and travel agent, hooked up with Mr. Mc-

Greevey when he first ran for governor

in 1997 despite a shady past that included writing $50,000 in bad checks,
sticking Air India and other airlines
with $319,000 in losses, and racking up
$361,000 in tax liens, court judgments,
and other legal claims in the past 10
years.
The Punjabi migr soon parlayed his
connection to Mr. McGreevey, then
mayor of Woodbridge, to get ahead.
Business owners in the towns Little India section told The Record that Mr.
Chugh tried to raise money for Mr. McGreevey by implying that he had influence in township zoning and code-enforcement decisions. Other members of
the Asian Indian community said that
Mr. Chugh promised them jobs or political favors in exchange for donations.
Mr. Chugh managed to raise an estimated $1 million for the governors
campaign and the Democrats. Starting
in 2000, he was paid $10,000 a month
by the State Democratic Committee.
But as many as a third of the donations

he generated were rejected because of

irregularities.
Mr. Chugh was ultimately rewarded
with a largely ceremonial $85,000-ayear state job as an ethnic outreach
official. Mr. Chugh resigned in June, just
days after The Record confronted McGreevey officials with federal court
documents describing Mr. Chughs
checkered history in the travel industry.
Its small wonder that so many Asian
Indians in this state are disenchanted
with politics: The man Mr. McGreevey
chose to be their champion had done
his best to exploit them.
Unfortunately, the sordid story of
Roger Chugh says even more about the
governor than it does about Mr. Chugh
himself. The governor, who has shown
incredibly poor judgment in some of his
political appointments, seems willing to
place a far higher value on cash than on
character.
The governor has tried to distance
himself from the growing scandal. At
the time of Mr. Chughs resignation, the

governors director of communications

said that if the governor had known
that Roger had done anything illegal, or
even unethical, he would have acted.
And this week another spokesman
downplayed Mr. Chughs connection to
the governor, calling him one of more
than 100 employees.
But six people interviewed by The
Record told of the repeated warnings
that the governor had received about
Mr. Chughs tactics, and of Mr. McGreeveys failure to do anything.
In the wake of The Records article,
state Republicans are calling for the
U.S. Attorneys Office to investigate Mr.
Chughs fund-raising activities. And late
yesterday, state Attorney General Peter
Harvey said he is looking into the allegations. Both steps make sense.
The Roger Chugh scandal also
speaks to the desperate need for campaign finance reform in New Jersey. Mr.
McGreevey has always talked a good
game about cleaning up politics, but
money has always talked louder.

22 THE RECORD

JANUARY 2005

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Sunday, Dec. 28, 2003

He plays, you pay

Generous law firm
gets lots of work
First of two parts

By SHANNON D. HARRINGTON,
CLINT RILEY, and JEFF PILLETS
STAFF WRITERS

Youve probably never heard of M. Robert DeCotiis, but

your tax money has helped make him one of the best-paid attorneys in New Jersey.
From his suite of offices in Teaneck, the 62-year-old lawyer
directs a group of high-powered professionals who have
brought home more than $10 million per year in no-bid contracts awarded by politicians across New Jersey.
At the same time, DeCotiis and his lawyers are sending
nearly $500,000 a year to political campaigns in this state.
Bob DeCotiis and his team of government law specialist
at the firm now called DeCotiis, FitzPatrick, Cole & Wisler
have been the counselors of choice for a generation of
mayors and committeemen, freeholders and governors.
DeCotiis and his supporters say thats because their firm
offers unrivaled expertise in government work. But critics say
that DeCotiis and other top lawyers like him thrive by exploiting a system that encourages politicians to reward their
big contributors with juicy and perfectly legal no-bid
contracts financed by the taxpayers.
A sweeping review of DeCotiis work for towns and public agencies shows how high rollers in this pay-to-play
sweepstakes reap huge returns from investments in the right
politicians. In a study of DeCotiis legal bills for towns and
public agencies across New Jersey, as well as interviews with
dozens of elected officials, The Record has found that:
The DeCotiis firm billed at least 128 government entities nearly $26.6 million during the 2 1/2-year period
starting in January 2001. From Alpine to Atlantic
City, in 15 of New Jerseys 21 counties and many
departments of state government, DeCotiis
lawyers are charging the taxpayers for contracts
that, under New Jersey law, can be awarded
without competitive bidding.
The data come from thousands of
pages of DeCotiis legal bills obtained
through requests placed under the
states Open Public Records Act to
more than 550 government agencies.
Fifty-nine municipalities
and governing agencies in
Bergen, Passaic, Hudson,
and Morris counties paid
the firm more than a total of
$4 million during 2001,
2002, and the first six
months of 2003. The biggest
billings were in the firms
See DeCOTIIS Page 23

BETH BALBIERZ/STAFF PHOTOGRAPHER

M. Robert DeCotiis, managing partner, DeCotiis, FitzPatrick, Cole & Wisler law firm. It excels in the world of
contracts and political contributions.

JANUARY 2005

THE RECORD 23

Published Sunday, Dec. 28, 2003

DeCotiis: A world of political contributions, lucrative contracts

From Page 22
home county, where the Bergen
County administration alone paid
the DeCotiis firm $771,890.84 in
legal fees, more than twice as
much as any other firm. Since
1999, DeCotiis attorneys have
contributed $154,000 to candidates for Bergen County offices
and party organizations on both
sides of the aisle.
In the past five years, lawyers
working in the 80-member firm
have contributed more than $2.5
million to local, county, and state
politicians from both major parties, state campaign finance
records show. At the same time,
DeCotiis partners were also leading fund-raising efforts that yielded millions more for politicians
statewide.
The apportionment of political contributions is the first duty of
the firms managing partners
specifically mentioned in their
partnership agreement, a copy of
which was filed in state court in
January. The firms net profits are
computed only after political contributions have been deducted
from the bottom line.
Public officials sometimes pay
little attention to legal billings a
failing of a system that provides little incentive to rein in costs, critics
say. The firm charges $230 an
hour for tasks as simple as retrieving voice mail. Taxpayers get stuck
with $75-an-hour bills for paralegals to deliver documents gofer
work couriers perform for a fraction of the cost. In one instance, a
misplaced decimal point cost Englewood Cliffs taxpayers nearly
$5,000 until the mistake was noted by a reporter.
Bob DeCotiis declined to be interviewed in person for this story.
But in a statement issued to The
Record, he said his success has less
to do with political connections
than the quality of legal work provided by a high-powered staff of
associates dedicated to the DeCotiis family dictum: Be honest,
work hard, help others, do your
best for your family and others.
He dismissed the suggestion that
his firms financial success is connected to his sponsorship of powerful policymakers.
The current equation put forth
in the public domain that political
donations equals government
work is simplistic, demeaning to
public officials, and, in our case,
demeaning to the competence and
professionalism of our lawyers,
said DeCotiis, who called his legal
bills fair and appropriate for the
complex public finance and government work he performs.
It is the quality and experience
of our attorneys that accounts for
our appointments and reappointments as counsel, he said, not
political contributions.
While the secret of Bob DeCotiis success might be a matter
for debate, there can be no argument that the Seton Hall Law grad
and the attorneys who work for
him enjoy enormous influence in
Trenton and beyond.
In an interview before his death
from cancer this year, James J.
Sheehan, the wily former chairman of the Bergen County Republican party, summed it up this way:
The DeCotiis law firm basically runs the county, even now, no
matter which partys in there, he
said. When we were in there, they
were running the county. Now
theyre running the county.
Theyre halfway running the
state.
Assemblyman John Rooney, a
Republican from Northvale, said
DeCotiis success transcends politics.
Forget about the parties
they cross over all lines, Rooney
said of the firm. Theres the Republican Party, the Democratic
Party, and the Money Party. And
theyre part of the Money Party.
These are the people that really
make money from the political
process.
Yet, DeCotiis supporters say his
success has less to do with money
than his ability to find a middle
ground. Bob DeCotiis is a consummate pragmatist, they say.
I dont know if hes a good attorney, said state Sen. Gerald R.
Cardinale, R-Demarest, a former
Demarest mayor who once tried
to block DeCotiis bid to become
borough attorney, before being
won over. Im not an attorney. ...
But I think hes a practical person
who looks for disagreements to be
put in the background and for
agreements to be reached. Hes a
great negotiator, not in the sense
of getting an advantage, but for
getting it done.
Assemblywoman Loretta Weinberg also spoke about his skills at
bringing people together.
In many respects, politically
active firms are known as either
Democratic firms or Republican
firms. There arent too many that
can do both sides of the street,
said the Teaneck Democrat. The

Snapshots of a legal colossus

The law firm of DeCotiis, FitzPatrick, Cole & Wisler provides services for at least 128 public entities large and small, from one end of New Jersey to the other. Here is a representative sampling of some of those clients, noting fees paid to the firm between January 2001 and June of this year.

North Jersey District Water

Supply Commission

Bergen County

Paid: $800,250.30

For: Special counsel, including representing the county in an ongoing

Paid: $771,890.84

contract dispute with the private contractor who runs the county's public hospital. Over the last five years, the firm has made $154,264 in contributions to candidates for county office from both parties and to both
political organizations.

For: General counsel for the commission

that runs the Wanaque Reservoir system.

Delaware River Joint Toll

Bridge Commission
Paid: $160,000
For: Bond counsel for this agency,

which operates a number of small

bridges spanning the Delaware, mostly in the northern half of the state.

Teterboro
Paid: $16,025.42
For: Special counsel
and bond counsel;
that works out to nearly $900 for each of the
borough's 18 residents (2000 census).

Essex County
Utilities Authority
Paid: $2,544,606.60
For: General counsel to
this agency which built the
county's debt-ridden
garbage burner and oversees Essex's solid-waste
disposal system.

Edgewater Municipal
Utilities Authority
Paid: $372,366.09
For: General counsel for this

agency, which operates the borough's sewage-treatment plant.

Rahway
The state of New Jersey
Paid: $3,916,535.90
For: Litigation and service as bond
counsel and as underwriters' counsel.
The firm helped defend the state
against allegations of racial profiling in
civil lawsuits; it also received fees from
the issuance of debt backed by future
tobacco-settlement proceeds.

Paid: $979,988.24
For: General counsel to this Union County community,

Manalapan

where James Kennedy, the best man at Governor McGreevey's wedding, is mayor; Kennedy is a lobbyist at State
Street Partners, a Trenton firm in which the DeCotiis partnership held a major financial stake until December 2001.

Paid:

$416,049.37
For: General

counsel

New Jersey
Turnpike Authority
Paid: $2,039,814.37
For: General counsel, much of

that arising in 2002 for work on

the merger of the turnpike with
the former N.J. Highway Authority, which ran the Garden State
Parkway. The firm is now one of
two outside counsels retained
by the merged highway agency.

Atlantic City
Paid: $396,561.50
For: Defending the

Vineland

city against tax appeals from casinos

and other property
owners.

Fees: $720,443.94
For: Counsel on utilities
issues for this agricultural center in Cumberland County.
Source: documents supplied to The Record under the
Open Public Records Act by the entities themselves

DeCotiis firm has managed that perts on public projects that have
registered millions in cost oververy well.
runs. A proposed Essex County
Finding legal bills
jail and cogeneration complex,
were out of control once estimated to cost $220 million, might now cost taxpayers as
Still, public officials who are fa- much as $300 million.
miliar with DeCotiis fee-for-servWhile the cost overruns are due
ice juggernaut say the firms unri- to a number of factors, Essex offivaled access can cost taxpayers cials say DeCotiis legal fees are at
plenty.
least a small portion of them.
Essex County Executive Joseph
DeCotiis said the project overDiVincenzo Jr. says he came to of- runs were largely attributable to
fice in January to find that the the cost of property acquisition,
countys expenses for outside legal construction overruns, and enviwork performed by the DeCotiis ronmental cleanup expenses.
firm and other lawyers were toOfficials in Essex County said
tally out of control.
the DeCotiis firm received more
Essex taxpayers, he said, were than $13 million in county busigetting gouged by lawyers who ness during Treffingers eight years
charged whatever they wanted, as executive.
padding their bills while doubleWhat they do is create legal
teaming routine work sessions that process and then have the political
could have been handled by a sin- godfathers take care of things,
gle lawyer. County records show said one Essex County source,
that in just two years 2001 and who agreed to speak on condition
2002 DeCotiis lawyers billed of anonymity.
Essex County agencies for $2.7
In response, DeCotiis noted
million in legal work and were, in that commissioners at the indethe estimation of some officials, es- pendent authorities, who are not
sentially running major offices, answerable to county officials, resuch as the county sewer authori- viewed the firms billings. He also
ty.
pointed out that the firm continues
This firm [DeCotiis] was send- to represent both the improveing three and four people to meet- ment and the utilities authorities.
ings and they were having social
The commissioners on both
gatherings more than anything boards are selected by the county
else, said DiVincenzo, whose ad- executive.
ministration has dramatically cut
Lawyers who have worked for
spending on outside legal work.
DeCotiis and others with knowlAt the same time platoons of edge of his firms inner workings
DeCotiis lawyers were appearing say the pay-to-play system has fosat meetings in Essex County, the tered an atmosphere of unaclaw firm was pumping more than countability and greed. The firm
$100,000 into the campaign funds has quintupled in size over the
of former county executive and past 10 years.
two-time U.S. Senate candidate
Whos going to question Bob
James Treffinger.
DeCotiis legal fees besides a few
Treffinger is now heading for a flaky councilmen and cranky gad13-month prison term following a flies? Certainly not the people
federal conviction for extorting who hired him, because he probcampaign contributions. Data ably bankrolled their election,
compiled by The Record show said one former associate.
that the Republican was by far the
With that kind of power, arrolargest single individual benefici- gance and greed are certain to folary of the DeCotiis firms political low.
donations in the past five years.
Bob DeCotiis family his
During that same period De- brother, two sons, a daughter, and
Cotiis lawyers, in their dual role as son-in-law - have worked for the
general counsel for both the Essex firm and many of the firms
County Improvement Authority lawyers have grown rich in their
and Essex County Utilities Au- role as chief defender and protecthority, presided as the legal ex- tor of New Jerseys political class.

Wildwood
Paid: $268,399.76, which works out to

nearly $50 for each permanent resident of

this Cape May County resort community.
For: Bond counsel and utilities counsel.

An annual study by the New

Jersey Law Journal found that the
firm was by far the most profitable
of the states top 20 law practices;
the 17 DeCotiis partners split
$11.4 million in net revenue last
year.
A copy of the firms partnership
agreement shows that Bob DeCotiis brought home at least
$72,500 a month in 2002, the last
year covered by the document.
Former partner Michael Gluck, a
prominent Republican bond
lawyer whom DeCotiis joined
forces with in 1994 as the GOP
took control of state government,
was making at least $77,900 a
month before he quit the firm last
December, with a dozen associates in tow. The document became
public as part of Glucks January
2003 lawsuit against the firm.
Glucks suit went to arbitration,
and he would not comment for
this story. But sources knowledgeable about the ugly divorce at
one point Gluck sought a restraining order forcing his old firm to
forward his mail said Gluck was
distressed by the constant pressure
to squeeze more billable hours
from public clients, in part by
sending multiple attorneys to public meetings.
I think he was quite disgusted
and needed to move on, said one
source.
DeCotiis denies that the firm
overstaffs meetings. We do not
encourage the practice you describe and we do not engage in it.

Trying to put an end

to pay to play
In recent years, the pay-to-play
system has become a prime target
for reformers.
It is really the taxpayers who finance the excesses of the pay-toplay system, these reformers point
out. Your tax dollars, your highway tolls, your sewer fees go to litigators, bond lawyers, engineers,
architects, and other professionals
who have little incentive to work
cheaply.
We already have public funding of campaigns, the taxpayer just
doesnt understand it, said former
Democratic state Sen. Paul Contillo of Paramus, a campaign fi-

nance reform activist with Common Cause NJ.

Contillo says taxes are pushed
up when contracts are awarded
without competition to campaign
contributors looking to recoup the
thousands of dollars they gave to
the public officials who control
hiring.
If the taxpayer groups realized
it was costing them so much more
in their taxes, they would be more
concerned about pay to play, Contillo said.
Some states have already limited the ability of campaign contributors to get state work. Leading
bankers, lawyers, and security
dealers have condemned pay to
play, and those who benefit from
it, as immoral.
New Jersey politicians are also
clamoring for reform. A year ago,
Governor McGreevey announced
that pay-to-play reform would be
one of his top priorities. But he has
yet to offer a single concrete proposal that would curb the practice,
and his Democratic allies in the
Legislature kill any effort to bring
the issue to a vote.
A spokesman for McGreeveys
office said the governor would not
comment on pay-to-play reform or
the DeCotiis firm for this story,
even though Bob DeCotiis was a
key member of the governors own
campaign-finance team.
Since McGreevey became governor in January 2002, state departments and agencies controlled
by his appointees have awarded
the DeCotiis firm at least $4.4 million in no-bid work, according to
The Records analysis of the state
documents.
Michael DeCotiis, the son of
Bob DeCotiis, left the firm last year
to serve as deputy executive director of the Port Authority of New
York and New Jersey and earlier
this year became chief counsel to
McGreevey, a powerful position
that his father held before him in
the administration of Gov. Jim
Florio.
Bob DeCotiis, in his written
statement, said his firm has not
asked Michael to intervene on any
matter regarding a public agency
since the son joined the administration. Michael DeCotiis could
not be reached for comment.

McGreevey spokesman Micah

Rasmussen said Michael DeCotiis severed all ties with his familys
firm when he became chief counsel and recused himself from any
issue that even appears to affect
the interests of his family or their
clients. I can assure you hes quite
serious about this stuff, said Rasmussen.

Big role in reshaping

the Meadowlands
Bob DeCotiis claims that more
than half of his law firms business
comes from private and corporate
clients. But some of the largest of
those clients are involved in projects that hinge on obtaining permits and regulatory concessions
from the same state officials who
have awarded DeCotiis no-bid
contracts.
Right now, for example, the
DeCotiis firm is lead attorney for
two private projects that will reshape the Meadowlands: the EnCap Corp.s trash-dump-to-golflinks proposal and the colossal
Xanadu project, a shopping and
entertainment complex to be
erected by the Mills Corp. next to
Giants Stadium. DeCotiis cited
both projects in his statement as
examples of his private clients.
In all, DeCotiis lawyers are
shepherding some $5 billion in
projects that Bob DeCotiis claims
are the largest ... on the East
Coast.
DeCotiis describes it this way:
Our attorneys have been involved in some way, shape, or
form in virtually every major governmental issue or trend statewide
for the last two decades. We have
handled the privatization of water
and sewer systems, the privatization of hospitals, the merger of the
Turnpike and the Garden State
Parkway, the use of brownfield redevelopment tools to redevelop
sites that would otherwise lay barren, the construction of resource
recovery facilities, the restructuring of the states solid waste disposal system, and the first successful public condemnation of a private electric utility by a local government entity.
The firm also has a lobbying
See SUCCESS Page 24

24 THE RECORD

WEDNESDAY, NOVEMBER 30, 2005

Published Sunday, Dec. 28, 2003

Success: Building a major law practice via pay to play

From Page 23
arm, representing a range of public and
private clients in that capacity. Indeed,
the firm isnt just serving as a legal adviser to Mills, it is also lobbying legislators to
win concessions on transportation and
other infrastructure improvements critical to the Virginia companys Xanadu
proposal.
At the same time DeCotiis lawyers are
working with their political patrons on
government contracts, theyre working to
get their political patrons reelected.
In addition to serving as a top McGreevey fund-raiser, Bob DeCotiis was
collecting contributions for Democratic
Assembly Speaker Albio Sires and the
Assembly Democrats. Bobs brother and
law partner, Al, served with him as cochairman of the Assembly Democrats finance committee. Al also served as a
member of the Democratic National
Committee and was New Jersey finance
chairman for Bill Clinton in both 1992
and 1996.
After raising $5 million for the DNC, a
feat that won him an invitation to one of
Clintons White House coffee klatches, Al
DeCotiis told an interviewer for The New
York Times in 1996 that the time had
come to reduce the influence of big money in politics. If you write a large check,
you get to be well known in the party and
you get a certain amount of access, he
observed.
Michael DeCotiis twin brother and
former law partner, Joseph DeCotiis, is a
consultant to the Democratic State Committee. Another DeCotiis partner, former
Kean administration chief counsel
Michael Cole, is a lawyer for the Democratic State Committee.
The DeCotiis partners contribute tens
of thousands of dollars every year to both
Democratic and Republican politicians
across New Jersey.
During the last five years, the firm gave
$154,000 for countywide political races
in Bergen County, $136,000 for such
races in Union County, and $134,000 in
Middlesex.
DeCotiis generosity extended to candidates in mayoral and council races. Jersey City candidates received some
$43,000. Their counterparts in Rahway,
where billings exceeded $1 million over
30 months, received more than $25,000.
In a search of state records, The Record
found that DeCotiis lawyers, all told, gave
to local candidates in at least 85 localities
during the past five years.
One longtime government attorney in
New Jersey, who acknowledged that for
years he has contributed to both Republicans and Democrats as a cost of doing
business, said small firms like his have
been priced out of the market by the likes
of the DeCotiis firm.
It becomes a bidding war, said the attorney, who also spoke on condition of
anonymity. You reach a point where
you just cant afford it. Were squeezed
out of that.
Some local officials are particular favorites of the DeCotiis cash machine.
Nutley Township Commissioner Mau-

ro Tucci, for example, has already received $14,500 from DeCotiis lawyers for
his 2004 reelection campaign.
Tucci was chairman of the Essex
County Utilities Authority when it approved $2.3 million in no-bid payments
to the law firm. In Bloomfield, where
Tucci is township administrator, the DeCotiis firm has been paid about $350,000
since 2001 for legal work. And in Nutley,
DeCotiis was awarded a $25,000 contract as legal adviser on the construction
of a federally funded adult day-care center.
Tucci isnt the only public official who
has had a hand in giving DeCotiis work
in more than one locality.
Edgewater Mayor Bryan Christiansen
oversaw $1.5 million in DeCotiis legal
work at the Joint Meeting of Essex and
Union Counties, a sewage plant in Elizabeth where Christiansen serves as executive director.
DeCotiis made $400,000 in Edgewater
most of it at the borough utilities authority, where Christiansen also was
chairman. Christiansens campaigns have
received $2,200 directly from the firm,
while the mayors fellow Democrats received another $5,000.
Christiansen did not return calls seeking comment. Tucci said in an interview
that he received campaign cash from the
DeCotiis firm simply because of the
friendship he developed with partner Eric
Wisler as the two worked at the Essex
utilities authority.
I needed to solicit funds for my campaign and my friend [Wisler] stepped in
and helped me raise money, Tucci said.
What happened afterward one contract for $25,000. Is that pay to play?
DeCotiis denied that political contributions had anything to do with the work
they received from agencies where Tucci and Christiansen held positions.

Advice, contributions,
contracts, and jobs
The setting for the DeCotiis familys
stunning success is a world where all
sides come together in a meeting ground
of public and private ambitions that are
not easily distinguished.
At any given time, there are public officials in New Jersey who are not only
seeking legal advice from the DeCotiis
firm, not only collecting campaign contributions from the firm, not only awarding no-bid contracts to the firm, but
thinking about a future job at the firm as
well.
In some cases, the DeCotiis firm has
hired key representatives of their public
clients immediately after they leave public service.
Jerrold Binney, the former chief of staff
to Bergen County Executive William
Pat Schuber, joined the DeCotiis firm
when he left the county in 1999, just one
year after the firm earned hundreds of
thousands of dollars arranging the privatization of Bergen Pines, the largest public hospital in the state.
In Essex County, former County

Counsels Catherine Tamasik and Steven

Mannion received jobs at a DeCotiis firm
that was reaping millions in no-bid work.
DeCotiis said that the county counsels
office has no oversight of the countys independent authorities.
Jeffrey J. Miller, Division of Law director in
the New Jersey Attorney
Generals Office from
1998 to 2002, also won a
top job under DeCotiis.
As the states top civil
lawyer, Miller had SCHUBER
awarded the DeCotiis
firm more than $3 million to defend the
New Jersey State Police against charges
of racial discrimination.
Both Schuber and Ronald Calissi,
Bergen Countys former chief of public
safety, have also joined the DeCotiis firm
on an of counsel basis. In that capacity,
they enjoy a consulting relationship with
the firm and are listed on the DeCotiis
letterhead but are not actively involved in
the firms day-to-day work.
DeCotiis says he recruits top government prospects because he is a government lawyer and needs lawyers who understand the complex political and regulatory realities of the system.
We bring the tools to get the job done
for our clients on the most complex of
problems, says DeCotiis. We are resultoriented problem solvers. It is not unusual for all sides in the political world to
seek our counsel.

A classic American
success story
Bob DeCotiis, a Hasbrouck Heights
native who now lives in a gated community in Tuxedo Park, N.Y., began working
for politicians right after graduating from
Seton Hall Law School in 1969, when he
joined the law firm of longtime Bergen
County Democratic boss Anthony Andora.
Some people drink it with their mothers milk, said Andora in a recent interview when asked about DeCotiis compunction for politics.
Right from the beginning, Andora said,
DeCotiis showed an uncanny knack for
negotiation and consensus-building. He
described the young DeCotiis as energetic
and capable and said he moved through
the public domain soliciting business with
perfect ease.
But the ambitious young man also had
a reformist streak.
Thomas H. Bruinooge, former classmate of DeCotiis at Seton Hall, says DeCotiis was one of a handful of young
Bergen-bred lawyers who were intent on
breaking up the countys old-boy GOP
power structure.
We were all motivated by Jack
Kennedy, Bruinooge recalled. We had a
group of young turks ready to challenge
the Republican Party bosses. Among DeCotiis early political lights, he pointed
out, were progressive Democratic lawmakers such as state Sen. Alfred Kiefer
and the anti-war Congressman Henry

Helstoski, whom the young lawyer

worked for as a volunteer.
Kiefer, one of the few pre-Watergate
lawmakers who voluntarily disclosed his
political donors, believed that any contribution over $500 was potentially a cause
for corruption. In 1971, Kiefer vocally opposed the proposed Meadowlands Sports
Complex, especially the racetrack, arguing
it amounted to a corrupting force and
pollution of the people.
While DeCotiis may have moved away
from his youthful idealism, Bruinooge
said his utter mastery of the political
process makes DeCotiis a classic American success story.
Clearly [DeCotiis] voice is heard and
listened to at all levels of government in
New Jersey. That is a fact, he said. It
boils down to two things: competence
and connections.
By 1983, DeCotiis already had built the
most lucrative municipal law practice in
Bergen County. A report by The Record
found he earned $148,303 that year representing five Bergen towns. Even though
DeCotiis was an active Democrat, Republican towns such as Closter and Demarest sought to retain him.
His knack for attracting political patrons from both major parties became the
hallmark of DeCotiis career from his
chairmanship of the GOP-controlled
Casino Reinvestment Development Authority in the Kean years, to his tenure as
chief counsel under Democrat Florio, to
the years of the DeCotiis firms astronomical growth collecting no-bid state
contracts furnished by Christie Whitman
and her Republican appointees.
This is one of the things that makes me
different from other attorneys, DeCotiis
told The Record two decades ago. I think
it is because I give straight answers; I dont
get involved in politics. I serve all officials,
not just Democrats or Republicans.

Firm profits amid

troubles of others

much money DeCotiis was charging as

the agency fought for its life in the wake of
a 1997 Supreme Court ruling declaring
county trash agencies like the PCUA illegal monopolies.
Under the firms consecutive five-year
contracts, DeCotiis was paid a flat
$30,000 fee for attending authority meetings the equivalent of $2,500 for each
of the 12 monthly meetings. Attorneys,
who were paid as high as $195 an hour,
billed as much as $450 to write up the
meeting agenda.
Collins said he was astounded at the
number of times the firm billed taxpayers
for DeCotiis lawyers simply talking to
each other.
If two lawyers talked at the water
cooler and the word PCUA came up, we
got billed for two lawyers, Collins said.
Bob DeCotiis says his firms legal fees
reflected the myriad complex tasks connected to the failed incinerator project.
He pointed out that his firm had obtained
necessary permits for the project and was
ready to proceed on schedule with construction before Florio stepped in and
quashed the project.

DeCotiis and N.J.: perfect

together
In some ways, M. Robert DeCotiis and
the pay-to-play system he has mastered
are ideally suited to New Jersey, a geographically compact state with an incestuous capital where everyone knows
everyone and loyalties accrue rapidly.
DeCotiis record of making big donations and getting big government contracts reflects, on one level, the fact that
hes got a lot of friends.
That is probably the most complex
part about pay-to-play, said David Rebovich, a political scientist at Rider University in Lawrenceville. New Jersey is so
clubby, so chummy, its almost impossible
to operate here without getting sucked
into the game.
In New Jersey, Rebovich points out,
there are distinct political families that
build up friendships over generations
the Keans, the Byrnes, the Glucks.
The DeCotiises are just another one of
those families, Rebovich said. Does that
mean their political donations dont buy
influence? Of course not. It means that reforming the system will be very hard in
New Jersey.
Mauro Tucci, the Nutley councilman
who accepted DeCotiis political donations before approving a $25,000 no-bid
contract to the firm, wonders what all the
fuss is about:
In life, when youve got to get something done, you go to your friends, you go
to someone you know and trust, Tucci
said. Just because DeCotiis contributes
money, does that make him a bad guy?
We go to DeCotiis because hes our
friend and he does a good job.
Whats wrong with that?

Notwithstanding DeCotiis vaunted

ability to make deals for his political
friends, critics maintain that the firm has
a history of profiting from financial fiascoes and public-policy boondoggles.
Passaic County officials say the law
firm prospered amid the havoc at the Passaic County Utilities Authority, the troubled trash agency.
Between 1990 and 1997, the DeCotiises billed the agency $6 million, much of
it relating to a proposed incinerator in
Passaic killed by Florio in 1991.
According to a report published in The
Record in 1997, the firm, its employees,
and their relatives had given more than
$162,000 to Republicans that controlled
county government.
The agency which at one point had
racked up $100 million in debt even
borrowed money to pay hundreds of
thousands of dollars in legal fees to the
firm.
Timothy J. Collins, a Democrat who E-mail: harrington@northjersey.com and riwas appointed to the trash authority in ley@northjersey.com and pillets@northjer1999, said he was surprised to learn how sey.com

DeCotiis political contributions

A look at where the DeCotiis, FitzPatrick firm has contributed money to political campaigns. Figures are based upon a review of state Election Law Enforcement Commission reports for all statewide and federal candidates between 1999 and the fall of 2003 as well as all candidates in Bergen and Passaic counties and localities in which the DeCotiis firm received legal work.
Recipient
Contribution
Statewide
State legislators
$457,181.95
State political parties, other committees $193,722.40
Jim McGreevey
$60,233.29
Other statewide candidates
$27,356.66
Federal
Senators/congressmen/ party committees
$170,990.00
Atlantic
Brigantine
$6,800.00
Atlantic County
$2,000.00
Bergen
Bergen County
$154,264.00
North Arlington
$22,400.00
Paramus
$10,500.00
Fort Lee
$7,000.00
Edgewater
$5,200.00
Hackensack
$4,000.00
Englewood
$3,750.00
Lyndhurst
$3,500.00
Elmwood Park
$3,500.00
Demarest
$3,050.00
Closter
$2,400.00
River Edge
$2,250.00
Fairview
$2,100.00
New Milford
$2,000.00
Wallington
$1,500.00
Hillsdale
$1,100.00

Recipient
Leonia
Ridgefield
Hasbrouck Heights
Moonachie
Oakland
River Vale
Saddle Brook
Upper Saddle River
Cliffside Park
Burlington
Burlington County
Camden
Camden County
Cape May
Cape May County
Cumberland
Vineland
Essex
Essex County
Nutley
Belleville
Bloomfield
Newark
Hudson
Hudson County
Jersey City
West New York
Hoboken
North Bergen

Contribution
$1,000.00
$1,000.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$400.00
$2,050.00
$75,854.45
$1,000.00
$8,250.00
$250,985.72
$16,555.42
$16,500.00
$15,000.00
$7,200.00
$69,154.55
$43,296.59
$16,000.00
$13,300.00
$6,900.00

Recipient
Guttenberg
Union City
Secaucus
Mercer
Hamilton
Mercer County
Washington Township
Middlesex
Middlesex County
Edison
Sayreville
North Brunswick
Old Bridge
Piscataway
South Brunswick
Monmouth
Monmouth County
Marlboro
Manalapan
Hazlet
Aberdeen
Keyport
Middletown
Morris
Morris County
Rockaway Township
Ocean
Ocean County
Lakewood

Contribution
$2,000.00
$2,000.00
$1,000.00
$13,400.00
$11,606.18
$1,000.00
$134,050.00
$51,544.00
$53,171.90
$14,106.31
$3,200.00
$3,000.00
$2,360.00
$40,075.00
$19,000.00
$13,537.59
$12,890.59
$10,500.00
$8,700.00
$1,500.00
$7,467.00
$500.00
$19,109.80
$17,200.00

Recipient
Brick
Dover Township
Beachwood
Lacey Township
Stafford Township
Little Egg Harbor
Point Pleasant Beach
Surf City
Passaic
Passaic County
Paterson
Passaic City
Totowa
Somerset
Somerset County
Sussex
Sussex County
Union
Union County
Rahway
Elizabeth
Union Township
Garwood
Warren
Warren County
Total

Contribution
$14,075.00
$10,025.00
$3,550.00
$2,800.00
$2,750.00
$2,100.00
$1,300.00
$300.00
$72,100.00
$8,108.00
$1,500.00
$800.00
$47,500.00
$5,000.00
$143,150.00
$25,251.50
$20,000.00
$7,000.00
$500.00
$2,500.00
$2,507,472.90

WEDNESDAY, NOVEMBER 30, 2005

THE RECORD 25

Published Sunday, Dec. 28, 2003

Seems like clock is always ticking on legal bills

By SHANNON D. HARRINGTON,
CLINT RILEY and JEFF PILLETS
STAFF WRITERS

The debate was intense.

The Bergen County administration
wanted to hire the DeCotiis, FitzPatrick
law firm to help negotiate a deal to build
a minor league baseball stadium in Ridgefield Park.
Some members of countys Board of
Freeholders wanted no part of hiring the
firm.
The discussion went back and forth in
the freeholders wood-paneled conference
room for nearly 40 minutes that Wednesday evening in March 2002. Finally, later
that night, the board voted to hire the law
firm, though only after the teams wouldbe owner agreed to make a donation to
the county to cover the legal costs.
What the freeholders didnt realize was
that, even as they battled against footing
the legal bills, the DeCotiis firm was already on the clock at $150 an hour.
When the firm submitted its first invoice
to the county in the stadium matter a
month later, partner Eric D. Wisler had
billed two hours for attending the meeting,
where he sat among the audience. He
even billed 12 minutes for
a conference that day
with another DeCotiis attorney to discuss the ballpark issue.
More than a year later,
one freeholder who attended that meeting was
scratching his head when
MOLA
told about the bill by a reporter.
How can you bill somebody when
youre only discussing whether they
should be hired? Freeholder Richard
Mola asked.
The matter was part of nearly $26.6 million in billings by the Teaneck-based DeCotiis firm to at least 128 government entities in New Jersey during a 2-year period starting January 2001, The Record
found in a study of work around the state
by the firm, now known as DeCotiis, FitzPatrick, Cole & Wisler.
The newspaper reviewed the firms
itemized legal bills in about three dozen of
those towns, counties, and government
agencies.
Heres what we found:
The firm billed the Essex County Utilities Authority as much as $262,000 a
month during 2001. This month, first-year
County Executive Joseph DiVincenzo described those legal expenses as totally out
of control. As many as nine DeCotiis
lawyers and seven paralegals were billing
the authority in one month.
A sampling of invoices paid by Bergen
County showed DeCotiis lawyers billed 57
times at the rate of $150 an hour for conferences among themselves, even though

Charging for voice mails and deliveries

Top 10 legal firms
Based on fees paid by Bergen and Passaic counties, excluding independent agencies, such as utilities authorities. Data for
2003 is into October.
Firm
2001
2002
2003
Total
DeCotiis, FitzPatrick, Cole & Wisler (Teaneck)
$485,849.93
$229,094.64
$120,415.51
$835,360.08
Lum, Danzis, Drasco & Positan (Roseland)
$134,788.44
$200,120.41
$175,613.82
$510,522.67
Genova, Burns & Vernoia (Livingston)
$88,682.93
$167,572.11
$218,159.87
$474,414.91
Nowell, Amoroso, Klein & Bierman (Hackensack)
$217,724.11
$162,285.41
$17,689.49
$397,699.01
DeYoe Heissenbuttel (Wayne)
$149,608.88
$140,413.54
$91,879.61
$381,902.03
Weiner Lesniak (Parsippany)
$121,523.82
$224,022.73
$3,282.70
$348,829.25
Connell Foley (Roseland)
$126,480.68
$119,738.12
$62,571.91
$308,790.71
John L. Kraft, Esq. (Florham Park)
$104,277.54
$78,041.16
$108,060.96
$290,379.66
Carella, Byrne (Roseland)
$50,610.42
$61,093.02
$149,198.03
$260,901.47
Sarkisian, Florio & Kenny (Hoboken)
$85,483.77
$41,792.35
$126,397.93
$253,674.05
Source: vendor databases supplied by the counties

the countys guidelines for outside legal

counsel warn firms against billing for such
conferences.
One DeCotiis lawyer charged Monmouth Countys Manalapan Township for
doing more than 18 hours of work in a single day in January 2001, costing taxpayers
$2,123. Just a week earlier, the same
lawyer billed the township for a 15.3-hour
workday. Those bills and others prompted
a township committeeman to ask when
the lawyer had time to sleep and eat.
Several DeCotiis attorneys routinely
billed their government clients as much as
$230 an hour for retrieving, forwarding, or
leaving voice mail messages. Retrieving
one message often cost taxpayers $23.
Three rounds of phone tag, $69. In one
case, a message from a DeCotiis partner to
one of the firms associates cost a school
board $14.50. But because the fees were
lumped into a bond issue, at an average
4.87 percent interest rate over 19 years,
that message ultimately will cost taxpayers
$35.
A paralegal last fall charged the Hudson County Improvement Authority $75
per hour to pick up one packet of documents and to drop off another at the county courthouse. The tasks took a combined
four hours to complete and cost the county $300.
Managing Partner M. Robert DeCotiis
and other attorneys at the firm declined repeated requests to be interviewed for this
story, and would only answer questions in
writing.
In a written statement, DeCotiis said the
firms charges in the bills questioned by
The Record were accurate and appropriate.
He added: We presume all of our
clients review our bills prior to payment
and, if there are questions regarding a bill,
our clients bring them to our attention and
they are resolved.

But elected officials in towns that have

hired the DeCotiis firm expressed outrage
when shown what the town was billed for.
They were nickel and diming us to
death, Woodcliff Lake Councilman John
Glaser said after reviewing DeCotiis
$3,431 in bond counsel invoices from
2001, in which attorneys on numerous occasions charged the town for retrieving
and forwarding phone messages.
Leaving a voice mail, forwarding a
voice mail thats crazy, said Glaser,
who had not seen the itemized invoices
until a reporter pointed them out to him.
Shame on us because [we approved
them].
Another public official went a step further and argued that the more than $2.5
million that the DeCotiis firm has contributed to elected officials and party organizations in New Jersey during the past
five years has restrained the oversight by
the beneficiaries of those contributions.
They are buying the ability to bill whatever they want, said Stuart J. Moskovitz,
a former mayor of Manalapan, where DeCotiis attorneys billed a total of nearly
$400,000 in 2001 and 2002 while contributing more than $13,500 to the campaign funds of township committee members.
Between 1995 and 2002, the firm
racked up $1 million in legal fees to defend
former Bergen County acting Prosecutor
Charles Buckley from lawsuits claiming he
retaliated against three subordinates who
aided an internal probe. The county freeholders, despite some grumbling on the
board, approved the firms bills.
The firm lost one of the three cases
when a jury awarded former Assistant
Prosecutor Robert L. Hennessey $1.5 million. The county ultimately settled all three
cases for a combined total of more than
$2.4 million.
Hennesseys attorney, Neil Mullin, ac-

cused the DeCotiis firm of milking the

case, claiming that his client originally had
offered to settle the case for less than a
third of the $1.4 million he eventually received.
My sense is that the only people benefiting from this is the DeCotiis firm,
Mullin said in December 2001. Its a matter of record the firm is a major political
contributor, and I think thats important to
note.
DeCotiis partner S. Lee Cohen at the
time called Mullins suggestion ludicrous, saying that county officials closely
monitored the cases progress and made
him justify every addition to the firms contract.
The firms bills have become the subject
of controversy in two other North Jersey
counties.
In Essex County, DiVincenzo called for
the slashing of legal fees at the countys
utilities and improvement authorities,
where DeCotiis billed a combined $2.7
million in 2001 and 2002.
Multiple DeCotiis lawyers charging
between $175 and $265 per hour would
attend and bill for authority meetings, said
DiVincenzo, who succeeded disgraced
Republican County Executive James Treffinger, the single largest individual beneficiary of the DeCotiis firms campaign cash
during the past five years.
In effect, DeCotiis was running the authority, acting utilities authority Executive
Director Elmer J. Herrmann Jr. said.
Timothy J. Collins, a Passaic County
Utilities Authority commissioner, said he
found out-of-control legal spending when
he was appointed to the authority board in
1999.
Despite losing virtually all of its revenue
in 1997 the result of a U.S. Supreme
Court decision that struck down counties
monopoly on trash disposal the utilities
authority paid the DeCotiis firm nearly

$670,000 in 1998,Collins said.

The Record found in 1997 that the firm
made nearly $6 million from the authority
between 1990 and 1997, while at the same
time giving more than $162,000 to the Republicans who then controlled Passaic
County government.
Collins complained that DeCotiis contract gave the firm ridiculously fat fees, like
the $30,000 the firm received for having
an attorney at authority meetings. Attorneys also were billing as much as $450 to
put together the meeting agenda, he said.
Collins, who became chairman in 2000,
said that his persistence in cutting the authoritys legal bills has paid off. The authority paid DeCotiis $53,651 between
January 2001 and this past June.
I think theyve realized that the cash
cow and the milk is drying up, he said.
Bob DeCotiis defended the firms work
in Bergen, Essex, and Passaic counties.
DeCotiis brushed off suggestions that
the firm milked the Bergen whistle-blower cases for legal fees. We acted at the direction of our client in this matter, he
said.
He also denied overstaffing meetings in
Essex County or racking up needless billable hours, as some have suggested.
We bill for services rendered, which
we provide in as cost-effective and efficient
a manner as possible, and also exercise
billing judgment prior to the submission of
our legal bills to any of our clients, public
and private, DeCotiis wrote.
As for the criticism in Passaic County,
DeCotiis said the firm helped the utilities
authority wade through a series of complex legal issues. Then-Gov. Jim Florios
decision to cancel the incinerator project
opened up the authority to a host of lawsuits from contractors and other parties.
The firm also had to help the county secure waste disposal contracts in the incinerators absence, he said.
DeCotiis was also staunch in his defense of the firm on other billing issues
raised by The Record.
Asked why Wisler billed for attending
the Bergen freeholder meeting that took
place before the firm was hired, DeCotiis
said Wisler attended to identify for the
Freeholder Board the various legal and financing issues, as we had experienced
them in other baseball projects.
Audiotapes of the freeholder meeting
show that Wisler addressed the board only
once regarding the baseball project, and
that was simply to name other baseball stadium deals the firm had helped negotiate.
DeCotiis said the 18.3-hour workday
billed to Manalapan by former DeCotiis
attorney Peter A. Tucci Jr. was an accurate
reflection of multiple tasks the attorney did
for the town that day.
Regarding the paralegals who billed
four hours at $75 an hour to pick up one
document packet and drop off another,
See BILLS Page 26

DeCotiis fees
A look at where the law firm of DeCotiis, FitzPatrick, Cole & Wisler made its money from government clients between January 2001 and June 2003. The figures are based on The Record's public records requests to 556
governing agencies in New Jersey.
Government agency
Total
Government agency
Total
Government agency
Total
State agencies
Hackensack Board of Education
$408.27 Middletown Township Sewerage Authority
$19,000.00
State of New Jersey
$3,916,535.90 Camden
Ocean Twp. Sewerage Authority
$17,000.00
New Jersey Turnpike Authority/Highway Authority
$2,039,814.37 Pollution Control Financing Authority
$63,795.22 Western Monmouth Utilities Authority
$12,505.29
New Jersey Educational Facilities Authority
$638,130.43 Cape May
Middletown Township
$6,705.52
University of Medicine & Dentistry of New Jersey
$108,352.80 Wildwood City
$268,399.76 Morris
Regional agencies
Cape May County Municipal Utilities Authority
$36,014.90 Washington Township
$71,546.47
Joint Meeting of Essex and Union Counties
$1,532,137.80 Cumberland
Morris County
$38,745.03
North Jersey District Water Supply Commission
$800,250.30 Vineland City
$720,443.94 Rockaway Township
$13,058.42
Delaware River Joint Toll Bridge Commission
$160,000.00 Essex
Montville Township
$11,628.06
Atlantic
Essex County Utilities Authority
$2,544,606.60 Chester Borough
$3,595.79
Atlantic City
$396,561.50 Essex County Improvement Authority
$390,721.21 Dover Town
$1,406.85
Brigantine City
$151,846.44 Bloomfield Township
$349,743.75 Netcong Borough
$425.08
Absecon City
$30,818.00 Belleville Township
$114,797.94 Wharton Borough
$315.00
Bergen
Nutley Township
$18,994.02 Ocean
Bergen County
$771,890.84 Essex County
$676.83 Lakewood Township
$99,676.13
Edgewater Municipal Utilities Authority
$372,366.09 Hudson
Ocean County
$94,530.63
Englewood City
$232,618.85 Hudson County Improvement Authority
$755,025.83 Brick Township
$56,138.35
Fort Lee Borough
$116,275.76 Jersey City Redevelopment Agency
$273,943.94 Brick Twp. Municipal Utilities Authority
$45,916.79
Paramus Borough
$74,821.85 Hudson County
$202,490.72
Lacey Township Municipal Utilities Authority
$36,549.61
Alpine Borough
$70,515.15 West New York Town
$184,985.59
Little Egg Harbor Municipal Utilities Authority
$34,810.90
Demarest Borough
$59,795.38 Jersey City
$129,084.64
Point Pleasant Beach Borough
$32,259.71
Wallington Borough
$51,307.46 Hoboken City
$38,527.71
Lakewood Twp. Municipal Utilities Authority
$30,710.06
River Vale Township
$49,571.11 North Bergen Township
$28,384.69
Little Egg Harbor Township
$30,374.85
Rochelle Park Township
$48,152.03 Hudson County Community College
$26,156.14
Toms River Regional Board of Education
$24,725.00
Teaneck Township
$46,933.47 Kearny Town
$12,426.08
Dover Township
$24,679.25
River Edge Borough
$38,390.57 Guttenberg Town
$5,695.72
Tuckerton Borough
$22,029.03
Fairview Borough
$35,500.83 Jersey City Municipal Utilities Authority
$4,167.00
Beachwood Borough
$16,072.42
Edgewater Borough
$32,526.71 Harrison Town
$1,452.75
Lacey Township
$9,335.98
Ridgefield Borough
$31,338.47 Mercer
Stafford Township
$8,629.30
Bergen County Utilities Authority
$23,499.40 Mercer County Improvement Authority
$236,603.20
Ocean
Township
$6,737.53
Westwood Borough
$22,739.86 Hamilton Township
$61,718.04
$6,209.20
Hillsdale Borough
$19,323.75 Hamilton Twp. Board of Education
$39,681.18 Eagleswood Township
$4,801.16
New Milford Borough
$17,817.88 Washington Township
$35,621.35 Surf City Borough
Passaic
Hackensack City
$17,771.63 Middlesex
$53,651.52
South Hackensack Township
$16,953.90 Sayreville Borough
$1,030,422.38 Passaic County Utilities Authority
Totowa
Borough
$7,099.87
Teterboro Borough
$16,025.42 Edison Township
$755,846.24
Paterson
City
$729.20
Upper Saddle River Board of Education
$15,178.06 Middlesex County Improvement Authority
$561,993.32
Somerset
Tenafly Borough
$13,215.24 Piscataway Township
$65,066.11
$930,570.10
Closter Borough
$11,668.69 North Brunswick Township
$51,594.27 Franklin Township
$10,760.52
Englewood Cliffs Borough
$10,460.39 Old Bridge Municipal Utilities Authority
$36,638.83 Somerset Raritan Valley Sewerage Authority
Moonachie Borough
$9,947.47 South Brunswick Township
$1,702.02 Union
Rahway City
$979,988.24
Fort Lee Board of Education
$8,275.49 Monmouth
Union
County
Utilities
Authority
$905,853.20
Garfield City
$6,359.40 Manalapan Township
$416,049.37
$173,529.35
Lyndhurst Township
$5,587.27 Hazlet Township
$404,010.26 Union County
Elizabeth
City
$100,755.82
Teaneck Community Charter School
$3,969.75 Marlboro Township
$211,995.60
$40,630.03
Woodcliff Lake Borough
$3,448.94 Aberdeen Township
$184,091.20 Rahway Valley Sewerage Authority
$27,649.87
Harrington Park Borough
$2,387.45 Monmouth County
$169,540.58 Union Township
$6,824.35
Leonia Borough
$2,337.66 Keyport Borough
$83,918.91 Garwood Borough
Garfield Housing Authority
$855.31 Millstone Township Board of Education
$29,621.14 Total
$26,599,491.80

26 THE RECORD

TUESDAY, NOVEMBER 30, 2004

Published Sunday, Dec. 28, 2003

Bills: Charging taxpayers for meetings, voice mails, deliveries

From Page 25
DeCotiis said that the firms practice is to use messenger services
where appropriate and available,
but that there are instances that
require us to use our firms paralegals for the delivery and filing of legal documents.
Asked about the voice mail
billings, DeCotiis said the firm provides detailed bills to its clients that
accurately reflect the time appropriately spent by our attorney and
the tasks performed.
Some local officials who were
asked about the voice mail billings
also said they saw nothing inappropriate with them. In Mercer
Countys Washington Township
where phone tag with township officials was billed more than once at
the rate of $230 an hour, Chief Financial Officer Diane Baldino said
she has seen other firms charge for
the same task. Likewise, Woodcliff
Lake Borough Administrator
Gene Vinci said he saw no problem with the charges to his borough for voice mail tasks.
The clock is always ticking for
attorneys, whether theyre spending the time listening to your voice
mail messages I guess it doesnt
matter, because I guess theyre still
investing the time, he said.
Legal billing experts say that
billing for such minor tasks, on the
surface, is legal and considered acceptable under the American Bar
Associations billing guidelines.
Attorneys are often told to
round up the time they spend on a
task to the nearest tenth of an
hour. But rounding up means you
have worked at least 50 percent of
the billing increment, said Lisa G.
Lerman, a law professor at the
Catholic University of America in

Washington who, among other

things, teaches billing ethics to
budding attorneys.
Many critics argue that too often
such charges are not questioned by
the public officials responsible for
approving bills.
Local governments often lack
sophistication in negotiating for legal fees or reviewing legal bills,
said Lester Brickman, a professor
at Yeshiva Universitys Cardozo
School of Law. Brickman has testified before Congress and often
lectures on legal fee abuses. Private-sector employers of legal services will typically closely examine
legal bills, he said, adding that the
difference partially lies in the fact
that public officials are spending
other peoples money.
The Record found one instance
where a $4,600 overpayment to
DeCotiis went undetected from
both ends.
In June, officials in Englewood
Cliffs, where DeCotiis was hired as
bond counsel, sent the firm a
$5,120.50 check to pay for a
$512.50 invoice.
When asked by a reporter about
the goof, borough Deputy Tax Collector Janice Romano blamed it on
a misplaced decimal point. Asked
who would be responsible for
noticing the overpayment, Romano said, I would think that
morally if they get an overpayment,
they would notify us.
Weve gotten no notification
from them of an overpayment,
said Romano, adding that the borough auditor likely would have
caught it at the end of the year.
Bob DeCotiis said the overpayment was not identified initially
by our billing department, and
that the $4,600 was refunded im-

Spend money to make money

A look at the five counties where the DeCotiis law firm made the
most money while contributing to the campaign funds of elected officials in those counties. The figures, gathered from public records,
include fees paid by towns, school boards, utilities authorities, and
county governments.
County
Essex
Middlesex
Bergen
Union
Hudson

Fees*
Jan. 2001 - June 2003
$3,419,540.35
$2,503,263.17
$2,260,235.80
$2,235,230.86
$1,662,340.81

Contributions*
Jan. 1999 - Nov. 2003
$306,241.14
$261,432.21
$233,914.00
$195,901.50
$153,651.14

* Figures for fees and contributions may not be complete. Campaign committees are not
required to disclose the source of donations under $400. In addition, The Record's survey
did not include every municipality in the counties.

mediately after the borough contacted the firm.

The Record found that contracts
some local governments had approved with DeCotiis listed only
broad expectations of the firm. But
some governments do send law
firms specific billing guidelines.
Bergen County officials warn
law firms in a list of guidelines not
to bill them for time attorneys of
the firm spend talking among
themselves, such as when one attorney briefs another on a meeting
or new development in the case.
Bergens billing guidelines call such
conferences an internal law firm
management tool that taxpayers
shouldnt have to pay for.
Union County tells lawyers that
if more than 100 pages of photocopying is needed, the copying
should be done by the county.
Photocopying costs often add hundreds, if not thousands, of dollars
to a law firms annual bills.
But even in counties that do set
specific guidelines, The Records

review of DeCotiis invoices found

that the guidelines apparently were
not always enforced.
Despite Bergen Countys warning that firms should not bill for intra-office conferences, a look at just
13 DeCotiis bills found 57 instances where DeCotiis lawyers
billed for talking with other
lawyers at the firm. In nine of those
instances,
two
lawyers were each
billing $150 per
hour for the same
meeting. And in
one of those
meetings,
one
lawyer billed half
an hour for a conRANDALL
ference with his
fellow partner while the other
billed for only 12 minutes.
Former Bergen County Counsel
Elizabeth Randall, who developed
the guidelines while running the
eight-attorney staff from 1999 until Democrats took control of
county government last year, said

the bills cited by The Record appeared to be at variance with the

usual pattern of bills submitted to
the county by outside law firms.
But she acknowledged that not
every bill received the full scrutiny
it should have. The problem, she
said, was a lack of manpower.
The challenge has always been
the compliance piece, said Randall, who was elected to the county Freeholder Board in November
and will take office next month. It
could have taken an [in-house] attorney almost full time to scrutinize
all the bills and try to achieve compliance. Randalls successor,
County Counsel Esther Suarez,
said through a spokeswoman that
she personally reviews virtually
every legal bill submitted to the
county.
Nonetheless, DeCotiis is still
billing the county for intra-office
conferences. In three bills submitted by the firm in 2003, lawyers at
the firm billed 15 times for discussions amongst themselves.
Bob DeCotiis contended that
Bergens guidelines allowed for intra-office conferences to be billed
when they further the representation of the client.
Asked why, as in the one case,
attorneys would bill different times
for the same meeting, he said, differences in attorney time reflect the
nature of the work performed and
the billing judgment of the supervising attorney.
Critics contend that a lack of
scrutiny of bills can stem from the
close political ties and generous
political contributions that the firm
makes to elected leaders.
One example is Manalapan,
population 33,400, where former
Mayor Moskovitz claims that the

DeCotiis firms bills led to a doubling of the townships legal costs

in 2001. DeCotiis became township attorney in early 2001.
By October, Moskovitz said, the
townships legal bills were approaching $400,000, nearly double
Manalapans $207,000 legal budget. The DeCotiis firm itself had
billed $233,000, he said.
We were going way over budget on legal work, Moskovitz said.
Moskovitz, a former assistant attorney general in Pennsylvania,
said even more startling were the
number of hours that as many as
three attorneys billed for individual
invoices. One attorney alone,
Moskovitz noted, was billing the
township for 18-hour, 15-hour,
and 11-hour days.
Consider Jan. 10, 2001, for example: Former DeCotiis attorney
Peter A. Tucci billed 18.3 hours on
a day that Tucci was preparing for
and attending a township committee meeting to hammer out municipal service agreements with several private developments.
When that bill and others became a public issue and were requested to be reviewed by the public, Moskovitz said the firm even
billed for time it spent deleting
what it argued was confidential information in those bills. In some
instances the information redacted
was the names of public officials
with whom the attorneys had spoken.
We not only paid for the firms
research, we paid for [the attorneys] to redact bills, Moskovitz
said at a Township Committee
meeting in 2001. And make no
mistake, that time was not spent
on protecting the township; it was
spent protecting them.

The DeCotiis law firm

Supporters and detractors of DeCotiis, FitzPatrick, Cole & Wisler say that the firm's stock in trade is its far-reaching connections and its ability to use those connections to get things done. Many members of the firm have
either government employment or a political career in their backgrounds. Here's a brief look at some of those connections:

M. Robert DeCotiis
(managing partner)
Age: 62
Born: Hackensack
Graduate: Seton Hall Law
School, 1969; president, Law Student Division of the American Bar
Association, 1968.
First municipal attorney appointment, Little Ferry, 1971.
Commissioner and vice chairman, New Jersey State Election
Law Enforcement Commission,
1980-1984.
Chairman and member, New
Jersey Casino Reinvestment Development Authority, 1985-1992.
Chief counsel to Gov. Jim Florio, 1992-1993.
Served on the national finance
committee of Democratic presidential candidate Gary Hart,
1984.
Served on the finance committee of numerous political candidates in New Jersey, including
Gov. Jim Florio.
Co-chairman of the executive finance committee for the Assembly Democrats, 2003.

Alfred C. DeCotiis

Clinton to serve as U.S. representative to the United Nations General Assembly, 1995.
Member, Democratic National
Committee. New Jersey finance
committee co-chairman of Clinton/Gore presidential campaigns
in 1992 and 1996.
Served on the finance committee of numerous political candidates in New Jersey, including as
chairman and treasurer of former
Hudson County Executive Robert
Janiszewski's failed gubernatorial
campaign, 1997.
Co-chairman of the executive finance committee for the Assembly Democrats, 2003.
Brother of M. Robert DeCotiis
and uncle of Michael and Joseph
DeCotiis.

Michael R. Cole
(managing partner)
Age: 59
Born: Elizabeth
Graduate: Rutgers Law School,
1970.
Director of the New Jersey Division of Law, 1981-1986.
First assistant New Jersey attorney general, 1983-1986.
Chief counsel to Gov. Thomas
H. Kean, 1986-1989.
Member, New Jersey Supreme
Court Disciplinary Board, 1993current.
Married to New Jersey
Supreme Court Justice Jaynee
LaVecchia, who was state Banking and Insurance commissioner
before Gov. Christie Whitman appointed her to the Supreme
Court.

(senior partner)
Age: 60
Born: Hackensack
Graduate: Villanova Law School,
1968.
Assistant U.S. attorney, District
of New Jersey, 1969-1971.
Special counsel to the New Jersey Assembly Committee on Independent Authorities and Commissions, 1984.
Vice chairman, New Jersey
Transportation Trust Fund Author- Michael R. DeCotiis
(former managing partner)
ity, 1984-1988.
Age: 39
Appointed by President Bill

Born: Paterson
Graduate: Seton Hall Law
School, 1991.
Partner at DeCotiis law firm,
1994-2002, where he served as
general counsel to numerous
public agencies, including the
New Jersey Highway Authority,
the North Jersey District Water
Supply Commission, the Joint
Meeting of Union and Essex
Counties, and the Edgewater Municipal Utilities Authority.
Appointed by Governor McGreevey as deputy executive director of the Port Authority of New
York and New Jersey, 2002-03.
Chief counsel to Governor McGreevey, 2003-current.
Son of M. Robert DeCotiis,
nephew of Alfred DeCotiis, and
twin brother of Joseph DeCotiis.

Joseph M. DeCotiis
(managing partner)
Age: 39
Born: Paterson
Graduate: Seton Hall Law
School, 1994.
Partner at DeCotiis law firm,
1994-current, where he has specialized in public procurement
and contracting, public facility privatization, and redevelopment issues.
Consultant to New Jersey Democratic State Committee, 2003.
Son of M. Robert DeCotiis,
nephew of Alfred DeCotiis, and
twin brother of Michael DeCotiis.

Eric D. Wisler
(managing partner)
Age: 47
Born: New York, N.Y.
Graduate: Rutgers Law School,
1981.
Lead general counsel at Essex

County Utilities Authority until

2003, when the firm was stripped
of the position and renamed outside counsel.
Lead attorney for EnCap Golf
Inc., a Florida-based company
selected by the state to transform
six landfills in Lyndhurst, North
Arlington, and Rutherford into a
massive golf resort community
with residential and commercial
development.

Deputy chief counsel to Gov.

Jim Florio, 1992-1994.
Member, Governor's Study
Commission on Discrimination in
Public Works Procurement and
Contracting, 1989-1992.
Served as the top deputy counsel to both Michael Cole and M.
Robert DeCotiis when they were
chief counsel to Republican and
Democratic governors, respectively.

Jonathan L. Williams

Louis N. Rainone

(partner)
Age: 55
Born: Bedford, Ohio
Graduate: Ohio Northern University Law School, 1975.
Deputy attorney general of New
Jersey, 1980-1986.
Deputy attorney general in
charge of litigation, New Jersey,
1986-1989.
General counsel, Union County
Utilities Authority, 1989-1994.
General counsel, Marlboro
Township, Monmouth County.
Son-in-law of M. Robert DeCotiis.

(partner)
Age: 47
Born: New York, N.Y.
Graduate: Seton Hall Law
School, 1980.
City of Rahway assistant city attorney, 1984-1992, and city attorney, 1992-current.
Township attorney, Township of
Edison, 1994-current.
Township attorney, Township of
Franklin, Somerset County, 1999current.
Special counsel: City of Passaic, 1990-1991; North Bergen
MUA, 1989-1992; Borough of
Red Bank, 1992-1993; and Township of Edison, 1990-1994.
Former law partner of Assembly
Speaker Alan Karcher, D-Middlesex 1986-89, whose daughter
Ellen Karcher serves as Marlboro
Township Council president.
Karcher, D-Marlboro, defeated
Republican state Senate President John O. Bennett III for his
12th District Senate seat.

William Harla
(partner)
Age: 41
Born: Milford, Conn.
Graduate: Rutgers Law School,
1979
Deputy attorney general, 19791986.
Assistant counsel to Gov.
Thomas H. Kean; special assistant to chief legal counsel to
Kean, 1986-1987.
Assistant attorney general for
administrative procedures and
administrative agency advice,
state Attorney General's Office,
1987-1992.

Jeffrey J. Miller
(partner)
Age: 44
Born: Orange
Graduate: Fordham University
School of Law.

New Jersey assistant attorney

general, litigation, 1995-1998.
Director, Division of Law, New
Jersey Attorney General's Office,
1998-2002.
A sampling of other partners
and "of counsel" members of
the DeCotiis law firm:
Benjamin Clarke (partner), deputy
attorney general and assistant attorney general in charge of litigation, 1989-1995.
J. Sheldon Cohen (partner), councilman, Borough of Fort Lee, New
Jersey, 1987-1989.
William R. Lundsten (partner),
chief, Trial Section, New Jersey
Division of Criminal Justice, 198385.
Jerrold B. Binney (partner), chief
counsel to former Bergen County
Executive William Schuber.
Frank Huttle III (partner), husband
of Bergen County Freeholder
Board Chairwoman Valerie Huttle.
Steven C. Mannion (partner), assistant Essex County counsel,
1996-1999, Essex County counsel 2002-03.
Catherine E. Tamasik (partner),
Essex County counsel, 19951999.
William P. Schuber (of counsel),
Bergen County executive, 19912002.
Ronald E. Calissi (of counsel), associate executive dean, Fairleigh
Dickinson University, 2001-current, and director, Department of
Public Safety, Bergen County,
1991-2001.
James R. Napolitano (of counsel),
president, Commerce
Bank/North, and vice chairman,
Hackensack Economic Development Commission.
Edward N. FitzPatrick (partner)
died in January 2000.

JANUARY 2005

THE RECORD 27

Published Sunday, Jan. 18, 2004

Dead man giving: political donations from late lawyer

Experts say it shows holes in campaign-financing laws
By SHANNON D. HARRINGTON
and CLINT RILEY
STAFF WRITERS

As an attorney with the politically juiced Teaneck law firm that

bears his name, Edward N. FitzPatrick often joined his partners in
doling out contributions to New
Jerseys politicians.
The lifelong Republican gave to
governors and senators, county executives, and town councilmen. He
gave long after his political career
ended as mayor of Allendale.
And, if state campaign finance
records are to be believed, FitzPatrick continued to give more
than a year after he died.
FitzPatrick died in January
2000. Still, in the months following
his death from April 2000
through June 2001 three different Democratic campaign funds in
Hudson County cited FitzPatrick
as having contributed money eight
times, for a total of $8,250.
The law firms partners and the
committees who reported the contributions called the reports honest
mistakes, which went unnoticed
until recently, when reporters
pointed them out. No one would
be foolish enough to believe that
the firm actually tried to pass off
contributions by a dead partner,
said M. Robert DeCotiis, managing
partner at DeCotiis, FitzPatrick,
Cole & Wisler, in a written statement.
But experts say the FitzPatrick
contributions reflect poorly on
New Jerseys campaign finance system, particularly the rules that regulate contributions from business
partnerships.
The problems go well beyond
just a few contributions attributed
to a dead man. And they go well
beyond the DeCotiis law firm.
As listed in state campaign finance records specifically, the
online database thats most often
viewed by the public more than
3,000 contributions since 1999 totaling millions of dollars from law
firms and other partnerships do
not conform to state rules.
The rules, established by the
Election Law Enforcement Commission, the state agency charged
with enforcing New Jerseys campaign-finance laws, are designed to
prohibit those involved in partnerships from multiplying their contributions and influence and sidestepping contribution limits that
bind individuals and corporations.
Without increased disclosure,
tighter rules, and better enforcement, experts say, the public has no
way of knowing whether New Jersey politicians and their biggest fi-

nancial backers are playing fast

and loose with rules designed to
limit the influence of any one individual or group over the democratic process.
If [regulators] turn their back
on this, they are turning their back
on the entire campaign-finance
system in New Jersey, said Craig
Holman of the government watchdog group Public Citizen.
ELECs executive director acknowledged there are problems.
He said his staff of two field investigators and three compliance officers is simply overwhelmed by the
more than 25,000 campaign-finance reports filed each year.
This agency needs to be better
funded, better staffed, and better
equipped, said Frederick M. Herrmann, whose agency has a $2.9
million annual budget that has remained stagnant the past several
years. Its crucial to properly support the agency that supports the
law.
Further, Herrmann said ELEC
lacks expertise in how various business partnerships and limited-liability companies work.
Im not an expert in this field
and no one at ELEC is, he said.
Being able to measure contributors influence will become even
more key if state lawmakers enact
proposals designed to prohibit government officials from awarding
no-bid government contracts to
large campaign contributors.
Last month, The Record reported the DeCotiis firm was averaging
more than $10 million a year in
fees from governments in New Jersey while it was contributing an average of $500,000 to the politicians
who had hired them.
Under the proposed reforms, no
government official could award a
contract to any firm that gives
more than $5,000 in campaign
money through the company, its
executives, and principal partners.
As its rules are followed today,
experts point out, its nearly impossible for ELEC to determine
whether campaign-contribution
limits are being violated or whether
contributions from partners are being made voluntarily by the contributor recorded in ELEC records.
Those are two of the main functions of campaign-finance regulation, they say.
Furthermore, sanctions are limited, and rarely applied.
The posthumous contributions
from FitzPatrick are glaring examples of this problem, experts said.
One of the basic principles of
any campaign finance system is
whether the contributions are
made voluntarily, said Larry No-

ble, a former general counsel to the

Federal Elections Commission
who now heads the Center for Responsive Politics in Washington,
D.C. There is a very serious question of who is making these contributions. Its a question of how voluntary a contribution from a dead
man can be.
Representatives of the DeCotiis
firm blamed the FitzPatrick contributions on the campaign committees, saying officials mistakenly attributed money to FitzPatrick that
should have been allocated among
the surviving partners.
ELEC records continue to show
FitzPatrick as the contributor, a
month after reporters first raised
the issue.
Among the 3,000 contributions
that ELEC records attribute to
partnerships are donations from
some of the states top law firms,
developers, lobbyists, and liquor
distributors. Nearly 200 of those
contributions are attributed to DeCotiis, FitzPatrick, Cole & Wisler,
the largest single component of the
problematic entries.

Attempts to control
big moneys influence
Partnership attribution has long
bedeviled attempts to control the
influence of big money in politics.
New Jersey real-estate developer Charles A. Kushner, for example, used a web of dozens of business partners and more than 90
limited-liability companies to direct
$3.1 million to federal and state
candidates during a recent fiveyear period. That money included
more than $1.5 million directed to
political funds benefiting Governor
McGreevey. Court papers allege
that Kushner made contributions
in the names of partners without
their knowledge or pre-approval.
Kushner, through a spokesman,
has repeatedly denied the allegations, which federal prosecutors
are now probing.
In an attempt to limit abuse and
to increase disclosure by individuals involved in partnerships and
limited-liability companies, ELEC
established a set of regulatory safeguards in the late 1990s.
Those business entities were
prohibited from making contributions directly. If they wanted to
send a campaign a check from the
partnership bank account, the
money must be allocated to individual partners none of whom
could give more than the limit on
contributions by individuals.
To ensure that the contributions
were made voluntarily, the checks
also must be accompanied by state-

ments signed by each contributor

acknowledging they were voluntarily giving that money.
What we should see on the reports [filed by campaign committees] is not the name of the partnership, but the name of the partners, Herrmann said. The name
that shows up on the report has to
be that persons money.
But those rules often are not being followed.
In addition to the more than
3,000 contributions attributed to
partnerships on the ELEC Web
site, The Record found dozens
more examples in non-electronic
records filed by smaller campaign
funds in towns and school districts
around the state.
The ELEC Web site cautions
that the database is subject to clerical error. But a spot-check of
dozens of paper records submitted
by the campaigns showed that the
database was accurate in most cases. The contributions were still attributed to partnerships and limited-liability companies, not the partners themselves.
For example, on Oct. 25, 2002,
the state Democratic committee reported receiving a combined
$45,000 from two companies that
had contracted with Bergen County in 1998 to run the countys public hospital. The companies,
Bergen Regional Medical Center,
LP, and Solomon Healthcare
Group, LLC, are principally owned
by a group of Colorado investors
who gave the state Democrats a total of nearly $100,000 that same
day through various entities they
control.
What the state committee didnt
disclose in its reports, however, is
which partners made the contributions.
A spokesman for the state committee said the attribution for
Solomon Healthcare was inadvertently left off the ELEC report
and that partner Solomon J.
Melamed made the $20,000 contribution. But the spokesman acknowledged that the committee
has no partner information for the
$25,000 given by the Bergen Regional partnership, even though it
was given a year ago.
Its still in the process of the follow-up stage, said the spokesman,
Adam Green. Melamed did not return a phone call left at his Denverarea office.
Yet, another example occurred
during a three-month period last
year when the New Democratic
Assembly Leadership PAC controlled by Assembly Speaker Albio
Sires reported receiving two contributions from DeCotiis, FitzPatrick, Cole and Wisler LLP totaling $25,000 and a separate
$25,000 contribution from De-

Cotiis, FitzPatrick, Cole and Wisler

PC Esqs.
As reported, the contributions
would violate rules prohibiting direct contributions from a partnership and the $25,000 contribution
limit that any single individual or
entity can make to a legislative
leadership committee.
Through a spokesman, the DeCotiis firm said it had paperwork
on the correct attribution among
the partners. But neither the committee nor the firm would share
that paperwork with The Record,
and the state ELEC Web site continues to show the contributions as
having come from the partnership,
a violation of its rules.
A review by The Record of the
firms $2.5 million in contributions
since 1999 showed that more than
half was attributed in campaign-finance records to the partnership,
not to individual partners.

Dead mans donations

an innocent mistake

said Holman, of Public Citizen. I

am quite astounded to hear something like this is going on in New
Jersey.
DeCotiis said in his written
statement that all campaign contributions from the firm were made
with the full knowledge and approval of the partners to whom the
money was attributed.
After the newspapers inquiries,
the firm retained a top New Jersey
campaign finance attorney to offer
an opinion on the discrepancies.
Its not uncommon for there to
be the kind of errors you are finding, said Angelo J. Genova, a partner in the Livingston law firm of
Genova, Burns & Vernoia. There
are deficiencies in the law, there
are deficiencies at ELEC and there
is inadequate sophistication by
many of the people using the [state
campaign finance] system.
Genova, who serves as special
counsel to the state Democratic
committee, said he does not believe
anyone at the DeCotiis firm intentionally violated any state law or
regulation. Any improperly reported contributions, including those in
FitzPatricks name, are at worst
technical non-compliance.
The fact is there is disclosure
that the dollars came from this law
firm, Genova said. Not everyone
dots their Is and crosses their Ts.
But even if a contributor were at
fault for violating disclosure rules,
state law places accountability for
those omissions entirely on the
politicians and their campaigns.
Currently, there is no law or regulation that allows ELEC to directly penalize campaign contributors who fail to provide required
contributor information or choose
to ignore disclosure rules and contribution limits. New Jerseys law in
this area is weaker than those covering federal campaigns and contributions made to campaigns in
numerous other states.
Last year, ELEC officials sanctioned and levied just more than
$100,000 in fines on more than 70
campaign and political action committees throughout the state, in
most cases for filing campaign finance reports late or not at all. No
contributors were sanctioned.
Watchdogs say the burden
should not be placed solely on
campaign officials.
That is a bit unusual, said Noble, of the Center for Responsive
Politics. It puts all the burden on
the committees and none of the
burden on the contributors. It
seems like the type of law you
would write if you wanted to encourage people to give contributions.

A handful of campaign officials

contacted by The Record said the
DeCotiis firm provided allocation
letters identifying the source of the
contributions. Officials said the
committees simply didnt disclose
that information.
In the case of the FitzPatrick
contributions, The Record contacted officials from all three Hudson
County committees the Hudson
County Democratic Organization,
the North Bergen Democratic Municipal Committee, and the 2001
campaign committee of now-Jersey
City Mayor Glenn Cunningham.
While officials called the FitzPatrick allocations mistakes by the
campaigns, none of the committees
provided supporting allocation letters.
It strikes me as most likely an
innocent mistake made at the campaign, said Alex Booth, former
treasurer for the Cunningham
committee. It was probably made
because the campaign staff was
overworked at the time.
Further raising questions about
contributions made by the DeCotiis firm, experts say, is a copy of the
firms partnership agreement,
which was obtained by The Record
from court papers.
The agreement states that without limitation all decisions concerning contribution(s) to candidates, political parties, and/or similar organizations are to be made
by a five-member management
committee an arrangement that
campaign finance experts say raises questions about the voluntary
nature of contributions made in the
names of partners outside the manE-mail: harrington@northjersey.com
agement committee.
Thats absolutely outrageous, and riley@northjersey.com

Published Thursday, March 4, 2004

Governor has met figure in FBI probe

Carteret executive gave to McGreevey
By MITCHEL MADDUX
and JEFF PILLETS
TRENTON BUREAU

Governor McGreevey said Wednesday that a little-known political fund-raiser who has attracted the FBIs interest is
a casual acquaintance he once met at a
high school party 30 years ago.
Years later, during his tenure as the
mayor of Woodbridge, McGreevey said
he became reacquainted with David
DAmiano, 44, a Carteret waste management and recycling executive, who eventually became a financial backer.
McGreevey said he last saw DAmiano
at a Christmas party at the governors
mansion, Drumthwacket. Six years ago,
the waste management executive was included along with some of the states
Democratic elite on the host committee
of a party fund-raiser headlined by thenPresident Bill Clinton and McGreevey.
And DAmiano served as part of McGreeveys finance teams for his two campaigns for governor.
A day after FBI agents searched the
Democratic State Committees Trenton
headquarters for information about
DAmianos fund-raising activities, McGreevey said that he wants the committee to be as open and transparent as possible with regard to the federal probe.
I informed the state committee that
they should fully cooperate with authorities, he said.
DAmiano, who has not been charged
with any wrongdoing, did not return a
call Wednesday. Someone answering the
phone at the offices of DAmianos
Carteret office said DAmiano was not

there. We havent seen him for a couple

of weeks, said the individual, who identified himself as a worker.
His attorney, John Sponganetz, who
said he had last spoken to his client on
Tuesday, also declined to comment about
the FBI search.
The DAmiano files are the latest to
bring federal investigators to the partys
headquarters in Trenton. The action is
part of a larger federal probe into political corruption in New Jersey that has targeted officials in both parties.
Democratic sources who worked as
fund-raisers for McGreevey in both the
1997 and 2001 gubernatorial campaigns
said DAmiano was not a widely known
player in fund-raising circles. They said
the trash recycler resembled other lowprofile fund-raisers who had close tries to
McGreevey but to few others in the Democratic inner circle.
There are always guys like him that
are attracted to a major campaign, said
one Democratic consultant who worked
for McGreevey. They are not interested
in showing off or making names for
themselves. They usually have very narrow, specific reasons for being involved.
Another longtime Democratic fund-raiser who has been a key McGreevey supporter since McGreevey served as Woodbridge Township mayor in the 1990 was
surprised to learn that DAmiano had a
spot on the governors prestigious fundraising committee.
I took a good look at my files and was
shocked to see this guy was on the committee that organized the Clinton fundraiser in 1997, he said. This guy obviously knows how to pick the right

events. An invitation for the Oct. 8,

1997, event in West Orange lists DAmiano as a member of the host committee
along with 50 others, including such
prominent names as state Sen. Barbara
Buono, construction magnate Sam
Halpern, former Democratic Assembly
Speaker Alan Karcher and Democratic
money man Stephen Moses.
Records show DAmianos companies
have contributed moderately to political
campaigns. His companies and associates have given $3,500 to the Carteret
Democratic organization since 2001 and
more than $1,000 to McGreeveys campaigns. They also contributed to Republican campaigns and politicians during
the early 1990s.
Several of DAmianos firms are on 33
acres in Middlesex County that are key to
an ambitious redevelopment project on
the site of a mammoth landfill.
Part of the proposal is a $165 million
plan to completely rebuild Interchange
12 on the New Jersey Turnpike in
Carteret, and build a 6,000-foot-long elevated roadway that will link the thoroughfare with the Tremley Point area of
adjacent Linden.
The Turnpikes executive director,
Michael Lapolla, said the interchange is
in the worst of the 148-mile turnpike and
that the planned reconstruction has been
on the boards for years. The new interchange will redirect truck traffic directly
into industrial areas instead of routing it
through Carterets retail thoroughfare,
Lapolla said.
The new interchange is also key to the
ambitious redevelopment plans that will
stretch to Tremley Point, he said.
The only way to get anybody to invest
there is to get access to the Turnpike,
Lapolla said.

The new interchange will included a

raised connector road that will cross
DAmianos property, he said.
The adjacent development, known as
the Carteret Redevelopment Plan, would
include the proposed construction of a
travel center, hotels, restaurants, a
670,000-square-foot warehouse and distribution facility, according to published
studies.
Capping the landfill and cleaning up
toxic waste deposits at the brownfields
site would be necessary, but could turn a
137-acre site worth $15.4 million into a
parcel valued a $64 million, according to
the study, which was conducted in part
by New Jersey Transportation Planning
Agency.
Spoganetz said that Carteret wants to
acquire all of DAmianos property on the
site, but that no meaningful negotiations had begun with either the city or
the Turnpike.
We just want to get paid fair market
value for the land, Spoganetz said.
They going to have to pay for the land
if they want to take it.
The attorney said he believes there was
no connection between the proposed developments on DAmianos Carteret
properties and the FBIs search in Trenton Tuesday, but he declined to speculate
on what motivated the federal agents actions.
One of DAmianos firms, Dauman Industries, had its permit to operate a recycling facility renewed by the state Department of Environmental Protection
on Feb. 9, despite the fact that his firms
owe more than $28,000 in penalties for
committing a variety of civil infractions,
according to Mary Helen Cervantes, a
DEP spokeswoman. Some of the fines
are a decade old.

Spoganetz said that DAmiano had requested a hearing to fight one of the fines,
and explained that such citations and
having DEP operating licenses renewed
despite violations were not uncommon.
In December, state officials confirmed
that Tremley Point was being considered
as the possible site for a new trash transfer station that would handle waste from
New York City.
But the McGreevey administration
scuttled the proposed transfer station last
month.
A similar plan to use Tremley Point for
trash transfer was approved by Linden
and Union County in 2000 but fell
through when the owners of the 18-acre
site became involved in a state investigation. Among the investors in the site was
Union County attorney Paul Weiner, the
law partner of Democratic state Sen. Ray
Lesniak.
News of the FBI raid prompted Republican lawmakers to demand the Democrats to call for a special session of the
Legislature to enact legislation calling for
the end of pay to play, the system that
favors campaign contributors for no-bid
government positions and contracts.
Such legislation was approved last
year in the Senate but stalled in the Assembly. The leaders called for a special
legislative session to take up the matter
again.
This is not a partisan issue, said Senate Minority Leader Leonard Lance, RHunterdon. The end of pay to play, is
based on what is good for the people of
this state.
Staff Writers Josh Gohlke, John Dyer, and
Elise Young contributed to this article.
E-mail: maddux@northjersey.com and
spillets@northjersey.com.

28 THE RECORD

JANUARY 2005

Published Saturday, March 6, 2004

Probe widens with aid of farmer

By MITCHEL MADDUX
and JEFF PILLETS
TRENTON BUREAU

McGreevey fund-raiser under more scrutiny

A Middlesex County pumpkin

and dairy farmer emerged Friday as
a central figure in a widening federal probe into a campaign fundraiser for Governor McGreevey, a
knowledgeable source said.
For more than a year, farmer
Larry Halper has been cooperating
with federal prosecutors probing
the fund-raising activities of a
Carteret waste management executive who is a longtime member of
McGreeveys political fund-raising
committee, the source said.
Halper, who has waged a protracted battle over the future of his
familys 75-year-old farm, is an acquaintance of David DAmiano,
who FBI agents have taken increasing interest in over the past
week, the source said.
Cornell Dairy Farm, of which
Halper is part owner, was listed in
subpoenas delivered by federal
agents to the state Department of

Agriculture on Thursday, said another source familiar with the subpoena.

Larry Halper did not return several phone calls Friday night.
Also on Thursday, FBI agents
visited McGreeveys office and
dropped off a subpoena, and did
the same at the state Division of
Taxation, a source familiar with the
subpoenas said.
Federal prosecutors who have
been scrutinizing DAmianos
fund-raising activities are looking
at the way nearly $1 million in
back taxes and penalties owed by
the Carteret executive and his firms
were settled after negotiated agreements with the state tax authorities,
a source said.
The federal subpoenas received
at the governors office and the
Taxation Division requested any
documents or information that officials have pertaining to DAmi-

ano, the source familiar with the

subpoenas said. The agency said
that DAmiano had four corporate
and four personal liens from 1995
through 1997 totaling $500,000,
which were settled prior to 1998
during the Whitman administration. Beyond that, $433,000 from
three of DAmianos corporate and
personal tax liens were settled in
2003, the agency said.
Micah Rasmussen, a spokesman
for McGreevey, confirmed that the
agencies had received the subpoenas but declined to elaborate in detail.
The subpoenas request a limited scope of documents and are directed to offices, not specific individuals, Rasmussen said. The
governor has directed staff to fully
comply with the requests and we
expect to furnish the documents
quickly.
Halpers involvement in the case

is both unusual and benign, the

knowledgeable source said.
Although cooperating federal
witnesses commonly help investigators after being implicated in
wrongdoing, Halper represents a
different breed a citizen who
came forward to report perceived
wrongdoing to federal prosecutors,
the source said.
His wife, Clara Halper, said she
did not know if her husband was
assisting the government in its investigation.
If he is involved in this investigation he hasnt told me, Mrs.
Halper said just before stepping out
to temple. Im certainly going to
ask him about it now.
Mrs. Halper said she did not
know DAmiano, but had heard
his name on television news earlier this week.
The fight between Piscataway
and the Halper family over the

township council, filed assault

charges against a member of council who she claimed had attacked
her during a meeting. The township also accused the Halpers of
running an illegal trash transfer station behind their grain silo, a
charge they denied.
The Halpers, who said they
could have sold their land to developers for $20 million, eventually rejected a $4.3 million offer from
the township and a $3 million offer
from the state Farmland Preservation Program.
In 2003, a state judge ruled that
the township could condemn the
farm and those proceedings are under way.
Its very, very sad for us, Clara
Halper said in a phone conversation Friday. This farm has been in
our family for three generations.
Now theyre taking it away from us
because they have the power of the
state behind them. It isnt fair.

largest tract of undeveloped land

remaining in the township began
in 1998 when local officials announced their intention to condemn the family-owned farm.
Larry and Clara Halper, according to sources and published reports, were apolitical farmers with
few interests beyond growing
pumpkins, operating hayrides, and
watching over the family property
that also includes a riding academy.
Township officials, fearing that
the Halpers were planning to sell
their farm, sought to gain control of
it to keep it from being developed.
When the Halpers refused to go
along with the townships plans,
the dispute that ensued devolved
into a long-running battle in which
Larry Halper lined his property
with anti-township placards.
At one point, Clara Halper, who E-mail: maddux@northjersey.com
had run unsuccessfully for the and pillets@northjersey.com

Published Wednesday, March 17, 2004

D'Amiano sought favors

Nagged McGreevey aides, files show
By JEFF PILLETS, MITCHEL MADDUX,
and JOHN DYER
TRENTON BUREAU

A Carteret waste recycler who raised

more than $100,000 for Governor McGreevey spent two years hustling favors
for his friends and family in Trenton with
the help of the governor and his closest
aides, according to documents released
by the administration Tuesday.
The documents show that from the
opening weeks of the McGreevey administration, David DAmiano, now at
the center of a widening federal corruption probe, was granted access to top administration officials who met and corresponded with him more than a dozen
times from January 2002 to December
2003.
In a string of faxes, phone calls, and
handwritten notes, DAmiano successfully pressed the administration to name
three friends including his wifes boss
to influential state boards. He set up
meetings for a friend who was seeking a
state waste permit. He asked the administration to intervene with the Department of Transportation for a construction friend involved in a messy road project. He even sent letters recommending a
string of judicial nominees.
DAmiano is driving me nuts, Amy
Mansue, then McGreeveys deputy chief
of staff, wrote in a November 2002
memo to an official in the governors appointments office. Do we have any [direct appointments] we can do? In a related matter, documents also disclose
that McGreevey met with a Middlesex
County farmer whose property has become central to the federal investigation.
DAmiano is close to farms owners.
McGreevey himself not only exchanged letters and phone calls with
DAmiano, but directed his staff to assist
the fund-raiser, documents show. At McGreeveys request, Chief Counsel
Michael DeCotiis met with DAmiano,
whose company has been saddled with
more than $2 million in federal tax liens,
to discuss potential judicial nominees.
The administrations extraordinary decision to release the 500 pages of internal
records regarding the controversial fundraiser comes less than two weeks after
federal agents served search warrants on
the Democratic State Committee and
subpoenas at the governors office and
the Treasury and Agriculture departments.
The documents released Tuesday, with

some very minor exceptions, were identical to those given the U.S. Attorneys
Office last week, an administration official said. Among those not released were
a questionnaire filled out by a judicial
candidate and documents covering the
transition period before McGreevey took
office in January 2002.
Administration officials, who only last
week insisted they were barred from talking about the federal probe and McGreeveys relationship with DAmiano,
said Tuesday that they decided to release
all their files because McGreevey has
nothing to hide. DAmianos contacts
with the administration and success in
winning appointments for friends, they
said, are not evidence of wrongdoing
We wanted to hand out everything we
possibly could to show that the administration acted ethically and aboveboard
regarding this matter, said Micah Rasmussen, the governors spokesman. The
documents released today speak for
themselves.
Sources say federal agents are searching for evidence that DAmiano received
favors for himself and others. The governor has called DAmiano a casual
friend whom he knew in his youth
growing up in Carteret. McGreevey has
said he met DAmiano again upon becoming mayor of Woodbridge in 1991.
In several documents released Tuesday, DAmiano is referred to as an old
friend of McGreevey. In an April 30,
2003, handwritten note from DAmiano
to McGreevey, the waste recycler asked
the governor to attend the wedding of acquaintances who have always helped
me during the campaigns. If you are
unable to attend, could you please send a
congratulatory letter? DAmiano wrote,
signing the letter Thanks, Dave. On
June 29, McGreevey sent a letter to the
newlyweds, Mr. and Mrs. Michael
Charles Gorombey, wishing them a lifetime of health, cheer, and happiness.
McGreevey also met at least once with
another friend of DAmianos, a Piscataway farmer who gave $10,000 to the
Democratic State Committee in December 2002 as he was fighting to save his
75-acre farm from condemnation.
Sources familiar with the investigation
have said that Mark Halper and his Cornell Dairy Farm are central to the federal
probe.
For more than a year, the sources said,
Mark Halper wore a concealed recording
device to assist the government investigation.

In a Feb 24, 2003, letter to McGreevey,

Halper thanked the governor for a meeting to talk about saving the family farm.
I would like to thank you for meeting
with me last week to discuss the future of
the Halper farm, Halper wrote. I was
impressed by your knowledge of the factors relating to this case. Your observation that egos are getting in the way of
policy is succinct. The most promising aspect of our discussion is your desire to
bring an amicable resolution to this matter. Until now, administration officials
said they did not know if Halper and McGreevey ever talked about the farm
preservation controversy, which has put
the Halper family at odds with Piscataway officials for more than six years. On
Tuesday, officials downplayed the meeting and were unwilling to say what, if
anything, McGreevey did to help Halper.
This was a five-minute meeting during a Democratic Party meeting at the
East Brunswick Hilton, one administration source said. It was inconsequential. Halper, contacted at his home, declined to talk about the meeting.
Cornell Dairy Farm has been at the
center of a preservation controversy
since 1998, when the township first announced plans to take the farm by condemnation as a way to protect it from development. Township officials, who last
year won a court ruling granting them the
right to condemn the land, said the
Halpers were secretly planning to sell out
to major home builders.
The family, which is appealing the ruling, rejected in 2002 as too low a $3 million offer from the state Farmland Preservation Program that would have preserved 64 of the farms 75 acres.
While DAmianos role regarding the
farm remains unclear, the documents
show that DAmiano aggressively lobbied
for the appointment of several people to
state judicial posts.
In a letter dated Nov. 24, 2003, DAmiano wrote to McGreeveys chief counsel
to push for a state judgeship for J.
Howard Solomon, who serves as the municipal prosecutor in Teaneck.
This is an unusual role for a fund-raiser, especially given DAmianos professional qualifications as a waste management executive who also runs pallet and
mulch businesses. Traditionally, recommendations for judicial nominations
come from legal and bar association circles, or from state legislators and local
party officials.
I truly believe that Mr. Solomon will

A first-name relationship
Fund-raiser David D'Amiano, whom Governor McGreevey first described as a "casual friend, is no stranger to the governor's inner circle. Documents released Tuesday show D'Amiano lobbying McGreevey and his staff for appointments and help
in resolving problems. Here are some excerpts from that correspondence:

Lobbying for appointments

Oct. 10, 2002 Handwritten letter faxed to McGreevey from DAmiano, advocating the appointment of Dr. Alexander Hall to the state Board of Dentistry: Jim,
Dr. Alexander Hall of East Orange would make an excellent choice to the Board of
Dentistry of NJ. Hall was later appointed to the board.
Oct 24, 2002 Handwritten note from DAmiano to Deputy Chief of Staff Amy
Mansue. D'Amiano is asking the staff to consider Ranjit Sinha of South Brunswick
for a post on an environmental board: The governor requests that I give this rsum to you. thanks, Dave.
Nov 27, 2002 Internal memo from Tara Dowdell, McGreeveys director of appointments, indicating DAmiano's persistent lobbying for Sinha. Scrawled on the
memo is a note by Mansue to Dowdell: Tara, D'Amiano is making me nuts. Do we
have any direct [appointments] we can do?

Seeking help for firms

Undated Memo from DAmiano to a member of the governors staff, regard-

ing an Ocean County company, USA Trans X LLC of Barnegat: They have a junkyard permit in the Pinelands in Ocean County. They want to trade off their junkyard
permit and receive a garbage transfer station permit. Need a meeting with the
Pinelands Commission.
Dec 11, 2003 Memo from DAmiano to unnamed staffer in governors office.
DAmiano is lobbying on behalf of a Mountain Lakes firm that is trying to collect
costs involving work it did for the state Department of Transportation: [Firm] says
someone dumped contaminated soil on their job site with NJ DOT. NJDOT refuses
to pay for their removal cost. Staffer writes that Kris Kolluri, chief of staff to Transportation Commissioner Jack Lettiere, will check into the matter.

Pressing for a wedding greeting

April 30, 2003 Handwritten note from DAmiano to McGreevey: Jim, en-

closed is a wedding invitation for you and your family. ... The father of the bride has
always helped me during the campaigns. If you are unable to attend, could you
please send a congratulatory letter, Thank you, Dave. McGreevey sends congratulations letter a month later.

be an excellent choice for a judgeship. ...

I respectfully urge that serious consideration be given for his appointment as Administrative Law Judge or Workers
Compensation Judge, DAmiano wrote.
I have enclosed his rsum.
Solomon, who has contributed several thousand dollars to Democratic causes over the past four years, according to
state records, declined to comment Tuesday about DAmiano, citing the longstanding tradition of potential judicial
nominees not commenting on issues related to their candidacy.
In September and October 2003, the
records show, DAmiano made numerous contacts with the governors office
and DeCotiis, the chief counsel, regarding pet judicial nominees.
Mike, just passing this rsum along.
Call when you get a chance, DAmiano
wrote to DeCotiis on Sept. 19, referring
to Morganville attorney Paul W. Bergrin,
who declined to comment. An Oct. 1

memo from McGreevey aide Kim Kersey

to Kaye Caputo, an aide to DeCotiis,
refers to DAmiano as a friend of the
governor who is feeding me a string of judicial names. ...
He spoke of a rsum he forwarded
regarding someone he wants in the Essex
County Prosecuters Office, Kersey
wrote.
Telephone records show that DAmiano, with the approval of the governor,
also was talking and meeting with DeCotiis, whose responsibilities include the
review of all potential nominees to the
bench.
None of the nominees forwarded by
DAmiano received judgeships. DeCotiis did not respond to requests for interviews. Rasmussen, McGreeveys spokesman, said DAmianos failure to get anyone on the bench shows that he had little real influence.
E-mail: pillets@northjersey.com

JANUARY 2005

THE RECORD 29

Published Wednesday, July 7, 2004

Democratic fund-raiser indicted

McGreevey denies knowledge
of alleged extortion plot
By JEFF PILLETS,
MITCHEL MADDUX,
and AMY KLEIN
TRENTON BUREAU

NEWARK Federal prosecutors leveled charges of extortion, bribery, and fraud Tuesday
against former Democratic fundraiser David DAmiano in a 47page indictment that raises ominous clouds over Governor McGreevey.
The 11-count indictment, unsealed at U.S. District Court
here, describes in vivid detail
how DAmiano allegedly extorted $40,000 in cash and political
contributions from a Piscataway
farmer who was seeking to save
his land from condemnation.
DAmiano, the indictment

suggests, capitalized on his status as a key fund-raiser to

arrange an extraordinary series
of private meetings with Middlesex County officials and the governor himself. The meetings led
to a lucrative preservation offer
for Cornell Dairy Farm owner
Mark Halper.
The fund-raiser did not know,
however, that Halper was secretly working with the FBI to
tape-record conversations that
will now become key evidence
in one of the biggest public corruption cases in recent state history. Those conversations, as detailed in the indictment, show a
furtive and paranoid DAmiano
obsessed with the use of code
words and the cloak-and-dagger
aspect of secret deal-making.

While McGreevey is not

named in the indictment, the
governor acknowledged Tuesday that he is one of two unnamed state officials who are described as meeting with DAmiano and Halper about the future
of the farm.
But McGreevey said the fiveminute meeting at the East
Brunswick Hilton in February
2003 was merely a courtesy such
as he extends to many constituents. The governor denied
any wrongdoing and insisted
that he never even spoke to any
Middlesex County officials about
Halpers farm.
I said at the outset that I was
confident that my administraCARMINE GALASSO/STAFF PHOTOGRAPHER
tion acted ethically, appropriateSee DAMIANO Page 30 David D'Amiano, whose ties to the governor go back to their teen years, surrendered Tuesday.

Published Wednesday, June 30, 2004

2 top bank executives accused of corruption

Commerce bosses among 12 indicted
By MITCHEL MADDUX
TRENTON BUREAU

PHILADELPHIA - Federal
authorities indicted two senior executives of Commerce Bank on
Tuesday on corruption charges,
saying the men secured lucrative
city banking business through
rigged bidding and fraud.
Glenn K. Holck, 44, the president of Commerces Pennsylvania
division, and Stephen M. Umbrell, 44, one of his regional vice
presidents, approved generous
personal loans for this citys treasurer, and were rewarded with a
substantial portfolio of Philadelphias city banking business, prosecutors said.
The two executives were
named in a 155-page indictment
that also charged 10 others, including prominent city officials.
The ongoing probe into Philadelphia city government corruption
became public in October when
city police discovered FBI wiretaps in Mayor John Streets office.
But the sprawling indictment

also calls into question business

practices at the very top of the
Cherry Hill, N.J.-based Commerce Bancorp Inc., the rapidly
growing bank that has wielded
clout through its political contacts
and campaign contributions in
New Jersey and Pennsylvania.
Pay-to-play is not a victimless
crime, Patrick L. Meehan, the
U.S. attorney in Philadelphia, said
of the alleged fraudulent business
scheme. He said that in addition
to taxpayers, firms unwilling to
participate in corrupt business
practices lose out when illegal
methods are used to seal business
deals.
When the games rigged, why
play it at all? Meehan said.
The indictment contains several references to Commerce Bancorps chief executive officer, Vernon W. Hill II, identifying him
only by his title and suggesting he
participated in several phone calls
and e-mail exchanges with his
subordinates across the Delaware
River who were involved in securing the Philadelphia city busi-

ness. However, federal prosecutors have not charged Hill with

any wrongdoing.
Commerce issued a statement,
but a spokesman would not answer specific questions about
Hill.
The company has confirmed
that neither it, nor any of its subsidiaries or other officers and employees are targets of the investigation, Commerce said in a statement. The company has fully cooperated with this investigation.
The company believes that this
will have no material negative financial impact on the company.
Holck and Umbrell denied
wrongdoing through their attorneys, who said the men eventually would be cleared of the
charges. Commerce said it had
suspended both Tuesday after
learning of the indictment.
The indictment says Holck and
Umbrell, on behalf of their employer, Commerce Bank, curried
favor with Corey Kemp, who was
then Philadelphias city treasurer,
in order to get business for the

bank. Kemp was also indicted

Tuesday.
Prosecutors allege that Holck
and Umbrell approved a credit
line and a home mortgage exceeding $225,000 for Kemp, despite the fact that his personal finances were in disarray and his
car recently had been repossessed. A Commerce loan officer
described Kemps credit rating as
among the lowest scores he had
seen in his 40-year banking career, the indictment said.
But the two Commerce executives overrode objections from
staffers about Kemps credit problems and approved the loans anyway, and even extended other
loans to Kemps brother-in-law,
who also had a shaky credit history, the indictment said.
Holck, Umbrell, and other officers and employees of Commerce Bancorp Inc. also provided numerous gifts to Kemp, including tickets to professional
sporting events and meals - and
even tried to buy tickets for him
to a Metallica rock concert, the
indictment charged.
In return, Kemp was instrumental in rigging a bid and providing inside information that

helped Commerce win a contract

to provide a $30 million line of
credit to finance a Philadelphia
neighborhood redevelopment
project, prosecutors said.
Kemp, who took direction
from lawyer Ronald A. White, a
prominent fund-raiser and close
associate of the mayor, told the
Commerce executives that the bid
was too high and that they needed to lower it to be competitive
with other banks bidding on the
project, the indictment said.
White, who was also indicted
Tuesday, served on the board of
directors of Commerce Banks
Pennsylvania division, officials
said.
For his services, Commerce
paid White a monthly retainer
and legal fees, which totaled
$182,000 in 2002. The bank also
contributed $25,000 for a youth
foundation run by White, and
also donated $50,000 to Mayor
Streets campaign.
White was charged with allegedly steering business to Commerce by fraudulent means, along
with a variety of crimes that
stemmed from his role as a City
Hall power broker, prosecutors
said.

Commerce shares were halted

from trading in the New York
Stock Exchange on Tuesday. Its
shares fell $3.51 before trading
was halted at 2:58 p.m., a drop of
5.5 percent to $60.95.
In New Jersey, Commerce has
established itself as a banking
powerhouse and a formidable
force in statewide politics.
Commerces employee political
action committee, Compac NJ,
distributed almost $1.65 million
to New Jersey candidates for state
and local office from 1998 to
2003, much of it pumped into political funds in counties and
towns where Commerce then
reaped millions of dollars in
banking, bond, and insurance
business.
The bank also plays a role in
local government financial services.
At the end of 2002, it held $1.8
billion in New Jersey taxpayer
money. Commerce is also involved in government insurance
contracts in nearly every municipality. And it has become the
dominant player in buying and
selling government debt, at one
point underwriting one-third of
all bonds issued in the state.

EDITORIALS
Published Thursday, March 18, 2004

Published Thursday, July 8, 2004

Inside look

Trenton intrigue

An open door for a top McGreevey fund-raiser

Fund-raising scandal on McGreeveys doorstep

HE BURGEONING scandal involving a fund-raiser for Governor

McGreevey has produced a rare and
ugly look at this administration at its crudest level. When it comes to getting access,
money talks, loud and clear.
How else does one explain the inordinate clout of David DAmiano, a Carteret
waste recycler who has raised more than
$100,000 for Mr. McGreevey? Mr.
DAmiano, one of the apparent targets of
a federal investigation into New Jerseys
Democratic Party and the McGreevey administration, sure gets a lot of gubernatorial attention for a man whose company
has been hit with $2 million in federal tax
liens and another $200,000 in state labor
fines.
In an effort to control the political fallout, the governors office this week released more than 500 pages of internal
documents. The point, apparently, was
that Mr. McGreevey has nothing to hide.
Micah Rasmussen, a spokesman for the
governor, said the documents speak for
themselves, and indeed they do. They
show that as soon as the governor took office, Mr. DAmiano was pestering him and
his top aides for an array of political favors.
In one innocuous instance, Mr. DAmiano asked the governor to write a congratulatory note to newlyweds because
the father of the bride has always helped
me during campaigns. More-serious requests ranged from jobs and appointments
to state boards to meetings for people and

business leaders looking for help from the

state. For example, the governor met with
a Piscataway man who gave $10,000 to
the Democrats as he was fighting to save
his 75-acre farm from condemnation.
Mr. DAmiano wrote to the governor to
request a state judgeship for Teanecks
municipal prosecutor, J. Howard
Solomon. Traditionally, recommendations
for judgeships are reserved for state senators and bar associations. Mr. DAmiano
also pushed candidates for the state Board
of Dentistry, an environmental board, and
a job in the Essex County Prosecutors Office. In all, he asked the administration to
appoint five people to state boards and
jobs. Two of them were nominated, both
to unpaid board positions, and one later
withdrew.
Mr. Rasmussen said the fact that no one
Mr. DAmiano recommended for a judgeship has been appointed shows his lack of
clout. Nevertheless, the fund-raiser peppered the governor and his staff with so
many requests during the past two years
that at one point a deputy chief of staff
wrote in a memo: DAmiano is driving
me nuts. Do we have any [direct appointments] we can do? Clearly, Mr. DAmiano expected something in exchange for
all the money he raised. And just as clearly, Mr. McGreevey and his staff never disabused him of that notion.
For a governor who campaigned on a
promise to change how Trenton does
business, Mr. McGreevey sure seems to
practice old-fashioned politics as usual.

OR THOSE who relish a good political potboiler, the unfolding scandal involving a top fund-raiser for
Governor McGreevey is lively summer
reading. For Mr. McGreevey himself, the
sordid story holds scant hope of a happy ending.
This weeks 47-page indictment of
David DAmiano on bribery and extortion charges paints a vivid picture of how
political influence can be bought and
sold in New Jersey. Toss in an ambitious
prosecutor, a hidden microphone, and a
scene that seems straight out of a cheap
spy novel, and there could well be the
makings of a major bestseller.
Exactly how the story will pan out
and just how close to the governor the
case will ultimately get is anybodys
guess. But the perception of the governor
meeting with a sleazy fund-raiser and uttering a secret code word is almost certain to muddy up his image. Judging from
the nitty-gritty of the indictment, as well
as hundreds of pages of documents that
the McGreevey administration released
earlier this year as a preemptive defense,
Mr. DAmianos fund-raising techniques
were politics at their most corrupt.
In a nutshell, this weeks indictment
alleges that Mr. DAmiano parlayed his
clout as a major Democratic fund-raiser
to set up a series of private meetings with
Middlesex County officials and the governor for a hefty price. Ultimately, a
Piscataway farm owner got an exceedingly generous land-preservation offer.

Heres the most riveting part of the indictment: In February 2003, Mr. DAmiano is said to have told the farm owner
that they would meet the governor and
other state officials later that day, and
that if one of the officials used the code
word Machiavellian, it meant the officials were sympathetic and could deliver
on the promise to preserve the farm at a
hefty price. The farm owner was wearing
a hidden microphone. At the meeting,
Mr. McGreevey promptly said the magic
word Machiavellian. The governor
says it was an innocent literary reference,
but that would sure be one whopping coincidence.
With the recent resignation of scandalplagued John Rowland as governor of
Connecticut, its not illogical to wonder
just how high up this Garden State scandal will go. Democrats can say, with
some degree of truth, that the investigation by U.S. Attorney Christopher
Christie is politically motivated, since
Mr. Christie, a Republican, has refused
to disabuse people of the notion he may
well run for governor next year.
The U.S. attorney points out that he
has prosecuted both Democrats and Republicans, but his most often cited highprofile Republican case which brought
a guilty plea by former Essex County Executive James Treffinger had been initiated by his predecessor.
On the other hand, if Democrats appear dirty and some certainly do
they demand Mr. Christies full attention.

30 THE RECORD

JANUARY 2005

Published Wednesday, July 7, 2004

A DAmiano case
timeline
Here are some of the key events
alleged in the federal indictment of
Democratic Party fund-raiser
David D'Amiano:

2002
August Piscataway farm
owner Mark Halper and other
family members reject an offer of
$3 million to preserve their property as farmland. Township officials begin condemnation proceedings to seize the property.
Nov. 10 David D'Amiano tells
Halper, a business associate, that
Halper would have to pay $20,000
in cash and
$20,000 in political contributions
to the Democratic
State Committee
to gain approval
for farmland
MCGREEVEY preservation at a
favorable price. D'Amiano says he
could arrange a meeting with
"state official 1," identified by
sources as Governor McGreevey.
Nov. 17-22 D'Amiano tells
Halper there was a "real deal" in
place regarding the farm and that
a meeting with McGreevey would
occur. D'Amiano tells Halper to
bring the money to the meeting or
deliver it soon to D'Amiano.
Dec. 12 D'Amiano demands
and receives a $10,000 cash installment from Halper - and a
$10,000 check payable to the Democratic State Committee's Victory Fund, postdated Dec. 23 CARMINE GALASSO/STAFF PHOTOGRAPHER
during a meeting at D'Amiano's
David D'Amiano, who has a recycling and mulch business in Middlesex County, leaving U.S. District Court in Newark, where the 11-count indictment was unsealed Tuesday.
business. At the meeting, Halper
tells D'Amiano to arrange for one
of the Piscataway officials at an
upcoming meeting to indicate that
they knew a favorable deal was in
place by using the code word
From Page 29
the book weve been writing into contact with Halper. In me- County officials at DAmianos Greeveys first run for governor
"Machiavellian."
ly, and legally, and I stand by over the past 2 years, Christie dia interviews, however, sources Carteret office. The officials, in 1997, and he raised more than
that statement, the governor said. The system in this state is close to the two-year probe said who are considering paying the $100,000 during McGreeveys
told reporters after a bill-signing corrupt and broken and not just the farmer initiated contact with farmer $7.3 million for the de- successful 2001 campaign. Mc2003
ceremony in Camden County.
velopment rights to his farm, use Greeveys formidable fund-raisthe FBI.
as it applies to this case.
Jan. 13 D'Amiano tells
The governor called on U.S.
Halper was helping investiga- the code word Machiavellian. ing operation broke state
The investigation is ongoing,
Halper that he has arranged a
Attorney Christopher J. Christie Christie said.
tors gather evidence from early DAmiano is setting up another records, generating $28.2 million
meeting with him with two unto release all recordings so the
meeting with a powerful former for the Democratic State ComIf any charges are brought in 2002, sources have said.
Halpers strained and colorful state senator referred to by the mittee in 2001.
named Middlesex County officials public can hear them in context. against other people, they will be
But a Christie spokesman said brought at the appropriate time, relationship with DAmiano, code name bridge boy.
However, few New Jersey Deat D'Amiano's offices.
August 2003: DAmiano mocratic Party insiders and regthe tapes would not be released. he said. Im not going to com- and the fund-raisers alleged at Jan. 23 During the meeting,
ment on any other people who tempts to squeeze money from meets at a McDonalds with a ulars on the McGreevey fundUttering code words may or may not be involved. the farmer, are at the heart of the high-ranking Middlesex County raising circuit say they knew
one county official uses the code
word "Machiavellian," saying he
In the indictment, McGreevey
DAmiano, a 45-year-old re- indictment. DAmiano demand- official to finalize the deal. A few DAmiano, and many insist they
did not think the county's motives appears to be sympathetic to the cycler and mulch dealer from ed direct cash payments to him- weeks later, McGreevey meets had never even heard of him unplight of Halpers 75-acre farm, Carteret who raised $100,000 as self or political donations to the Halper and DAmiano again at a til the probe became public
in the negotiations were "Machiwhich has been the subject of a a member of McGreeveys elite Democratic State Committee be- Florham Park fund-raiser organ- when the FBI raided the state
avellian."
condemnation bid by the town- fund-raising committee, is the tween December 2002 and July ized by a small group of trash Democratic headquarters in
Jan. 24 D'Amiano presses
ship of Piscataway since 1999. second close associate of the 2003, the indictment says.
haulers. A deal to offer Halper Trenton on March 2.
Halper for further payment, stating In two brief meetings with governor to come under investiMcGreevey has said that
That was the price, DAmiano $7.4 million is agreed upon even
Halper and one phone call, the gation for using intimidation in explained, for getting an audi- though one key county official DAmiano was a casual acthat Halper had to make D'Amiano "look right in Trenton." D'Ami- governor directs Halper to meet raising campaign cash for state ence with top policymakers in would say that the amount ex- quaintance from his teenage
with county officials who can Democrats.
years in Carteret and that their
Trenton and Middlesex County ceeded his comfort level.
ano also says that a Democratic
help him.
The amount was $3 million friendship was rekindled when
Ex-cabdriver Roger Chugh, who would help Halper preserve
State Committee official knew the
The most intriguing and who became a member of Mc- his farm. Halper eventually paid more than a previous offer to McGreevey became mayor of
meeting had taken place and
bizarre aspect of the indict- Greeveys administration, is be- the entire $40,000 he had prom- Halper from a state farmland Woodbridge in 1991.
therefore the payment had to be
ment was its description of the ing probed for, among other ised DAmiano, but not fast preservation program. But the
But internal official memoFebruary 2003 meeting between things, shaking down shop own- enough for the fund-raiser, the deal was never completed.
randa released by the governors
turned over.
McGreevey, Halper, DAmiano, ers in the Little India section of indictment says.
Throughout the negotiations, office in March suggested that a
Jan. 28 A $5,000 check to
and an unnamed aide to the gov- Woodbridge.
At one point, DAmiano tells DAmiano is constantly bicker- deeper bond had developed bethe Democrats' Victory Fund is
ernor, identified by sources as
the farmer that he will really be ing with the farmer and fearful tween the two men, and in sevwritten by Halper and handed to
Amy Mansue, former deputy A two-year probe
f-----d if he doesnt pay up. An- that Halper is secretly taping eral documents, DAmiano is reD'Amiano at his Carteret office.
At a brief afternoon appear- other time, DAmiano warns him. Before almost every meet- ferred to as McGreeveys old
chief of staff.
A few hours before the meet- ance in U.S. District Court in that an unnamed party iden- ing, DAmiano frisks the farmer. friend.
Feb. 18 After a Democratic
State Committee finance commit- ing, DAmiano promised Halper Newark, DAmiano stood in a tified in the indictment only as a He also insists that Halper speak
that he would arrange for one of slightly wrinkled navy suit and co-schemer would bury in cryptic phrases and commu- Staff Writers Josh Gohlke and Clint
tee session at an East Brunswick
the state officials to use the se- barely spoke, other than to say, him 20 miles beneath the Pacif- nicate in writing, the indictment Riley contributed to this article.
hotel, D'Amiano, McGreevey, and cret code word Machiavellian Yes, your honor, to Magistrate ic Ocean if he doesnt pay up. says.
E-mail: pillets@northjersey.com
Halper meet in a hallway. During
during the conversation, the in- Madeline Cox Arleo.
At one point, DAmiano tells
DAmiano succeeded in lining
DAmiano was released on up more than a dozen meetings Halper that it will cost him
dictment says. The code word
the brief meeting, McGreevey
calls for and asks "state official 2" would reassure the farmer that $100,000 bond, secured by two and phone calls with sympathet- $35,000 in contributions and A glossary
[former Deputy Chief of Staff Amy the officials were sympathetic rental properties he owns in ic officials, according to the in- $35,000 in cash to stop a Piscat- Federal officials say fund-raiser
and could deliver on their prom- Woodbridge. His travel was re- dictment. Among them:
away vote on a certain zoning is- David D'Amiano, who allegedly exMansue] to follow up. In introduc- ise to preserve his farm.
Dec. 20, 2002: DAmiano sue. The fund-raiser later com- torted campaign cash from Midstricted to New Jersey and New
ing her to Halper, McGreevey
McGreevey did indeed refer York City, and he was ordered meets with McGreevey in plains, however, that he had got- dlesex County farmer Mark Halper,
uses the word "Machiavelli."
to the Italian Renaissance to turn over any weapons and Princeton and speaks to Halper ten few favors from township of- used colorful shorthand and code
by telephone. The governor tells ficials even though he raised words on his own or to communiphilosopher and his famous his passport.
Feb. 19 Halper gives D'Amithe farmer to double back and $275,000 in contributions on cate with others. Here is a sample
DAmianos
lawyers
said
their
book
on
cutthroat
politics
withano a $5,000 cash installment.
in minutes of meeting Halper. In client would plead not guilty, but press his case with Middlesex top of the table and other stuff of the allegations from Tuesday's
D'Amiano also is recorded saying introducing Halper to Mansue, refused to comment on the County officials.
under the table.
indictment:
that everything was moving for Jan. 23, 2003: Halper and
McGreevey pointed out that the charges, saying they just received
DAmiano emerged on New
Machiavellian A code
ward and the farm owner would
farmer was reading from The the indictment Tuesday morn- DAmiano meet with Middlesex Jerseys public stage during Mcword used by officials connected
ing.
Prince
by
Machiavelli
to
learn
be happy.
with D'Amiano to signal that they
Federal agents tried to arrest
how to deal with the farm nego May 21 After all but $10,000
were aware of efforts to provide
Niccolo Machiavelli
DAmiano early Tuesday morntiations, the indictment says.
favorable treatment to Halper's
of the $40,000 in payments had
On Tuesday, McGreevey ac- ing at his home in Edison, but
1469-1527
farm. At a brief meeting with
been made, D'Amiano, Halper,
knowledged
dropping
the left without making the arrest.
Halper on Feb. 18, 2003, McWHO:
A
political
philosopher
and unidentified county officials
philosophers name during his They instead arranged for
Greevey also used the word
and
Italian
diplomat
during
the
meeting with Halper, but said it DAmiano to turn himself in latmeet to negotiate for farmland
"Machiavelli."
Renaissance
who
gained
everpreservation. One official says the was only an innocent reference. er in the day, said Christie
lasting
fame
and
infamy
for

Mulch and Topsoil Refers

It was not a code word, the spokesman Michael Drewniak.
county would be willing to make
"The Prince," a political treatise
to $20,000 in campaign contribuIn addition to four counts of
governor said. It was a literary
an offer of $7.4 million, or more
in which he advised a ruler how
tions and $20,000 in cash payallusion. In New Jersey politics, mail and wire fraud, DAmiano
to stay in power.
than double the original offer.
ments that D'Amiano allegedly deMachiavelli is not a far-off, re- faces two counts of extortion
manded from Halper. In exchange,
HIS MESSAGE: Essentially, that
and a single bribery count. Conmote word.
Sept. 16 Middlesex County
D'Amiano reportedly agreed to
the
end
justifies
the
means.
Poliviction
on
any
of
the
counts
Christie,
a
Republican
apofficials suggest to Halper that the
use his influence to help Halper
tics cannot be governed by a
could
bring
him
a
fiveto
20pointee
who
met
with
reporters
farmland preservation deal could
get a better deal for his farm.
single set of moral or religious
here after the indictment was year prison term and a $250,000
be done if Halper agreed to acabsolutes, he suggested, and vi Three Nickels Refers to
unsealed, carefully navigated the fine.
cept $7.35 million, with certain
olence, expediency, and deception are acceptable if a head of state
$15,000 that D'Amiano was alDAmiano also is charged
political implications. He reconditions regarding the use of
needs them to maintain authority.
legedly still seeking from Halper in
fused to name either of the two with pocketing contributions
February 2003.
the farm. Halper wants to negotitop state officials or three Mid- that he should have forwarded
HIS GOAL: "The Prince" is an impassioned call for Italian unity dlesex County officials, all of to the Democratic State Comand an end to foreign intervention - at a time of intense political
Disneyland Another code
ate the uses. D'Amiano also tells
whose voices appear on the mittee. And in another alleged
conflict among the city-states of Florence, Milan, Venice, and
word D'Amiano said would be
Halper that the price is "conscheme, DAmiano sought to extapes.
Naples, as well as the Papacy, France, Spain, and the Holy Roman
used by Middlesex County offifirmed" and that nothing could
Christie painted DAmiano as tort money from Halper that
Empire. In reality, it wasn't until 1870 - more than 350 years after its
cials to signal that they had comhave been accomplished without one more example of New Jer- would be used to buy special fawriting - that Italy became a unified country.
pleted their work on behalf of
the help of McGreevey.
seys rampant problem of public vors from Piscataway officials
Halper.
HIS QUOTES: "It is much more secure to be feared, than to be
corruption, which includes Re- concerning development of a
October Indictment states
loved."
275 on Top ... of the Table
publicans like James Treffinger, commercial bank on a parcel
that Halper could not get farm
Refers to an amount of money
"All armed prophets have conquered and unarmed ones failed."
the former Essex County execu- owned by Halper.
D'Amiano says he raised for offideal finalized because he could
HIS FANS: Cromwell, Frederick the Great, Louis XIV, Napoleon,
Christie would not describe
tive who is in federal prison on
cials he was negotiating with on
not coordinate schedules with
Bismark, Hitler. Dick Morris, the disgraced former adviser to Presithe origins of the investigation
bribery charges.
behalf of Halper.
dent
Bill
Clinton,
wrote
his
own
version
of
"The
Prince."
county officials.
This is the latest chapter in nor say how his office first came

DAmiano: Former Democratic fund-raiser indicted

JANUARY 2005

THE RECORD 31

Published Sunday, July 11, 2004

DAmianos influence paints troubling picture

By MITCHEL MADDUX
TRENTON BUREAU

One day late last August,

David M. DAmiano was at yet
another fund-raising event and,
yet again, at the side of Governor
McGreevey.
They were talking about the
farm.
DAmiano explained that he
had talked with an official in
Middlesex County about the controversial property, just as McGreevey had instructed him. And
McGreevey replied that he already knew this; he already knew
where negotiations about preserving the farm stood.
It was just a brief chat caught
on tape, a tape that is now evidence in a federal extortion and
bribery probe that could turn
New Jerseys political world on
its head.
McGreeveys meeting with
DAmiano was one of more than
a dozen between the fund-raiser
and officials that were taped secretly as part of a corruption
probe that was outlined in a 47page indictment announced by
the U.S. Attorneys Office last
week. While the document does
not name McGreevey, the governor has acknowledged to reporters that he is the State Official 1 who prosecutors believe
played a key role in a sweetheart
land deal for a Middlesex County
contributor.
The governor, who is not
charged in the indictment, has
strongly denied any wrongdoing
and says his conversations with
DAmiano and farm owner Mark
Halper were innocent and routine chats with constituents.
But the U.S. attorneys description of McGreeveys contact
with DAmiano and Halper, if
correct, is a troubling illustration
of the clout big fund-raisers have
within the administration of the
Woodbridge Democrat.
DAmiano, a 45-year-old trash
recycler with a poor environmental record and a long history
of tax delinquency, emerges in
the indictment as a virtual minister of McGreeveys government.
He brags about working late
nights on behalf of the governor.
For the better part of a year in
2002 and 2003, DAmiano is in
frequent contact by fax, phone,
e-mail, and in person with McGreevey and several of his top
aides.
And several of the meetings
that were secretly taped by
Halper in his role as a cooperating informant show DAmiano
serving as an intermediary between McGreevey and Middlesex
County officials who control
county land preservation programs that eventually offered
Halper a lucrative $7.4 million
for his 74 acre Piscataway tract.
Why was DAmiano allowed
to take such an apparently active

Scenes from an indictment

The 47-page indictment released by federal prosecutors last week describes in vivid detail how Democratic fund-raiser David D'Amiano used his connections to allegedly forge a
sweetheart land deal for one contributor. A primer on some key locales in the budding scandal:

Drumthwacket, the Governors Mansion in Princeton: March 19, 2004: Governor

McGreevey meets with four federal agents who confront him with secretly taped evidence, including a recording of the governor uttering the alleged code word Machiavellian."

East Brunswick Hilton: On Feb. 18, 2003, McGreevey meets with DAmiano and
Halper to discuss the farm and is caught on tape uttering the mysterious word Machiavellian. Prosecutors say it is a code word used by conspirators in the land-deal
scheme.

Dauman Industries: D'Amiano and unnamed Middlesex County officials meet in the
offices of DAmianos mulch business to hammer out details on a $7.4 million sweetheart deal to preserve political donor Mark Halpers Piscataway farm. At a Jan. 23,
2003, meeting, one county official is secretly taped using the code word Disneyland.

Cornell Dairy Farm: 74-acre Piscataway tract that is at the center of federal indictments. Prosecutors say Democratic fund-raiser David DAmiano extorted $40,000 from
farm owner Mark Halper to set up a deal that would save the farm from condemnation.
At least five state and Middlesex County officials took part in the scheme, the indictment says.

role in the preservation of a controversial Middlesex County farm

that had been the subject of condemnation proceedings since
1999? Experts on government
ethics say the actions described in
the indictment raise red flags.
Larry Noble, executive director of the Center for Responsive
Politics, a non-partisan research
institution in Washington that
tracks how money influences
public policy, said the arrangement was clearly disturbing.
What makes this particularly
troubling is not just that you leave
this to an intermediary, but you
leave it to an intermediary who is
a fund-raiser, said Noble, a former legal counsel at the Federal
Election Commission. When
you give that fund-raiser the appearance of acting in some kind
of official capacity, you really increase the perception that they
are selling access and selling ties
to the administration.
Kathy Ellis, a spokeswoman
for the governor, declined to
comment for this article.
McGreevey, speaking to reporters at a bill-signing ceremony
Friday, declined once again to

discuss specifics of the indictment, but said both he and his

administration had acted appropriately, ethically, and honestly.
The indictment describes in
detail three conversations among
Halper, DAmiano, and McGreevey.
On one occasion when
DAmiano was attending a party
at the governors home in Princeton, the indictment says, the
fund-raiser hooked up Halper
and the governor via cellphone.
McGreevey advised the farmer to
talk to a Middlesex County official and then double back with
DAmiano after that conversation, the indictment says.
About two months later, in
February 2003, Halper met with
McGreevey for five minutes in
the hallway of the East
Brunswick Hilton, where a Democratic State Committee meeting was under way, the indictment says. The meeting was
arranged by DAmiano, who was
also present.
It was during this brief chat,
the indictment says, that McGreevey mentioned the word
Machiavelli, referring to Flo-

rentine political theorist Niccolo

Machiavelli.
The governor, in response to
the indictment, has said he was
only making a literary allusion to
the complexities of politics in
New Jersey. But prosecutors
maintain the reference was a prearranged code word that would
prove to Halper that the governor was aware of DAmianos
controversial, back-channel negotiations on the farm.
At the meeting as described by
the indictment, McGreevey introduced Halper to his deputy
chief of staff, Amy B. Mansue, a
key assistant who was known as
the governors contact with fundraisers and other favor-seekers.
Mansues duties included directing constituents to state offices
and programs that might address
their concerns.
The state Agriculture Department was also aware of Halpers
problems. The agency, which employs 258 civil servants and has a
budget of $18.5 million, specializes in assisting farmers with a
wide spectrum of concerns.
Mansue and officials at the
Agriculture Department have

said in the past that they attempted to help Halper properly

access state programs and services that might help him preserve
his farm.
Yet, if the indictment describes
events correctly, McGreevey deputized his own fund-raiser to mediate in a preservation controversy that has pitted Halper against
Piscataway officials since 1999,
when the township first sought to
condemn his farm out of fear he
might sell it to home developers.
Several months after the
Hilton meeting, McGreevey once
again met with Halper and
DAmiano, the indictment says.
This time, the meeting took place
during a fund-raising gathering of
prominent trash haulers in
Florham Park. Prosecutors say it
was at this event that McGreevey
referred to his earlier directive
asking DAmiano to intercede on
the farm issue.
Later at this same event,
DAmiano made a public introduction of McGreevey to those in
attendance, according to the indictment.
DAmianos emergence onto
New Jerseys public stage coin-

cided with McGreeveys gubernatorial campaigns in 1997 and

2001, when the Carteret waste recycler raised more than $100,000
for the man who became governor. That was a time when McGreeveys formidable fund-raising operation broke state records,
generating $28.2 million for the
Democratic State Committee in
2001, when he was making his
second run for governor.
DAmianos alleged role as a
de facto government minister for
McGreevey raises difficult questions for some experts who study
how access is granted to top policymakers.
Michele L. Swers, a professor
of American government at
Georgetown University, said the
real issue is about democracy itself: Why should well-connected
favor-seekers and fund-raisers
have special access to the machinery of government that is
supposed to be enjoyed equally
by all? Is it personal connections that get you in the door, or
is it campaign donations that get
you in the door? Swers asked.
E-mail: maddux@northjersey.com

Published Friday, Sept. 17, 2004

Published Friday, March 19, 2004

AN EDITORIAL
Trentons slime pit
Big money fuels a climate of corruption

HE PAST 10 days just might

be the most tumultuous
and the most sordid in
New Jerseys political history.
First, Governor McGreevey announced plans to resign amid
claims he was being extorted by his
alleged gay lover, Golan Cipel, an
Israeli national formerly on the
State House payroll. Then last
week, Mr. McGreeveys chief fundraiser, Charles Kushner one of
the nations top political fat cats
pleaded guilty to charges ranging
from 16 counts of lying on his tax
returns to hiring prostitutes to intimidate witnesses in a federal investigation. Things cant get tawdrier than this.
What slime pit has New Jersey
descended into? Its so bad a politicsnj.com columnist has taken to
running such items as New Jersey
Felon of the Day. Newsweek,
meanwhile, wrote last week that
New Jerseys history of corruption
has been rivaled by no other state,
with the possible exceptions of Illinois and Louisiana. The residents
of this state deserve better.
U.S. Attorney Christopher
Christie has said that Mr. McGreevey is not involved in the

Kushner mess at least not the

mess that is sending the real estate
baron to prison for many months.
But as The Records front-page story today shows, Mr. McGreevey,
Mr. Kushner, and Mr. Cipel have
been part of an insiders web thats
made the state a national disgrace.
Until the scandal involving Mr.
Cipel, money alone was the major
corrupting influence. The zeal for
campaign donations that has dominated Mr. McGreeveys term in office is the reason for most of the
hideous or dubious legislation that
was passed. The system of fasttracking of state permits for big developers comes immediately to
mind. And you can blame that zeal
for money for every piece of
worthwhile legislation that got castrated along the way most notably, efforts to clean up campaign
financing and government ethics.
Mr. McGreeveys missteps have
been so enormous that they dwarf
his accomplishments, from championing stem-cell research to overhauling E-ZPass and the DMV.
And those missteps are part of a
larger climate of corruption that
revolves around the almighty dollar. To get elected to statewide of-

fice now requires tens of millions

of dollars. And unless you have the
deep pockets of Sen. Jon Corzine,
its all too tempting to get involved
in unsavory alliances and do
whats in the best interests of your
backers, not whats in the best interests of New Jersey. As of last
week, 19 of Mr. McGreeveys
fund-raisers were indicted, convicted, or under investigation.
Maybe something good will rise
from this swamp. Maybe New Jer-

sey voters will rally behind candidates who champion integrity in

office and true campaign-finance
reform to take the corrosive influence of county bosses and big
campaign donations out of the political system for good.
For his part, Mr. McGreevey is
considering an executive order that
would help stop some campaign-financing abuses. But the damage
has been done, and the Democrats
have played the system for every

penny. The governor could have issued that order the day he took office, but didnt because he feared
upsetting the Legislature. Ambition
should be made of sterner stuff.
The sad irony of all this is that in
his inaugural address, Mr. McGreevey proclaimed that my administration will change the way
Trenton does business.
Well, he did. He made things
worse than anyone could have
imagined.

32 THE RECORD

JANUARY 2005

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Wednesday, July 14, 2004

McGreeveys top donor

charged in sex-tape plot
Money
man now
a liability

Kushner
allegedly
interfered
with probe

By JOSH GOHLKE
TRENTON BUREAU

Tuesdays charges against Governor McGreeveys most prolific

fund-raiser were another reminder
that fund raising, a crucial ingredient of the governors success, may
be the one most likely to spoil it.
The allegations against real estate developer Charles Kushner
accused of hiring a prostitute to
muck up a continuing federal investigation of his taxes and campaign donations are far removed
from the State House. But Kushners key role in funding McGreeveys campaign now becomes
a political liability.
The charges against Kushner
come only a week after the much
more extensive extortion and
bribery indictment against another fund-raiser, trash recycler David
DAmiano. That indictment referred frequently to the governors
relationship with DAmiano.
The two criminal cases have
marred what would otherwise
have been a good summer for the
governor.
He and his fellow Democrats in
the Legislature have enacted controversial but generally popular
environmental and budget proposals, and McGreeveys poll
numbers have, at long last, been
improving.
But much of that would not
have been possible without the
money. Under the governors leadership, the Democratic Party won
total control of the Legislature last
fall, with unprecedented campaign
spending. In the final weeks of the
race, the largest Democratic organizations collected more than
$22 million, out-raising Republicans 3 to 1.
TARIQ ZEHAWI/STAFF PHOTOGRAPHER
The legislative campaign was a
continuation of the aggressive fi- Developer Charles Kushner leaving the federal courthouse in Newark through a back entrance. He is flanked by his lawyers, Alfred DeCotiis,
See FUND RAISING Page 33 left, and Benjamin Brafman. A grand jury has 30 days to indict Kushner, whom Governor McGreevey once wanted to lead the Port Authority.

By AMY KLEIN, CLINT RILEY,

and JEFF PILLETS
STAFF WRITERS

Real estate mogul Charles

Kushner, who has financed the
campaigns of Governor McGreevey and many of the regions
top Democrats, was shackled and
charged Tuesday with hiring two
New York City call girls to obstruct
a federal investigation of his alleged
financial misdeeds.
Kushner, 50, paid $37,000 to
hire two intermediaries and the
prostitutes, including one who was
videotaped in December having
sex in a Bridgewater motel room
with a witness in the federal probe,
according to a criminal complaint
from the U.S. Attorneys Office in
Newark.
Kushner held onto the tape until May, when he allegedly ordered
an associate to mail it along with
still photos of the encounter to the
witness and his wife, who was
identified in the complaint as
Kushners close relative. The tape
was mailed two days after Kushners associates were told they were
targets of a grand jury investigation,
the complaint said.
Sources with knowledge of the
case identified the couple as Kushners sister and brother-in-law, Esther and William Schulder of West
Orange, who are cooperating with
the government investigation into
Kushners campaign contributions
and alleged tax fraud.
Kushner also is charged with
trying unsuccessfully to arrange for
a prostitute to seduce and tape another witness, the complaint said.
That witness, who was identified
Tuesday by his attorney as Joseph
Yontef, Kushners former accountant, resisted the call girls advances.
See KUSHNER Page 34

Commerce Bank quits bond business

By RICHARD NEWMAN
STAFF WRITER

Commerce Bancorp said Tuesday that

it will shut down its municipal bond underwriting business in an attempt to restore investor confidence after last
months indictment of two executives in a
government corruption probe.
Commerce, the largest bank headquartered in New Jersey, also hired the Washington law firm Perkins Coie to review
policies on how it deals with government
clients, officials said Tuesday as the company announced another quarter of
record earnings.
The move involving the bond business
is the second by the company in 15
months designed to blunt criticism of its
actions in the public sector. Commerce
closed its political action committee in
New Jersey last year amid criticism that
arose as The Record and other news outlets reported on the extent to which Commerce had used political contributions to
win government banking business in the
state.
In a conference call Tuesday with skeptical analysts, Chief Executive Vernon Hill
II vowed to make sure our brand is protected in almost any foreseeable circumstance.
The stock has fallen more than 15 percent since Glenn K. Holck, president of
the banks Pennsylvania operations, and
Stephen Umbrell, a regional vice president, were indicted for allegedly approving personal loans for the Philadelphia

CEO cites heat from corruption inquiries

city treasurer in exchange for government
bond business. The indictment repeatedly
said Holck and Umbrell communicated
with the company CEO about their dealings with the treasurer, but Hill was not
indicted.
When governments raise money for
capital projects by selling bonds, an underwriter acts as an intermediary between
the government and investors, earning
commissions and fees. Hill said the underwriting business accounted for only 1
percent of the banks revenue, and said
the move will not affect its earning predictions for this year.
In 2003, Commerce was the 10th
largest underwriter of short-term bonds in
the country, and the 23rd largest in longterm bonds, according to figures from The
Bond Buyers Municipal Marketplace, a
trade publication.
The better we do [in bond underwriting], the higher our reputational risk, Hill
said.
Even after closing its political action
committee and now withdrawing from
the government underwriting business,
Commerce maintains close ties to government leaders. Former acting Gov.
Donald T. DiFrancesco, a Republican, sits
on the banks board, as does Democratic
power broker George Norcross III. About
16 percent of the banks deposits are from
government accounts. And the bank is

known for its politically connected

lawyers who argue before zoning boards
in towns where it wants to open branches.
Until the Philadelphia trial is completely behind them, the stock is going to
trade with this dark cloud above it, said
Gerard Cassidy, analyst with RBC Capital
Markets. Wed like to take management
at their word, but we just dont know.
I think the company did a good job articulating their view but I cant help but
think that there is still headline risk, said
Jacqueline Reeves, managing director at
Ryan Beck & Co.
Indeed, Commerce stock fell another
92 cents Tuesday, to $54.26, even after the
company reported big jumps in deposits
and loans. The Cherry Hill-based bank,
which has more than 250 branches in
New Jersey, New York, Pennsylvania, and
Delaware, earned $66.2 million in the second quarter, up 46 percent from the yearago period.
Commerce, which plans to open 50
branches this year, calls itself Americas
most convenient bank and boasts of its
Sunday hours and free coin-counting machines.
An eight-month investigation by The
Record revealed last year that from 1997
to 2002, Commerce made more political
contributions and received more no-bid
contracts than any other bank, insur-

with any wrongdoing, nor will any of its officers or employees, Critchley said.
When an analyst asked if prosecutors
or financial services regulators had sought
bank documents in any other investigations, Critchley said, The answer to the
question is no.
The banks securities lawyer, Larry
Wiseman, fielded a question on the outcome of an informal Securities and Exchange Commission investigation disclosed by the company last October. We
anticipate nothing further, nor have we
heard anything further from the regulators, Wiseman said.
Asked if he had heard the FBI tapes of
phone conversations that got Holck and
Umbrell into trouble, Critchley said he
had not, and declined to identify the government officials whom he said helped
him conclude that there would be no
more fallout from the Philadelphia case.
Critchley said he is confident the two
executives will be exonerated. He said the
bank is paying their salaries and legal fees
while they are on suspension. .
The Comptroller of the Currency, one
of the federal regulators with oversight of
Commerce Bancorp operations, has indicated it would pursue no special action
related to the Philadelphia case, Hill said.
What if the accused bankers turn
states evidence? an analyst asked.
Im not going to answer any hypothetical questions, Critchley replied.

ance broker, or bond underwriter in New

Jersey.
In its report, titled Banking on Your
Money, The Record found that Commerce had hired or given campaign donations to a passel of political insiders in
New Jersey, including a former acting governor, two former state Senate presidents,
and five county party bosses. Bergen
County Democratic leader Joseph Ferriero was among the latter.
And in some instances, repeated money transfers between political funds controlled by Commerce Bancorp, the holding company for the regional bank, allowed Commerce employees to sidestep
laws intended to limit political donations
from those who profit from government
bond deals. (The articles are available online at www.northjersey.com/ commercebank) Analysts said they were satisfied
that the closing of the bond business
would not have a major impact on Commerces earnings. But more than half of an
hour-long conference call was dedicated
to questions about the indictments.
There is not going to be a second shoe
dropped, company lawyer Michael
Critchley said.
The government conducted an investigation, and the government concluded an
investigation. At the end of the investigation, the bank has not been charged with Staff Writer Clint Riley contributed to this arany wrongdoing, nor will it be charged ticle. E-mail: newman@northjersey.com

JANUARY 2005

THE RECORD 33

Published Wednesday, July 14, 2004

Kushner proves
rich not smarter
than rest of us
NEWARK
The man, described by his well-tanned attorney as one of the great philanthropists of
this century, had no belt, no tie.
But Charlie Kushner, the multimilliondollar real estate mogul who became Governor McGreeveys top campaign contributor, definitely had leg irons and handcuffs as he shuffled into a
federal courtroom Tuesday
and came face to face with
a problem that no amount
of cash may erase.
If federal charges
against Kushner are true,
MIKE
he seems to have concoctKELLY
ed a plot that looks like a
cross between the The
Sopranos and Seinfeld.
Think of Jerry Seinfeld at the Bada Bing
and you get the idea.
This one has hookers and videotape, a
botched blackmail attempt, a motel called
the Red Bull Inn, and a diner called Time
to Eat. It also has enough stupidity to make
you wonder how Charlie Kushner could become so rich rich enough to amass a real
estate fortune and have enough spare cash
to bankroll McGreevey and other Democratic Party candidates with more than $3 million in donations in the last five years.
This isnt just another court case. This is a
DON SMITH/STAFF PHOTOGRAPHER case of rich-guy stupidity.
You cant make it up.
U.S. Attorney Christopher J. Christie, right, and FBI agent Joseph Billy Jr. at a news conference about the charges against Democratic fund-raiser Charles Kushner.
Last week, the feds indicted a McGreevey
fund-raiser who came up with a code word
Machiavellian to signal his alleged dealmaking. This week, we have Kushner, one
of the richest guys in New Jersey, allegedly
From Page 32
Kushner has been fined for using his the actions of others even actions Taffet was his campaign manager.
hiring prostitutes to work on his behalf.
nance operation that got McGreevey myriad business partnerships to orches- wholly unrelated to politics.
Kushner is accused of trying to thwart a
But the governors communications
into office in 2001. That year, Democrats trate contributions to federal campaign
Christie has denied that, saying his of- director, Kathleen Ellis, said the Mc- federal investigation of his taxes and camspent more than $42 million to Repub- funds benefiting, among other Democ- fice pursues investigations regardless of Greevey campaign took great pains to paign contributions by hiring hookers to
licans $18 million. Considering that he rats: McGreevey, former presidential the partisan implications.
check out the sources of contributions. blackmail potential witnesses. Kushner was
had no statewide power base, Mc- candidate Bill Bradley, and former Sen.
The Democratic view of Tuesdays She said it could not know everything even willing to shell out $25,000 each for
Greevey had to cast the net far and Robert G. Torricelli.
hookers and handlers, court papers say.
charges as wholly separate from Mc- about the people who solicited them.
wide, no doubt about it, one DemocraAnd a Record investigation found that Greevey might win more sympathy if
One problem, though. The lugs Kushner
The part of the fund-raising operation
tic official remarked of the gubernatori- Kushner and his companies circumvent- they did not seem to fit into a larger pat- that the campaign could control was allegedly hired to find the hookers couldnt
al campaign.
ed campaign-finance limits to funnel $1.5 tern. Kushner and DAmiano are not the scrupulous, Ellis said.
find any.
The same official suggested that, given million in contributions to McGreeveys only gubernatorial patrons who are acSeinfeld anyone? How about Dumb
The contributions were all scrutithe scope of McGreeveys fund-raising political funds from 1997 to 2002.
cused of running afoul of commonly ac- nized and vetted to a degree that they and Dumber? So Kushner, who is smart
operations, the number of fund-raisers
Still, some Democrats bristled at the cepted ethical standards.
hadnt been before. It appears that some enough to oversee 40 partnerships from his
under investigation or indictment, in that suggestion that Kushners behavior is a
Roger Chugh, whose avid fund raising aspects of fund raising are beyond the headquarters in Florham Park and influencontext, is very small.
mark against McGreevey. One operative helped him get a position in the admin- eyes and ears and ethics of those who are tial enough to have placed himself in line for
Republicans took advantage of the lat- repeated a favorite counterattack that istration, resigned in disgrace last year. part of a campaign.
the Port Authority chairmanship before he
est accusation Tuesday, with a statement U.S. Attorney Christopher J. Christie, a Federal authorities are investigating
The state Republican Partys finance resigned abruptly last year, went ahead and
headlined McGreeveys Web of Cor- Republican and oft-rumored gubernato- whether he coerced fellow Indian-Amer- chairman, William Palatucci, said that reportedly found the hookers himself in
ruption Widens.
rial hopeful, seems to have political as icans in Woodbridge into contributing to vetting contributors and fund-raisers is Manhattan.
Sen. Joseph Kyrillos of Monmouth well as law-enforcement goals.
Yep, you heard that right: Rich guy goes
McGreeveys campaign.
difficult but necessary.
County, the state Republican chairman,
Instead of making this a part of his
The governors former chief of staff,
In particular, he said, those in charge on hooker hunt.
called on Democrats to come clean and larger case [against Kushner], the U.S. at- Gary Taffet, and chief counsel, Paul of campaign fund raising have to draw a
The feds wont say how Kushner did this.
return the hundreds of thousands of dol- torney consciously chose to issue what Levinsohn, also face a federal investiga- bright line between backers who want But the notion is so surreal that even U.S.
lars in illegal contributions they received amounts to a standalone, smutty sex nov- tion of a successful billboard business recognition and those who expect quid Attorney Christopher J. Christie had trouble
from Charles Kushner and David el, knowing full well it would allow Re- they sold just before McGreevey took of- pro quo.
holding back a smile as he described it.
DAmiano that have greatly aided Jim publican politicians to exploit it precise- fice and after they secured zoning apIts been very frustrating for the Re- Kushner looks like he ought to be lining up
McGreevey and the Democrats in recent ly the way they have today, the Demo- provals on several public properties. The publicans to understand why they cant putts at Pebble Beach, not lining up hookers
years.
crat said.
U.S. Securities and Exchange Commis- compete in terms of fund raising, on Eighth Avenue.
The governors supporters said such
Either hes a horrific publicity hound, sion, meanwhile, is suing Taffet on insid- Palatucci said.
With the hookers in his pocket, the feds
statements were inappropriate, but in- or hes trying to help Republicans smear er-trading grounds. Levinsohn led McAnd now I think were starting to un- say, Kushner orchestrated a plan to have
evitable.
the governor and other Democrats with Greeveys fund-raising operation, and derstand some of the reasons why.
them lure two potential federal witnesses to
the Time to Eat diner in Somerville and then
to Bridgewaters Red Bull Inn for fun, frolic,
and a secret video all of which Kushner
planned to use to coerce the witnesses and
stop them from cooperating with the FBI.
Sounds simple, right? Well, consider this
Federal officials gave the following account of the al- Kushner gives a co-conspirator $25,000 to pay for
Mid-December An attempt by a call girl to sethe Seinfeld version of Jersey corruption.
leged activities of Charles Kushner and two associthe scheme.
duce the third cooperating witness fails. She is ultiOne witness turned down the hookers
ates - called co-conspirators in the complaint: * Feb- November 2003 Kushner personally hires a call mately paid $2,000 for her efforts.
offer.
The other ended up at the Red Bull
ruary 2003 - U.S. Attorneys Office starts grand jury
girl for $7,000 to $10,000, after the people he re May 7, 2004 Kushner associates receive letters
Inn
for
some physical activity. Afterward,
investigation into Charles Kushner, focusing on alletained to do it failed.
from the U.S. Attorneys Office stating that they are
Kushner watched the video and expressed
gations that he violated federal tax and fraud laws
targets of a grand jury investigation.
satisfaction with the result, the feds say in a
and used his real estate companies to violate federal Dec. 3, 2003 Call girls first attempt to make
contact
with
Kushners
relative
fails.
May 9, 2004 Kushner tells his co-conspirator
statement that accompanied the formal
campaign finance laws.
that he wants to mail the videotape and photographs
charges.
March 2003 Kushner and his associates notified Dec. 4, 2003 Call girl makes contact with KushFive months later and only days after
ners relative outside a diner in Bridgewater, asks the to the relatives spouse and to the couples children.
of the investigation.
Defendant Charles Kushner further instructed that
the feds sent letters to Kushners associates,
relative
for
a
ride
back
to
her
motel,
and
exchanges
March 2003 Kushner begins regular efforts to
naming them as targets of a grand jury probe
telephone numbers after her invitation to her room is he wanted the videotape mailed from Canada and
persuade investigators that three cooperating wit Kushner reportedly ordered the video and
that
he
wanted
it
to
arrive
at
[the
couples]
house
imrebuffed.
nesses - including a close relative of Kushner and the
other pictures mailed to the hooker-seduced
mediately
prior
to
a
family
party
which
was
sched
Dec.
5,
2003

Call
girl
returns
to
the
same
motel,
relatives spouse - are generally untrustworthy. A
witness and his unsuspecting wife. The feds
uled
for
the
following
weekend,
the
complaint
says.
where videotaping equipment has been installed,
Kushner representative gives investigators an audio
say Kushner had to be talked out sending
His
aide
convinces
him
not
to
send
the
tape
to
the
makes contact with Kushners relative, and has sexrecording that he secretly made against his relative,
the video to the couples children. Maybe it
children.
saying it proves obstruction of justice.
ual relations. She is paid $7,000 to $10,000 in cash.
was all that philanthropy Kushners deeply
Kushners co-conspirators deliver the tape to Kushn- May 10, 2004 Co-conspirator drives to town in
August 2003 Kushner initiates a scheme to ortanned lawyer says he is doing that inspired
upstate New York and mails the videotape and phochestrate the covert videotaped seduction of his rel- er at his Florham Park office. Kushner watches the
this small moment of reported mercy.
tos to the couple in Essex County, N.J. When the entape and expresses satisfaction with it. Later,
atives spouse. He recruits two people - officials call
Oh, yes, Kushners lawyer: Say hello to
Kushner tells the co-conspirators to engage in a sim- velope arrives a few days later, the couple turn it over
them co-conspirators - to hire a woman to seduce
Benjamin Brafman, a guy who knows the
the spouse and then videotape the two having sex.
ilar scheme with the other cooperating witness.
to federal law enforcement officials.
meaning of overstatement.
Before he was touting Charlie Kushner
one of the most successful businessmen in
the United States and one of the great philanthropists of this century, Brafmans
client list has included Michael Jackson,
sohn, broke laws when they helped seAugust 2003 Federal
ferred to Vernon W. Hill,
demn the farm. McGreevey met on at
Sean P. Diddy Combs, and Salvatore
cure zoning approvals for more than a
prosecutors begin probthe chief executive offileast three occasions with the farmer,
Sammy the Bull Gravano.
dozen billboards on public land around
ing the activities of Racer of Commerce BanMark Halper, who was secretly cooperOn Tuesday, as he entered a Newark
the state that netted them a reported $4 corp. Hill, who was not
jesh Roger Chugh, a
ating with the FBI and wearing a hidden courtroom, Kushner looked over the gallery
million. Both men were key members of charged with any
key official in the New
recording device. McGreevey denies
of FBI agents, journalists, lawyers, and
McGreeveys fund-raising operation dur- wrongdoing, communiJersey Department of
any wrongdoing and has not been
friends. He pressed his lips together and
ing his 1997 and 2001 bids for governor. cated with the banks
State and a top fundcharged. Federal authorities continue to slumped into a chair, hunching forward as
That probe is also continuing. Taffet sold Pe+nnsylvania execuraiser for Governor Mcexamine whether the McGreevey admin- he listened quietly to Brafman and two othCHUGH
his Highview Planning Associates insur- tives about the Philadel- HILL
Greevey. Asian shopistration improperly assisted DAmiano
er attorneys whisper instructions.
ance consulting firm to Kushner in 2000. phia deals, authorities said. Commerce
keepers complain that hes asked for
in settling $433,000 in tax liens or interKushner nodded slightly as his attorneys
campaign contributions in exchange for
has wielded political clout and is a pow- vened in the controversial condemnation agreed to $5 million in bail secured by
help with building permits and other iserful force in statewide politics. Its politi- of Halpers Piscataway farm.
Kushners home in Livingston and beach
June 29, 2004 Philadelphia bond
sues in Woodbridge, where McG reevey lawyer Ronald A. White, a major fundcal action committee, Compac NJ, dishouse in Elberon. He nodded again when
was mayor during the 1990s. The probe raiser for McGreeveys 2001 campaign,
tributed nearly $1.65 million to those
the judge ordered him to wear an electronic
July 13, 2004
into his tactics is still under way.
running for state and local offices in New Charles Kushner, the
monitoring devise, turn in his passport, and
is indicted on bribery and other federal
Jersey from 1998 to 2002.
not try to obtain any other travel documents.
charges resulting from his professional
Florham Park developOtherwise, he said nothing to the judge.
relationship as a confidant of the citys
June 16, 2004 The
er and landlord who
His attorney dutifully marched outside to
mayor, John Street. The probe centers
U.S. Securities and ExJuly 6, 2004 David
contributed more than
the TV cameras and called the charges
on a contracts-for-campaign cash inchange Commission
M. DAmiano, a long$1.5 million to Mcbaseless and promised Kushner would be
sues former McGreevey
vestigation in Philadelphia.
time McGreevey fundGreevey-related camexonerated. It hardly seemed to matter,
chief of staff Gary Taffet,
raiser and owner of a
paign accounts, is
KUSHNER
though.
charging him with civil
Carteret
recycling
and
charged
on
federal
June 29, 2004 Two top executives of
Upstairs, one of the richest guys in New
insider-trading violawaste-hauling
firm,
is
conspiracy,
obstruction,
and
prostitution
Commerce Banks Pennsylvania subJersey was still in handcuffs and trying to
tions. The SEC says
indicted
on
extortion,
allegations.
Investigators
continue
to
sidiary are indicted with White in the
Taffet earned more than TAFFET
bribery, and fraud
probe whether some contributions came fight off a forlorn look.
Philadelphia federal probe. The execuDAMIANO
The man who bankrolled McGreevey got
$250,000 from stock trades that came
charges.
Federal
prosefrom money improperly diverted from
tives, Glenn K. Holck and Stephen M.
caught trying to bankroll hookers.
from insider tips in 1998 and 1999.
cutors
allege
that
DAmiano
took
tens
of
corporate
business
partners
and
deUmbrell, are charged with fixing bids to
Bada Bing.
Meanwhile, a federal grand jury in Cam- win multimillion-dollar business from
thousands of dollars from a Middlesex
posits of tenants.
Bada busted.
den considers whether Taffet and McCounty
farmer
after
promising
him
to
Philadelphias city government for the
Mitchel Maddux
Greeveys chief counsel, Paul Levinhelp
resolve
a
township
effort
to
conbank. The federal indictment also reE-mail: kellym@northjersey.com

Fund raising: Governors success becomes liability

The case against Charles Kushner

How series of federal investigations unfolded

34 THE RECORD

JANUARY 2005

Published Wednesday, July 14, 2004

Kushner
From Page 32
McGreeveys top campaign donor in
2001, Kushner is the second Democratic fund-raiser this month to be criminally charged by federal authorities, and one
of several top money men close to the
governor under criminal investigation for
their fund-raising tactics. Last week, a
federal grand jury indicted Democratic
fund-raiser and longtime McGreevey
friend David DAmiano on charges that
he extorted $40,000 in cash and campaign contributions from a Middlesex
County farmer in exchange for arranging
a higher price for the condemnation of
the family farm.
U.S. Attorney Christopher J. Christie,
however, strongly denied Tuesday any
connection between the governor and
the charges against Kushner. Still,
Christie acknowledged publicly for the
first time that the ongoing, 15-month
probe of Kushner deals with allegations
he violated campaign contribution laws.
This case is, at its core, about obstruction of justice. There is nothing,
nothing more sacrosanct than the integrity of the federal grand jury process,
said Christie, a Republican who has not
ruled out running against McGreevey
next year. There is nothing in this document today that has anything to do with
Jim McGreevey.
The governor, for his part, released this
statement: We are saddened to hear of
the allegations. It would be inappropriate,
however, to comment further on matters
unrelated to this office.
Kushner surrendered to federal agents
Tuesday morning and later appeared at
a brief hearing before Magistrate Ronald
J. Hedges in U.S. District Court in
Newark. Wearing a blue-and-white
checked shirt and dark gray pants, Kushner stood handcuffed at the wrists and
shackled at the ankles. He did not speak.
Kushner posted a $5 million bond secured by his home in Livingston and a
beach house in the Elberon section of
Long Branch, and agreed to wear an electronic bracelet, surrender his passport,
and stay in New Jersey. His wife, Seryl,
joined Kushner after a brief hearing and
gave him a perfunctory pat on the back.
Benjamin Brafman, Kushners lawyer,
who has represented Michael Jackson
and Sean Combs, said after the hearing
that his client would plead not guilty.
Charles Kushner is one of the most
successful, well-respected business leaders in America and one of the greatest
philanthropists of this century, said Brafman, who is based in Manhattan. The
charges in this case are entirely baseless.
When this matter is resolved in court,
hell be completely exonerated.
Now that the complaint is filed, a
grand jury has 30 days to indict Kushner.
Federal prosecutors made it clear that
the charges against Kushner grew only recently out of a much larger probe into the
developers business activities and campaign contributions. A grand jury continues to hear evidence on the larger probe,
which deals in part with Kushners alleged defrauding of family and business
partners as well as millions of dollars in
contributions to McGreevey and others.

Allegations of blackmail
Kushner is charged with retaliation
against a witness and obstruction of justice. Each carries a maximum penalty of
10 years in prison and a $250,000 fine.
He also is charged with conspiracy to
promote an interstate act of prostitution,
which carries a maximum penalty of five
years in prison and a $250,000 fine.
Joseph Billy Jr., special agent in charge
of the FBIs Newark office, called Kushners alleged actions one of the lowest
forms of blackmail.
The events in the criminal complaint,
if true, describe how Kushners obsession
with raising money for his favorite politicians helped to drive apart a family whose
members are among New Jerseys most
powerful landlords and public developers.
Lawsuits filed against Kushner by his
brother, Murray, and former company
executives in 2003 claimed the developer
engineered a vast scheme to defraud his
real estate partners and funnel company
profits to politicians.
Through intermediaries, Kushner has
claimed that his brother and other siblings were jealous of his success and his
ambitions to become, as he once boasted,
one of the nations largest owners.
Between 1997 and 2002, Kushner, his
family, and business partners gave more
than $3.1 million to federal, state, and local politicians and political committees
that supported them, an investigation by
The Record found. Kushner and his companies have given $1.5 million to campaign accounts benefiting McGreevey
since 1997, while at the same time employing some of the governors closest
aides.
McGreevey named Kushner to the
Port Authority of New York and New
Jersey in 2002, and made clear that he
would be made chairman. But in February 2003, Kushners mounting legal problems forced him to resign before he could
ascend to the top spot.
Late last month, Kushner settled a
long-running Federal Election Commission investigation into federal campaign
contributions. A divided FEC board approved a negotiated deal in which Kushner agreed to pay a $508,900 penalty, the
fourth-largest civil sanction imposed by
the FEC since 1980.
Kushner attributed the problems to
clerical errors but acknowledged vio-

Charles A. Kushner
Personal history
Kushner's parents emigrated from
Russia to the United States in the aftermath of World War II, and he was born
in Brooklyn. His late father, Joseph, was
a Holocaust survivor. Joseph, a carpenter, began buying garden apartments
and eventually became a developer.
Kushner, 50, and his brother, Murray, inherited the business from their father.
Family: Wife, Seryl. Four children,
Dara, Jared, Nicole, and Joshua. They
live in Livingston.
Education: Bachelor's degree, New
York University, 1976; law degree, Hofstra University Law School, 1979; M.B.A.,
New York University, 1979.
Career: A tax lawyer at Price Waterhouse & Coopers, 1979-80; lawyer,
Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone in Roseland,
1980-84; chairman, Kushner Cos., 1985
to present; chairman, NorCrown Bank,
1996 to present. Member of the board
of trustees at Hofstra University and
Touro College.
Business empire
As New Jersey's biggest landlord,
Kushner owns or operates about 9 million square feet of retail and residential
space, including 22,000 rental apartments throughout New Jersey. The
Kushner Cos. Real Estate Group, headquartered in Florham Park, provides a
full range of specialized services, including property and land acquisition, new
construction, sales and marketing, commercial and industrial leasing, and accounting, financial, and legal services.
The firm also manages office buildings,
shopping centers, and industrial complexes.
NorCrown Bank, based in Livingston,
has a dozen retail branches in North Jersey.
Statfeld Vantage Insurance/Highview
Planning provides brokerage and consulting services to private and public
sector entities.
Westmin Tech builds telephone, cable
and Internet networks for commercial

lating a federal campaign-finance law that

limits annual contributions by one donor
to a total of $25,000. The settlement does
not affect whether he can be charged
criminally with federal campaign finance
violations.
Kushner has been a flash point for alleged misdeeds and controversies that
have dogged McGreevey since he took
office as governor. The developer also has
been the benefactor of several controversial McGreevey aides, some of whom
emerged as subjects of federal probes
themselves.
In 2002, it was revealed that Kushner
had sponsored the work visa of an Israeli
public relations man and political operative whom McGreevey named as his
$110,000-a-year Homeland Security adviser. Golan Cipel was forced to resign
the post after it was reported that he had
no credentials as an anti-terror expert and
could not even get security clearance to
discuss classified intelligence.
Court papers that came to light last
year showed Kushner had extensive business dealings with McGreeveys chief of
staff, Gary Taffet, at the same time both
men were raising money for the governor.
Kushner paid Taffet more than $4 million
for his year-old Middlesex County insurance company, which had few clients.
After buying Taffets company, Kushner gave Taffet a high-paying job as its
president.
In addition to those probes, federal
and state investigators are examining allegations that former cabdriver Rajesh
Roger Chugh used intimidation and illusory promises of patronage jobs to secure nearly $1 million in contributions to
McGreevey and the Democratic campaign committees that supported his successful gubernatorial bid.

Help wanted: a call girl

Federal agents said Tuesday that Kushner began scheming to have prostitutes
seduce the witnesses in August 2003. The
complaint alleges Kushner paid $25,000
to two intermediaries identified by
sources Tuesday as a private investigator
and a police officer to hire a prostitute
to seduce Schulder to cause problems
and personal difficulties.
But when the intermediaries were unable to find a willing prostitute, Kushner
personally headed to New York City in
November to recruit a call girl, the complaint said. Kushner told the woman that
he would pay her $7,000 to $10,000 to
have sex with Schulder on tape so that
he could have leverage, the complaint
said.
On Dec. 3, the call girl met with the intermediaries at a Bridgewater motel,
where she was told to pretend that her
car had broken down and ask Schulder
for a ride back to the motel, the complaint
said. But the woman failed to meet up
with Schulder.
The woman returned the next day, this
time approaching Schulder at a diner in
Somerville where one of the intermediaries had followed him. There, she gave
him the rehearsed story about needing a
ride, the complaint said.
A source said the two met at the Time
to Eat diner and drove to the Red Bull
Inn on Route 22 in Bridgewater.
Schulder drove the prostitute back to
the motel but resisted going into her
room; instead, they exchanged phone
numbers, the complaint said.
The two spoke Dec. 5, and Schulder
then came to the womans hotel room,
where one of the intermediaries had in-

and residential properties.

Last fall, a group led by Kushner and
U.S. Sen. Jon S. Corzine was among
four bidders attempting to buy the New
Jersey Nets basketball team. Kushner's
group became one of two finalists when
each offered $300 million for the team.
Kushner sought to keep the team at
Continental Arena, contingent on a $125
million building renovation. He lost out
to developer Bruce Ratner, who wants
to move the team to Brooklyn.
Political activity
Between 1997 and 2002, Kushner, his
family, and his business partners gave
more than $3.1 million to federal, state,
and local politicians and political committees that supported them, according
to an investigation conducted by The
Record. The bulk of the money has benefited New Jersey's and New York's
most powerful and influential politicians,
men and women who play important
roles in deciding how the region develops. Kushner and his companies have
given $1.5 million to campaign accounts
that benefited McGreevey since 1997.
McGreevey and U.S. Sen. Hillary Rodham Clinton of New York have counted
Kushner and his companies as their

stalled a hidden video camera to tape

their sexual encounter, according to the
complaint.
Later that day, one of the intermediaries brought the tape to Kushner at his
office, where he watched it with an associate and expressed satisfaction, the
complaint said. Kushner then asked that
copies and still photos be made of the
tape and that the womans face be pixeled
out, it said.
In mid-December, Kushner decided to
carry out the same scheme with another
witness in the federal investigation, the
complaint said. That witness was identified Tuesday as Yontef, the former chief
bookkeeper of Kushner Cos.
Theodore Moskowitz, Yontefs attorney, said his client wanted the public to
know that he was not taken in by Kushners alleged blackmail scheme and never had relations with prostitutes working
with the developer.
My client was not seduced by any call
girls sent by Charlie Kushner,
Moskowitz said. Others were not as fortunate.
Indeed, according to the complaint,
the prostitute was unable to lure Yontef
into her room after hitching a ride back
to her motel with him. Still, the woman
was paid $2,000 for her efforts, and the
intermediaries split the remaining
$10,000, the complaint went on.

A family affair
Yontef, of West Orange, worked for
Kushner between February 1999 and November 2002. Kushner fired him in June
2002 after learning that he had informed
family members of the developers alleged
manipulation of company profits, according to court papers.
The suit, which was similar to others
brought by Kushners brother, Murray, alleged that Kushner was defrauding his
family and business partners by diverting
company profits to make political donations. Kushner recently made an out-ofcourt settlement on those suits.
After the failed attempt to tape Yontef
with a prostitute, Kushner waited until
May 10 for one of his intermediaries to
drive to upstate New York and mail the
tape and still photos to the Schulders in
Essex County, the complaint said. The
original plan had been to mail the material from Canada.
Two days earlier, a federal grand jury
had sent letters to potential targets of its
investigation. On Tuesday, Christie, the
U.S. attorney, refused to say whether
Kushner had received a letter or how he
knew they were mailed.
Kushner also wanted to send the tape
to the couples children, the complaint
said, but one of the intermediaries talked
him out of it. The childrens ages were not
known.
A few days later, the Schulders opened
the envelope, discovered the tape and
photos, and turned them over to federal
agents, the complaint said.

The talk of Trenton

Kushner has been a flash point for alleged misdeeds and controversies that
have dogged the governor since he took
office. The developer also has been the
benefactor of several controversial McGreevey aides, some of whom emerged
as subjects of federal probes themselves.
In 2002, it was revealed that Kushner
had sponsored the work visa of an Israeli
public relations man and political operative whom McGreevey named as his
$110,000-a-year Homeland Security ad-

biggest political donors. Others who received donations include Corzine, U.S.
Sen. Frank R. Lautenberg of New Jersey, and U.S. Sen. Charles Schumer of
New York. All are Democrats.
Kushner has also employed some of
McGreevey's top aides, including Golan
Cipel, an Israeli citizen and public relations executive whom the governor
named as a homeland security adviser.
In September 2000, Kushner purchased
a Woodbridge insurance firm, Highview
Planning, that was owned by Gary
Taffet. Kushner later tapped Taffet to run
his insurance subsidiary. Taffet became
McGreevey's chief of staff.
Last week, the Federal Election Commission imposed a $508,900 civil penalty on Kushner for violating campaign
donation limits. The penalty the fourth
largest civil sanction imposed nationwide since 1980 was imposed after
Kushner and his associates gave
$541,000 in federal campaign contributions between 1997 and 2000. The law
limits annual contributions made by one
donor to $25,000.
Controversy
In the past two years, Kushner was
sued by his brother, Murray; Robert
Yontef, a former executive at his firm;
and Nicholas W. Minoia, a former business associate. The men leveled a spectrum of accusations, saying that Kushner had reneged on a business deal and
leveling sweeping charges of financial
malfeasance inside Kushner's firms. Included were accusations that Kushner
had deliberately violated election laws to
exceed the amount of money he could
legally donate.
In February 2002, McGreevey nominated Kushner to a six-year term on the
Port Authority of New York and New
Jersey, and intended him to be the next
head of the $4.5 billion agency. Kushner
resigned after the civil lawsuit was filed.
Last December, the FBI searched the
home of a former top Kushner executive, as well as the offices of an accounting firm that has done work for Kushner.
Mitchel Maddux

viser. Golan Cipel was forced to resign

the post after it was reported that he had
no credentials as an anti-terror expert and
could not even obtain security clearance
to discuss classified intelligence.
Court papers that came to light last
year showed Kushner had extensive business dealings with McGreeveys chief of
staff, Gary Taffet, at the same time both
men were raising money for the governor.
Kushner paid Taffet more than $4 million
for his year-old Middlesex County insurance company, which had few clients.
After buying Taffets company, Kushner gave Taffet a high-paying job as its
president.
In addition to those probes, federal
and state investigators are examining allegations that former cabdriver Rajesh
Roger Chugh used intimidation and illusory promises of patronage jobs to secure nearly $1 million in contributions to
McGreevey and the Democratic campaign committees that supported his gubernatorial bid.
The charges Tuesday raised eyebrows
on both sides of the political aisle, as Democrats and Republicans in New Jersey
assessed the meaning.
Democrats treaded cautiously and
stopped short of backing Kushner, who
has been not only McGreeveys most generous donor, but a good friend to those
close to the governor.
If this is true, I am astounded at the
arrogance, along with the stupidity, said
Assemblywoman Loretta Weinberg, DTeaneck. I just wish folks like this didnt get involved with our political life. Its
very disconcerting for those of us who are
involved with issues important to the
working people we represent.
Sen. Jon Corzine, D-N.J., joined with
Kushner last November as one of four
bidders attempting to buy the New Jersey
Nets. Kushners group and one led by real
estate developer Bruce Ratner the
eventual winner became the two finalists when each offered $300 million for
the basketball team.
The senator feels that if the facts turn
out as charged, hell be extremely disappointed, said Corzine spokesman David
Wald. Beyond that, he has no comment.
Meanwhile, Republicans continued
their attack on McGreeveys fund-raising
practices.
It is time that the Democrats come
clean and return the hundreds of thousands of dollars in illegal contributions
they received from Charles Kushner and
David DAmiano that have greatly aided
Jim McGreevey and the Democrats in recent years, said state Sen. Joseph Kyrillos, chairman of the New Jersey Republican State Committee.
Assemblyman Kevin OToole, R-Cedar
Grove, said that at some point, the public
will hold McGreevey accountable for the
activities of those with whom he has surrounded himself.
I think its potentially fatal, said
OToole, the Essex County Republican
chairman. This is the individual Governor McGreevey selected for probably
the single most important appointment
he has, head of the Port Authority. It
goes right to defining who Governor
McGreevey is and the company he
keeps.
Staff Writers Mitchel Maddux, Herb Jackson, Mary Jo Layton, Josh Gohlke, and
John Brennan contributed to this article. Email: kleina@northjersey.com, riley@northjersey.com, and pillets@northjersey.com

Governor
surrounded
by pals? Or
just a noose?
As Democrats made a frenzied push to
raise record sums of money to propel James
E. McGreevey into the governors mansion in
2001, they were also planting a series of land
mines that are now exploding around him.
The chief question Tuesday after top contributor
Charles Kushner was accused of interstate trafficking in prostitution and witness tampering was how
many more explosions McGreevey could take and
there could be more before his reelection chances
HERB
in 2005 are blown away.
JACKSON
Well, this is New Jersey,
and he clearly is not dead
CAPITAL
yet, and he arguably might
GAMES
not even be that wounded.
This is the state, after all,
where people have been reelected while
awaiting sentencing for corruption, so voters
dont always get excited about mumble words
like allegation, especially when theyre
aimed at somebody close to the official rather
than the official himself.
And despite all the headlines, no one has
accused McGreevey of anything except being
caught on a bug using a code word in a conversation with a guy who refers to contributions as trailers of mulch, and nominating a
guy like Kushner to run the Port Authority
while the agency was still groping its way
through the smoke of Sept. 11.
When Kushner was nominated, the main
rap against him was that he was shameless in
his financial backing for the governor. To
some, the complaints sounded like sour
grapes from people who wished they had a
sugar daddy like that.
Not only did Kushners contributions from
numerous real estate holdings make a mockery of laws intended to limit how much a single contributor could give, he also played
benefactor to those working to get McGreevey elected governor.
Kushner sponsored a temporary work visa
for Golan Cipel, the former Israeli sailor who
advised McGreevey on terrorism and helped
the Irish Catholic candidate appeal to the
Jewish vote. Court papers also say that Kushner paid $2.4 million to buy an insurance firm
started by longtime McGreeveyite Gary Taffet.
After selling the firm, Taffet went back to
work for McGreevey, was co-chairman of the
2001 campaign, and then became the governors chief of staff.
Taffet only lasted a year in that job, however, and a federal investigation may be continuing into billboard business deals arranged by
him and Paul Levinsohn, McGreeveys 2001
finance chairman and later chief counsel. Also
on the McGreevey fund-raising team was
Roger Chugh, whose activities as McGreeveys man in the Little India section of
Woodbridge and Edison are also believed to
be under investigation.
Taffet and Levinsohn and Chugh all could
be future land mines on the road to 2005, and
those blasts could reach closer to the governor than the racy allegations against Kushner
and the spy-novel intrigue surrounding mulch
dealer David DAmiano.
Party bosses so far are content to sit and
wait, because they know theres no real rush.
The last-minute withdrawal by Sen. Robert
Torricelli from the 2002 campaign proved
that with the right replacement, candidates
can be switched as late as two months before
Election Day.
But some are starting to worry McGreeveys problems could drag down a party
that has made big gains recently. Not only did
the McGreevey soft money in 2001 help capture the Assembly and half the Senate, Democrats since then have expanded their control of the Legislature and seized county governments in Essex, Bergen, and Mercer counties.
Despite the worries, no one seems ready to
talk openly about getting rid of McGreevey.
I think people are starting to think it, but
no one wants to say it, because if they say it, it
will get out that they said it and then everyone
will say, Did you see what he said? said
one Democrat, who for the aforementioned
reasons did not want his name used.
The reality is, he continued, if the polling
doesnt dip, it doesnt matter.
It is possible that bad news about McGreevey is just more static on a channel that
the public stopped listening to long ago.
The administrations official position Tuesday was that the Kushner allegations were
unrelated to this office so therefore McGreevey doesnt have to comment on them.
Anonymously, loyalists said New Jersey voters
will ignore a lot if they think a politician is
working hard for them, and they may have
data to support that view.
After the unprecedented FBI raid on Democratic State Committee headquarters in
March, newspapers were filled with stories
about DAmiano and what sources said the
government was looking at, although no one
mentioned code words.
And during that time, McGreeveys poll
numbers went up. Of course, McGreevey was
also running millions of dollars of publicly
funded advertising on television during that
time. He also outlined a plan to raise income
taxes on the wealthy so most homeowners
and senior citizens could get bigger rebate
checks.
If thats what it takes to boost poll ratings,
just imagine how big the rebates will be next
year when McGreeveys name is on the ballot.

JANUARY 2005

THE RECORD 35

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Sunday, Aug. 8, 2004

S P E C I A L

R E P O R T

Under the influence:

Money in Trenton
Special interests shower of campaign cash
bolsters their power to win legislative favors
First of seven parts
By HERB JACKSON and BENJAMIN LESSER
STAFF WRITERS

Plumbers, electricians, and carpenters unions gave a cool $1.8 million to legislative
candidates elected in 2003, just a year after organized labor received a virtual monopoly over the states multibillion-dollar school construction program.
Real estate and construction companies donated $9.3 million while they prodded
lawmakers to ditch proposed limits on suburban sprawl and extend the program that
funds more than $1 billion in transportation projects each year.
And as legislators worked to mandate stricter California car emission standards,
auto dealers doubled their contributions to more than $438,000.
Overall, last years election for 120
seats in the Legislature was the most
expensive in New Jersey history, with
almost $56 million going to the winning candidates alone. And much of
that money came from groups with a
financial stake in legislation groups
that were trying to win special treatment on legislation, reward friends for
past favors, or bottle up or water down
initiatives that would hurt them.
For some, the stakes were massive.
The states largest teachers union,
which gave at least $411,000 and
wields enormous clout through an effective political organization, got the
word less changed to greater this

summer in a spending cap bill. The

change will likely allow school districts
to spend tens of millions of dollars
more for teachers salaries in coming
years than they would have otherwise
been allowed to spend.
To determine which donors gave the
most to the current Legislature, The
Record analyzed more than 33,000
contributions made in 2002 and 2003
to last years winning candidates and to
the major PACs that supported them.
The Record also reviewed recent
legislative history and conducted
dozens of interviews to ascertain what
donors got for their money, the role
See CONTRIBUTIONS Page 36

36 THE RECORD

JANUARY 2005

Published Sunday, Aug. 8, 2004

STAFF PHOTOS BY CHRIS PEDOTA

During end-of-session marathons when lawmakers may pass as many as 100 bills a day, contributors frequently gain favors. Big donors often win concessions or consolation prizes even when they lose battles.

Contributions deliver clout

From Page 35
contributions play in making New
Jerseys laws, and the state of campaign contribution laws. The
analysis found:
Seven of the top 10 donors
were labor unions representing
public employees or building
trades. Those seven unions contributions totaled nearly $4 million, and organized labor overall
gave $5.6 million to legislators on
both sides of the political aisle.
Both parties have shown they will
eagerly vote for union initiatives,
even if they ultimately cost taxpayers more money.
Big donors often win concessions or consolation prizes even
when they have been trumped on
some high-profile bills by grassroots pressure or public opinion.
For example, developers and construction companies which,
combined, gave more than any
other industry could not block
passage in June of a law preserving a vast portion of the Highlands in northwestern New Jersey.
But the following week, the Legislature voted to accelerate consideration of projects in smart
growth areas for deep-pockets
developers who could pay higher
fees.
It can be costly to bet big on
one party if that party loses, especially if opposing interests are also
spreading money around. This
was demonstrated in the battle
over medical malpractice reform,
when the Medical Society of New
Jerseys PAC threw most of its
money behind Republican candidates and the trial lawyers PAC
backed Democrats. After Democrats seized outright control of the
State House on Election Day,
both houses passed a version of
malpractice reform that doctors
had condemned as inadequate a
year earlier.
During hectic end-of-session
marathons when lawmakers may
pass as many as 100 bills a day,
contributors can often gain all
kinds of smaller favors. Funeral
directors, for example, gave more
than $180,000 through their PAC
in the 2003 election and last
month won passage of a bill exempting them from a requirement
that limousine drivers have commercial drivers licenses.
Enforcement of New Jerseys

In legislators behind-the-scenes haggling over the fine print of complicated laws, special interests wishes are influential, critics say.
campaign finance laws is scattered at best, and data available to
the public can be so error-riddled
that its value is questionable. One
potential reason: Legislators control the enforcement agencys
budget.
Decade-old contribution limits do little to reduce the influence
of well-funded special interests,
and may actually make identifying
donors more difficult. Thats because millions of dollars flow
through state and county committees, which can legally accept 10
to 15 times as much as candidates
and then pass along unlimited
amounts to those candidates. Senate President Richard Codey
called this legalized money laundering when Republicans began
to do it during the Nineties, but
now Codey manages the states
third-wealthiest PAC.

As campaign spending has

mushroomed, so too has the pressure to contribute. One lobbyist
said it has reached the point of
legalized extortion, and another
said hes afraid not to give. But a
third said complaining about contributions is like complaining
about the weather; theres nothing
you can do about it.
Despite all the attention given this year to efforts to ban pay
to play the practice of lucrative
state contracts going to major
contributors reform laws enacted in June would affect only a
small group of donors. Even if a
stricter law sought by reformers
had been approved, most of the
biggest donors would have been
unaffected because they dont get
government contracts.
Some say the failure of the latest round of reforms to reduce the

If you give me a contribution,

you get a thank-you. Thats it.
SENATE PRESIDENT RICHARD CODEY, D-ESSEX

amount of money in campaigns is

no accident.
Fund raising and the needs of
campaigns are driving the states
policy, said former Assemblyman
Matt Ahearn of Fair Lawn, whose
one term in the Legislature featured a highly public exit from the
Democrats to the Green Party in
2003.
That was the preeminent
thing, and any discussion of what
you took the job of legislator to do
was not tolerated. You were rocking the boat or disrupting the caucus.

Moneys role
Legislative leaders, whose
broad powers include deciding
which bills the Senate and Assembly may vote on, argue that
the only thing contributors get for
their money is a sympathetic ear.

D-West New York, and Assembly

Majority Leader Joseph Roberts,
D-Camden, argued their record of
approving bills that special interests opposed proves that money
does not hold sway in Trenton.
We reined in telemarketers
and predatory lenders, and dealt
with requiring childproof handguns and clean-car legislation.
The moneyed interests, if you will,
were all on the other side of those
issues, Roberts said.
Lobbyist John Torok, whose
clients include the states optometrist association, which
ranked 18th highest among all
donors, said the most that contributions will get is a legislators attention.
Its not as simple as saying if I
[raise] $100,000, somebody will
do this bill for me, Torok said. I
wish it were that simple.
But others say money gets
more than lobbyists and leaders
admit to.
I dont think every special interest gets what it wants, but most
of the time you have corporations
fighting other corporations, said
Staci Berger, program director for
New Jersey Citizen Action, which
fought for campaign finance reform this year and whose directors include labor unions, tenants
organizations, and community
groups.
What it buys you is the ability
to have your idea floated in the
first place, or the ability to stop
things from happening, Berger
said.
That assessment was essentially
confirmed
by
Donald
DiFrancesco, a Republican who
was Senate president for 10 years
and acting governor in 2001.
The moneys a psychological
thing, said DiFrancesco, who left
office in 2002. In the back of
your mind, you know that if
somebodys maxed out [given the
maximum donation], you are going to defer to them in certain areas. But when it comes to policy,
if the pollings against them,
theres no way these organizations
and their money can overrule
public opinion.

I dont know of anybody

whos going to let themselves be
bought. Thats pretty demeaning,
said Codey, D-Essex. If you give
me a contribution, you get a
thank-you. Thats it.
Codey said he will meet with
groups he knows are traditionally big contributors, but he insists
their money does not influence
whether he agrees with their
views. Rather, he said, he will tell
the interest groups what his position is, and let them decide afterward whether to contribute.
Some of them might say,
Codey doesnt agree with us on
these issues, but maybe down the
road therell be another issue
where he might, so they give a
contribution because they want to Money never loses
But much of what the Legislahave an entree, to build a rapture does never rises to the pubport.
Assembly Speaker Albio Sires,
See LOBBYISTS Page 38

The money never loses. Sometimes

it doesnt win, but it never loses.
FORMER ASSEMBLYMAN MATT AHEARN OF FAIR LAWN

JANUARY 2005

THE RECORD 37

Published Sunday, Aug. 8, 2004

38 THE RECORD

JANUARY 2005

Published Sunday, Aug. 8, 2004

Lobbyists feel need to give

Liquor taxes
At least 24 brewers, distillers, bars, liquor importers, and distributors gave a total of more than $422,000 to last years legislative winners. Leading the pack was distributor Allied Beverage Group, at $155,000, and Budweiser brewer AnheuserBusch, at $112,000.
Former Assemblyman Matthew Ahearn of Fair Lawn thinks
theres a connection between those contributions and the fact
that liquor taxes were not increased this year even though
other sin taxes on cigarettes and casinos were.
Also playing a role, he argues, is the number of former bar
and restaurant owners in the Legislature, including Assembly
Majority Leader Joseph Roberts; Democratic State Committee
Vice Chairman and Assemblyman Joseph Cryan; Assembly
Republican Conference Leader Guy Gregg; and former Assembly Minority Leader Paul DiGaetano.
Ahearn, whose disagreements with Democratic leaders led
him to switch to the Green Party last year, remembers asking
during a closed Democratic caucus why a liquor tax increase
was not on the table.
After the caucus ended, he said, Roberts followed him out.
He said if I have questions about things like that I should
bring them to him in person, not raise it in the caucus, said
Ahearn, who lost his reelection bid in 2003. Then he said he
and Speaker [Albio] Sires wanted to sponsor a fund-raiser for
me.
Roberts flatly denied that happened and suggested Ahearn
made it up.
Party leaders say the main reason liquor taxes stayed put has
nothing to do with campaign contributions. Rather, they say,
more people drink than smoke, so such a tax would be more
politically damaging.

School spending
Children in elementary school learn the difference between
those angled symbols that designate less than and greater
than.
The Legislature got a refresher course in June, when it took
up a bill sought by Governor McGreevey that put a 2.5 percent cap on school spending increases.
The bill was opposed by the states largest teachers union,
the New Jersey Education Association, which was also the
10th-highest contributor to winning candidates in the 2003
election with more than $411,000.
During the 10 days it took for the bill to go from introduction to passage, the word less in several sections was
changed to greater. As a result, schools will be able to increase spending in the future by 2.5 percent or the rate of inflation, whichever is greater, a difference that could let districts
spend many millions more each year on teachers raises.
The NJEA is still unhappy about the bill, but one Assembly
Democrat said party members were told in caucus that the
union was OK with lawmakers voting for it because of the
word change and because of the promise of further tweaks
to the cap later this year.

Lawyers
There are plenty of reasons why lawyers and law firms put
roughly $4 million behind winning legislative candidates and
committees in 2003.
Some do extensive work as government bond counsels or
municipal attorneys, and figure prominently on any list of
payers in the game of pay to play. Some specialize in accident and malpractice suits and want to protect plaintiffs rights
to sue.
But other law firms are built around representing government agencies themselves, and they are major contributors to
officials who have the power to hire them.
Topping the list of such contributors in 2003 was more than
$400,000 from Marlton-based Parker, McCay & Criscuolo. Its
chief executive officer, Philip A. Norcross, is the brother of
George Norcross, a South Jersey Democratic power broker,
and of Donald Norcross, head of the South Jersey AFL-CIO.
Coming in second was the $330,000 given by the Teaneckbased firm headed by brothers Al DeCotiis, a member of the
Democratic National Committee, and M. Robert DeCotiis,
who was chief counsel to former Gov. Jim Florio. Bob DeCotiis son, Michael DeCotiis, is chief counsel to Governor McGreevey.
The firm of Bergen County Democratic Chairman Joseph
Ferriero, Secaucus-based Scarinci & Hollenbeck, donated
about $65,000. The firm of Burlington County Republican
Chairman Glenn Paulsen, Mount Laurel-based Capehart &
Scatchard, gave $66,000.
A bill designed to limit pay to play, enacted in June, will
curtail some of these firms contributions. The bills general
premise was to block no-bid contracts for businesses that gave
more than $17,500 to officials with the power to award the
contracts. And state laws allow the hiring of professionals such
as lawyers, engineers, and accountants without bidding.
But that doesnt mean all law firm contributions will be
barred by the pay-to-play ban. Thats because many of those
contributions come primarily from individual lawyers and their
spouses not the firms themselves and unless a lawyer controls more than 10 percent of the firms profits, his or her donations still are permitted.
Another group of donors within the legal profession are
those with extensive lobbying operations. Roseland-based
Lowenstein Sandler, which has an affiliated lobbying firm
called Issues Management with more than $2 million in
billings last year gave nearly $270,000 in the 2003 election.
Morristown-based Riker Danzig, which had $1.3 million in
lobbying receipts last year, contributed $186,400.
Mary Kathryn Roberts, a Riker Danzig attorney and lobbyist, helped teach a seminar on lobbying sponsored by the state
bar association in December 2002. According to a text of her
remarks, attendees were warned to remember that the legal
profession has a written ethics code while lobbying does not.
She also noted that after becoming involved in lobbying,
you will come to recognize the level to which political fundraisers are part of the role of maintaining important government and political relationships.

From Page 36
lics attention, especially behindthe-scenes haggling over the fine
print of complicated laws. In these
settings, critics of the system say,
legislators will try to find ways to
maintain the appearance that they
are doing what the public wants
while also crafting consolation
prizes for well-funded interests.
The money never loses, said
Ahearn. Sometimes it doesnt
win, but it never loses.
Consider these examples from
the last year:
The Laborers Union was the
largest single contributor to the
2003 election, with locals and
PACs accounting for more than
$750,000. Afterward, the union aggressively supported an increase in
the states gas tax because transportation officials said it was needed to continue funding the $1.2
billion the state spends annually
on highway and transit projects.
Also lined up behind the tax were
construction companies, engineering firms, and trade associations,
which, combined, gave $1.5 million. But Republicans took a party-line position against the increase and effectively killed it.
Still, the donors did not lose out
completely. After abandoning the
gas tax, the McGreevey administration announced a complicated
and unprecedented plan to borrow
money against the promise of future federal funds so that the $1.2
billion in annual projects could
continue.
Passage of a bill to preserve
the Highlands, a swath of pristine
land that protects half the states
drinking water, was a blow to real
estate developers and construction
companies the biggest sector of
donors, who, combined, contribute about 25 cents out of every
campaign dollar. But a week later,
a second bill that was a boon to
big-time
developers
sailed
through: If you pay steeper fees,
the state will speed up consideration of environmental permits for
projects outside the Highlands.
The developers who can afford
those higher fees are likely the
same ones who can afford large
campaign contributions.
The auto dealers PAC ranked
ninth among all donors with contributions of more than $438,000
while they were trying to kill a bill
mandating stricter California car
emissions standards. They lost the
battle to environmentalists pressure, but may still win the war: The
final draft of the bill added a study
committee that could recommend
scrapping the standards just 18
months after they take effect. The
committee can also recommend
public subsidies to car dealers if
low-emission vehicles dont sell.
I dont know at end of the day
whether it is a bill with teeth in it
or not, said Assemblyman Reed
Gusciora, D-Mercer.

An unspoken law
Veterans of legislative wars say
that as campaign spending has
mushroomed, the demand for contributions has gotten more intense
and solicitations are inching
closer and closer to the line between the legitimate and the illegal.
Theres never any [threat], If
you dont do this, well do this.
But its definitely an unspoken law
down here these days that you
have to contribute if you want to
accomplish things, said one lobbyist, who asked for anonymity to
protect his job and his clients.
Its almost like an insurance
policy. Theres this sense that if the
day comes that you do need help,
you might not be able to get it if
you dont contribute.
Secaucus lobbyist Alan Marcus
said it is not unusual for a legislator to refer businesses or interest
groups to specific lobbyists, and
then expect the lobbyists to organize fund-raisers for the legislator.
Lawmakers will also drop not-toosubtle hints about why donations
would be in a lobbyists best interests.
Marcus described a call he received this year from a freshman
Democrat who had been in office
just a few months.
He asked me to take part in his
upcoming fund-raiser, and when I
asked him, Why should I contribute? I dont even know you, he
started naming clients he figured
would probably be appearing before committees on which he
would be serving, said Marcus, a
Republican who was once executive director of the Assembly staff.
When I told him he was being
pretty blatant and someone might
take what he said the wrong way,
he started backing off.
Ive found that fund raising has
become legalized extortion, said
Marcus, who said he couldnt remember the legislators name.

CHRIS PEDOTA/STAFF PHOTOGRAPHER

Its not as simple as saying if I [raise] $100,000, somebody will do

this bill for me. I wish it were that simple.
LOBBYIST JOHN TOROK, LEFT, WHOSE CLIENTS INCLUDE THE STATE OPTOMETRISTS ASSOCIATION, SHOWN
TALKING WITH SEN. JOSEPH CONIGLIO, D-PARAMUS
Told of Marcus experience, the tools and skills you use to do
U.S. Attorney Christopher Christie your job, said James Appleton,
said the legislator probably president of the Coalition of Auto
stopped short of committing a Retailers. The Legislatures lookcrime.
ing for support, and we want to see
I couldnt tell you off the bat if good legislation enacted. I tell my
it was illegal, but I know it was members its not just an option, its
wrong, Christie said. In a larger your responsibility as an active
sense, it displays the atmosphere in member in the business communiwhich we are operating. Going ty to participate in democracy.
so close to the line sometimes
Labor clout
leads people to cross the line.
Tracking campaign contribuChristie explained that it is illegal to demand a contribution in tions can be like determining
exchange for an official action, or whether the chicken or the egg
to threaten to take or withhold came first. Contributors say theyre
such an action if a contribution is not buying favors, theyre rewardnot received. It is also illegal for a ing past support. And legislators
contributor to give money with the say theyre not being bought,
expectation that an official action theyre doing whats right for their
constituents: Its just a
will be taken in exhappy coincidence if
change for the money.
contributors also want
But he said proving such
the same thing.
cases often requires one
But among the hunparticipant
in
the
dreds of bills passed
scheme to be cooperateach year, there are aling and possibly wearing
ways some that provide
a secret recording despecific benefits to spevice.
cific groups, and more
Legislative leaders deoften than not those
nied that the solicitation
groups are labor unions
Marcus described was SECAUCUS
that are also major camcommon for legislators.
paign contributors.
Codey, the Senate pres- LOBBYIST ALAN
When you talk about
ident,
questioned MARCUS
special interest legislawhether the story was
tion, the unions stick out
true because Marcus did
not identify the caller. Marcus like a sore thumb, said Assemblynamed several legislators he man Richard Merkt, R-Morris.
thought it might have been, but They are omnipresent and omsaid he didnt write down the nipotent in Trenton and control a
huge amount of what goes on
callers name.
Sires, the Assembly speaker, there.
Overall, labor gave at least $5.6
said lobbyists complained about
having to make campaign contri- million to winning candidates and
butions when Republicans were in top committees last year, with
power as much as they complain unions representing laborers,
now. Roberts, the majority leader, plumbers, electrical workers, state
said some lobbyists might lose a workers, carpenters, police, and
battle on the merits and then tell a teachers all ranking in the top 10
client it was because of money giv- of contributors.
Both parties have a history of
en by the other side.
Other lobbyists said that while supporting laws sought by unions
legislators are asking for more even if they end up costing taxmoney these days $500- and payers more because of unions
$1,000-a-plate fund-raisers are financial resources and their abilmore common, whereas just a few ity to provide volunteers and votes
years ago they were the sign of a on Election Day.
Republicans hoped in vain, it
veteran legislator with clout the
process of solicitation and the turned out that union support
pressure to give is the same as it would help them retain control of
the Legislature in 2001 when they
has ever been.
I dont feel any more pressured boosted monthly pension payto give than a carpenter feels pres- ments by 9 percent for 475,000
sured to hammer a nail. Its one of current and retired public employ-

Ive found
that fund
raising has
become
legalized
extortion.

ees. The bill passed with minimal

debate and almost no dissent, at a
cost of $5.2 billion to taxpayers
over time.
A Treasury Department analysis
said there were enough assets in
the pension system to pay for the
pension increase, but that analysis
was based on top-of-the-bubble
2000 stock prices. Since the stock
market fell a year later, the state
has not been able to keep up payments into the pension system.
If I looked on unions as a cash
cow, then shame on me, said Assemblyman Joseph Malone, RBurlington, who received about 29
percent of his reported contributions in 2003 from labor. But I do
whats right based on my own impressions and experience, and
based on what I think my constituents are interested in. And if it
offends people in my party, so be
it.
Malone said his support for
unions comes from his experience
with apprenticeship programs at
the county college where he
works.
By and large, union-trained
guys tend to perform better overall
than non-union guys, Malone
said.
Democratic leaders say they
support unions because they are a
core constituency, not because
they are financial backers.
Its what we grew up with, supporting unions, said Sires, the Assembly speaker.
Building-trade unions biggest
triumphs lately have come
through expansion and tougher
enforcement of prevailing wage
laws, which require all contractors
who get public contracts to pay
wages equal to what unionized
contractors pay organized labor.
Unions support these laws because they take away any incentive for contractors to spurn union
labor.
A bill passed during the final
lame-duck week of the 2002-03
session unveiled criminal penalties
for prevailing wage violations, and
two bills passed during a marathon
budget session in June expanded
the wage laws scope.
Codey dismissed arguments that
taxpayers are unfairly burdened by
such laws, which critics say essentially require the use of union labor
See UNIONS Page 39

JANUARY 2005

THE RECORD 39

Published Sunday, Aug. 8, 2004

Unions give big, win laws

From Page 38
on public construction work.
When you use union people,
you get the job done quicker, and
that worker is more likely to have
health benefits, Codey said.
Somebody who doesnt [have
benefits], if they end up in the hospital, we as a society end up paying
their bills.
Unions have given their friends
more than just cash. The president
of the state AFL-CIO, Charles
Wowkanech, was a surrogate
speaker for Governor McGreevey
at labor gatherings during the governors 2001 campaign and organized a massive get-out-the-vote effort. And when Democrats were
battling business groups over a $1
billion increase in corporate taxes
in 2002, the largest union of state
employees, the Communications
Workers of America, ran radio
commercials supporting the tax
hike.
Here in New Jersey, I think organized labor is one of the largest
strategic partners with the Democratic Party, Wowkanech told a
delegate breakfast at the Democratic National Convention last
month. The more members we
take in, chances are the more people youll have and were going to
grow bigger and stronger together.
Unions also have been working
for years to encourage members to
run for office, while urging other
members to vote for them.
The current chairmen of the Assembly and Senate labor committees, Assemblyman Joseph Egan,
D-Middlesex, and Sen. Stephen
Sweeney, D-Gloucester, are both
officials of construction union locals. Senate State Government
Committee Chairman Joseph
Coniglio, D-Paramus, is a past
president and finance chairman of
a Lodi plumbers local.

Billboard taxes

CHRIS PEDOTA/STAFF PHOTOGRAPHER

Legislators have a history of supporting laws sought by unions, because of unions financial resources and
ability to provide votes on Election Day.
Egan, the business manager of a
North Brunswick electrical workers local who got $157,000 from
electrical workers unions last year,
was sworn in to his first term in
2002. That same year, he sponsored a bill that business groups
called a massive giveaway to construction unions. It effectively required all public buildings to be
built with union labor, critics said.
The timing was especially significant because a 10-year, $6 billion school construction program
had recently begun.
Egan said the bill, authorizing
what are known as project labor
agreements, or PLAs, simply put
more force behind prevailing wage
laws.
If the prevailing wage is to be
paid whether you use a union contractor or not, it shouldnt matter.
The only way PLAs matter is if the

The staff
Herb Jackson, 42, has covered New Jersey government
and politics or directed coverage as an editor for 15 of the
past 20 years. A Hudson County native and Rutgers University
graduate, he has worked in the
Trenton bureau of The Record
since 1998. Since February
2002, he has taken readers behind the scenes in Trenton with
his column, Capital Games.
Benjamin Lesser, 28, has
worked on computer-assisted
projects since coming to The
Record in November 2000 from
The Times Union of Albany,

N.Y. While attending the University of Missouri School of

Journalism, he worked for the
National Institute for ComputerAssisted Reporting. He has
also taught classes at Columbia Universitys Graduate
School of Journalism.
Editors: Deirdre Sykes,
Charles Stile
Copy editors: Mike Kozma,
Nancy Cherry
Graphics editor: Jerry Luciani
Designer: Robert Townsend
Graphic artist: Bob Rebach
Photographer: Chris Pedota

contractor wants to cheat, he

said.
Sweeney and Egan followed up
this year with two more bills
sought by unions, both of which
passed overwhelmingly during the
marathon session that began the
afternoon of June 24 and ended
early on the morning of June 25.
One bill applied prevailing wage
requirements to projects funded by
state authorities even if theyre
built for private hospitals or universities. The other said that if prefabricated plumbing or duct work
is used in a public building, the
prefabrication work must have
been done by workers getting the
prevailing wage.
Both bills received no public attention, but were sought by unions
to protect jobs.
Say youre building a jail, and
you get a prefabricated cubicle cell
thats got a sink and toilet already
built in somewhere off-site, you
could have somebody making
minimum wage making that. My
contractor cant compete with
that, said Michael Maloney of
Plumbers and Pipefitters Local 9
in Englishtown, which accounted
for about half of the $660,000 given by plumbers unions in the 2003
race.
Maloney argued that the bills
were simply good policy and not
the result of campaign contributions.
Were not buying anything. If
anything, were protecting the taxpayers of the state by ensuring the
work will happen in New Jersey,
and the people who do the work
will pay taxes in New Jersey, not to

Pennsylvania, New York, Connecticut, or Delaware, he said.

Critics such as Merkt say the bill
will drive up the cost of state and
local construction projects, which
ultimately is borne by taxpayers.
But some legislators rationalize
that voters will not likely identify
those costs, while unions could retaliate for a vote against the bill by
putting money behind an opponent in the next election, Merkt
said.
If you talk to some members of
the Legislature, they would tell you
privately the right thing to do
would be to vote against a prevailing wage bill, but publicly they
cant risk being seen doing that,
said Merkt, who comes from a safe
Republican district and voted
against the prefab bill.
I have no problem with helping working people, but the problem here is the purpose of government is to purchase goods and
services on the most economical
basis, not to grant political favors
to any group, he said.
Some government reformers
such as Harry Pozycki, state chairman of Common Cause, warn that
as the need to raise contributions
continues to grow, the need to
provide more and more favors also
grows.
We have a saying in reform circles, he said, that you shouldnt
be surprised if representatives financed by private interests respond to private interests when
they get in office.
E-mail: jackson@northjersey.com and
lesser@northjersey.com

AN EDITORIAL
In Trenton, money talks
Big donors wield big influence

N AMERICA, government is supposed to be of the people, by the

people, for the people. But take a
closer look at how election campaigns
are funded in New Jersey, and youll see
a state government thats also for the special interests.
The front page of The Record today
kicks off a weeklong investigative series
that documents who is pouring a lions
share of the money into legislative campaigns and how these large contributions often determine Trentons agenda
at the expense of the citizens of New Jersey.
As former Assemblyman Matt Ahearn,
D-Fair Lawn, told Staff Writers Herb
Jackson and Benjamin Lesser: Fund
raising and the needs of campaigns are
driving state policy.
For last years legislative races, donors
gave a record-setting $56 million to the
winning campaigns. A majority of those
donations came from organizations or
people who had a financial interest in
major measures under consideration or
who were rewarding the incumbents for
passing legislation that the donors had
sought.
Consider this:
Real estate interests and developers
donated $9.3 million, and were rewarded with a controversial law that makes
it easier for developers to get expedited
state permits in roughly a third of the
state.
Construction unions gave nearly $2
million, after the Legislature gave organized labor a monopoly on work related
to New Jerseys $6 billion school-con-

struction program.
The states largest teachers union
gave $411,000, and was rewarded with a
change in language on a spending-cap
bill that will likely allow districts to
spend tens of millions of dollars more on
teachers salaries.
Indeed, a theme of the articles is not
only how special interests use campaign
donations to get their way in Trenton, but
how legislators use the system to generate campaign money. One lobbyist told
The Record that its not unusual for a
lawmaker to steer companies or interest
groups to certain lobbyists, and then expect campaign contributions in exchange.
Legislative leaders deny and decry the
unsavory connections between cash and
public policy, saying that campaign money at most can get a lawmakers attention
and perhaps access. Whats more, they
point to several laws they passed that are
decidedly unfriendly to special interests
such as those curbing telemarketers
and promoting childproof handguns and
clean-car emissions. But these measures
were extremely popular with voters, indicating that the one thing that can
trump campaign cash is an opinion poll.
Some lobbyists see hefty campaign contributions as a way to inoculate themselves just in case some unwanted legislation is introduced. Its almost like an
insurance policy, one lobbyist told The
Record. Theres this sense that if the day
comes that you do need help, you might
not be able to get it if you dont contribute.
One reason that special-interest mon-

ey affects the legislative agenda so much

of the time is the high cost of campaigns.
And theres little being done to curtail
that influence. Because of 10-year-old
limits on donations to candidates, contributors have been bankrolling state and
county party committees, which can accept from 10 to 20 times larger donations
and then pass the largesse along to legislators who vote the party line.
In June, the Legislature made a big deal
about passing a tough new ethics law that
purportedly put an end to the unseemly
conflicts of interest and the legalized extortion known as pay to play, in which
those who make sizable campaign donations are rewarded with government contracts. In fact, as The Records articles underscore, the new legislation has more
loopholes than a basketball net and has
scant impact on all the interests who seek
favors rather than government business.
What can you do to reduce big moneys corrosive influence in Trenton? First
of all, you must overcome the common
public mind-set that this insidious form
of corruption is so ingrained in New Jersey that its somehow acceptable.
The best defense against the special interests is to take a greater interest in what
happens in Trenton, to keep an eye on
how much money your legislators are
getting from those interests. Even more
important, you need to become better informed on measures that come before
the Legislature, and then make your
voice heard, loud and clear. Contact your
legislators. Write letters to the editor, and
vote - for candidates who represent the
public, not the special interests.

Governor McGreevey raised more than state revenues

when he signed a bill that was expected to increase fees on
billboard companies by $24 million. He also raised campaign
contributions for the opposing Republican Party.
Nine billboard companies contributed $170,000 to winning
candidates in the 2003 election, and 84 percent of that went to
Republicans, who had attacked the fees as an unfair attempt to
get political cover at the expense of a legitimate industry.
When McGreevey proposed the increase in early 2003, hed
just replaced his first chief of staff, Gary Taffet, and chief counsel, Paul Levinsohn, because of harsh news coverage of the lucrative deals in the billboard industry the two had made just
before joining his administration.
Though two Republicans ultimately provided votes in the
evenly divided Senate to pass the tax, many others called it
outrageous especially after an outgoing state official said it
would never raise the expected $24 million because the entire
billboard industry only generated about $70 million in revenue.
The tax ended up raising about $10 million.
But it also raised a lot of campaign cash.
Topping the list of recipients was $87,000 contributed to the
Senate Republican Majority committee, which turns out to
have been a bad investment. Despite the committees name,
Senate Republicans fell three seats short of gaining a majority
as Democrats captured 22 of the 40 Senate seats in November.
An additional $20,000 was contributed to the Republican
State Committee; $9,200 to Paul DiGaetano, then Assembly
minority leader; and $8,250 to the Assembly Republican Majority PAC he controlled last year.
Perhaps its coincidence, or perhaps Democrats noticed all
the money bet on them losing power. Either way, with this
years budget the Legislature renewed the higher billboard fees,
which would have expired July 1.
On top of that, it repealed a law that had exempted many
billboards from local property taxes.

Mystery donor
As The Record attempted to identify donors who gave more
than $20,000 for this analysis, one mystery was the toughest to
track: A donor who had given 14 contributions totaling
$24,500 to legislative candidates and the Democratic State
Committee.
The donor was identified alternately as MAPAC, MAPAC 2, IMPAC, or MOPAC 2.
Its Washington post office box was listed on the reports, but
no other information was provided. Calls confirmed that neither the Massachusetts Association of Problem Animal Controllers nor the Mid-Atlantic Personnel Assessment Consortium was giving campaign money to New Jersey legislators.
Finally, a Google search on the five digits of the post office
box number, 19089, scored a hit on a campaign finance watchdog groups Web site. The site posts searchable versions of tax
returns filed by groups that give political contributions but are
not required to register as political action committees with the
Federal Election Commission.
That document provided a full name for the group the
Mid-Atlantic Political Action Committee. A search of its tax return showed it was founded by officers of the United Food and
Commercial Workers Union in the mid-Atlantic states. The
UFCW also has a Northeastern PAC in New York, which
made nine contributions worth $20,000.
Other branches of the UFCW, which represents supermarket workers, gave $131,000 to winning legislative candidates
last year.

Gas tax
Voters might have been surprised after the 2003 election
when a potentially massive increase in the state gas tax started
to gain momentum in Trenton.
It certainly wasnt discussed before the election in public,
that is.
But companies and labor unions interested in guaranteeing
that the states Transportation Trust Fund got a new source of
cash so that it could continue to support $1.2 billion a year
in projects made sure their presence was known to Governor McGreevey and legislative candidates and committees
during the campaign.
Leading the charge were laborers unions, which were the
No. 1 group of contributors overall in the election at nearly
$765,000 in donations. Also on board were the heavy machinery and crane-controlling operating engineers, who gave
$182,000.
An additional $484,000 came from two top North Jersey
highway contractors, Sanzari Cos. and J. Fletcher Creamer &
Son. The Utility and Transportation Contractors Association
gave more than $157,000 through its political action committee, Constructors for Good Government. Engineering, construction, asphalt, and quarry companies that belong to the
UTCA gave $900,000.
All told, thats more than $2.4 million from contributors
hoping to see a gas tax increase, out of nearly $56 million given overall to candidates who would go on to win the election.
The expectation was that the Legislature would take up the issue during its lame-duck session, when several outgoing members could provide votes and spare freshmen the potentially
career-ending chore.
But after Republicans lost several key races, the partys conservative wing was angry and looking for new leadership. And
with some potential 2005 gubernatorial candidates seizing on
the gas tax as a populist attention-getter, there was a party-line
decision not to help the Democrats. The gas tax increase was
shelved, and advocates now do not believe it will be back until
after the 2005 election.
Stay tuned for how much in contributions are generated for
that race.

40 THE RECORD

JANUARY 2005

Published Monday, Aug. 9, 2004

Shaping paternity legislation

Bill advances after sculptors donations
By HERB JACKSON
TRENTON BUREAU

Sculptor would not normally rank

high on the list of occupations of major
campaign contributors.
But heir just might.
Sculptor J. Seward Johnson Jr. of
Princeton is world-renowned for his
life-size cast bronze
works of people in
everyday positions.
His depiction of a
businessman looking
in a briefcase was installed on the plaza of
the World Trade
Center and survived
the Sept. 11 attacks.
Local residents may
be familiar with the Under the
man dozing in the influence:
wingback chair in the
lobby of Hackensack Money in
Trenton
University Medical
Center.
4th of 7 parts
Johnsons
work
also can be found in and around state
buildings in Trenton, but in the capital
hes known as much for his checkbook:
He and his wife have given more than
$280,000 to state candidates and party
committees since 2001.
That was the same year that Johnson,
now 74, lost a court battle to force 43year-old Jenia Cookie Johnson to submit to a DNA test to prove whether
shes his daughter, and critics say hes
now trying to get the Legislature to do
what the courts would not.
He contends shes not his daughter,
and therefore should not share in a
$350 million trust set up by his father,
the late J. Seward Johnson Sr., son of
one of the founders of the global health
care product maker Johnson & Johnson.
J. Seward Johnson Jr. is listed as Jenia
Johnsons father on her birth certificate,
but he contended in his divorce filings
in 1962 that his first wife conceived the
child with another man. At the end of

legislative session: They made 70 donations worth $161,850 to legislative candidates, with 92 percent going to those
who would win the 2003 elections.
Again, the money spanned the political spectrum. Statewide political action
committees controlled by Democrats
got $47,000, while Republican PACs
got $36,750. Among the individual candidates, $32,600 went to Democrats
and $45,500 to Republicans.
During that period, a bill similar to
Singers was reintroduced. It, too, made
it out of one committee, then died at the
end of the session.
But the third time could be the
charm: A bill revising the Parentage Act
zipped through the Senate Judiciary
Committee in June and won full Senate
approval on a 24-8 vote. Its now pending in the Assembly Judiciary Committee, which approved the similar measure in the last session.
It looks like its wired to pass, and
thats just unfortunate, Assemblyman
Reed Gusciora, D-Mercer, said. It
speaks of what is wrong with legislative
process.
The bills two primary sponsors each
have benefited from Johnsons largesse:
Assemblyman Neil Cohen, D-Union,
received $6,900 in campaign contributions, and Assemblyman Anthony ImPattern of donations
preveduto, D-Secaucus, received
Thirteen days after the 2001 election, $4,400.
the Senate Judiciary Committee approved a bill by Sen. Robert Singer, R- One particular case
Since Singers original bill faltered,
Ocean, to change the states Parentage
Act to allow the kind of paternity chal- the measure has been revised several
times, and supporters now say its prilenge Johnson was seeking.
But the bill went no further after mary purpose is to address issues raised
Singer, who had received $4,400 from by the paternity fraud movement
the Johnsons in his reelection cam- men who contend they are wrongfully
paign, complained publicly that he had ordered to pay child support for chilbeen misled by a lobbyist and an attor- dren who are not theirs.
Senate Minority Leader Leonard
ney working for Johnson. Singer said he
believed the bill would simply correct Lance, R-Hunterdon, said he co-sponan inequity in the law, and would never sored the bill because he believes DNA
have sponsored it if he knew it was de- testing should be used to retroactively
confirm paternity, just as it is used
signed to help a single family.
The Johnsons continued their new retroactively to challenge criminal conpattern of contributing in the 2002-03 victions. Lance, who received $3,000
the divorce proceedings in 1965, however, Johnson signed a formal acknowledgement of paternity.
He tried to reopen the case in 1996, a
year before the trust fund was to be distributed, but the state Supreme Court
ruled in 2001 that the old paternity acknowledgement could not be reopened.
The U.S. Supreme Court declined to
hear the case later that year.
The state Election Law Enforcement
Commissions database shows that in
the five years preceding the courts rulings, J. Seward Johnson Jr. and his current wife, Joyce Johnson, made just nine
contributions: two $1,800 checks to
state Sen. Peter Inverso, R-Mercer, and
seven checks to the Republican State
Committee worth a combined
$160,000.
After the ruling, however, the number
of donations multiplied and the funds
were earmarked for legislative candidates and committees rather than one
state party. From March to December
in 2001, the Johnsons made 20 donations worth nearly $119,000 to 14 recipients. Both parties shared in the bonanza, with $17,500 each going to the
four leadership committees controlled
by Assembly and Senate Republicans
and Democrats, ELEC records show.

Among the works of sculptor J. Seward Johnson Jr. of Princeton is a life-size figure of
a man sleeping comfortably in a chair. Titled After Lunch, it is in the Hackensack University Medical Center lobby.
from Johnson, is a potential candidate
for governor next year.
But Robert Del Tufo, a former attorney general who represents Jenia Johnson, said whole sections of the bill, including one temporarily lifting the
statute of limitations, are written solely
to help J. Seward Johnson Jr.
Were dealing with one particular
case where parentage was adjudicated
40 years ago and has been upheld by
the New Jersey Supreme Court and the
U.S. Supreme Court, Del Tufo said.
The Legislature is meddling in those
decisions, and this is not a proper role
for the Legislature. Theyre overstepping
their bounds.
Donald Sico, a consultant who works
for Johnson, denied that the contributions were designed to buy special legislation. Sico, a former executive director of the Assembly Republican staff
who is now president of Capital City
Solutions, said Johnson definitely wants
the parentage law changed but that he
has other interests as well.

Mr. Johnson has deeply held views

on a number of social issues, Sico said.
He has supported candidates in New
Jersey who both support his view on paternity fraud as well as those who disagree with him.
The state Department of Human
Services opposes the bill, arguing that
finality in determining paternity issues
is in the best interest of children. Alisha Griffin, an assistant director in the
Division of Family Development, testified that allowing challenges to paternity after it has been established could
conflict with federal child support laws
and result in a substantial loss of
funding for the states child support
and welfare programs.
Lance countered that hes seen a legal opinion that federal funding would
not be affected. The opinion was written
by Pelletieri, Rabstein & Altman the
law firm representing J. Seward Johnson
Jr. in the paternity suit.
E-mail: jackson@northjersey.com

Published Wednesday, Aug. 11, 2004

Lawyers won war of dueling donations

Doctors couldnt cap
malpractice awards
By BENJAMIN LESSER
STAFF WRITER

Doctors and trial lawyers, locked in a

fierce battle for the hearts and minds of
state lawmakers weighing malpractice reform, contributed nearly $1.2 million to
2003 legislative campaigns.
Generous donations were nothing
new for the trial
lawyers political action committee, which
anted
up
about
$280,000 for 2003
and $800,000 over the
last three election cycles. They always give
a lot of money.
But it was a depar- Under the
ture of sorts for the influence:
doctors, who more
than tripled their con- Money in
Trenton
tributions to try to
help persuade law4th of 7 parts
makers that the way
to rein in skyrocketing insurance premiums was to cap jury awards in malpractice cases.
Indeed, MEDAC the PAC run by the
Medical Society of New Jersey gave
nearly $900,000 in the last election, a far
cry from the combined $385,000 it spent
on the previous two legislative campaigns
combined.
In order to move the political process
in your favor, the way to talk to them
you have to give them donations, Dr.
Manzoor Abidi, president of the medical
society, said in explaining the change in
tactics.
The societys leaders decided during
the summer of 2003 that they needed to
pull out all the stops leading up to November, Abidi said, so they began to aggressively raise money from members to
give to sympathetic candidates.
And those candidates, the doctors believed, were mostly Republicans. As a result, MEDAC sent most of its dollars to
GOP hopefuls and their partys PACs.
But the strategy didnt work: The doctors had invested heavily in the wrong
party.
New Jersey Democrats won decisively on Election Night, seizing the majority in both houses of the Legislature. And
that spelled trouble for the doctors.
We realized we lost the game, Abidi
said.
The trial lawyers PAC, meanwhile, had

BETH BALBIERZ/STAFF PHOTOGRAPHER

Doctors calling for malpractice reform during a rally in front of the State House last year. Physicians tried but failed to win
caps on jury awards.
given most of its money to Democrats.
Certainly, after the election, we were
very confident that caps would never be
passed, said Dennis Drazin, chairman of
the PAC for the New Jersey chapter of
the Association of Trial Lawyers of
America, called ATLA.
Drazin dismissed the notion that donations buy direct influence. But he did
acknowledge that they enable donors to
educate receptive lawmakers.
I dont think you influence people
with money. You get a chance to educate
them on the issues, Drazin said. I dont
think Ive been able to persuade someone
to vote a different way because I wrote
them a check. We educate them about
things they may be unaware of.
He also said the lawyers would have
been politically active with or without the
malpractice issue.

We were aware of what they were

doing, but I dont think we tried to raise
extra money, he said. Whatever we
were doing we were going to do anyway.
The legislators
Among the legislators most involved in
the malpractice debate was Loretta
Weinberg of Teaneck, the Democratic
chairwoman of the Assembly Health and
Human Services Committee. Weinberg
who received $3,000 from ATLA and
$1,750 from MEDAC said she usually
sides with doctors, but not this time.
If I had a bias at the beginning, it was
toward the medical community, she
said. It was the facts of the situation that
changed my mind.
As far as I was concerned, the money didnt have anything to do with it.
She believed that, in some ways, the
doctors were very ill-advised. For ex-

ample, she said, a friend told her a doctor

had placed her photograph in his office
with the caption: Bad for medicine.
That stepped right over the line,
Weinberg said.
Republican state Sen. Gerald Cardinale of Demarest said the doctors lost because they hadnt traditionally been players in the political process. Cardinales
top contributor was MEDAC, at $12,800.
The trial lawyers PAC gave him nothing.
The doctors, I think, were looked
upon by those who are influenced by
money differently because they traditionally were not active in politics, said Cardinale, who is a dentist. So their interest would dry up as soon as they achieved
their objective and the lawyers will be
around forever.
One of Cardinales running mates,
Assemblywoman Charlotte Vandervalk

of Montvale, supported the doctors fight

for caps but knew it was a lost cause after
Election Night.
That was the sense, that it was all
over, she said. Vandervalk received
$3,000 from MEDAC and $2,500 from
ATLA.
Vandervalk, who served with Weinberg on the Health and Human Services
Committee, believes the perception that
donations are a prerequisite to being
heard in Trenton is a serious concern.
Its all wrapped up in the idea that
well give large sums of money and then
well be recognized and get what we want
whether its a contract or legislation or
anything else, she said. I think thats
the perception out there and that has to
change.
Unless we do some serious reform, its
not going to change.
Fund created
The doctors did get some of what they
wanted from legislators. A bill signed by
Governor McGreevey in June a consolation prize of sorts created a $78 million fund to help physicians pay the high
costs of malpractice insurance.
We still passed a bill that is helpful to
doctors, Weinberg said.
However, the doctors say they didnt
get nearly enough to bring the crisis under control.
Certainly this issue is not going
away, Abidi said.
Abidi said mistakes had been made in
part because the doctors were naive.
We should have concentrated on
fewer races, he said.
The doctors also attracted negative attention when some of them called oneday strikes agreeing only to handle
emergencies or went door-to-door,
clad in their white coats, seeking support
in some legislative districts.
The lawyers, on the other hand, waged
a fierce public relations struggle with
their foes. Each time doctors planned a
rally at the State House in Trenton, trial
attorneys hit the phones to contact
clients they had represented in malpractice suits.
When they had their rallies, we made
sure we had some of the victims to go
public and put a human face on the issue, Drazin said. As time went on, we
did win the PR battle.
In the end, the more politically savvy
and experienced trial attorneys were able
to defeat the passionate but admittedly
naive doctors.
They may have spent a lot of money,
but they didnt use a lot of common
sense, Drazin said. It came to a point in
time that doctors committed political
malpractice.

JANUARY 2005

THE RECORD 41

Published Tuesday, Aug. 10, 2004

Donations run afoul of the law

Checks to 3 lawmakers top corporate limit
By HERB JACKSON
TRENTON BUREAU

Youre a powerful state legislator

raising hundreds of thousands of
dollars for reelection in a district
where the opposing party never
wins. Are you really supposed to
notice if a few
of the corporate
checks
you took have
the same address?
State election
law,
which is written by the Legislature, says
you are. Corpo- Under the
rations are not influence:
allowed to get
around
the Money in
$2,200-perTrenton
election contri3rd
of 7 parts
bution limit by
making multiple donations from affiliated companies.
But one Monmouth County
businessman, whose multiple companies are regulated by or do business with the state, did just that
with donations to three lawmakers.
And after The Record questioned
the contributions, Democratic Assemblyman Louis Greenwald and
Republican Sens. Joseph Kyrillos
and Andrew Ciesla conceded they
would have to give the excess donations back.
The three then questioned how
they were supposed to know the
companies were owned by the
same person in this case, Charles
J. Hesse III of Middletown.
Its very difficult, if not impossible, for us to know the ownership
of these different companies, said
Greenwald, D-Camden.
Ive raised a fair amount of
money and I know weve returned
checks. In some ways, I pride myself on not being sure of all the
checks that pour in, said Kyrillos,
R-Monmouth.
Against the backdrop of last
years legislative election, when a
record-shattering $56 million was
raised by the winning candidates,
the tale of a combined $4,400 in excess contributions to three legislators may not seem significant. But
as the state prepares to implement
new laws that will make campaign
finance even more complex, the apparent violations show that compliance with the old laws was at
best uneven, with enforcement underfunded and far from vigorous.
Among the many complications
is the state law that says corporations are deemed to be affiliated if
one person owns more than 30
percent, a fact that no public document discloses for privately held
corporations.
State law also says that for a contribution to be illegal and its recipient to be subject to fines, its receipt
must be willful and intentional, a
phrase that is the source of some
disagreement. Some lawyers argue
that it means a candidate has to
know it is illegal, while others who
have worked on election law cases
say it is sufficient to simply prove
the candidate deposited the money.

Over the limit

In the case of Hesse whose interests include trucking, highway
paving, operating a landfill, and
owning and breeding racehorses
The Record flagged donations from
three of his companies that added
up to more than the legal amount.
All three had used the same post office box.
Campaign records show that
both Ciesla, R-Ocean, and Kyrillos
received checks that totaled $3,000,
or $800 over the limit, from one of
Hesses companies. They then returned the $800, only to have the
same amount come back during
the same election cycle from a different company Hesse controlled.
Hesse did not return several calls
for this story.
Kyrillos said the $800 coming
back from another company with
the same post office box should
have sent up a red flag. But both
he and Ciesla denied there was any
intention to get around contribution limits.
I can tell you most assuredly
that when were doing our reports,
were not going through calculations saying, Lets send this back
and have them send the money
back to us through an alternate
contribution, Ciesla said.
Fred Herrmann, executive director of the Election Law Enforcement Commission, declined to
comment specifically on the cases
uncovered by The Record, except
to say the candidates could be in violation of the law. He said the
commission uses prosecutorial
discretion in determining which
candidates to sanction. Contribu-

Errors pervade
states data on
campaign cash
Missing, confusing identifications
make it difficult to track donors
By BENJAMIN LESSER
STAFF WRITER

Anatomy
of improper
contributions
In reviewing more than 33,000
contributions to winning
candidates and the committees
that supported them in the 2003
election, The Record uncovered
a series of contributions from
affiliated corporations at the same
Monmouth County address that
totaled more than the legal
amount. The recipients, who were
all in powerful posts in 2003,
returned the excess donations
after being questioned
by The Record.
The donor: Charles J. Hesse III
controls three corporations with
the same post office box: C.J.
Hesse Inc., a highway paving contractor; Brick Wall Corp., which
runs the Ocean County landfill; and
Atlantic Trucking. Hesse is also
one of the states biggest owners
and breeders of thoroughbred
racehorses.
Recipient 1: Assemblyman Louis
D. Greenwald, D-Camden,
chairman of the powerful
Assembly Budget Committee.
Greenwald received $2,000 from
Atlantic Trucking on June 25,
2003, and $2,000 on Oct. 1, 2003.
Thats $1,800 more than the legal
limit of $2,200 per donor. The
excess contribution was returned
on June 2 of this year.
Recipient 2: Sen. Joseph M. Kyrillos, R-Monmouth, chairman of the
Republican State
Committee. Kyrillos received
$1,000 from C.J. Hesse Inc.
on March 25, 2002; checks for
$1,000 each from C.J. Hesse Inc.
and Brick Wall Corp. on Aug. 20,
2002; and $1,000 from C.J. Hesse
Inc. on April 20, 2003. His
campaign apparently noticed that
the three C.J. Hesse Inc. checks
were over the limit and returned
$800 on May 1, 2003, but then
Kyrillos received $800 from Brick
Wall on May 22. Kyrillos refunded
the $1,800 excess contribution
from Brick Wall on June 29
of this year.
Recipient 3: Sen. Andrew R. Ciesla, R-Ocean, former cochairman of the Senate
Transportation Committee. Ciesla
received $1,000 from Brick Wall
Corp. on June 24, 2002, and
$2,000 on May 7, 2003, refunded
$800 to Brick Wall on May 20,
2003, then received $800 from
Atlantic Trucking on May 31, 2003.
He refunded $800 to
Atlantic Trucking on June 2
of this year.

tors can also face fines of up to

$100,000 up to $200,000 in the
next election cycle if the commission believes an illegal donation
was intentional.
Inquiries by The Record also led
to Sen. Thomas Kean Jr., R-Union,
returning a contribution raised in
the 2003 election. It was not a new
experience for the senator, who
emerged as a leading Republican
spokesman over the past two years
for ethical reforms.
Kean had a fund-raiser in April
2003 where 16 donors contributed
$4,400 each, or double the legal
amount. He said the excess donations were returned the next day
when his campaign learned of the
clerical mistake, which he
blamed on a treasurer who was
more familiar with federal campaign finance laws than state laws.
Candidates for federal office may
accept contributions for their primary and general election campaigns at the same time, but New
Jersey law requires them to actually win a primary before raising
money for the general election.
Candidates may roll over any unspent primary donations into general election campaigns.
Kean said the error of accepting

STAFF PHOTOS BY CHRIS PEDOTA

From top, Assemblyman Louis Greenwald, Sen. Joseph Kyrillos, and

Sen. Andrew Ciesla received more in donations from a businessmans
companies than allowed under state law. They returned the excess
money after the contributions were questioned by The Record.
the double donations was noticed
almost immediately, and the refunds were posted a day after the
deposits on his campaign finance
reports. State law says excess donations returned within 48 hours of
their receipt do not violate the law.
Of the $37,400 in excess contributions that Kean refunded in April
2003, $30,800 was donated back to
his general campaign the following
August.

$2,200 returned
Kean also blamed an accounting
error for another donation to the
2003 primary campaign that he returned in June, after The Record
questioned it. Kean reported receiving $4,400 on March 28, 2002,
from an Anthony Domino, who
was described as a pension benefits
executive from Connecticut on
Keans reports. Kean told The
Record that the donation was legal
but misreported because it came
from Domino and his wife, each of
whom legally could give $2,200.
But when The Record followed
up with a question about another
$2,200 check dated March 13,
2003, from an Anthony Domino in
West Harrison, N.Y., Kean called
back to say that was the same per-

son, and he would be returning the

donation. Through a spokeswoman, Kean described Domino
as a personal friend.
Hesse corporations also gave
$2,500 to John Bennett, the Republican from Monmouth County
who was co-president of the evenly divided Senate last year but lost
in November. Bennett said he
would give the excess donation
back if he had it, but his 2003 campaign still has a $16,000 debt.

Sharpe James is the mayor of

Newark.
Hes a state senator.
Hes also a secretary if you
believe the campaign contribution database compiled by the
state.
Indeed, the states database is
riddled with inaccuracies like
this, making it difficult and
sometimes impossible to trace
the millions of dollars flowing
into the campaign coffers of
New Jerseys elected representatives.
And that means an incomplete picture of whos paying the
freight in state politics.
Its important to have that information so that you know if
you have a special interest group
involved, said Edwin Bender,
executive director of the Institute
on Money in State Politics, a
Washington-based campaign finance watchdog group. It is an
investment. They are wanting
something for their money.
The Record found thousands
of inaccuracies from sloppy errors and omissions to shortcomings in the way the data is kept
in a review of more than 33,000
contribution reports from 2002
and 2003 maintained by the
states Election Law Enforcement Commission.
Among the problems:
The names of donors employers and donors occupations
are often missing on the original
reports filed by candidates.
When the names are there,
they can be spelled as many as
five or six different ways, making
it onerous to track the total contributions from one source.
Occupations may be wrong,
such as the Newark mayor being
listed as a secretary in a report
on a contribution he made to his
own campaign.
The affiliations of some of
the givers can be baffling. An example: A $1,500 donation to
Sen.
John
Girgenti,
DHawthorne, received on Feb. 5,
2003, lists the donor as Local
464A PAC. That shorthand actually stands for a United Food
and Commercial Workers union.
Donors often make contributions in the names of different
companies they own, again complicating any effort to collate
their totals and to enforce the
legal limits of gift giving.
For example, Arie Halpern, a
real estate developer, gave about
$200,000 to various candidates
or party organizations in the runup to the 2003 elections through
at least 30 companies he controls. The only string tying all
that money together was the
same address, P.O. Box 457 in
Woodbridge, listed on all the
forms. But if anyone searched
ELECs database for Arie
Halpern, they would find only
two donations for $1,000 and
$5,000 in the last three years.
Many of the reports are
handwritten and the handwriting
can be poor, making it difficult to
determine the identity of a contributor.
If a candidate accepts a contribution that exceeds the legal
limit and then returns the difference, the refund is not added to
the database.
When The Record first began
reviewing the contributions, it
appeared that Sen. Thomas
Kean Jr., R-Union, kept $37,000
in donations that exceeded the
state limits. In reality, Keans
campaign had refunded the
money shortly after receiving it,
but the electronic data did not
reflect that.
In an interview, Carol
Neiman, ELECs director of systems administration, acknowledged the problem, and said her
staff was working to fix it.

Where to go
for information
To view campaign finance
reports or search for
contributors, go to the
New Jersey Election Law
Enforcement Commission
Web site at www.elec.state.nj
.us/index.html

Jersey laws. Ironically, the very

people whose campaigns it must
oversee are also the people who
are responsible for its existence.
Under the laws, every candidate and political action committee must periodically disclose
all contributions of $400 or more
as well as their expenditures. The
contributors name and contact
information are supposed to be
included.
Since more than 90 percent of
the reports are filed on paper, it
takes up to six keyboard specialists to enter all the information
just as it appears in the reports,
including errors and omissions
into the computer database.
If thats what is in the report,
that is what goes in the system,
Neiman said. Were keying it in
as a camera.
ELEC officials acknowledged
in interviews that their system is
far from perfect.
We know we can be better,
Frederick Herrmann, the executive director, said. We are always working to improve.
Herrmann declined to discuss
in detail what the commissions
investigators do with reports as
they come in, saying he didnt
want to divulge investigative
methods. He said only that they
are reviewed.
Money is fungible. Its very
hard to trace this stuff, Herrmann said. Its like trying to
find a single drop of water in a
full bathtub.
ELEC has a staff of 44 and a
budget that is set to increase by
$2 million this fiscal year, bringing its annual funding to just under $5 million. The additional
cash will allow the commission
to hire new staff, enforce new
disclosure and auditing requirements for lobbyists, and provide
additional training for campaign
treasurers.
This is an incredible investment, Herrmann said. This is a
pacesetter for the rest of the
country. Well be a pioneer.
According to its annual report
for 2003, ELEC collected nearly
25,000 disclosure reports from
campaigns and PACs and
$87,000 in fines for violations.
However, in its annual report
for 2003, ELEC says it brought
55 complaints against candidates
for not filing disclosure forms
and 32 other complaints for violations ranging from the personal use of campaign contributions
to accepting donations beyond
the legal limit.

Electronic filing

Some states, such as Montana,

have already moved to a fully
electronic filing system that allows them to automatically flag
potential campaign finance violations, including donations that
exceed the legal limit, Bender
said. While he acknowledged
that the initial cost of such a system could be high, the long-term
benefits outweigh that concern,
he said.
Its a way of ultimately saving
a lot of money, Bender said.
Idaho has gone to purely electronic filing and their office and
budget has not changed. Three
people are doing the job.
However, New Jersey is far
from alone in its difficulty in
maintaining quality data.
Every state where we get
electronic data, we spend more
time [cleaning] the electronic
data than on the data we input,
Bender said.
Disclosure reports
Neither
Herrmann
nor
The Election Law Enforce- Neiman would speculate on
ment Commission was created when all campaigns will be reSen. Thomas Kean Jr. returned by the state Legislature in 1973 quired to file electronically.
$37,400 in excess contributions in to collect campaign finance information and to enforce New E-mail: lesser@northjersey.com
2003 after a clerical mistake.

42 THE RECORD

JANUARY 2005

Published Thursday, Aug. 12, 2004

Politicians share the wealth with campaigns

Donations boost power of legislative, party chiefs Politicians as contributors
By HERB JACKSON
TRENTON BUREAU

Hoping to move up in politics someday?

Well, if youre a candidate in New Jersey, you
might want to make sure that you raise enough money to share it with people who will be in positions to
help you.
The third-largest category of campaign contributors to the Legislature in 2003, after real estate/construction interests and labor unions, was politicians and committees, a Record
analysis shows.
The contributors break down
into three general categories: party committees that can take big donations and spread the wealth
around to other candidates; politicians in safe districts or newcomers
who want to curry favor in ad- Under the
vance of their next step up the lad- influence:
der; and ex-pols who are trying to Money in
keep their fingers on the pulse of
Trenton
power.
Former Gov. Thomas H. Kean, 5th of 7 parts
who hasnt launched a campaign
since leaving the State House 14 years ago, still has
$370,000 in a political action committee. In the 2003
race he donated $2,500 of it along with $6,600 from
himself and his wife to his namesake son, a state
senator and potential gubernatorial contender next
year.
Former Sen. Robert G. Torricelli still has more
than $2 million he raised for his aborted 2002 reelection campaign and has been spreading it around
among candidates in New Jersey and beyond.
Among his most controversial donations was
$1,000 which was returned to Lambertville Mayor David DelVecchio while Torricelli was battling a
traffic ticket in that borough.
Torricelli also gave $50,000 to Florida-based
Americans for Jobs & Health Care, which ran campaign ads in Iowa and New Hampshire attacking
Howard Dean, then the front-runner, during the Democratic presidential primaries; $2,500 to the Iranian
American Political Action Committee in New York
City; and $58,000 to an organization called Grassroots Democrats, whose address, ironically, is on lobbyists row: K Street in Washington.
To the top state and county committees in the 2003
election, Torricelli gave $82,500, including $25,000
each to the Democratic State Committee and Senate
Democratic Majority Committee and $15,000 to the
New Democratic Assembly Leadership PAC.
Though some party leaders had hoped Torricelli
would turn his campaign kitty over to the party when
he dropped out of the Senate race in September 2002,
the chances of that happening ended when foe Frank

Lautenberg was chosen as his successor. Federal law

provided Torricelli with several options: He could refund unused donations, give the money to a party
committee, or hold on to it to use for a future campaign or other political purposes, which is what he
appears to be doing.
Torricellis 2002 year-end report shows he refunded about $291,000 in contributions, out of $9.9 million raised from 1997 through 2002.

Political powerhouses
Torricellis and Keans contributions, however,
pale by comparison to the powerhouses of politicianto-politician financing the legislative leadership and
state and county party committees which can legally accept 10 to 15 times as much as candidates themselves.
A 1993 state law bars legislative candidates from
accepting more than $2,200 per election from an individual and $7,200 from most PACs. But that same
law passed by many of the people who are still in
power today set up special rules for PACs controlled by legislative leaders and state committees,
which could accept up to $25,000, and county committees, which could accept up to $37,000.
These committees were also allowed to give unlimited amounts to individual candidates, boosting
the power of legislative leaders and party bosses
tremendously.
The New Democratic Assembly Leadership PAC,
controlled by Assembly Speaker Albio Sires, led the
pack by giving victorious 2003 candidates and the
committees that supported them more than $3.3 million. That included $2.8 million to individual candidates and joint candidate committees, $432,000 to
county committees, and $73,000 to state committees.
The Senates leadership committee and the state
committee, which is effectively controlled by Governor McGreevey, each doled out $2.8 million.
In addition to helping win elections, the ability of
state and county leaders to control such huge sums is
critical to party discipline, since those who toe the line
know theyll be helped come election time while
those who stray might be frozen out.
Some county organizations, such as Bergens Democrats, have largely centralized fund raising for local and legislative candidates, giving party leaders
even more power. Bergen Democrats doled out
$417,000 to winning legislative candidates and joint
committees.
And in a sign of how money wheels around the
state, the county committee gave $232,000 to the Democratic State Committee, $100,000 to the Assembly
Democrats, and $60,000 to the Senate Democrats
while also receiving $598,000 from those three
groups.

State and county committees can accept contributions 10 to 15 times as large as those that individual candidates can accept, and then those committees can pass on unlimited amounts to candidates for their elections. As a result, state and county leaders can use these funds to enforce party discipline. Heres a look at
the top 15 contributors in 2003 among political committees, candidates, and officials, along with a breakout
of what kinds of committees received their contributions.
To single/joint To county/
candidate
municipal To statewide
Organization
Party committees committees committees
Total
New Democratic Assembly Leadership PAC
D
$2,826,296
$432,590
$73,000 $3,331,886
Democratic State Committee
D
2,462,301
208,390
169,500
2,840,191
Senate Democratic Majority Committee
D
2,058,209
162,900
585,550
2,806,659
Camden County Democratic Committee
D
2,224,333
103,000
290,210
2,617,543
Burlington County Republican Committee
R
882,675
627,082
1,509,757
Gloucester County Democratic Organization D
831,253
9,000
28,625
868,878
Bergen County Democratic Organization
D
417,330
10,750
391,500
819,580
Sweeney for Senate
D
662,000
23,000
30,500
715,500
Middlesex County Democratic Organization
D
115,556
227,500
197,665
540,721
Assembly Republican Majority
R
281,907
258,105
540,012
Senate Republican Majority
R
140,950
330,085
471,035
Republican State Committee
R
363,003
95,126
458,129
West New York Municipal Democratic Comm. D
8,200
37,000
370,500
415,700
Sweeney, Burzichelli & Fisher
D
262,800
20,000
1,750
284,550
Jon Corzine
D
38,400
121,500
112,500
272,400
Source: Record analysis of New Jersey Election Law Enforcement Commission data

county leaders who often determine who gets the

party line on primary ballots also has been a proven
technique for people looking to break onto the political scene or move up the ladder.
In 1999, a largely unknown investment banker
named Jon Corzine opened his checkbook to county committees and legislative candidates, helping him
capture several county endorsements in his 2000 U.S.
Senate Democratic primary battle against former
Gov. Jim Florio.
Corzine has continued to help state candidates
since going to Washington. In the 2003 elections he
donated $50,000 to the Assembly Democrats,
$25,000 each to the Senate Democrats and state
committee, and $37,000 each to the Bergen, Camden,
and Gloucester County party committees.
His track record in supporting the party has been
pretty clear for a while, said Corzine spokesman
David Wald. He thinks it makes a difference if Democrats control the Legislature, just as hes working
really hard on the federal level to get a Democratic
Senate.
He really believes elections determine policy,
Wald said.
Two Democratic members of the House of Representatives who may have higher aspirations in state
politics were also among the top donors in the 2003
races: Rep. Robert Menendez of Hoboken spread
around $106,400, while Rep. Steve Rothman of Fair
An open checkbook
Lawn donated $58,750, including $42,000 to the
Bestowing donations on legislative candidates and Bergen County Democrats.

And congressmen are not the only politicians in

safe districts helping out fellow candidates. Senate
President Richard Codeys individual campaign committee gave 10 other candidates and committees a
combined $177,000, including $37,000 each to the
Camden and Gloucester County party organizations,
where Democrats faced tough races.
Assemblyman Louis Greenwald, D-Camden, is
said to be maneuvering for a possible run for governor in 2009, and he showed its never too early to
start making friends in other parts of the state. Greenwald, who is chairman of the Assembly Budget Committee, doled out $258,000 to 16 different recipients,
including $12,800 to Assemblyman Peter Eagler, DClifton.
Greenwald also gave $7,200 each to candidates
Joan Voss of Fort Lee and Robert Gordon of Fair
Lawn, who won open seats in Bergen Countys 38th
District.
Leading the pack on the Republican side was Douglas Forrester, the pharmacy benefits management executive who was leading Torricelli in the 2002 Senate
race but ultimately lost to Lautenberg. Forrester, a potential candidate for governor next year, gave
$143,270 to party candidates and committees, including $50,000 to the Assembly Republicans PAC.
Other potential Republican contenders and their
donations were Bergen County businessman Robert
Schroeder, $53,400; investment banker Lewis Eisenberg, $33,450; and Morris County Freeholder John
Murphy, $25,425.

Party leaders fund transfers aid senators rise

Sarlo campaign
benefited from
wheeling of
contributions
By BENJAMIN LESSER
STAFF WRITER

Paul Sarlo owes his state Senate seat to the 18,035 people who
voted for him in the 36th Legislative District, made up mostly of
southern Bergen County towns.
But the Wood-Ridge Democrat
also owes his victory to more than
$1 million in campaign cash donated by a select group living outside the district the state partys
power brokers.
Nervous about holding on to
the seat, Democratic leaders cast
a wide fund-raising net for Sarlo,
hauling in contributions from other lawmakers, political bosses in
counties as far-flung as Camden
and Middlesex, and of course,
some of New Jerseys most generous campaign donors.
More than 65 percent of all the
funds Sarlo received came from
state, county, and legislative war
chests. We needed resources to
get our message out, he said.
Sarlo is not the only political
figure whose meteoric two-year
rise from obscurity to the Senate
was paved with the deep pockets
of party bosses, and he certainly
will not be the last.
In fact, he is a beneficiary of a
process that allows party leaders
to amass hefty contributions and
then transfer, or wheel, the
funds directly to a candidates
campaign account. At least $14
million was wheeled from one
party organization to another and
to individual candidates during
last years election, when $56 million was spent overall on winning
campaigns.
Quite often, top party leaders
collect contributions from other
county committees and contributors and route the money into
campaigns that need it.
These transfers, party officials
say, allow them to carry out their
core party-building responsibilities: raising and spending money
to get enough of their members
elected so that they can dominate
city councils, county freeholder
boards, and the state Legislature.

CHRIS PEDOTA/STAFF PHOTOGRAPHER

MEL EVANS/STAFF PHOTOGRAPHER

Sen. Paul Sarlo, D-Wood-Ridge, celebrating after he won election to a full term last fall. A committee controlled by Senate President Richard J. Codey,
top right, gave Sarlo $644,068 in aid, and a PAC controlled by Assembly Speaker Albio Sires, lower right, gave him more than $100,000.
But campaign watchdogs and
other critics point to a troubling
underside to wheeling. These flurries of transfers often done in
the final days of a campaign allow wily donors to evade campaign contribution limits, they
say.

Unlimited sums
An individual donor, for example, is permitted to give Sarlo a
maximum of $2,200 for a general
election campaign, while a PAC
can contribute up to $7,200.
But a donor can multiply his or
her potential influence by also
making donations to state party,
legislative leadership or county
committees up to $25,000 to
state party or legislative leadership committees and $37,000 to
county committees. Many of
these same committees are then
free to transfer unlimited sums to
a candidates campaign.
Various local plumbers unions,
for example, contributed $9,800
to Sarlos campaign. They also
contributed $92,250 to the Senate
Democratic Majority Committee,
controlled by Senate President
Richard J. Codey. In turn, Codeys
committee gave Sarlo $644,068 in
financial support.

Sarlo also received $16,450

from local International Brotherhood of Electrical Workers
unions. IBEW unions donated an
additional $78,100 to the New
Democratic Assembly Leadership
PAC, controlled by Assembly
Speaker Albio Sires of West New
York. Sires committee then gave
Sarlo more than $100,000.
There is no way to determine
whether any of the same money
that organized labor gave to the
Senate or Assembly committees
actually ended up in Sarlos campaign. But some critics fear that
donors, chafing at the contribution limits, privately ask party officials to route their money to specific candidates a tactic that
party leaders routinely deny exists
and that watchdogs acknowledge
is almost impossible to confirm.
The commission has expressed concern about unlimited
transfers, said Frederick Herrmann, executive director of the
states Election Law Enforcement
Commission. Theres an appearance that the money is circulating
in a way that cant be accounted
for. It could lead to the circumvention of contribution limits.
ELEC has conducted investigations of suspected wheeling, but

none has led to any formal

charges or fines, said Jeff Brindle,
ELECs deputy director. Once
the money goes into the committees treasury, its difficult to trace
it, he said.

Part of reform effort

Despite these concerns, the
current system has its defenders,
who note that it was established
in the last set of major campaign
finance laws enacted in 1993. Before that, individual candidates
were viewed as easy prey for special interest groups and lobbyists,
who sometimes recruited candidates, raised money for them, and
even ran their campaigns.
The creation of new and powerful legislative leadership committees, controlled by each partys
top officials in the Legislature,
was aimed at changing that relationship. Now, special interest
money is consolidated with the
leadership, who can then exercise
control over how it is spent. Supporters say the money and influence is pooled and diluted,
making it less likely for candidates
obligated to any one donor.
It means that the parties are
responsible for raising money, allocating funds, and recruiting can-

didates, said Alan Rosenthal, a

Rutgers University political science professor who served on the
committee that recommended the
1993 reforms.
Its better to see all that done
by the parties than by various interest groups.
But the law also gave some top
legislative leaders even more
fund-raising clout than originally
envisioned. As speaker, Sires controls the New Democratic Assembly Leadership political action committee, which took in
more than $5 million in donations and spread around more
than $3.3 million to Democratic
legislative candidates and committees.
In addition, Sires is the mayor
of West New York and controls
the West New York Democratic
Municipal Committee. His West
New York committee contributed
more than $400,000 to the Democrats legislative election efforts in 2003, including a $37,000
loan to the Bergen County Democratic Committee.
Its fair to say that, for starters,
the laws permitting transfers between party organizations never
contemplated anything near this
magnitude, said Tom Byrne Jr.,

ASSOCIATED PRESS

former chairman of the Democratic State Committee. It concentrates legislative power more
than it ever was before.
Republicans have also been in
a position to take advantage of
the system. In 2001, former Senate President Donald T.
DiFrancesco served as acting governor after Christie Whitman resigned to join the Bush administration.
DiFrancesco was in a rare but
powerful spot to launch his own
campaign for governor. He was
raising money for the Senate Presidents leadership PAC, maintained control of the Republican
State Committee, and also raised
money for his own 22nd District
legislative account until he
dropped out of the race amid
questions about past business
dealings.
Rosenthal added that no campaign finance system yet devised
has been able to totally regulate
the flow of campaign cash.
If you say youve come up
with the perfect campaign finance
system, he said, Ill personally
sign the papers to have you committed.
E-mail: lesser@northjersey.com

JANUARY 2005

THE RECORD 43

Published Friday, Aug. 15, 2004

Reforms wont close campaign cash spigot

Package of ethics measures
leaves system largely intact
By HERB JACKSON
TRENTON BUREAU

When he signed a package of

ethics reforms in June, Governor
McGreevey declared that New
Jersey was taking significant
steps to reduce the influence of
money in politics.
But those
reforms will
not
fundamentally
change
the
way political
campaigns in
the state are
funded.
An analysis
by The Record Under the
has found that influence:
if the new
Money in
laws had been
in effect durTrenton
ing the 2003
6th of 7 parts
legislative
elections when the winners
raised an unprecedented $56 million only a trickle of the flood of
money from groups trying to affect state policy would have been
plugged.
And even that might not have
occurred, because firms still could
sidestep the new restrictions by
changing the way they donate.
The 25-bill ethics package did
address a host of issues that had
been on reformers wish lists for
years, including broader disclosure laws for legislators and lobbyists and a pilot program for
publicly financed elections of legislators.
But numerous other proposals
to change the way Trenton does
business went nowhere. For example:
Corporations and labor
unions can continue to make direct contributions to candidates
and committees, even though the
state Election Law Enforcement
Commission pushed for a ban
similar to the one imposed by
Congress on federal elections.
New Jerseys dubious distinction as the nations leader in dual
office-holding by officials will
continue unchecked; the reforms
merely created a committee to
study the issue.
A measure touted as a tough
conflict-of-interest ban was approved, but lawmakers themselves continue to be the ones to
determine if a personal conflict
actually exists.
The vast majority of donors
face no new restrictions. They include issue-oriented groups such
as those fighting gun control or
smoking, as well as unions, businesses, and professional groups
whose contributions are aimed at
influencing laws and regulations,
not obtaining government contracts.
A law aimed at contributors
who do get no-bid contracts
touted as an unprecedented ban
on whats known as pay to play
has so many loopholes that it
may end up affecting a minuscule
number of donors.
This phony ban on pay-toplay was designed from the very
start to fail, said Assemblyman
Richard Merkt, R-Morris.

Many bills praised

To be sure, many bills in the
package were hailed by ethics advocates as long overdue, and they
bring New Jersey more in line
with other states that have been
cited for tough ethical standards.
Some addressed issues that
have been a source of criticism for
years, such as the revolving door
between government and lobbying. One change requires legislators and top state officials to wait
a year after leaving office before
beginning to lobby.
Other laws were aimed at improving weak public disclosure
requirements. For example, legislators now must indicate their
sources of income within a dollar
range; previously, no amounts
had to be revealed. Lobbyists also
will have to acknowledge their attempts to influence the executive
branch for permits and contracts;
the old law dealt only with the
Legislature.
The 25-bill package was the
most comprehensive package in
over 30 years, and I think as those
laws begin to be implemented and
become reality, people will see
weve made great progress, said
Assembly Majority Leader Joseph
Roberts, D-Camden, a chief architect of the package.
He was most proud of the bill
signed Wednesday that established a pilot clean elections
program. It provides public financing for candidates who agree
to strict fund-raising limits

stricter than limits in place for

publicly financed gubernatorial
races.
Candidates who raise 1,000
contributions of $5 and 500 contributions of $30 could receive the
full public financing. In turn, they
would be barred from taking any
other money or support including money from party committees
or, in the case of incumbents,
from campaign funds they had
previously raised. In the gubernatorial system, candidates receive
matching funds for private dollars
they raise up to a limit, but party
committees still can chip in on
top of that.
Even if it doesnt result in a
massive overhaul of the Legislature, it allows legislators to think
and act and vote on issues without having to worry about
whether its going to affect their
contributions, said Staci Berger,
a program director for New Jersey
Citizen Action, a reform group.
A lot of legislation is going to
benefit somebody. We want the
Legislature to evaluate those proposals independently, she said.

Leaky plug
Of all the bills in the reform
package, however, the one that
got the most attention involved
pay to play the much-maligned practice in which lucrative
government contracts are awarded to firms that make big campaign contributions. Pressure for
a ban grew after a Californiabased contractor botched the job
of overhauling the states motor
vehicle inspection system. A subsequent investigation found that
the contractor became the sole
bidder for the job after hiring
well-connected lobbyists and contributing to key officials and committees.
The law, which takes effect after the 2006 election, was touted
as the toughest pay-to-play ban in
the country, a boast that is true as
far as it goes. New Jerseys ban
does more to limit contributions
from contractors than any other
state, but only three other states
have passed such laws.
The new law says a firm cannot
receive a no-bid government contract worth more than $17,500 if
that firm gave a campaign contribution of any amount to the official or officials with the power to
award the contract or to the
party committees at the officials
level of government in the previous 12 months.
But most campaign contributors do not receive government
contracts which means that,
even with the strictest enforcement, the new law would have no
impact on 22 of the 27 contributors who gave more than
$200,000 in the 2003 election.
And even the remaining five
might be able to adjust the way
they contribute so that they could
continue getting contracts.
Lawmakers own fund-raising
machines also will hardly be affected because, as a body, the Legislature grants few government
contracts directly even though
it helps craft the state budget from
which the contracts are paid and
approves school and municipal
aid that pays for many of the attorneys and architects and accountants who get the local nobid work.
Harry Pozycki, chairman of
Common Cause New Jersey and
one of the driving forces behind
pay-to-play restrictions, said a
study by his group found that
while McGreevey was the Democratic mayor of Woodbridge and
Republican Bret Schundler was
mayor of Jersey City, 19 percent
of their local contributions came
from local contractors.
Pozycki said pay-to-play money is the most corrupting money
in the political system.
What makes it most corrupting is it is initiated by the career
politicians and the party fundraisers, Pozycki said. Theyre
pushing the contractors to give
more money, so they have to imply therell be more contracts.
And the impact of this corrupting
is mostly felt by the taxpayer because its the contract thats the
bait for the contribution.
U.S. Attorney Christopher
Christie noted that the now-imprisoned former Essex County
Executive James Treffinger instructed a county official to tell a
contractor to increase his price by
$10,000 so the contractor could
contribute that amount to Treffingers campaign accounts.

CHRIS PEDOTA/STAFF PHOTOGRAPHER

A legislative session in Trenton. A new law requires legislators to disclose their sources and amounts of income, and another limits campaign
contributions from contractors.

Highlights of changes
Mandatory disclosure of who pays for grass-roots advertising to
influence legislation or regulations and for recorded telephone calls
about candidates and public questions.
Better disclosure of legislators sources of income, including dollar ranges.
Pilot program of publicly financed legislative elections for candidates who demonstrate broad support and agree to strict fund-raising limits.
Ban on legislators voting on bills in which they have a personal financial interest, and increased penalties for violations.
Prohibition on state officials soliciting contributions on state
property.
Reducing from $400 to $300 the level at which a contributors
name must be disclosed, and repealing the law requiring that
threshold to be increased periodically.
Mandatory training for campaign treasurers about contribution
limits and reporting requirements.
Ban on legislators, the governor, and Cabinet heads taking jobs
as lobbyists within one year of leaving office.
Mandatory disclosure of lobbyists efforts to influence executive
branch decisions, including contract awards; previous disclosure
laws applied only to lobbying the Legislature.
Placing additional members of the public on boards that regulate
executive and legislative ethics.
Ban on lobbyists accepting contingency fees to influence legislation or regulations.
Random audits of lobbyists disclosure reports by the state Election Law Enforcement Commission.
Ban on no-bid government contracts going to some firms that
make campaign contributions.

play money to flow, consider the

contributions to the Democratic
State Committee from consultants hired by the New Jersey
Turnpike Authority.
The law will prohibit the state,
as well as state agencies and authorities, from giving no-bid contracts worth more than $17,500
to firms that contribute to the
governor or to his partys state
committee.
Since the Turnpike Authority
recently assumed control of the
Garden State Parkway, it had two
sets of consultants in 2003 most
of whom were contributors to the
Democratic State Committee. The
law firms were Woodbridge-based
Wilentz, Goldman & Spitzer,
which gave $51,000 and was paid
$1.8 million in 2003, and Teaneckbased DeCotiis, FitzPatrick, Cole
& Wisler, which gave $40,000 and
was paid $1.5 million.
Environmental
consultant
Birdsall Engineering gave $25,000
and was paid $1 million, while
another environmental consultant, PMK Group, gave $13,000
and earned $223,000. General
consulting engineer HNTB Corp.
gave $20,000 and was paid $7.4
million, while traffic engineer
Vollmer Associates gave $9,600
and was paid $1 million. Auditor
Deloitte & Touche gave $25,000
and was paid $166,200.
One might assume that since
the firms all earned more than the
pay-to-play laws $17,500 threshold, none would be able to get future contracts if they continued
contributing after 2006. But its
not that simple.
The laws restrictions apply to
contributions from a business or
from an individual with an interest of 10 percent or more in the
businesss profits or stock. That
Limited ban
means Deloitte & Touche would
To understand how gaps in the not have been able to get the turnnew law could still allow pay-to- pike contract if the pay-to-play

law had been in effect because its

$25,000 donation came from the
firm itself.
But things are not as clear with
the DeCotiis firm. Its $40,000
contribution was made up of 34
checks from 18 different lawyers,
and theres no easy way to know
which lawyers have an interest of
more than 10 percent. Some, including those with the last name
of DeCotiis, presumably hold a 10
percent interest. But others may
not, and nothing in the law would
stop the firm from getting a contract if those other attorneys were
the ones giving the money.
The law actually leaves it to the
firms seeking a contract to file a
written certification that they are
eligible because they did not
make any contributions that
would trigger the ban. But just in
case they did, the law allows them
to ask the official who got the
money to give it back thus making them eligible for the contract.
And, of course, theres nothing
in the law to stop Deloitte &
Touche or anyone else from
landing a contract if its individual
accountants make contributions
instead of the firm itself.
This bill was not everything I
wanted it to be, said Assemblywoman Loretta Weinberg, DTeaneck, who sponsored the payto-play law and battled with Democratic leaders to make it
tougher. But I do believe that
[with a law addressing] no-bid
contracts, well be able to get at
the most egregious allegations
that have been made about professional services and pay-to-play.
Its better than what was there
before and its better than nothing, Weinberg said.

cracked down a decade ago on

pay-to-play among underwriters
of government bonds a reform
sparked in part by a scandal in the
administration of Gov. James J.
Florio they restricted contributions not only by brokerage firms
but also by their employees. They
also required disclosure of contributions by any lobbyists or consultants hired by the underwriters
to help get them work.
Since that time, contributions
to state committees from bankers
who underwrite government debt
have declined markedly. Some
employees of banking firms are
still allowed to give, but only if
theyre not involved in the investment side of the business.
Those restrictions by the Municipal Securities Rulemaking
Board were a model used by the
state Investment Council this year
when it was crafting a policy to
block political favoritism in hiring
investment managers for the
states multibillion-dollar pension
funds. The council is considering
a rule that would bar any contract
from going to a firm if the firm, its
employees, or a company PAC
gave a related political contribution in the previous two years.
The proposal also tried to bar
contributors from getting around
the ban.
The practices of other states
are largely distinguished by the
magnitude of their loopholes,
council Chairman Orin Kramer
of Englewood wrote in a confidential memo. Kramer, a major
Democratic contributor, argued
for protecting the pension system
from political hacks out to make
a buck.
Probably the most difficult issues surround the multifarious indirect paths through which economic actors purchase political
good will, he wrote. Among
high-end sophisticates in the political marketplace, it may take
the form of funneling contributions to a low-visibility political
committee which then makes independent expenditures or transfers to another committee, known
as wheeling.
Much more commonly, it involves retaining well-connected
intermediaries whose influence
arises at least in part from political contributions. We do not
want investment managers to do
indirectly [hiring major contributors as intermediaries] what we
disallow them from doing directly [treating their own political
contributions as a business development tool].

Debate over wheeling

Critics raised many of the same

questions about the states new
pay-to-play law. They complained
that it does too little to stop
would-be contractors from contributing to legislative leadership
committees, which can accept up
to $25,000 a year, or to county
committees, which can accept up
to $37,000. Those committees, in
turn, can pass unlimited money
Others reforms
on to officials with the power to
But others have found ways to award a contract.
be tougher.
It was already illegal to try to
When federal regulators get around contribution limits by

giving money to someone with

the expectation that he would
pass it along to the intended candidate. And the reform package
increased penalties for doing so.
Now, if someone evades contribution limits through wheeling,
he will be subject to a fine of up to
three times the amount of the
contribution. And if the evasion is
designed to get around the payto-play law, the penalty can be as
much as the amount of the contract awarded, plus a five-year disqualification from receiving future government contracts.
But proving such a scheme
usually involves one player in the
conspiracy agreeing to testify
against another. A simpler way,
included in a bill that passed the
state Senate in March 2003 but
died in the Assembly, was to cap
how much a contractor could
give overall.
Roberts, the Assembly majority
leader, said that approach was
unconstitutional. In order to limit a businesss eligibility for a government contract, he argued,
there had to be a connection between the donation and the person or group with the power to
award the contract. He argued
that a stricter ban would violate
free speech rights.
Roberts also opposed limits on
county-to-county transfers of donations.
The Republican Party in
Burlington County, for example,
wants Republicans around the
state to be as strong as they can
be, and should be able to send
money to a county which is trying
to build its party strength,
Roberts said, deliberately selecting a GOP example.
In the final negotiations on the
pay-to-play law, Roberts did agree
to a ban on county transfers during the first six months of every
year, which Senate President
Richard Codey, D-Essex, had
sought. Such a ban would block a
county boss from sending money
into another county to influence
a primary. But it would still allow
party bosses to wheel money
around the state to influence general elections in November.
Some advocates for reform say
these kinds of transfers make it
more difficult to trace who is actually trying to influence officeholders; they say it could be time
to question the wisdom of contribution limits. Among them is
Gregg Edwards, a former executive director of the Senate Republican staff who worked on the
commission that recommended
the first contribution limits on legislators in the early Nineties.
Those reforms encouraged
people to start sending money to
other entities so those entities
would then send that money to
the intended beneficiary, all of
which makes disclosure very difficult, Edwards said. And to the
extent that you make disclosure
harder to police, harder to implement, harder to follow, then its
bad for the system.
Roberts said that if reformers
are unhappy with the final pay-toplay law, they would have been
See CAMPAIGNS Page 44

44 THE RECORD

JANUARY 2005

Published Sunday, Aug. 15, 2004

Campaigns: Donations to keep flowing despite reforms

From Page 43
even more outraged if lawmakers
had tried to dismantle existing
contribution limits. Despite criticism of the new law, Roberts believes it and the overall reform effort will be a winning issue with
the voters.

Wish lists
Overall, ELEC Executive Director Fred Herrmann said, the
commission which is getting a
$2 million boost to its budget this
year was pleased with the
package. But some reforms that
ELEC had repeatedly sought in
its annual reports to the governor
and the Legislature were not implemented.

For example, the commission

wanted the state to follow the
lead of the federal government
and 46 other states and ban corporate contributions. It also recommended a ban on unions
making direct contributions from
their treasuries.
In federal elections, corporations and unions may only make
donations through PACs funded
by voluntary donations from employees or members. New Jersey
allows most corporations and all
unions to make direct donations
as well as operate their own
PACs essentially allowing two
bites at the contribution apple.
Reform advocates have also
called for the state to curb dual

office-holding, which a researcher at the National Conference of State Legislatures said is

more prevalent in New Jersey
than anywhere else in the country. Allowing one person to be
both a mayor and a legislator, for
example, complicates enforcement of the pay-to-play ban: The
mayors local campaign might
not be able to receive contributions from the municipal attorney, but the mayors legislative
war chest could happily take the
money.
The reform package was touted as restoring public confidence
in elected officials, but events
after its passage raised questions
about how serious legislators

were about policing themselves.

State Sen. Joseph Coniglio, for
example, sponsored a bill to revise conflict-of-interest rules for
legislators and increase fines for
violations from $1,500 to
$10,000.
Under the old law, lawmakers
were allowed to vote on bills that
would benefit them financially if
they filed a statement saying they
had impartially considered them.
The new law, which took effect
immediately, prohibited such
votes.
It is long past time that the
Legislature begin taking conflicts-of-interest voting seriously,
Coniglio, D-Paramus, said when
the bill was approved.

But 11 days later, Coniglio, the

former president and finance
chairman of a plumbers union local in Lodi, voted for a bill the
union had been seeking. It requires public construction projects using prefabricated materials
to pay union-scale wages for any
plumbing work.
Coniglio, who retired in May
from the local but remains a
member, said he had no conflict.
I wasnt going to derive any
profit from it, he said.
Even McGreevey, when he
signed the ethics package in June,
conceded that he had hoped for
more, especially on pay-to-play.
We should be proud of the
example New Jersey has set for

the rest of the nation, but we

must also continue to work together to uphold the highest
standards of ethical conduct, he
said.
Assembly leaders who devised
most of the plan said they would
be open to further changes. In
particular, Weinberg is planning
to push a bill later this year to
clarify that municipalities and
counties could impose stricter
pay-to-play bans than the minimums set by the state law.
If the publics faith in government has been eroded, its been
eroded over time, and it will be
restored over time, said Roberts.
E-mail: jackson@northjersey.com

Published Monday, Aug. 16, 2004

Highs and lows of political fund raising

About the data

Donations to North Jersey campaigns covered wide range

By HERB JACKSON
and BENJAMIN LESSER
STAFF WRITERS

Fund raising by North Jersey

candidates for the state Legislature last year was a tale of extremes: They won some of the
most expensive seats in the 2003
election, and some of the cheapest.
The winning candidates in two
highly competitive districts raised
nearly $4.8
million combined,
the
thirdand Under the
fourth-largest
influence:
totals among
Money in
the 40 legislative districts
Trenton
statewide.
Last of 7 parts
In
those
districts the 38th in Bergen
County and the 36th, covering
parts of Bergen, Passaic, and Essex counties Democrats took
both Senate seats and three of
four Assembly seats. The victories dashed Republicans hopes
of gaining control of the Senate
and expanded the Democrats
majority in the Assembly.
Both major parties poured
money into those races, and the
top donors there closely mirrored the top donors to legislative campaigns statewide. As a
rule, party committees and labor
unions led the pack.

At the other end of the fundraising spectrum were a host of

so-called safe districts where
incumbents from the dominant
party Democrats in the 32nd,
34th, 35th, and 37th, Republicans in the 26th, 39th, and 40th
raised far more modest
amounts.
For example, state Sen. Paul
Sarlo, D-Wood-Ridge, raised
nearly $1.7 million to hold on to
his 36th District seat in 2003,
while 37th District Assemblyman Gordon Johnson, D-Englewood, took in $44,000. That
works out to $92.14 per vote for
Sarlo, and $1.95 per vote for
Johnson.
Sarlo got $5,000 from the trial lawyers lobby, while Johnson
got $500. The states largest
teachers union gave Sarlo
$6,800 and Johnson $1,700. Sarlo got $13,800 from construction
and recycling companies controlled by Joseph Sanzari, Sarlos
employer. Johnson got $500.
The same kinds of contrasts
hold true with Republicans.
While 36th District Assemblyman Paul DiGaetano of Nutley
raised $805,098, 39th District
Assemblywoman Charlotte Vandervalk of Montvale collected
$46,093. Thats $46.96 per vote
for DiGaetano, $1.45 per vote
for Vandervalk.
Vandervalks biggest donor
was the New Jersey Medical Societys political action committee, which gave $3,000. The doctors gave DiGaetano $14,050,
but that only ranked them sec-

ond among his top donors.

Across the nine districts in
The Records circulation area,
the New Jersey Education Association ranked among the top 10
donors to 14 of the regions 27
legislators, giving $54,878. Laborers unions, the top donor
overall to winners in the 2003
campaign, were among the leading donors to 13 legislators in
the region, with $101,500 in
contributions. Three groups
the Coalition of Auto Retailers,
the state Realtors Association,
and police unions around the
state ranked among the top
donors to 10 local legislators.
Party committees dominated
the donor list in races where the
most money was raised.
For example, Sarlo collected
more than $1 million from just
four party sources the Senate
Democratic Majority Committee, Democratic State Committee, New Democratic Assembly
Leadership PAC, and Bergen
County Democratic Organization; that total combines his individual fund raising with his
share of receipts from a committee he ran with his Assembly
running mates.
For many legislators from
safe districts, the biggest threat
is not the general election in November but the June primary,
when they have to win their partys nomination to run in the fall.
In two North Jersey districts,
otherwise safe senators had to
ramp up their fund raising to
fend off primary challenges.

Otherwise, party leaders say, it

was not likely that Sen. Nia Gill,
D-Montclair, or Sen. Robert
Martin, R-Morris Plains, would
have had to work as hard at
fund raising. Gill raised
$476,000 to retain her seat in the
34th District, which covers parts
of Essex and Passaic counties.
Martin took in $388,000 to win
reelection in the 26th, which
covers parts of Morris and Passaic counties.
Bob Martin raised almost
$400,000, but he probably otherwise would have had
$38,000, said Bill Palatucci, finance chairman for the Republican State Committee. Palatucci
was still angry that Martin had
to spend so much to hold on to
his seat, because the intra-party
battle used up money that could
have been spent trying to oust
Democrats in November.
It was a complete waste of
resources in a fight that was very
counterproductive, Palatucci
said.
Safe legislators also have to
worry about a challenger with
significant personal wealth
emerging from the other party.
Longtime state Sen. Byron Baer,
facing a spirited challenge from
businessman Barry Honig,
raised nearly $400,000. More
than 40 percent of that total
came from the Senate Democratic Majority Committee, the
Bergen County Democratic Organization, and Baer himself.
Every incumbent with half a
brain is employing their own in-

The total amount raised by each legislator includes money

raised for primary and general elections and combines
donations of more than $400 that were compiled in a statemanaged database with totals received under $400 on paper
reports filed with the state.
For legislators who had joint committees with running mates,
totals for those committees were apportioned to each candidate
named in the committee. Donations from candidates to their
own joint committees were excluded.
Totals for legislative leadership committees include amounts
raised in 2002 and 2003.

The staff
Herb Jackson, 42, has covered New Jersey government and politics or directed coverage as an
editor for 15 of the past 20 years. A Hudson County
native and Rutgers University graduate, he has
worked in the Trenton bureau of The Record since
1998. Since February 2002, he has taken readers
behind the scenes in Trenton with his column,
Capital Games.
Benjamin Lesser, 28, has worked on computerassisted projects since coming to The Record in
November 2000 from the Times Union of Albany,
N.Y. While attending the University of Missouri
School of Journalism, he worked for the National
Institute for Computer-Assisted Reporting. He has
also taught classes at Columbia Universitys Graduate School of Journalism.
Editors: Deirdre Sykes, Charles Stile
Copy editors: Mike Kozma, Nancy Cherry
Graphics editor: Jerry Luciani
Designer: Robert S. Townsend
Graphic artist: Bob Rebach
Photographer: Chris Pedota

cumbent protection plan,

Palatucci said. They should be
staying close with their constituents and raising money. If
an incumbent comes in and has
a conversation with me, the first

question Im going to have is,

How much money do you have
in the bank?
Email: jackson@northjersey.com
and lesser@northjersey.com

40th Legislative District

Cedar Grove, Franklin Lakes, Little Falls, Mahwah, Midland Park, Oakland, Ridgewood, Ringwood, Verona, Wanaque, Wayne, Wyckoff

Henry P. McNamara

Committee: Senate Democratic Majority

Total raised: $4,004,391

Top Donors
Names
Passaic County Democratic Committee
Essex County Democratic Committee
Plumbers Unions
Camden Cnty Democratic Committee
Bergen Cnty Democratic Organization
SEIU-Service Employees Union
Codey for Senate
Community Corrections Corp.
Communications Workers of America
Democratic State Committee
Dem. Legislative Campaign Committee

Amount
$117,000
$103,400
$92,250
$73,210
$60,000
$50,000
$50,000
$50,000
$50,000
$50,000
$50,000

Kevin J. OToole

David C. Russo

Senate, R-Wyckoff
Legislative service: Senate, 1985present; minority whip, 1990-91; assistant minority whip, 1989
Committee assignments: Environment; Transportation
Total raised: $299,675

Assembly, R-Cedar Grove

Legislative service: General Assembly, 2002-present, 1996-2001;
deputy Republican leader, 2004present; assistant majority leader
1998-2001; Senate, 2001
Committee assignments: Budget; Transportation
Total raised: $164,666

Assembly, R-Ridgewood
Legislative service: General Assembly, 1990-present
Committee assignments: Financial
Institutions and Insurance; Housing
and Local Government; Joint Legislative Committee on Ethical Standards
Total raised: $130,793

Top Donors

Top Donors

Top Donors

Name
Amount
Daibes Bros.-Demetrakis
$9,600
MEDAC-Medical Society PAC
$7,500
Nowell Amoroso Klein
$7,500
Laborers Unions
$7,200
McNamara for County Executive
$7,200
J. Fletcher Creamer-Creamer Environmental $5,000
Coalition of Auto Retailers
$5,000
Fuel Merchants Association
$4,500
Computer Crafts Inc.
$4,400

Name
Amount
Prismatic Development
$11,600
Michael Zemsky Architects
$5,400
Edward McGlynn-ERM Government Affairs $5,200
JCA Associates Inc.
$4,400
WMBC TV 63
$4,400
Ravin Greenberg
$4,000
Bergen County Republican Organization
$3,590
Wachovia
$3,000
Passaic Cnty Regular Repub. Organization $2,860
Hovnanian
$2,750
Schoor DePalma
$2,750

Name
Amount
Russo, his family and businesses
$21,000
Van Eck Global
$4,625
Frank and Jesse Adamiak
$4,000
Police Unions
$3,950
Bergen County Republican Organization
$3,590
Shotmeyer Bros. Petrol
$3,500
DeCroce for Assembly
$3,000
Passaic Cnty Regular Repub. Organization $2,860
New Jersey Education Association
$2,500
Realtors PAC
$2,500
Collins & Stuhltrager for Assembly
$2,500

Committee: New Democratic Assembly Leadership

Total raised: $5,718,726

Committee: Senate Republican Majority

Total raised: $3,771,009

Committee: Assembly Republican Majority

Total raised: $1,911,649

Top Donors

Top Donors

Names
West New York Municipal Dem. Comm.
Middlesex County Democratic Org.
Laborers Unions
Commerce Bank/Insurance
Bergen County Democratic Organization
Parker, McCay & Criscuolo
Communications Workers of America
Joseph Jingoli Cos.
IBEW-Electrical Workers
DeCotiis, FitzPatrick, Cole & Wisler

Amount
$370,500
$197,000
$100,000
$100,000
$99,500
$81,000
$80,000
$79,500
$78,100
$70,000

Names
Burlington County Repub. Committee
Communications Workers of America
Metro Homes
NJBIA-Business and Industry Assn
Police Unions
Kyrillos for Senate
Singer for Senate
Gormley for Senate
Republican State Committee
Philip Morris USA Inc.
Ciesla for Senate

Top Donors
Amount
$120,000
$100,000
$65,000
$60,900
$51,250
$50,000
$50,000
$50,000
$45,376
$45,000
$45,000

Names
Communications Workers of America
DeCroce for Assembly
Douglas Forrester
Republican State Committee
Philip Morris USA Inc.
Bell for Assembly
NAIOP Developers PAC
NJBIA-Business and Industry Assn
Lowenstein Sandler
Builders PAC of N.J.

Amount
$60,000
$50,000
$50,000
$49,750
$45,000
$40,000
$34,600
$34,000
$33,900
$32,500

JANUARY 2005

THE RECORD 45

Published Monday, Aug. 16, 2004

26th Legislative District

Bloomingdale, Butler, Chatham Borough, East Hanover, Florham Park, Hanover, Kinnelon, Lincoln Park, Montville, Morris Plains, Parsippany-Troy Hills, Pequannock,
Pompton Lakes, Riverdale, West Milford

Robert J. Martin

Alex DeCroce

Joseph Pennacchio

Assembly, R-Parsippany-Troy Hills

Legislative service: General Assembly, 1989-present; Republican
leader, 2003-present; Republican
conference leader, 2002-03; deputy
speaker, 1994-2001
Committee assignments: Legislative Services
Commission
Total raised: $404,223

Senate, R-Morris Plains

Legislative service: Senate, 1993present; assistant majority leader,
1994-97; General Assembly, 198593; minority whip 1990-92
Committee assignments: Education; Judiciary; Joint Committee on the Public
Schools
Total raised: $388,052

Assembly, R-Montville
Legislative service: General Assembly, 2001-present; appropriations officer, 2004-present
Committee assignments: Appropriations; Federal Relations
Total raised: $117,730

Top Donors

Top Donors

Top Donors

Name
Laborers Unions
Railroad Construction
Motor Truck Association PAC
UPS
Coalition of Auto Retailers
Edwards & Kelcey Constructors Inc.
Boswell Engineering PC
Builders PAC of N.J.
Associated General Contractors PAC
NJBIA-Business and Industry Assn
Realtors PAC

Amount
$15,800
$11,900
$11,850
$7,200
$6,550
$5,650
$5,300
$5,000
$4,900
$4,700
$4,700

Name
Senate Republican Majority
Robert Martin
Levinson Axelrod
New Jersey Education Association
Riker Danzig
Singer for Senate
Gormley for Senate
DeCroce for Assembly
JBL RAL Associates
Lum, Danzis, Drasco & Positan

Amount
$28,000
$18,000
$15,200
$9,950
$8,500
$7,200
$7,200
$6,000
$5,400
$5,250

Name
Dental PAC
Coalition of Auto Retailers
MEDAC-Medical Society PAC
Realtors PAC
Federal Hill Risk Management
Operating Engineers
New Jersey Education Association
Bio-Reference Labs
Five contributors tied

Amount
$6,200
$4,700
$3,000
$2,500
$2,350
$2,100
$2,000
$1,600
$1,500

32nd Legislative District

East Newark, Fairview, Harrison, Jersey City (partial), Kearny, North Bergen, Secaucus

Anthony Impreveduto
Assembly, D-Secaucus
Legislative service: General Assembly, 1987-present; deputy
speaker, 2002-present; minority
conference leader, 1994-2001
Committee assignments: Regulated Professions and Independent Authorities, chairman; Transportation; Joint Legislative Committee on
Ethical Standards
Total raised: $339,857

Top Donors
Name
Doria Democratic Leadership Fund
Cohen for Assembly
Funeral Directors-PAC
ATLA Legal PAC-Trial Lawyers
Secaucus Democratic Committee
Police Unions
Coalition of Auto Retailers
Hudson County Board of Realtors
Wilenta Feed Inc.
Ophthalmology PAC
NJCPA PAC-Accountants

Amount
$15,000
$13,924
$8,500
$8,000
$7,500
$7,500
$7,200
$7,000
$5,500
$4,500
$4,500

Joan M. Quigley

Nicholas J. Sacco

Assembly, D-Jersey City

Legislative service: General Assembly, 1994-present; deputy
speaker, 2004-present; minority
parliamentarian, 1999-2001
Committee assignments: Homeland Security and State Preparedness, chairwoman;
Budget; Health and Human Services
Total raised: $97,861

Senate, D-North Bergen

Legislative service: Senator, 1995present
Committee assignments: Transportation, chairman; Law and Public
Safety; Veterans Affairs
Total raised: $154,376

Top Donors

Top Donors

Name
Hudson Cnty Democratic Organization
Police Unions
Hospital Association
Laborers Unions
New Jersey Education Association
Dental PAC
Realtors PAC
Davis Saltzberg Wenger
ATLA Legal PAC-Trial Lawyers
Plumbers Union

Amount
$4,298
$3,900
$3,600
$3,300
$2,900
$2,800
$2,500
$2,250
$2,000
$1,800

Name
N. Bergen Dem. Municipal Committee
Laborers Unions
Coalition of Auto Retailers
Plumbers Unions
Hudson Cnty Democratic Organization
DeCotiis, FitzPatrick, Cole & Wisler
New Jersey Education Association
Piro, Zinna, Cifelli & Paris
Metcalf & Eddy
MEDAC-Medical Society PAC

Amount
$60,319
$9,200
$5,000
$4,900
$4,298
$3,625
$3,600
$3,100
$3,050
$3,000

34th Legislative District

Clifton, East Orange, Glen Ridge, Montclair, West Paterson

Nia H. Gill

Peter C. Eagler

Sheila Y. Oliver

Assembly, D-Clifton
Legislative service: General Assembly, 2002-present
Committee assignments: Regulated Professions and Independent
Authorities, vice chairman;
Telecommunications and Utilities, vice chairman;
Senior Issues
Total raised: $130,066

Senate, D-Montclair
Legislative service: Senate, 2002present; General Assembly, 19942001; minority whip, 1996-2001
Committee assignments: Commerce, vice chairwoman; Judiciary;
Legislative Services Commission
Total raised: $476,165

Assembly, D-East Orange

Legislative service: General Assembly, 2004-present
Committee assignments: Health
and Human Services; Labor; Law
and Public Safety
Total raised: $78,130

Top Donors

Top Donors

Top Donors

Name
Roberts for Assembly
Greenwald for Assembly
Egan for Assembly
Peter Eagler
Harold Leb and Associates
Passaic County Education Associations
Sires for Assembly
Preakness Healthcare
New Jersey Education Association
Andalaft and Associates

Amount
$14,400
$12,800
$5,000
$3,500
$2,785
$2,600
$2,500
$2,400
$2,000
$1,800

Name
Senate Democratic Majority Committee
ATLA Legal PAC-Trial Lawyers
Coalition of Auto Retailers
Codey for Senate
Gill Baltimore and Solomon
Bobbi Brown Plofker
Lowenstein Sandler
Longshoremen
Laborers Unions
Three contributors tied

Amount
$53,810
$8,500
$7,200
$7,200
$6,200
$5,400
$5,300
$5,200
$5,000
$4,000

Name
Roberts for Assembly
Eagler for Assembly
Nigerian PAC
Realtors PAC
Joseph Iznnd
New Jersey Education Association
Grace Reformed Baptist Church
Joseph Yeadon
Nine contributors tied

Amount
$7,200
$7,200
$3,800
$2,500
$2,000
$2,000
$2,000
$1,500
$1,000

35th Legislative District

Glen Rock, Haledon, Hawthorne, North Haledon, Paterson, Prospect Park, Totowa

John A. Girgenti

Alfred E. Steele

Nellie Pou

Senate, D-Hawthorne
Legislative service: Senate, 1990present; majority whip, 2004-present; Democratic whip, 2002-03;
General Assembly, 1978-90; deputy
majority leader, 1990; assistant minority leader, 1986-89
Committee assignments: Law and Public Safety
and Veterans Affairs, chairman; Judiciary, vice chairman
Total raised: $267,226

Assembly, D-Paterson
Legislative service: General Assembly, 1997-present; deputy
speaker, 2002-present; assistant
minority leader, 2000-2001
Committee assignments: Senior
Issues, chairwoman; Appropriations, vice chairwoman; Education
Total raised: $135,525

Assembly, D-Paterson
Legislative service: General Assembly, 1996-present; deputy
speaker, 2002-present; assistant
minority leader, 1998-2001
Committee assignments: State
Government, chairman; Financial Institutions and Insurance
Total raised: $42,127

Top Donors

Top Donors

Top Donors

Name
North Jersey Federal Credit Union
Communications Workers of America
Railroad Construction
Hospital Association
Mechanical Contractors Assn of N.J.
Optometric PAC
Plumbers Unions
Police Unions
Federal Credit Union
Six contributors tied

Name
United Food and Commercial Workers
Passaic County Education Associations
Firefighters
Passaic Valley Sewage Comm Employees
Police Unions
Wakefern Food Corp.
Boswell Engineering PC
New Jersey Education Association
Four contributors tied

Amount
$9,550
$7,100
$4,300
$4,000
$4,000
$4,000
$3,800
$3,600
$3,500

Amount
$1,500
$1,500
$1,450
$1,350
$1,200
$1,200
$1,200
$1,150
$1,100
$1,000

Name
Realtors PAC
New Jersey Education Association
Communications Workers of America
Police Unions
NJBIA-Business and Industry Assn
Coalition of Auto Retailers
Firefighters
Crown Roll Leaf Inc.
Korean Cleaners Association of N.J.
Lester Lieberman
Passaic County Education Associations

Amount
$2,500
$2,000
$1,250
$1,100
$1,000
$1,000
$1,000
$1,000
$750
$750
$750

46 THE RECORD

JANUARY 2005

Published Monday, Aug. 16, 2004

36th Legislative District

Carlstadt, East Rutherford, Garfield, Lyndhurst, Moonachie, North Arlington, Nutley, Passaic, Rutherford, Wallington, Wood-Ridge

Paul A. Sarlo

Paul DiGaetano

Frederick Scalera

Senate, D-Wood-Ridge
Assembly, R-Nutley
Legislative service: Senate, 2003Legislative service:
General Aspresent; assistant majority leader,
sembly, 1992-present, 1986-87; Re2004-present; General Assembly,
publican leader, 2002-03; majority
2002-03
leader, 1996-2001
Committee assignments: Law and
Committee assignments: None
Public Safety and Veterans Affairs, vice chairman;
Total raised: $805,098
Budget and Appropriations; Judiciary
Total raised: $1,661,976

Assembly, D-Nutley
Legislative service: General Assembly, 2003-present
Committee assignments: Housing
and Local Government, vice chairman; Homeland Security and State
Preparedness; Labor
Total raised: $225,495

Top Donors

Top Donors

Name
Police Unions
MEDAC-Medical Society PAC
NJBIA-Business and Industry Assn
Operating Engineers
Laborers Unions
New Jersey Education Association
Builders PAC of N.J.
Plumbers Unions
Carpenters Unions
Realtors PAC

Top Donors
Amount
$20,450
$14,050
$13,100
$12,000
$11,900
$10,550
$8,250
$8,250
$8,200
$7,900

Name
Senate Dem. Majority Committee
Democratic State Committee
New Dem. Assembly Leadership PAC
Bergen Cnty Democratic Organization
IBEW-Electrical Workers
Carpenters Unions
Laborers Unions
Bryant for Senate
Joseph Sanzari Cos.
Communications Workers of America

Amount
$644,068
$250,000
$108,333
$41,667
$16,450
$16,400
$15,400
$14,000
$13,800
$12,700

Name
Amount
Democratic State Committee
$64,214
Bergen Cnty Democratic Organization
$16,667
Essex County Democratic Committee
$13,500
New Dem. Assembly Leadership PAC
$8,333
Impreveduto for Assembly
$7,200
Dem. Legislative Campaign Committee
$7,200
Greenwald for Assembly
$7,200
Imre Karaszegi for Assembly
$6,167
Joseph DiVincenzo for Essex Cnty Exec.
$6,000
Bonnie Watson Coleman for Assembly
$5,000

37th Legislative District

Bergenfield, Bogota, Englewood, Englewood Cliffs, Hackensack, Leonia, Maywood, Palisades Park, Ridgefield Park, Rochelle Park, Teaneck, Tenafly

Gordon M. Johnson

Byron M. Baer
Senate, D-Englewood
Legislative service: Senate, 1994present; Senate leader ex-officio,
2004-present; Democratic Senate
leader ex-officio, 2002-03; minority
leader pro tempore, 1996-2001; General Assembly, 1972-93; minority leader pro tempore,
1992-93; deputy speaker, 1991; associate Assembly
leader, 1990; assistant minority leader, 1986-89
Committee assignments: Commerce, chairman; Judiciary; State Government; Joint Committee on the
Public Schools; Legislative Services Commission
Total raised: $397,449

Assembly, D-Englewood
Legislative service: General Assembly, 2002-present. Occupation:
Undersheriff, Bergen County Sheriff's Department
Committee assignments: Law and
Public Safety, vice chairman; Homeland Security
and State Preparedness; Transportation
Total raised: $44,228

Top Donors

Top Donors

Name
Amount
Senate Democratic Majority Committee
$90,864
Bergen County Democratic Organization $43,230
Byron Baer
$38,000
Laborers Unions
$7,200
Adler for Senate
$7,200
Democratic Committee-City of Linden
$7,200
Johnson for Assembly
$6,000
Plumbers Unions
$5,500
Funeral Directors-PAC
$4,000
Girgenti for Senate
$4,000

Name
Sorce Cos.
Gordon Johnson
Chong and Sung Cho
New Jersey Education Association
Joseph Sanzari Cos.
Roberts for Assembly
Police Unions
Coalition of Auto Retailers
Builders PAC
Laborers Unions

Amount
$5,000
$3,110
$3,000
$1,700
$1,500
$1,500
$1,450
$1,000
$600
$600

Loretta Weinberg
Assembly, D-Teaneck
Legislative service: General Assembly, 1992-present; majority conference leader, 2002-present;
deputy minority leader, 1996-2001;
assistant minority leader, 1994-95
Committee assignments: Health and Human Services, chairwoman; Family, Women and Childrens
Services, vice chairwoman; Legislative Services
Commission
Total raised: $197,948

Top Donors
Name
Amount
Sorce Cos.
$8,000
Friends of Home Care PAC
$7,200
Optometric PAC
$6,000
AFSCME-State, Cnty, and Muni. Employees $5,500
Camden County Democratic Committee
$5,000
Hospital Association
$4,500
Realtors PAC
$3,500
ALTA Legal PAC-Trial Lawyers
$3,000
Attention America 770 LLC
$3,000
New Jersey Education Association
$2,778

38th Legislative District

Cliffside Park, Edgewater, Elmwood Park, Fair Lawn, Fort Lee, Hasbrouck Heights, Little Ferry, Lodi, Paramus, Ridgefield, Saddle Brook, South Hackensack, Teterboro

Joseph Coniglio

Robert M. Gordon

Joan M. Voss

Senate, D-Paramus
Legislative service: Senate, 2002present
Committee assignments: State
Government, chairman; Budget and
Appropriations; Labor
Total raised: $1,233,297

Assembly, D-Fair Lawn

Legislative service: General Assembly, 2004-present
Committee assignments: Appropriations; Environment and Solid
Waste; Health and Human Services
Total raised: $392,832

Assembly, D-Fort Lee

Legislative service: General Assembly, 2004-present
Committee assignments: Education; Regulated Professions and Independent Authorities
Total raised: $356,559

Top Donors

Top Donors

Top Donors

Name
Amount
Senate Democratic Majority Committee $451,098
Democratic State Committee
$289,359
Bergen County Democratic Organization $97,133
Paramus Democratic Organization
$75,495
IBEW-Electrical Workers
$22,000
Plumbers Union
$21,550
Communications Workers of America
$14,900
Bryant for Assembly
$14,000
Laborers Unions
$10,000
Bob Smith for Senate
$10,000

Name
Senate Democratic Majority Committee
Bergen County Democratic Organization
Democratic State Committee
Laborers Unions
Communications Workers of America
Greenwald for Assembly
Dem. Legislative Campaign Committee
Middlesex Cnty Democratic Organization
Sires for Assembly
New Jersey Education Association

Amount
$104,000
$97,633
$66,110
$7,200
$7,200
$7,200
$7,200
$5,000
$5,000
$4,650

Name
Amount
Senate Democratic Majority Committee $104,000
Bergen County Democratic Organization $97,133
Democratic State Committee
$66,110
Laborers Union
$7,200
Impreveduto for Assembly
$7,200
Greenwald for Assembly
$7,200
Dem. Legislative Campaign Committee
$7,200
Sires for Assembly
$5,000
Middlesex County Democratic Organization $5,000
New Jersey Education Association
$4,650

39th Legislative District

Allendale, Alpine, Closter, Cresskill, Demarest, Dumont, Emerson, Harrington Park, Haworth, Hillsdale, Ho-Ho-Kus, Montvale, New Milford, Northvale, Norwood, Old Tappan,
Oradell, Park Ridge, Ramsey, River Edge, River Vale, Rockleigh, Saddle River, Upper Saddle River, Waldwick, Washington Township, Westwood, Woodcliff Lake

Gerald Cardinale

John E. Rooney

Charlotte Vandervalk

Senate, R-Demarest
Legislative service: Senate, 1982present; deputy majority leader,
1994-2001; majority whip, 1992-93;
assistant minority leader, 1987-89,
minority whip, 1985-86; General Assembly, 1980-81
Committee assignments: Commerce; Judiciary
Total raised: $384,900

Assembly, R-Northvale
Legislative service: General Assembly, 1983-present
Committee assignments: Environment and Solid Waste; Regulatory
Oversight; Intergovernmental Relations Committee
Total raised: $57,530

Assembly, R-Montvale
Legislative service: General Assembly, 1991-present; deputy Republican leader, 2002-03; assistant
majority leader, 1992-95
Committee assignments: Health
and Human Services
Total raised: $46,093

Top Donors

Top Donors

Top Donors

Name
Amount
DeCroce for Assembly
$4,700
Daibes Bros.-Demetrakis
$3,600
Azzolina Feury & Raimondi Engineering Inc. $2,480
Stonehurst Associates Inc.
$2,200
Blasland Bouck & Lee Inc.
$1,900
Joseph Sanzari Cos.
$1,800
Inserra Supermarkets
$1,500
Costa Engineering Corp.
$1,500
Capital Alternatives Corp.
$1,200
Realtors PAC
$1,100

Name
MEDAC-Medical Society PAC
Realtors PAC
Optometric PAC
ATLA Legal PAC-Trial Lawyers
David Habif
Psychology PAC
DeCroce for Assembly
Police Unions
Hospital Association
Robert Schroeder

Name
MEDAC-Medical Society PAC
Dental PAC
Funeral Directors-PAC
DeCotiis, FitzPatrick, Cole & Wisler
Coalition of Auto Retailers
Nowell Amoroso Klein Bierman
Joseph Sanzari Cos.
Check Cashers PAC
Realtors PAC
Three tied

Amount
$12,800
$9,450
$9,200
$8,800
$7,200
$6,630
$6,200
$5,675
$5,500
$5,000

Amount
$3,000
$2,500
$2,500
$2,500
$2,200
$2,000
$2,000
$1,400
$1,400
$1,200

JANUARY 2005

THE RECORD 47

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Friday, Aug. 13, 2004

McGreevey resigns,
reveals gay affair
Onetime lover and aide demanded money, sources say

CHRIS PEDOTA/STAFF PHOTOGRAPHER

Governor McGreevey was accompanied by his wife, Dina Matos McGreevey, and his parents, Veronica and Jack McGreevey, at Thursday's historic announcement at the State House.

Resignation date prevents

sprint to special election
By SHANNON D. HARRINGTON
STAFF WRITER

It may have seemed like a footnote in

Governor McGreeveys resignation
speech Thursday.
But Nov. 15 the day McGreevey said
he will resign carries a significant
amount of weight in New Jersey politics.
It shut the door to what could have
been a mad-dash campaign for the gover-

nors seat in a special election Nov. 2

not to mention one that would have
stolen attention from the presidential election.
It also put all eyes on Senate President
Richard J. Codey, a 30-year state legislator
from West Orange who under the state
Constitution is set to assume the seat
through 2005.
It also prompted some Republicans
See NO SPECIAL ELECTION Page 49

At a point in every persons life, one has to look deeply into the mirror of ones
soul and decide ones unique truth in the world, not as we may want to see it or
hope to see it, but as it is. And so my truth is that I am a gay American.
GOVERNOR MCGREEVEY

Codey, Senate president,

will assume office on Nov. 15
By JEFF PILLETS
TRENTON BUREAU

Climb to top built on doing

the little and likable things
By JOSH GOHLKE
TRENTON BUREAU

Perhaps no one ever expected to see

the governor of New Jersey stand before
a throng of reporters in his outer office
and admit that he is gay.
But for those who know him, Governor McGreeveys reason for pretending
otherwise was much less surprising: He
had done what he thought it took to
make people like him.

By virtue of my traditions, and my

community, I worked hard to ensure
that I was accepted as part of the traditional family of America, the governor
said Thursday.
Because of my resolve, and also
thinking that I was doing the right thing,
I forced what I thought was an acceptable reality on myself, a reality that is
layered with all the, quote, good things,
and all the, quote, right things of typical
See CLIMB TO TOP Page 50

Saying that the time had arrived to

confront the unique truth of his soul,
Governor McGreevey on Thursday revealed that he is a gay man and said he
will resign in the wake of a homosexual
love affair that is threatening his family
and his office.
At a point in every persons life, one
has to look deeply into the mirror of
ones soul and decide ones unique truth
in the world, not as we may want to see
it or hope to see it, but as it is, McGreevey said. And so my truth is that I
am a gay American.
McGreevey, flanked by his wife and
parents, made the announcement outside his Trenton office as stunned and
weeping staffers and members of his

Cabinet looked on. The governors father, Jack McGreevey, a retired Marine
drill sergeant, stood a few feet behind his
son with his arms crossed and head
bowed.
With tears welling in
his eyes, McGreevey
said he would leave office Nov. 15 and admitted that his exit was being forced, in part, by an
adulterous affair with a
man he did not name.
I am also here today
CIPEL
because, shamefully, I
engaged in adult consensual affair with
another man, which violates my bonds
of matrimony, the governor said. It was
wrong. It was foolish. It was inexcusable.
What McGreevey did not say was that

for the past two weeks, he and his inner

circle have been reeling under what administration sources described as the
extortionate demands of the governors ex-lover former homeland security adviser Golan Cipel.
Several sources in the governors office said Cipel, an Israeli national who
was forced to resign his state post in
2002, threatened that he would file
charges against the governor unless he
was paid several million dollars.
The guy was extorting the governor,
one staffer said of Cipel. He [Cipel] will
stop at nothing. The governor was very
good to the kid. This is a guy who is trying to get rich.
Cipel first demanded $20 million from
McGreevey, then reduced the extortion
demand to $5 million, according to one
See RESIGNATION Page 48

48 THE RECORD

JANUARY 2005

Published Friday, Aug. 13, 2004

Cipel wasnt one to hang around very long

By ELISE YOUNG
STAFF WRITER

McGreevey pal bounced from one well-paid job to another

Job to job Golan Cipel went, working

in government and private business in
New Jersey and abroad, never seeming
pleased with his career moves.
As recently as March he was in Trenton, employed by Shelley
M. Zeiger, a developer
and Jewish philanthropist who said he was
a political supporter of
Governor McGreevey.
The job - at least his seventh part-time or fulltime position since com- CIPEL
ing to New Jersey in
2001 lasted just seven months. It ended as so many others had.
It really wasnt working out and
Golan and I agreed it was best for him to
leave the company, Zeiger said Thursday.
Cipel, 35, was hired in September to
work on business deals, particularly in Israel and Russia. He was assigned to a
project with Russian investors who were
interested in setting up a commercial venture at the Mercer County Airport.
He wasnt concentrating on the things
I needed him to do. It seemed like he had
a lot of stuff going on. It just didnt work

out here, Zeiger said.

Zeiger said Cipel never mentioned a
grievance against McGreevey.
From what I knew, the governor was
his friend and supporter, Zeiger said.
Indeed, McGreevey had treated his
friend well.
McGreevey has said he met Cipel in
2000 on a trip to Israel, where Cipel was
a spokesman for the mayor of Rishon Le
Zion, the countrys first settlement of
Russian immigrants.
Cipel came to New Jersey in 2001 on a
work visa sponsored by Charles Kushner,
the McGreevey fund-raiser who eventually was to become a political embarrassment for the governor. In July, Kushner
was arrested on charges of witness tampering, promoting interstate prostitution,
and obstruction of justice. The complaint
was related to a federal investigation of
his financial practices; Kushner has
pleaded not guilty.
Cipel had lived in the United States in
the 1990s, to attend college in New York
City and later to work as a spokesman for
the Israeli consulate and as a television
reporter. Now, newly arrived in New Jersey, he took on two jobs: public-relations
associate for Kushners company, and lat-

er, aide to the Democratic State Committee, where he was director of Jewish
outreach for McGreeveys election campaign.
In January 2002, Cipel had a new
sponsor for his work visa the state of
New Jersey and a new job, as McGreeveys key adviser on security in the
post-Sept. 11 era.
Along with the job in the State House,
Cipel got a substantial raise. Working part
time for Kushner, Cipel was paid $30,000
a year. On the payroll of the Democratic
State Committee, he was paid $2,183
plus expenses every two weeks. Now, reporting directly to McGreevey, he was
drawing an annual salary of $110,000.
Cipels ascent occurred without routine background checks or any kind of official announcement from the governors
office, standard procedure for high officials in state government.
I didnt feel that kind of check was
necessary, McGreevey said when questioned by The Record in a February 2002
interview. Hes a super-bright and supercompetent individual who brings a great
of wealth on security. ... Hes someone
who thinks with a different set of eyes.
He said Cipel had valuable insight

governor, lasted five months before

Cipel resigned to take up a series of shortlived jobs in public relations.
All the while, McGreevey declined to
make Cipel available for interviews. He
never disclosed Cipels specific duties as
special counsel. And Cipel never spoke to
reporters after he entered the private sector.
The months since Cipel left the state
payroll did not appear to be professionally fulfilling. In September 2002 his first
job, as vice president for public affairs for
MWW in East Rutherford, lasted barely a
month. The company did not disclose
why Cipel left, but sources said he was
not happy about the hours he was expected to work.
In October 2002, days after he left
MWW, Cipel had a new job at State
Street Partners, a Trenton lobbying firm.
One of its partners is James Kennedy,
who served as best man for each of McGreeveys wedding ceremonies. But by
May 2003 he was gone.
Cipels most recent known job was
with Zeigers company. Cipel left his office on Prospect Street in Trenton in
March and moved from Princeton,
Zeiger said.

about life in a country wracked by terrorism.

In New Jersey, Cipel was expected to
be familiar with power plants, military installations, and other possible targets. In
the event of a terrorist strike, he was to be
McGreeveys closest adviser.
In fact, Cipels status as a foreigner
made him ineligible for the federal security clearance considered vital to lead
New Jerseys homeland security efforts after the Sept. 11 attacks. His antiterrorism
training was limited to compulsory service in the Israeli military and reserves.
McGreeveys critics went berserk.
Some legislators said New Jerseyans
should fear for their safety in the hands of
a 33-year-old who seemed ill-suited for
such a job. In public they shed doubt on
the ability of a foreigner with a college degree in communications and a published
book of original poetry. In private they
questioned why McGreevey was so motivated to employ the man.
In March 2002, three weeks after The
Record revealed Cipels shaky credentials, he left the position. Yet McGreevey
managed to keep him around, reappointing him to another $110,000-a-year job. Staff Writer Jeff Pillets contributed to this
This new post, as special counsel to the story. E-mail: younge@northjersey.com

Resignation
From Page 47
source with knowledge of the allegation.
The sources in the governors
office confirmed that the office
has filed a complaint against Cipel
with the U.S. Attorneys Office in
Newark, which is now investigating the allegations.
A spokesman for U.S. Attorney
Christopher J. Christie declined
comment. But a source close to
the investigation confirmed that
Christie began looking into the alleged blackmail scheme late
Thursday morning after his office
was notified that the FBI had
been contacted by William
Lawlor, McGreeveys attorney in
Washington, D.C., the source
said.
Lawlor could not be reached
for comment.
Cipel also could not be reached
for comment Thursday. Allen
Lowy, an attorney who is reportedly representing Cipel, did not
return calls to his New York office. Neighbors at Cipels former
Princeton condominium said he
moved away at least four months
ago and did not know where he
was living.
Trenton was awash in rumors
that Cipel was preparing to file a
graphically detailed lawsuit describing his affair with McGreevey. By late Thursday afternoon, however, it appeared that
no lawsuit had been filed in either
state of federal court.
It was not clear if Cipel or his
attorney had advanced a copy of
the lawsuit to McGreevey or formally notified the state of plans to
file a lawsuit. But Democratic
sources said it was clear that Cipel
was prepared to make extensive
and graphic allegations against
the governor.
The governors office has
known for at least two weeks that
Golan was not making idle
threats, said one party insider.
Believe me, Jim McGreevey
would not be resigning today if
there were not serious and substantially detailed allegations that
are ready for publication.
McGreeveys decision to resign
means that Democratic Senate
President Richard Codey, an Irish
undertaker known as much for
his witty one-liners as for his slick
political skills, will become acting
governor through next year.
Codey, who also will retain his
state Senate seat, released a brief
statement that did not address
what direction he might lead New
Jersey My heart goes out to Jim

McGreevey and his family during

this difficult personal time. Jim
McGreevey is a good person and
a good friend and todays events
sadden me.
The governors Nov. 15 departure, after nearly three years in office, means that the Democrats
will not have to make tough political decisions about who will be
their standard-bearer in next
years gubernatorial race. Since
taking office in January 2002,
McGreevey has been bedeviled by
a series of scandals and federal investigations involving key staffers
and party fund-raisers.
Two men frequently mentioned
as possible replacements for McGreevey, U.S. Sen. Jon Corzine
and Rep. Rob Andrews, issued
statements that expressed sympathy with McGreevey but sidestepped the issue of their own political futures.
I am prepared to serve the
people of our state in whatever
position I am entrusted to hold,
said Andrews, who added that he
is concentrating on his reelection.
Said Corzine: Any speculation
about my own political plans in
light of the governors decision is
entirely premature. I am focused
today on electing John Kerry to
the White House, and on regaining Democratic Party control of
the United States Senate.
Leading Republicans appeared
to be caught off balance by Thursdays events. By early evening,
however, they started to give signs
that they might press for McGreevey to resign before Nov. 15.
Some Republicans protested
that McGreevey was in effect disenfranchising New Jersey voters
by not resigning now and calling
for a special election in the fall.
State law calls for a special
election in November if a governor quits office within 60 days of
an election this year, Sept. 3.
McGreevey should resign immediately so the voters of New
Jersey have a chance to decide
who their elected governor
should be, said William Palatucci, finance chairman of the Republican State Committee.
Likely GOP candidate Bret
Schundler, who lost to McGreevey in 2001, said the governors wish for a 90-day transition
period reflects the whims of Democratic party bosses who want
Corzine to run next year. He suggested that the Cipel allegations
were engineered by Democratic
leaders hoping to discard McGreevey.

ASSOCIATED PRESS

Governor McGreevey standing before a throng of news media and supporters in announcing his resignation, given the circumstances surrounding the affair and its likely impact upon ... my ability to govern.
If Jim McGreeveys resignation is simply the opening act in a
drama that was pre-scripted by
the leaders of the Democratic Party, then these leaders have saved
their place in history as the worst
scoundrels ever to run a state,
Schundler said in a statement.
Even as New Jersey heads into
yet another topsy-turvy political
era, few in the spellbound capital
seemed ready to engage in partisan battle. McGreeveys breathtaking series of admissions
stunned and saddened veteran
regulars of both parties.
As news spread Thursday afternoon that McGreevey was
preparing to out himself at a news
conference, the corridors of the
State House swelled with legislative staffers, Assembly members
and state senators, Cabinet members and their aides, and newspaper and television reporters.
State police were forced to turn
away scores of State House workers who tried to get into the governors outer office for his appearance. Dozens who eventually
crowded in waited silently for McGreevey. Aides wept and hugged
each other. Cabinet members
passed tissues.
The governors opening words
brought gasps from some:
Throughout my life, I have grappled with my own identity, who I
am. As a young child, I often felt
ambivalent about myself, in fact,
confused.
He went on to portray his life
as one of constant turmoil between what he felt himself to be
and what he said he needed to be

as a politician before the public.

From my early days in school,
until the present day, I acknowledged some feelings, a certain
sense that separated me from others. But because of my resolve,
and also thinking that I was doing
the right thing, I forced what I
thought was an acceptable reality onto myself, he said.
It makes little difference that
as governor I am gay. In fact, having the ability to truthfully set
forth my identity might have enabled me to be more forthright in
fulfilling and discharging my constitutional obligations. Given the
circumstances surrounding the affair and its likely impact upon my
family and my ability to govern, I
have decided the right course of
action is to resign.
McGreevey spoke calmly and
deliberately. Many observers remarked that he appeared relieved.
Several aides said McGreevey
had been through an excruciating
week first confessing his infidelity to his wife and family, then
confessing he had been unfaithful
with a man.
From what I hear, the confessions did not go well, one aide
said.
McGreevey smiled throughout
his brief speech, even as his mother, Veronica, grew increasingly
distraught and his father kept his
chin on his chest. The governors
wife, Dina Matos McGreevey, a
Portuguese-American whom McGreevey married in October
2000, looked unceasingly into her
husbands eyes, linking her hand
in his.

I do not believe that God tortures any person simply for its
own sake, McGreevey went on.
I believe that God enables all
things to work for the greater
good. And this, the 47th year of
my life, is arguably too late to
have this discussion. But it is here,
and it is now.
McGreevey made no reference
to Cipels proposed lawsuit and
did not mention the word extortion.
He said he was admitting his
sexuality to protect his family and
to protect the governors office
from exposure to threats and allegations.
It makes little difference that
as governor I am gay, he said.
Given the circumstances surrounding the affair and its likely
impact upon my family and my
ability to govern, I have decided
the right course of action is to resign.
McGreevey ended his statement without answering questions.
Afterward, his aides declined to
provide details about Cipel or the
timing of McGreeveys announcement. Were just going to
let the governors statement
stand, said press secretary Micah
Rasmussen.
After McGreeveys appearance,
Cabinet members spoke in grieving terms about what one termed
the loss of our leader.
In 2 1/2 years in office he has
done more good for this state
than his predecessors have in
years, said Department of Environmental Protection Commis-

sioner Bradley Campbell. New

Jersey is losing a real advocate.
This is truly a sad day.
Charles Kushner, the developer whose fund raising on behalf of
McGreevey is now the subject of
a federal probe, said he regretted
McGreeveys plight. Kushner,
who was responsible for bringing
Cipel from Israel to the United
States, at one time employed
Cipel as a public relations specialist and sponsored his work visa.
Mr. Kushner said he has great
sympathy and compassion for the
governor, and his heart goes out
to him, said Howard Rubenstein,
Kushners spokesman.
Others, however, talked about
how McGreevey erred in trying to
conceal his homosexuality. They
said all of McGreeveys closest advisers either know or had strong
suspicions that he was gay.
All of us knew it, the press
knew it and the governor was
forced to live this horrible lie,
said one Democrat who worked
closely with McGreevey. There
was a sense that there was this
time bomb waiting to go off. It undermined Jim. It undermined
what we were trying to do. And
now it is destroying him.
The Rev. Reginald Jackson, the
influential Democrat who heads
the Black Ministers Council of
New Jersey, said he regretted that
McGreevey did not come out
years ago.
A lot of people knew this, he
said, shaking his head. It didnt
have to end this way. Maybe he
should have stood up for what he
was in the beginning.
By early Thursday evening, McGreeveys bombshell was making
news around the world. On Chinaview.cn, a Web site operated by
the official Chinese news agency
Xinhua, McGreeveys resignation
was played just below a headline
about 29 people killed and 1,500
injured in a typhoon in Zhejiang.
The story had to explain that New
Jersey was in the eastern part of
the United States.
The Irish Echo Online noted
that McGreevey was a popular
governor who has been fighting
allegations of corruption [and]
has a long-standing record of interest in Irish and Irish American
issues.
The story also was the lead
item on the main news page on
Internet portal Yahoo, and an accompanying message board had
received more than 7,800 responses between 4 and 8:30 p.m.
Staff Writers Josh Gohlke, Amy
Klein, Clint Riley, Mike Kelly, Scott
Fallon, John Brennan, and Andrew
Glazer contributed to this article.

It was wrong. It was foolish. It was inexcusable

Text of Governor McGreeveys anYet, from my early days in school, unnouncement of his resignation, as tran- til the present day, I acknowledged some
scribed by e-Media Inc.:
feelings, a certain sense that separated me
from others. But because of my resolve,
Good afternoon.
and also thinking that I was doing the
Throughout my life, I have grappled right thing, I forced what I thought was an
with my own identity, who I am. As a acceptable reality onto myself, a reality
young child, I often felt ambivalent about which is layered and layered with all the,
myself, in fact, confused.
quote, good things, and all the, quote, right
By virtue of my traditions, and my com- things of typical adolescent and adult bemunity, I worked hard to ensure that I havior.
was accepted as part of the traditional
Yet, at my most reflective, maybe even
family of America. I married my first wife, spiritual level, there were points in my life
Kari, out of respect and love. And togeth- when I began to question what an acer, we have a wonderful, extraordinary ceptable reality really meant for me. Were
daughter. Kari then chose to return to there realities from which I was running?
British Columbia.
Which master was I trying to serve? I do
I then had the blessing of marrying not believe that God tortures any person
Dina, whose love and joy for life has been simply for its own sake. I believe that God
an incredible source of strength for me. enables all things to work for the greater
And together, we have the most beautiful good. And this, the 47th year of my life, is
daughter.
arguably too late to have this discussion.

But it is here, and it is now.

At a point in every persons life, one has
to look deeply into the mirror of ones
soul and decide ones unique truth in the
world, not as we may want to see it or
hope to see it, but as it is.
And so my truth is that I am a gay
American. And I am blessed to live in the
greatest nation with the tradition of civil
liberties, the greatest tradition of civil liberties in the world, in a country which
provides so much to its people.
Yet because of the pain and suffering
and anguish that I have caused to my
beloved family, my parents, my wife, my
friends, I would almost rather have this
moment pass.
For this is an intensely personal decision, and not one typically for the public
domain. Yet, it cannot and should not
pass.
I am also here today because, shame-

fully, I engaged in adult consensual affair

with another man, which violates my
bonds of matrimony. It was wrong. It was
foolish. It was inexcusable.
And for this, I ask the forgiveness and
the grace of my wife.
She has been extraordinary throughout
this ordeal, and I am blessed by virtue of
her love and strength.
I realize the fact of this affair and my
own sexuality if kept secret leaves me, and
most importantly the Governors Office,
vulnerable to rumors, false allegations,
and threats of disclosure.
So I am removing these threats by
telling you directly about my sexuality.
Let me be clear: I accept total and full
responsibility for my actions. However,
Im required to do now, to do what is right
to correct the consequences of my actions
and to be truthful to my loved ones, to my
friends, and my family, and also to myself.

It makes little difference that as governor I

am gay. In fact, having
the ability to truthfully set McGREEVEY
forth my identity might
have enabled me to be more forthright in
fulfilling and discharging my constitutional obligations.
Given the circumstances surrounding
the affair and its likely impact upon my
family and my ability to govern, I have decided the right course of action is to resign.
To facilitate a responsible transition, my
resignation will be effective on Nov. 15th
of this year.
Im very proud of the things we have
accomplished during my administration.
And I want to thank humbly the citizens
of the state of New Jersey for the privilege
to govern.
Thank you.

JANUARY 2005

THE RECORD 49

Published Friday, Aug. 13, 2004

Timing
is terrible
for N.J.
Democrats

Incoming
governor
is veteran
lawmaker
Codey well-known
for his sharp wit
By JOHN BRENNAN
STAFF WRITER

Essex County Democrat Richard J. Codey will find

himself in a familiar role starting on Nov. 15: a governor of New Jersey who didnt run for the office.
Few outside the Senate presidents family probably
remember it, but the 57-year-old West Orange insurance executive already has served as governor for 3
days, thanks to the states requirement that the Senate
president replace a governor who departs in midterm.
Codeys tenure began on Jan. 12, 2002, when he replaced former Senate Co-President John O. Bennett,
who also served for a mere 84 hours.
The oddity arose because acting Gov. Donald
DiFrancescos term expired one week before the start
of Governor McGreeveys term. The states constitution thus left the job to the Senate president for the seven-day gap but the November 2001 elections left
both the Republicans and Democrats with 20 state
senators apiece.
Its a marriage neither of us wants to be in, but one
we cant get out of, Codey said of his brief job-sharing
stint with Bennett.
After tentatively working out the job-sharing deal,
Codey said, I think we might be able to light a cigar
if in fact either one of us smoked.
The quips were vintage Codey, a father of two whose
sharp wit sometimes lightens up a tense situation and
other times adds fuel to the fire.
In 2001, he was asked how voters could be assured
Democrats wouldnt raise taxes.
One word, the onetime Senate minority leader
said. Florio.
It took me 10 years to get rid of the word minority, and I dont want to go back to it.
Opposing the idea of a controversial heavyweight
boxer applying for a license to fight in New Jersey in
2003, Codey said, Saddam Hussein is more likely to
reform himself than Mike Tyson.
When questions arose about whether a state tax on
phone lines was still a possibility, Codey had another
quip.
Im a licensed funeral director, he said. I can tell
you, its dead.
Codey began hearing rumors about a threatened
lawsuit against Governor McGreevey on Wednesday
night, a source close to him said.
McGreevey then spoke to him by telephone early
Thursday afternoon to tell him of his plan to resign.
Codey was stunned by the news.
There were no quips, the source said. This was
not a day for quips.
Asked whether Codey was considering a run for
governor, now that he is likely to serve as acting governor for all of next year, the source said, I dont think
Dick is thinking beyond what he is facing in the next
couple of months.
Codey, who comes from a family of funeral directors, currently serves as president of Olympic Insurance Agency in West Orange. He was elected to the
state Assembly in 1974 and moved up to the Senate in
1982.
By 1992, Codey was assistant minority leader. By

ASSOCIATED PRESS

Senate President Richard J. Codey, left, an Essex County Democrat, behind Governor McGreevey in January as he
signed a law giving legal rights to same-sex partners. In November, Codey will take over as acting governor.
1998, he was minority leader. After his brief stint as
governor, Codey settled into his Senate co-president
role before finally getting that job all to himself when
the Democrats took power in January.
Trenton insiders credit Codeys long, steady ascent
to his consummate deal-making skills. Hes passionate
on his favorite issues, but pragmatic enough to stave off
sporadic efforts by rivals to access some of his growing
power, they said.
Codey was an Assembly sponsor of the original
Casino Control Act of 1977 that turned Atlantic City
into a gambling mecca. Ever since, he been one of the
states leading experts on casino gambling, horse racing, and the New Jersey Sports and Exposition Authority.
Mental health also is a key issue for Codey, who in
1985 discovered that at least 300 state psychiatric hos-

No special election
From Page 47
who are eyeing the governors seat to declare that the resignation was perfectly
timed to allow the scandal-plagued McGreevey to step aside while allowing time
for Democrats to lure their dream candidate, U.S. Sen. Jon Corzine, into the governors race next year.
If McGreevey left office at least 60 days
before the Nov. 2 election, then New Jersey voters would choose his successor for
the next year, said election law attorney
John Carbone.
With the decision to resign after that
date, the state Constitution now calls for
the state Senate president whomever
that may be on Nov. 15, Carbone said
to serve as acting governor until a new governor is elected in 2005.
That will be Codey, a veteran of State
House politics who has led the state Senate in relative obscurity during a year of
scandal emanating from the governors office.
Democrats across the state and even
a few Republicans expressed confidence
in Codey to lead the state through the
bumpy times.

I think Dick will do fine, said Assemblyman Louis Greenwald, D-Camden.

Weve got tremendous people in both
houses who are prepared to govern and
lead. ... Nothing changes from our perspective.
I happen to think he makes a good
leader, said state Sen. Henry P. McNamara, R-Wyckoff, who has served with
Codey in the Senate since 1985. I think
Dick is a listener who has tried to work
things out in an equitable manner. Not a
dictatorial style but dont misinterpret his
strength because he is very strong-willed.
Despite the professed confidence in
Codey by Democratic colleagues, the Senate president has struggled at times to
maintain his own majority.
In January, members of the Senates
black caucus tried to nominate state Sen.
Nia Gill to lead the Senate, although the
attempt failed. The attempt stemmed from
Codeys decision not to name Gill, an
African-American, to head the Judiciary
Committee. Codey also has clashed with
Democratic power brokers in South Jersey.
Codey may be the guy Democrats will

McGreevey items eBay fodder

Capitalism didnt take long to catch
up with Governor McGreeveys resignation and announcement Thursday
that he is gay.
Within minutes of his admission, McGreevey campaign bumper stickers
went up for bid on eBay, starting at
$4.99.
The description read simply: Governor Resigns 8/12/04. These are leftovers
from the 2001 New Jersey governors
race, In happier times.
A short time later, the first T-shirt hit

the online auction block from a California seller, who started the bidding at
$9.99.
The white cotton shirt has a photograph of McGreevey screened on the
front with large, block uppercase letters:
I am a gay American.
The quote is decorated with multicolored striping.
Underneath the caption is McGreeveys name. By early evening, there
was one bid on the shirt.
Daniel Sforza

pital employees had criminal records.

Codey took the matter into his own hands, using the
name of a dead sex offender and the Social Security
number of a convicted robber in applying for a job at
Marlboro Psychiatric Hospital. Codey took the job,
and soon found hospital colleagues referring to patients as nuts and one attendant feeding a patient a
cigarette butt.
The resulting statewide outrage led to numerous reforms, and put Codey on short lists of potential gubernatorial candidates in 1989.
That idea didnt go anywhere, but Codey eventually made it to the governors office anyway.
Thanks to McGreeveys resignation on Thursday,
Codey will be heading back there again in November.
E-mail: brennan@northjersey.com

Rules of succession
What happens when a governor resigns, according to the state constitution:
The governors immediate successor is the president of the Senate until
a new governor is elected. If the Senate president cannot fulfill those duties, the speaker of the Assembly
takes office.
An election must be held to fill the
governors unexpired term at the next
general election, unless the vacancy

occurs within 60 days of that election

in that case, the vote would take
place the following November. Governor McGreevey would have to resign
by Sept. 3 for a gubernatorial election
to be held this fall.
No election is needed if the vacancy
occurs during a year in which the governor is to be elected to a full term.
A new governor elected to an unexpired term would take office immediately upon his election.

look to to lead them in the immediate future. But within hours of McGreeveys announcement, many party leaders already
were looking ahead to stepping up their efforts to recruit Corzine to assume the nomination next spring.
He would be the instant consensus Democratic candidate, said one Democratic consultant.
If he says yes, theres no doubt, said a
prominent Democratic official. Whether
hes going to say yes is a very big if.
That if, many believe, rides in part on
the presidential election. If Democratic
U.S. Sen. John Kerry defeats President
Bush, or if Democrats take control of the
Senate, Corzine who is leading the Democrats Senate campaign fund-raising efforts this fall would be in line for a key
leadership role in either the Senate or the
White House.
McGreeveys Nov. 15 departure gives
Corzine flexibility in deciding whether to
remain in Washington or return to New
Jersey as a candidate for governor.
Corzine, who was raising funds for the
Democratic Senatorial Campaign Committee in California and Colorado on
Thursday, dismissed speculation of a gubernatorial bid next year.
Any speculation about my own political plans in light of the governors decision
is entirely premature, Corzine said in a
written statement.
I am focused today on electing John

Kerry to the White House, and on regaining Democratic Party control of the United States Senate.
And one prominent Democrat expressed disappointment that McGreevey
did not announce an earlier resignation
date so that Corzine could be recruited to
run this year.
Some havent ruled out the possibility
that McGreevey could step aside sooner.
One top Senate official said the planned
Nov. 15 resignation is an outside date,
meaning that some in the party may push
for an earlier departure.
Some Republicans gearing up for next
years gubernatorial race, however, saw the
timing of McGreeveys resignation as a
ploy by Democratic leaders to push McGreevey aside.
McGreeveys Republican opponent in
2001 who has said he will seek the GOP
nomination again next year even suggested that Democratic leaders staged the
circumstances that led to McGreeveys announcement Thursday.
Why did Golan Cipel decide to bring
his charges now? former Jersey City Mayor Bret Schundler said. Is it because the
Democratic bosses who run New Jersey
got to him somehow, and are using him to
clear Jim McGreevey out of the way so
they can run John Corzine for governor
next year and keep themselves from losing
control of the most powerful governors office in America

For the record, Democrats really did

appear unified in Boston last month.
Ah, memories.
Governor McGreeveys resignation
announcement Thursday caused such
tremors in the party,
its almost as though
all sorts of political aspirations that have
been kept in highpressure containment
burst into the air like a
HERB water-main break.
The Democratic
JACKSON Party
has gone from
CAPITAL being in total control
GAMES to total chaos, said
one senior party
leader. Its not just that
there will now be no incumbent running in 2005; theres still some question
whether New Jersey will have a special
election in 12 weeks for a one-year governor to finish McGreeveys term.
On the outside, official reactions
from Democratic Party leaders were
filled with respectful tones praising the
governor for his courage, wishing him
and his wife the best, etc.
But beneath the surface, there was a
good deal of grumbling about McGreeveys selection of Nov. 15 for his
departure.
McGreevey said he needed to allow
for a smooth transition of power. He
didnt say so, but he also has a few personal details to deal with, such as the
fact that he has no home other than the
governors mansion, he doesnt own a
car, and he will have no job.
His 2001 tax returns showed he had
to take money out of a retirement account to pay for his wedding in October
2000, so you know the guy doesnt have
a lot of personal wealth. Simply put,
hes probably not going to be riding in
too many helicopters after Thanksgiving.
But party leaders arent concerned
about all that stuff.
The real effect of McGreevey waiting
until November is it makes the Senate
president acting governor until 2006,
instead of forcing a quickie campaign
for governor this November.
The Senate president is Dick Codey,
an Essex County Democrat who a lot of
party bosses despise. The reasons are
many, but they often boil down to
Codeys being his own man, a guy who
doesnt need bosses to tell him what to
do.
If somehow McGreevey left before
Sept. 3, the Constitution says there
would have to be a special election this
November to fill the remainder of his
term, which runs through January 2006.
Speculation continues to focus on
U.S. Sen. Jon Corzine as a possible candidate in such a race. Its easy to see
how someone might assume that McGreevey didnt mean it Thursday when
he said hed stay in Drumthwacket until
November. As we now know, McGreevey has said a lot of things in his
life that he didnt really mean, and
when you lie to yourself, and your
wives, and your family, whats one
more lie to your party and the people of
New Jersey? Some Republicans are demanding that McGreevey get out now
and let the public pick who will be governor for the next year. But Burlington
County Republican Chairman Glenn
Paulsen did not think that would be
such a great idea, especially if Corzine
runs.
I think its better for [Democrats] if
they have an election right away, they
make a clean break, Paulsen said. I
talked to a lot of Republicans today
who think just the opposite, but I think
it would help the entire ticket if it was
Corzine.
Republicans would have to scramble to decide who they would unite behind, he said.
Of course, he said, theres always the
Republican wild card that could trump
Corzine: former Gov. Thomas H. Kean,
who earned nationwide acclaim as
chairman of the 9/11 commission.
If McGreevey does stay past Sept. 3,
theres one other political tempest to
watch.
The post of Senate president does
not have a set term. The president of
the Senate is whoever the Senate says it
is, so if someone else could get 20 other
senators to support him or her, that
person would get to be Senate president
and acting governor as well.
Bergen County Democratic Chairman Joseph Ferriero laughed at speculation there would be some kind of
coup to get Codey out if the job included control of the front office.
The long and short of it is Dick
Codey will be acting governor until
2006 and Im sure hell do an excellent
job in that capacity, Ferriero said. Im
also confident that whoever the Democratic Party nominates in 2005 will be a
superior candidate.
E-mail: jackson@northjersey.com

50 THE RECORD

JANUARY 2005

Published Friday, Aug. 13, 2004

Time now for governor to tell us the rest of the story

He did not seem tense. He didnt sob.
Jim McGreevey almost seemed relieved.
He is gay, he said.
He called it my
truth.
But McGreeveys
truth-telling is not complete not yet. On
Thursday, he told only
half the story.
Yes, he told us, he is
gay. McGreevey told us
MIKE
this as eloquently as
KELLY
anyone could, straight
from what clearly
seems to be his vulnerable, troubled
heart.
Throughout my life, I have grappled
with my own identity, who I am, he
said. As a young child, I often felt ambivalent about myself; in fact, confused.
It was a deeply personal statement, reflecting a tormented, struggling soul.
And no matter how you feel about Mc-

Greeveys politics, such words were

clearly moving.
But its one thing to struggle with your
sexual identity. Its something else to
walk away from the most powerful elective office in the state.By itself, being gay
in 2004 is not enough of a reason for a
politician to resign from office, even a
politician who is married to a woman.
Indeed, even the revelation of an extramarital affair gay or straight may no
longer be enough to force a politician
out of office. Exhibit A is Bill Clinton.
So why is McGreevey quitting?
McGreevey has more explaining to
do, explaining that goes far beyond
Thursday's speech. He can begin that explanation by finally coming clean about
his relationship to another man: Golan
Cipel.
Cipel, a former public relations official
for the Israeli government, was tapped
by McGreevey in the months after the
Sept. 11 attacks to direct New Jersey's

counterterrorism efforts.
It was not just a surprising selection; it
seemed downright ridiculous. Cipel was
only 33 and had no background in
counterterrorism. Because he was not an
American citizen, he could not even receive classified CIA intelligence reports
about possible terrorist threats.
No one was surprised when Cipel left
the counterterrorism job. But what is
surprising now is that Cipel apparently
did not entirely disappear from McGreevey's life.
On Thursday morning, as McGreevey
was preparing his heartfelt resignation
announcement, an attorney for the governor called the FBI with a coldblooded
story about extortion that never made it
into the governor's speech, but should
have. As outlined by a key member of
McGreevey's staff and a federal law enforcement source close to the FBI, this
story is the real reason McGreevey is resigning.

That story revolves around Golan

Cipel.
In his Thursday morning phone call,
the governor's attorney explained to the
FBI that Cipel told McGreevey that he
wanted $20 million in return for keeping
silent about the governor's homosexuality. It was a clear-cut extortion plot, the
federal source said. Cipel was even apparently willing to bargain and reduced
his demand to $5 million, the source
added.
He wanted to get rich, a McGreevey
staffer said of Cipel.
Other McGreevey staffers said Cipel
was the governor's lover, but that the relationship was consensual.
That may be true. But the revelation
that Golan Cipel is at the center of this
sordid tale raises important questions:
Did this possible relationship influence McGreevey's attempt to appoint
the immensely unqualified Cipel as the
state's counterterrorism chief at a time

Sen. Gary Hart of Colorado, below, was a favorite to win the 1988 Democratic nomination for president when he withdrew from the race after his affair with model Donna
Rice, left, became public. Others whose political careers have been sunk by their sex lives
include Sen. Bob Packwood, Rep. Gary Condit, and Rep. Bob Livingston.

when the nation was reeling from 9/11?

Did the alleged extortion also play a
role?
Jim McGreevey needs to face these
questions.
He needs to speak about them as eloquently as he spoke about his own tortured soul and his affair with a gay lover
he did not name.
I realize the fact of this affair and my
own sexuality, if kept secret, leaves me,
and most importantly the governor's office, vulnerable to rumors, false allegations, and threats of disclosure, McGreevey said. So I am removing these
threats by telling you directly about my
sexuality.
It was a courageous statement, but it
was incomplete. Jim McGreevey is not
resigning merely because he is gay. He is
resigning because he fears an extortion
plot against him.
He needs to tell the truth about this.
He needs to do this quickly.

A sex scandal
different from
any in history
Long list of officials whose
indiscretions hurt their careers
By TOM DAVIS
STAFF WRITER

when authorities launched an investigation.

Former Newark Mayor Hugh
Addonizio (1962-1970) was found
guilty of extorting more than
$241,000 from contractors doing
business with the city and served
five years in prison.
State Sen. and Union City Mayor William V. Musto was reelected
as mayor in May 1982, a day after
he was sentenced to prison following a bribery conviction for
school-construction kickbacks. A
Superior Court judge later ruled
Musto had to step down, and he
served three years in prison.

Sex scandals are nothing new

to American politics, but Governor McGreeveys decision to quit
because of his extramarital affair
with another man is a first.
Having a governor of a state
stand in front of a national camera
and make a statement like this its difficult to imagine this outside
of Hollywood, said Ruth Mandel,
director of the Eagleton Institute
of Politics at Rutgers University.
Throughout history, governors
have resigned to take other jobs in
Washington or abroad. The last
New Jersey governor to step
down, Christie Whitman, left in
2001 to become head of the federal Environmental Protection
Agency.
When a governor has run into
trouble, however, it wasnt because of sex.
In 1988, Arizona Gov. Evan
Mecham was indicted on fraud
and perjury charges for allegedly
hiding a campaign loan. A jury acquitted him, but only after he was
removed in an impeachment conASSOCIATED PRESS PHOTOS viction by the state Senate on other grounds, including borrowing
state funds for his automobile
dealership and trying to thwart investigation of a state officials re Former Wayne Mayor Louis V.
ported death threat against an
Messercola pleaded guilty in 1989 aide.
to extorting $50,000 from a devel In 1997, another Arizona
oper. As he was serving his 33governor, Fife Symington, remonth sentence, he received an
signed after he was convicted of
additional 15 months for acceptfraud.
ing a $177,000 bribe in exchange
Indicted in June 1995 on
for building approvals.
charges of obtaining $300,000 in
Paterson Mayor Martin G.
Small Business Administration
Barnes pleaded guilty in July 2002 loans under false pretenses, Jim
to accepting gifts from contracGuy Tucker resigned as Arkansas
tors and tax evasion. Barnes was governor, hours after being consentenced to 37 months in prison, victed in the Whitewater case.
a $1,000 fine, 200 hours commu In June, Connecticut Gov.
nity service, and three years suJohn G. Rowland announced his
pervised release.
resignation amid a months-long
EMAN VAROQUA cascade of graft allegations, a fed-

brief stint with the Middlesex

County Prosecutors Office, he
went to work for the state Assembly Democratic office, where the
same work ethic ended up getting
him appointed executive director
of the state Parole Board at the
age of 27. After a time as a pharmaceutical lobbyist, he ran for office in 1989 and was elected to the
state Assembly.
McGreevey made little impact
during that term or later as a state
senator, but redistricting that year
forced him into the local politics
where he would make his mark.
When Woodbridge Mayor Joseph
DeMarino, a McGreevey mentor,
backed another Democrat for reelection, McGreevey decided to
challenge him for the mayoralty.
He later remarked that, Ironically, DeMarino may have done me
the greatest of favors.
Not only did McGreevey win
in a four-way race, but he managed to get out of Trenton just as
droves of Democrats were being
voted out of office on the heels of
Gov. Jim Florios tax increases. It
was there, in Woodbridge, that
McGreeveys talent for doorknocking, hand-shaking politics
could not be beat. He turned his
34 percent backing in 1991 into
86 percent by the time of his sec-

ond reelection, in 1999.

Those strengths also served
McGreevey well as a statewide
campaigner. In his first improbable run against Gov. Christie
Whitman in 1997, McGreevey
came within one percentage point
of winning. By 2001, McGreeveys networking prevented a
powerful senator, Robert G. Torricelli, from beating him out for
the Democratic nomination, and
he defeated Republican Bret
Schundler in a landslide.
But McGreeveys efforts to
please never flagged and often returned to stalk him. Even though
he wasnt seriously threatened by
the conservative Schundler in liberal-leaning New Jersey, he made
a hasty pledge that he would not
raise taxes.
He repeatedly revised the
promise through this year, when
he ultimately pushed a historic income tax hike on wealthy households. The so-called millionaires
tax, although it ran afoul of years
of promises, also happened to be
what many of McGreeveys fellow
Democrats and much of the public wanted.
If McGreeveys friends have
been his greatest strength as a
politician, they have also been his
most damaging weakness. He

N.J. political history full of scandals

Governor McGreeveys surprise
resignation is hardly the first time
a prominent official in New Jersey
has been beset by scandal.
Among the others: * In 1954,
Harold Hoffman, who was governor between 1935 and 1938, admitted in a letter opened after he
died that he had stolen $300,000
over the course of his career in
public service. Over two decades
as head of the Employment Security Division, Hoffman juggled $16
million in state funds to cover the
theft.
Sen. Harrison A. Williams Jr.
(1959-1982) was charged in the

1981 Abscam sting, in which FBI

agents posed as Arab sheiks and
offered bribes to members of
Congress. Williams was convicted
on nine counts and sentenced to
three years in prison.
Sen. Robert G. Torricelli, who
served in Congress from 1983 until 2002, dropped his reelection
bid in 2002 after a Senate ethics
panel admonished him over his
dealings with a donor.
Jersey City Mayor Frank Hague
(1917-1947) managed to purchase property worth millions,
though his salary was only $8,000
a year. He stepped down in 1947

Climb to top
From Page 47
adolescent and adult behavior.
McGreeveys extraordinary ascent from modest beginnings has
been, in large part, a function of
his drive to be popular and his
success at it. He often spoke of an
utterly typical background with
which many New Jerseyans could
identify: Irish-American, Catholic,
working-class, and set in an unremarkable town, Carteret.
His formative political experience was as mayor of nearby
Woodbridge, where he challenged a local boss and then built
an ironclad mandate during three
terms. And in many respects he
always remained the consummate
local politician, a sort of mayor of
New Jersey, for whom no ribboncutting was too small to attend
and no person was too unimportant to remember by name. His
year-round attention to the
minute, mundane tasks of campaigning left him surprisingly invulnerable to political challenge
and never unable to find an adoring crowd.
The same qualities, however,
helped make McGreeveys time

as governor extraordinarily difficult. He had made promises

anti-tax, pro-reform that people
wanted to hear, but often fell far
short of living up to them. He kept
some friends around him who, in
retrospect, it seems, he shouldnt
have. Even when once-trusted
members of his administration left
amid scandal, the governor was
loath to criticize them, valuing
good relations above all else.
The son of a nurse and a trucking company sales executive, McGreevey was born in Jersey City in
1957. He grew up in Carteret and
attended Catholic schools, where
teachers described him as overachieving his way to high marks.
He ultimately worked his way to
the Ivy League.
After starting at Catholic University in Washington, he took
courses at Rutgers and Middlesex
County College on his way to a
bachelors degree from Columbia
University. He later got a law degree from Georgetown and a masters in education from Harvard.
McGreevey got into government and politics quickly and for
the most part stayed there. After a

spent much of his first year in office dealing with controversies

over appointments and associates,
and he seemed forever reluctant
to abandon loyalties, no matter
how ill-advised they appeared to
be. A prime example was former
homeland security adviser Golan
Cipel, whose lack of qualifications
for the post led to an extended uproar. A threatened sexual harassment lawsuit from Cipel brought
about McGreeveys startling announcement Thursday, according
to a source close to the administration.
McGreevey has also had to
contend with allegations surrounding two former aides from
Woodbridge, Gary Taffet and
Paul Levinsohn, who served as
chief of staff and chief counsel
early in the administration. Their
billboard dealings during the transition have been under federal investigation, and Taffet has been
sued by federal authorities for alleged insider trading.
With a new staff led by veteran
political adviser Jamie Fox, who
took over as chief of staff in 2003,
McGreevey still struggled to take
controversial stands. He backed
off landmark higher-education
and environmental proposals
amid criticism. But he began to

eral investigation, and a rapidly

gathering drive to impeach him
for accepting gifts from friends
and businessmen.
In July, former Oregon Gov.
Neil Goldschmidt admitted he
sexually abused a 14-year-old girl
in the 1970s when he was Portlands mayor. Oregons lawmakers decided to move his portrait to
a less prominent location in the
state Capitol.
In recent years, however, there
have been a number of public officials among them, President
Clinton whose political careers
have been damaged by sex allegations.
In 1989, Rep. Barney Frank,
D-Mass, was reprimanded by the
House for using his influence on
behalf of prostitute Stephen L.
Gobie. Frank admitted paying
Gobie for sex, hiring him with his
own money as an aide, and writing a letter on congressional stationery in his behalf.
In 1987, Sen. Gary Hart, DColo, then the favorite for the
1988 Democratic presidential
nomination, had his campaign
sunk by his liaison with Donna
Rice.
In 1995, Sen. Bob Packwood,
R-Ore., resigned amid allegations
that he made unwanted sexual advances to 17 female employees
and colleagues, solicited jobs from
lobbyists for his former wife, and
altered his personal diaries to obstruct an ethics investigation.
In 1998, Rep. Bob Livingston,
R-La., was on the verge of becoming House speaker when he
acknowledged straying in his marriage. He resigned from Congress
a couple of months later.
In 2001, the political career
of Rep. Gary Condit, D-Calif., effectively ended after the disappearance of his former intern,
Chandra Levy. Condit reportedly
told police that he and Levy were
having an affair.
find his footing this year, pushing
through milestone legislation to
preserve the environmentally sensitive Highlands region. His income tax increase, which will expand property-tax rebates to most
homeowners, also proved successful and popular.
But McGreeveys old friendships surfaced again just as his
polls seemed to be recovering and
a legacy might be emerging. A
friend from his youth and a fundraiser during his campaign, trash
recycler David DAmiano, was indicted on charges that he extorted
money from a farmer seeking favorable government treatment.
And Charles Kushner, his top
contributor and onetime Port Authority appointee, was charged
with hampering a federal investigation by hiring prostitutes to seduce witnesses.
In the DAmiano case, federal
authorities accused McGreevey of
using a code word, Machiavelli,
to signal that he knew about the
scheme.
Some who know the governor
argued that it was easy to imagine
him saying something, not for any
nefarious reason, but just because
a friend asked him to.
E-mail: gohlke@northjersey.com

JANUARY 2005

THE RECORD 51

Published Friday, Aug. 13, 2004

Key dates in Jim McGreeveys life

CHRIS PEDOTA/STAFF PHOTOGRAPHER

McGreevey triumphant on the night of his election as governor, Nov. 6, 2001. He trounced conservative Republican Bret Schundler.

Aug. 6, 1957: Born in Margaret Hague Hospital,

Jersey City.
May 1978: Graduates with bachelor's degree in
political science from Columbia University after
also attending Catholic University, Rutgers, and
Middlesex County College.
May 1981: Juris doctorate, Georgetown University Law Center.
June 1982: Earns master's degree from Harvard University and begins work as assistant
prosecutor in Middlesex County.
1985-86: Executive director, New Jersey Parole
Board.
November 1989: Elected to state Assembly,
served one term.
November 1991: Elected mayor of Woodbridge
with 34 percent of the vote, defeating incumbent Joseph DeMarino and two others.
Dec. 1, 1991: Marries Karen "Kari" Joan
Schutz, a Canadian school librarian he met on a
cruise. Daughter Morag (Gaelic for Mary) is born
late the next year. They divorce five years later.

November 1993: Elected to

Feb. 1, 2002: While strolling the beach
state Senate, served one
at Cape May, the governor falls and
term.
breaks his leg, requiring emergency surgery.
November 1995: Reelected
mayor with 69 percent of the
March 7, 2002: McGreevey's state tervote.
rorism czar, Golan Cipel, resigns. Cipel,
a 33-year-old publicist and Democratic
November 1997: Loses race
operative, came under fire when it was
for governor by 1 percentrevealed that, as an Israeli citizen, he
age point to incumbent Recould not receive a top security clearpublican Christie Whitman.
ance from the government.
November 1999: Reelected
Oct. 18, 2002: McGreevey's state police
mayor with 86 percent of the
superintendent, Joseph Santiago, revote.
July-August 2000: Deflects A studious teen. As a signs amid rumors he had mob ties and
challenge for 2001 guberna- candidate, he capitalized had obstructed a criminal investigation.
on his Boy Scout image. August 2003: The Record reveals Ratorial nomination from Sen.
jesh "Roger" Chugh, a top McGreevey
Robert G. Torricelli.
fund raiser, has allegedly been shaking down
October 2000: Marries Dina Matos, a Newark
Asian Indians in New Jersey for campaign conhospital executive. Daughter Jacqueline was
tributions. Chugh remains under federal investiborn in December 2001.
gation.
Nov. 6, 2001: Wins gubernatorial election easily
Nov. 4, 2003: Backed by McGreevey's fundover Republican Bret Schundler, to become
raising prowess, Democrats win control of the
51st governor of New Jersey.

state Legislature for the first time in a decade.

May 4, 2004: Federal prosecutors indict David
D'Amiano, another McGreevey fund raiser, for
allegedly extorting bribes from a Middlesex
County landowner. The indictment reveals that
during a meeting with the landowner McGreevey said the word "Machiavelli," which
D'Amiano had established as a code word to
signal that a deal was on track. McGreevey said
he used the word innocently.
July 13, 2004: Federal investigators accuse McGreevey's top donor, real-estate mogul Charles
Kushner, of hiring call girls to seduce two witnesses cooperating against him in a probe of
Kushner's financial dealings. Kushner had been
McGreevey's pick to lead the Port Authority of
New York and New Jersey.
Aug. 10, 2004: Signs a landmark bill to preserve
800,000 acres of open space and water supplies in the Highlands region.
Aug. 12, 2004: Announces he will resign as governor after revealing he is gay and has had an
affair with another man.

THOMAS E. FRANKLIN/STAFF PHOTOGRAPHER

Joined by four former governors at a Highlands bill news conference in Trenton in April. From left,
Jim Florio, Brendan Byrne, Christine Todd Whitman, and Donald DiFrancesco.

ASSOCIATED PRESS

The mayor of Woodbridge, July 2000. He first won that office with a tireless campaign style that earned him the nickname the "Energizer candidate."
ASSOCIATED PRESS

With former Sen.

Bill Bradley at a
Belmar campaign
stop, 2001.

Being sworn in as governor with wife Dina

Matos, baby Jacqueline.

GARMINE GALASSO / STAFF PHOTOGRAPHER

ASSOCIATED PRESS

Campaigning at the shore in 1997, when he unsuccessfully challenged Whitman for governor.

McGreevey and Whitman entering a dinner in 1997.

He had sharply criticized her policies as governor.

PETER MONSEES / STAFF PHOTOGRAPHER

52 THE RECORD

JANUARY 2005

Published Friday, Aug. 13, 2004

Expressions
of sympathy
and support

Sexual
conduct
no issue
for many

Amid few critics, Garrett

faults delay in resignation

Real problem lies

elsewhere, they say

By DANIEL SFORZA, YUNG KIM, and ALEX NUSSBAUM

By BOB IVRY

STAFF WRITERS

STAFF WRITER

After recovering from the initial shock of

their governors bombshell Thursday a televised announcement that he was a homosexual and planned to resign his office many North
Jerseyans expressed similar feelings.
Hes gay, they said. So what? It has nothing
to do with anything, said Hedy Saulle, a 62year-old Clifton homemaker. I would never
think he would resign for something like that.
It makes no sense.
Indeed, to many, Jim McGreeveys reasons
for stepping down didnt quite seem on the level. After all, this was a job hed sought his entire
professional life. So they searched for reasons
beyond what the governor said.
Anthony Armando, 24, of Belleville, said he
believed McGreevey was quitting to try to head
off revelations of political corruption in his administration. He cited a growing list of charges
against some of McGreeveys top aides and
most enthusiastic fund-raisers.
I see the resignation as a way for him to get
out before all of the other things come to light,
said Armando, who graduated from Montclair
State University in June.
Tenafly lawyer Edward Imperatore, 53,
agreed with Armando. He wasnt buying the fact
that McGreevey was resigning because of an affair, even if it was with another man.
I think were well beyond that as citizens of
New Jersey, Imperatore said.
What really was the problem, he said, was a
drumbeat of scandal that continues to get louder.
I believe it will all come out in time, said
Imperatore, a former McGreevey supporter. I
dont believe sexual preference had anything to
do with it.
If Imperatore sounded a bit jaded, what to
make of Marilyn McKeown of Garfield? After
the tawdriness of the Monica Lewinsky and
Chandra Levy scandals, McKeown said, the
governors outing was no big deal.
Nothing surprises me in this day and age,
McKeown said.
At the Charles His & Her Barbershop in
Hackensack, the staff watched McGreeveys
speech Thursday with mounting surprise.
The governors gay! Stephen Lynch shouted to one of his fellow barbers. He just said it.
Yeah, I knew it, said Mimi Tyler of Hackensack, who met the governor during a 2001
campaign stop at the salon. Nobody told me.
I just felt it.
A couple of male barbers joked about the
firmness of the governors handshake, but a consensus soon emerged that what he does behind
closed doors is nobodys business.
Before long, everyone was wondering why he
would resign over an affair.
It has nothing to do with being governor,
said hairdresser Sonia Brown, 38, of Teaneck.
He should have stayed in office.
He might be a better governor now, because
it is out in the open, added Lynch.
Residents of the Edward Sisco Senior Citizens Village in Wayne said the announcement
didnt change their feelings about a governor
who provided property tax relief for the elderly.
Pausing during a stroll in the late afternoon
sun, Rose Dalton, 66, said she welcomed the
governors candor.
Its his private life, she said. He should stay
in office. Theyre not perfect, politicians. Theres
so much we dont even know about.
John Dragonetti, 72, said that McGreevey has
generally done a good job even though he is
a Democrat.
I am a conservative, Dragonetti said. But
the governor, he wasnt too bad. He shouldnt
resign. I have nothing against those people.
The one aspect of McGreeveys confessional
that didnt sit well was his admission of marital
infidelity.
I think its disgusting, said Daniel Kelly, a
heavy-equipment operator who watched McGreeveys speech at Democratic freeholder can-

KEVIN R. WEXLER/SPECIAL TO THE RECORD

John Stoupakis, co-owner of the Park West Diner in Little Falls, after the resignation speech.
"I'm stunned," he said, adding that he was not sure he would vote for a gay governor.
In Hackensack, right,
Bob Serio and Carlos
Negron talked about
Governor McGreevey's resignation at General
Poor's Tavern on
Main Street. Below,
Mary Williams
watching the live
broadcast of McGreevey's speech at
the Charles His &
Hers Barbershop on
First Street in Hackensack. He should
have stayed in office, another
woman said

STAFF PHOTOS BY PETER MONSEES

didate Terry Duffys tavern on River Street in Paterson. Whether you cheat with a man or a
woman, its still infidelity.
Outside the Cool Beans coffee shop in
Oradell, 19-year-old Christine Farrow of Ridgewood said she thought the affair was grounds for
leaving office.
Cheating on your wife is the most horrible
thing you can do, said Farrow, a Ramapo College student.
Inside the cafe, Claudia Pappas, a 52-year-old
real estate agent in Oradell, said she felt for Dina
Matos McGreevey, the governors wife.
I feel sorry for his wife because obviously he
knew [that hes gay], and why would he do that
to her? Pappas said.
At Shortways Barn in Hawthorne a restaurant owned by Republican Councilwoman
Marge Shortway Charles Crane of Fair Lawn
said McGreevey left him with questions.
If hes going to resign, why doesnt he resign
tomorrow? Crane said. Is his wife going to
stand by him? If looks could kill, hed be a dead

son of a ... In the final analysis, however, how

folks felt about Thursdays announcement depended a lot on how they already felt about the
governor.
At Cliftons Park West Diner, George Elhajj,
76, of Parsippany, said he was pleased by the
sudden turn of events.
Im delighted to see that crook out of office,
said Elhajj, a Republican.
He added that his Catholic faith would make
him unlikely to support a gay candidate.
And in the Garden State Plaza parking lot,
homemaker Theodora Ziolkowski, 63, of Elmwood Park, said: I dont care if hes gay or not,
as long as hes doing his job well.
Was McGreevey doing his job well, Ziolkowski was asked.
No, hes not, she said, with a laugh.
Staff Writers Kathleen Carroll, Merry Firschein,
Catherine Holahan, Paul H. Johnson, Tom
Meagher, Carolyn Salazar, and Brian Spadora contributed to this article.

Hometown people full of praise

By TOM DAVIS, JIM BECKERMAN,
and YUNG KIM
STAFF WRITERS

WOODBRIDGE Residents in Governor

McGreeveys old stomping grounds expressed
support for their former mayor Thursday, calling him a dedicated public official.
Word of the announcement stirred more
than the usual buzz at the Reo Diner, a McGreevey family haunt, where the governors
sexual preference had been rumored and
long ago dismissed as irrelevant.
Its been going around a long time, said
Maryann Wishbow, between forkfuls of pasta. I really believe he truly wanted to help
people, regardless of what he was or what he
did.
Wishbows husband, Edward, remembered
McGreevey for walking around town with a
notebook in hand, ready to jot down questions and concerns from residents.

Woodbridge feels
regret for ex-mayor

Getting it out in the open is better,

Rosenblum said. He was a good man.
Stephen Pete Dalina, deputy director of
the Middlesex County Board of Freeholders,
worked with McGreevey on the Township
Council and was shocked by his announcement. The 74-year-old Woodbridge resident
gave his longtime friend credit.
It was his decision, Dalina said. He did
what he felt he had to do.
Dalinas son, Rick, a Woodbridge Council
member and a high school classmate of McGreeveys, said the move took courage.
He also described the governor as a tireless
public servant.
Hes one of the best elected officials I have
ever seen and gotten to serve with, Rick Dalina said. He was active 24 hours a day. He
knew everybody and never forgot the names.

He made mistakes in trying to please

everybody, but he took care of Woodbridge
Township, Edward Wishbow said. He was
very accessible. Any complaints he took care
of. ... He was a good mayor. He did a lot of
good things that didnt make the news.
Jay Rosenblum, also at the diner with his
wife, said he would have voted for McGreevey again.
Everything he said he was going to do, he
did, Rosenblum said. Its a shame he [resigned]. I think he should have stood still.
Stephanie Rosenblum added that the former mayor was a good people person who engaged residents at town meetings. She also E-mail: davist@northjersey.com, beckerman
@northjersey.com, kimy@northjersey.com
commended the governors candor.

Politicians, appointees, and advocacy groups largely expressed support Thursday for Governor McGreeveys decision to disclose an extramarital affair with a man and to resign as of November.
However, none thought McGreevey should remain at the helm of the
state, and some used the unprecedented State House news coverage
to push their own agendas.
Rep. Scott Garrett, R-Wantage, was one of the few to criticize McGreeveys actions, accusing the governor of delaying his resignation for
political reasons.
By resigning Nov. 15, McGreevey will avert a special election to find his replacement and
instead cede the governorship to
state Senate President Richard
Codey, D-Essex, through the end
of next year.
If Jim McGreevey feels that a
resignation is appropriate, he
should resign immediately so that
the state of New Jersey can move
forward, Garrett said, adding that
the governor is bound to be distracted in his final days. These
challenging times require a governors full and complete attention.
Senate
Minority
Leader
Leonard Lance, R-Hunterdon,
said he was praying for McGreevey, but quickly moved to
politics.
The constitution of the state of
New Jersey and statutory law pro- ENVIRONMENTAL COMMISSIONER
vide an orderly process following a BRADLEY CAMPBELL
gubernatorial resignation, he said
in a statement. The Republican
members of the state Senate have that Democrats have achieved
confidence in this constitutional over the last thee years, he said.
process.
Weve had significant success in
Assemblyman Paul DiGaetano, reforming E-ZPass and the DiviR-Nutley, said that although he sion of Motor Vehicles. We have
disagreed with McGreevey politi- consolidated our toll roads and
cally, he was not interested in been able to reduce auto insurance
Governor McGreeveys, or any- rates.
one elses, private life. Any effort to
Wisniewski, who is the deputy
blackmail the governor because of speaker and chairman of the
his private life is just plain wrong. Transportation Committee, did
McGreevey said he was resign- not give a direct answer when
ing because keeping the secret of asked whether he was interested
his sexuality would leave the in running for governor.
Governors Office vulnerable to
There are a number of people
rumors, false allegations, and who would be interested in the pothreats of disclosure.
sition on both sides of the aisle,
So I am removing these threats he said. There will be a robust
by telling you directly about my competition for that in the future.
sexuality, he said.
New Jersey Turnpike Chairman
Many called it a courageous de- Joseph Simunovich said the party
cision.
leadership will soon confer.
Sen. Frank R. Lautenberg said
The leadership of the party is
his heart went out to the governor going to sit down and evaluate
and his family, and he added that what they are going to do, said
his fellow Democrat had served Simunovich, who was appointed
the people of New Jersey well.
by McGreevey.
Jim McGreeveys speech was
Pennsylvania Gov. Ed Rendell
touching as he shared a personal spoke of McGreeveys commitconfession, Lautenberg said in a ment to his job.
statement. I will do whatever I
Working with Governor Mccan to be of help to the state dur- Greevey on a number of public
ing this period of transition.
policy matters, I have always
Rep. Steve Rothman, D-Fair found him to be very committed to
Lawn, echoed Lautenberg and doing what is best for the people of
added that he, too, would help New Jersey, the fellow Democrat
with the transition, but with a said. In this arena, he achieved
heavy heart.
significant success. I expect a
Rothman said he was between smooth transition, and will work
town hall meeting events when he closely with Senator Codey on the
heard about the official announce- many matters that jointly affect
ment on the radio. While he was our states.
surprised by the announcement,
New York Gov. George Pataki
he said he was not surprised that was vacationing with his family
the subject was not mentioned at and had no immediate comment
the following event.
his office said. White House offiPeople there were interested in cials did not return calls seeking
talking about the national econo- comment.
my, veterans issues, and the genAdvocacy groups saw Mceral direction of the country, Greeveys admission as a way to
Rothman said.
get out their message.
Rep. William J. Pascrell Jr., DThe New Jersey Head Start AsPaterson, said the resignation sociation spent a few words exmarked a sad day for New Jersey pressing compassion for Mcand said his thoughts and prayers Greevey and his family, but quickwere with the McGreevey family. ly moved to its platform issue
While the office of the gover- about special-needs - or Abbott nor operates in the public forum, school districts.
now is the hour in which a familys
This administration has not
privacy should be respected, been complying with the Supreme
Pascrell said.
Court Abbott ruling, the stateOne of McGreeveys first ap- ment read. [We] hope that this
pointments, Environmental Com- shake-up in Trenton, while for
missioner Bradley Campbell, was personal reasons, causes a shakeimpressed by the governors spirit up in the administration that will
in making the admission.
result in cleaner accountability for
I think he made a very brave Abbott implementation.
and forthright statement, and put
Gay rights groups also had their
the interests of New Jersey citizens say on Thursday, lauding Mcfirst, recognizing that what should Greeveys coming out.
otherwise be a personal matter
The New Jersey [gay] commuwould distract from the priorities nitys quest for full equality conand achievements hes put in tinues, read a statement from
place, he said.
Garden State Equality. From
Assemblyman John Wisniews- marriage to every other area of civki, who represents McGreeveys il rights.
hometown district of Woodbridge,
touted the governors accomplish- This article also contains material
from The Associated Press. E-mail:
ments.
We need to remember that to- sforza@northjersey.com,
days statement is not going to take kimy@northjersey.com, and nussaway from the accomplishments baum@northjersey.com

I think he made a
very brave and
forthright statement,
and put the interests
of New Jersey citizens
first, recognizing that
what should
otherwise be a
personal matter
would distract from
the priorities and
achievements hes put
in place.

JANUARY 2005

THE RECORD 53

Published Friday, Aug. 13, 2004

Declaration gives lift to gay pride

By LESLIE BRODY
and LAURA FASBACH
STAFF WRITERS

Some empathized with the pain

of coming out.
Many applauded Governor McGreeveys declaration with pride.
There was also fear that some
hate-mongers might use his revelation linked as it was to marital
infidelity to hurt prospects for
other gay politicians.
McGreeveys stunning announcement Thursday that he is a
gay American and plans to resign provoked a mix of feelings
from gays and lesbians in his home
state.
Im sad he had an affair, but
Im very proud of him that he has
acknowledged his homosexuality,
said Jill Selleck of Maplewood, a
former national co-chairwoman of
Family Pride Coalition, a support
group for lesbian and gay families.
Until McGreeveys announcement, New Jersey was among 26
states that had no openly gay elected officials at the state level, according to the Gay and Lesbian
Victory Fund, which aims to promote gay political candidates. The
U.S. Congress has three openly
gay members.
Dave DiCicco, a spokesman for
the Washington-based fund, said
McGreeveys announcement was
bittersweet.
It is groundbreaking that a
governor would come out, but it is
neutralized by the circumstances,

Many feel the governors pain at coming out

DiCicco said. On the sweet side,
it does highlight that gays and lesbians are serving at all levels of
government.
McGreevey has been popular
with many gay New Jerseyans because he pushed for the Domestic
Partnership Act, which took effect
last month. It gave same-sex couples some of the privileges of married spouses, such as the right to
visit each other in the hospital and
make medical decisions for incapacitated partners. New Jersey is
the fifth state in the nation to give
official recognition to lesbian and
gay relationships.
Im sad for him because I spent
17 years in a marriage as a gay
man and thats hard enough, said
Marty Finkle of South Orange, an
activist with the New Jersey Lesbian and Gay Coalition. It hurts
to come out ... and to have to come
out so publicly takes a lot of guts.
Finkle said he was upset to see
McGreevey step down because
some people are going to jump
and say that because hes gay he
cant govern, which is absolutely
wrong.
Finkle nonetheless expressed
optimism that gay rights in New
Jersey would still make headway.
I think there will be a backlash,
Finkle said. People that are going
to be hate-mongers, this will fuel
them. For the people who are really for equal rights, it will fuel

them, too.
Some gays and lesbians said
they had heard rumors for years
that McGreevey was gay.
To find out that its true and
hes resigning in the same breath is
devastating, said Finkles partner,
Michael Plake. Given the circumstances, I have even more respect for what McGreevey did for
the gay community. Theres a lot of
risk you take affiliating yourself
with gay issues when youre hiding
your sexuality.
Selleck, however, said she had
expected more from him and
had hoped the governor would
push for same-sex marriage. She
suggested he did not go that far because he was wrestling with his
own sexuality.
He didnt fully address the civil rights of same-sex marriages because of his own internalized homophobia, Selleck said.
Charles Paragian agreed that
McGreeveys disclosure was hardly a surprise.
The gay community has
known for years he is gay, said
Paragian, who lives in Little Ferry
with his partner and five children.
Its actually a little bit frustrating
that he hadnt acted more aggressively to establish gay marriage in
New Jersey.
Paragian, who was raised in
Westwood, said his experience
growing up as a gay Catholic was

look like being gay is a basis for

someone to resign and I wholly reject that.
McGreevey himself insisted that
it makes little difference as a governor that I am gay. But given the
impact the revelations of his affair
will have on his family, he decided
to resign. Further, he said, he announced his homosexuality to
spare his office false allegations
and threats of disclosure.
Michael Blake, president of the
New Jersey Stonewall Democrats
and a personal friend of McGreeveys, said he hoped the governors announcement would encourage more gay candidates to
seek political office in New Jersey.
Back when the governor and I
were growing up, no one would
have thought it was a wise move to
be openly gay and pursue a career
in public office, Blake said. I
think times have changed.
J. Kevin Jones Jr., a Franklin
Lakes resident and board member
of Out and Equal Workplace Advocates, said he hoped McGreeveys resignation does not
mean the end of his public service.
I only hope he finds a way to
continue to serve the public in his
new persona as an openly gay
man, Jones said. He certainly
should be applauded for being
truthful. As a gay man, Im certainly proud of him for making
that statement.

different than McGreeveys story

of long-closeted homosexuality.
He came out after graduating from
high school. I was lucky enough
to have extremely understanding
parents, he said. I didnt have to
pretend.
Kimberly Miller of Maplewood,
who is raising three children with
her partner of 13 years, said she
hoped McGreevey would reconsider his plan to resign.
For the most part, from what I
could see, hes a decent human being and fairly good governor. Its
admirable hes being honest with
himself and his constituents. ... Im
hoping people will start a petition
saying dont resign, youre gay, and
its not a big deal.
Miller cautioned, however, that
she had also heard that more details might be emerging about McGreeveys behavior, and those revelations might change her views.
Thomas Prol, a Sussex County
environmental lawyer active in gay
rights, called Thursday a profound moment in gay and lesbian
history.
I look forward to the day when
an openly gay man or lesbian can
serve in elected office without
fear, he said. I dont feel this is a
reason to resign. Whatever issues
there are with his relationship with
his wife are between him, his God,
and his wife. I hope he reconsid- E-mail: brody@northjersey.com, fasers. ... Im concerned this makes it bach@northjersey.com

Remarks
about law
gain new
meaning
Governor gave
gays added rights
By ADRIENNE LU
STAFF WRITER

Governor McGreeveys surprise acknowledgement of his homosexuality creates a new context

for previous statements on gay-related issues, especially the campaign for a law that gave New Jerseys gay and lesbian couples
some of the rights enjoyed by
married couples.
Among his remarks:
This legislation is about fairness and basic human dignity. The
Domestic Partnership Act would
guarantee individuals who have
entered into an enduring, emotionally, and financially committed relationship the fundamental
rights they ought to have. Dec.
11, 2003, after the legislation
passed two Assembly committees.
Having the right to visit a
loved one in the hospital or to
make critical health-care decisions are matters of equality and
decency. It is the right thing to
do. - Jan. 8, 2004, after the state
Senate passed the bill.
The state Domestic Partnership Act marks fulfillment of the
promise of the American dream:
fairness, dignity, and respect.
Jan. 12, 2004, when hesigned the
act into law.
By recognizing domestic
partnerships, we are standing up
for thousands of gay and lesbian
couples across the Garden State.
... am grateful to have been a part
of this landmark act. I have
been a long-time supporter of civil unions for gay and lesbian couples. I have worked to advance
the debate to establish rights and
responsibilities for domestic partnerships in New Jersey. My administration remains committed
to ensure that all New Jerseyans,
regardless of sexual orientation,
have access to medical, inheritance, and insurance benefits. July 10, 2004, in a statement written for a guide to New Jerseys
Domestic Partnership Celebration
and Festival in Maplewood.
In addition, although McGreevey describes himself as a devout Catholic, he has taken issue
with the Catholic churchs stances
on homosexuality.
Last summer, Pope John Paul
II urged Catholic bishops to oppose legalization of same-sex
unions and called on Catholic
politicians to join the fight. In response, McGreevey said gays
should be allowed to form domestic partnerships with similar
protections and benefits granted
to married couples. He stopped
short of supporting gay marriage,
however.

CHRIS PEDOTA/STAFF PHOTOGRAPHER

Friends and relatives called Dina Matos McGreevey strong and resilient. Above, the inaugural ball; below, with their new baby.

First lady will hurt

but survive, many say
By JEAN RIMBACH
STAFF WRITER

Nearly four years ago they stood together

and took their vows as husband and wife.
When she was hospitalized during a difficult pregnancy, he canceled campaign appearances to be by her side.
And when their daughter, Jacqueline, was
born, Governor McGreevey and Dina Matos
McGreevey together introduced their first
child.
On Thursday, husband and wife again
stood together, this time as he confessed an
extramarital affair with a man and announced
I am a gay American.
For those who know the extremely private
first lady, it was a moment of searing empathy.
My first thought was, oh, how awful for
many people, but especially for Dina - just
thinking this must be very, very painful for
her, said Elizabeth Hull, who was Matos McGreeveys political science professor at Rutgers University.
But like others, she described Matos McGreevey as strong and resilient - someone
with deep family and community ties who can
come back from a devastating blow.
Dina is someone that I could see going
into public office some day - she is very intelligent and very strong, and shell look back on
this as heartbreaking, but ... she will go on to
lead a very full and rich life, Hull predicted.
As her husbands revelation swept through
the state and nation, some relatives of 37-yearold Matos McGreevey expressed surprise. In
disbelief, they recalled time spent with the
onetime public relations executive - now executive director of the Newark-based Columbus Hospital Foundation - and the governor.
Aderito and Maria Paulo, Matos McGreeveys uncle and aunt, said the family is in
shock. They said they saw their niece last
month, when she was visiting her mother,
Maria, and said that she seemed cheerful.
I dont know if she knew anything, said
Aderito Paulo, who is the brother of Matos
McGreeveys mother. If she knew, she didnt
say anything to anybody - not even my sister
knows it.
Maria Paulo said that at family gatherings,
including their daughters baptism and birthdays, Matos McGreevey and the governor
were always together.

They lived very happily and now my niece

looks sad, but she is strong, said Maria Paulo.
As the governor spoke Thursday, his wife
stood silently by his side, wearing a conservative blue suit.
McGreevey called his union with her a
blessing and said her love and joy for life has
been an incredible source of strength for me.
And together, we have the most beautiful
daughter.
He acknowledged the pain and suffering
and anguish he has caused. And he admitted
that, shamefully, I engaged in adult consensual affair with another man, which violates
my bonds of matrimony. It was wrong. It was
foolish. It was inexcusable.
And for this, I ask the forgiveness and the
grace of my wife, the governor continued.
She has been extraordinary throughout this
ordeal, and I am blessed by virtue of her love
and strength.
Many privately wonder if she knew or suspected her husbands secret. The first lady
may well be struggling with feelings of anger
and be questioning whether she did anything
that may have led to her husbands actions,
said Ken Lipman-Stern, former president of
the New Jersey Association of Marriage and
Family Counselors.
She might love him very much and might
feel so shocked and deceived, Lipman-Stern
said. She may be in conflict of all her feelings.
Matos McGreevey was raised in Newarks
Ironbound section. Outside Coutinhos Bakery on Ferry Street, Albert Coutinho and
Donald Goncalves talked about how she was
involved with everything from the Portuguese
American Congress to health-care events and
the Portuguese Club when she was in college.
They said she was always friendly and easygoing.
Goncalves, a former Union County freeholder and a member of the Elizabeth Board
of Education, has known Matos McGreevey
for 25 years. He called her a decent, wholesome, good person and took pride in her position as a Portuguese first lady.
Goncalves noted her nervous smile as
the governor spoke Thursday, and said she
has to hurt.
This takes the whole Bill Clinton thing to
a new level ... marital infidelity and marital infidelity and gay, he said, adding that Matos

McGreevey is strong, resilient and will survive.

More than anything today we feel very
saddened for what the entire family is going
through. Its unfortunate private matters become so public, said Coutinho, organizer of
the annual Portugal celebration and feast in
Newark. He has known Matos McGreevey
for some 15 years.
We feel very bad for everybody, he
added. Its going to be tough, but shell make
it through.
During her time as first lady, Matos McGreevey has kept a low profile, rarely granting interviews and limiting her public appearances. Many of those appearances have been
in support of the Governors Book Club,
which encourages young children to read.
Amity Pierce Buxton, executive director of
Straight Spouse Network, a national support
group based in California, said her organization estimates that there are 2 million couples
in the United States that have been or are in
similar situations.
Its not uncommon, it happens in every
ethnic group and socioeconomic group, said
Buxton, author of The Other Side of the
Closet: The Coming Out Crisis for Straight
Spouses and Families.
It happens across the board.
She said that usually when a spouse discloses his sexual orientation, the straight
spouse withdraws. Some couples stay together, but most dont.
After three years, a majority divorce, she
said.
McGreeveys marriage to Dina Matos was
his second. His first wife, Kari Schutz, filed for
divorce in 1997, after moving back to Canada
with their daughter, Morag. They now live in
New Westminster, British Columbia.
The Vancouver Sun sent a reporter to
Schutzs home but was unable to obtain a
comment. She claimed in court papers that
Jim McGreevey was so consumed by his political career that he neglected his family.
Staff Writers Evonne Coutros, Brian Aberback,
and Monsy Alvarado contributed to this article.
E-mail: rimbach@northjersey.com

A double
message
for gays
After all the troubles over his
fund raising and some of his dubious appointments to political
office, there was Jim McGreevey
standing in the hot lights, outing
himself on television, and informing New
Jersey that he
had cheated on
his wife with
another man.
She was at his
side, looking
JEFFREY slightly numb.
In one asPAGE tounding
moment at age 47,
McGreevey uttered the words to
8 million New Jerseyans that he
has never been able to say in public before.
My truth is that I am a gay
American, McGreevey said.
It should have been a moment
of relief, but it was not. McGreevey, married twice and the
father of two daughters, looked
quickly at his wife, Dina Matos
McGreevey, and spared himself
not at all. It was shameful what
he had done to her by engaging
in an extramarital affair with a
man. It was wrong, it was foolish, it was inexcusable, he said.
What an instant of colliding
purposes. Here was the blessed
truth at last. And here was an admission of infidelity like few others.
He said he would resign in
mid-November, and quickly left
without taking questions.
It is never a good day when
you have to lump it because of
who you are and for following
your nature, and McGreevey goes
out of office having to know that
hes never coming back.
And I am blessed to live in
the greatest nation with the tradition of civil liberties, the greatest
tradition of civil liberties in the
world, in a country which provides so much to its people, he
said. Maybe so, but when it
comes to openly gay people holding office, McGreevey ought not
be hopeful. When gay men and
lesbians are elected, it is usually
as local representatives, such as
the House and the New York
Legislature. They dont hold state
houses or Senate seats.
Its a sad commentary on
where we are as gay Americans
that this poor man felt he needed
to keep this in the closet for this
long, said Andrew McGibbon, a
gay Realtor from West Milford.
There are still a lot of gay people
in the closet too scared to come
out. When they see the governor
resigning over being gay, it doesnt help them at all.
Its nobodys business but his
own and his wifes, said McGibbon, 40, which makes this not a
good day in America with its
primitive views on sexuality.
But gay and straight New Jerseyans alike are faced with a major double message when the
same man acknowledges his sexual orientation and also informs the state and nation about
his unfaithfulness and then
quits the highest office in the
state.
So do gay men and women
benefit from McGreeveys decision to quit? Its two steps forward, McGibbon said. But its
three steps back. Its great for
Governor McGreevey but its
quite bad for the rest of us because he seems to be resigning
strictly because hes gay and also,
of course, because he had that affair.
If anything positive is to come
of this, it could be an understanding by the angrier members of the
straight community that when
they taunt or attack gay people,
they really never know who is
gay and who is straight. Could
cousin Henry be, you know, a little, uh, unstraight? Sometimes
you never know. Nor do gay people.
My jaw just dropped when I
heard about it, McGibbon said.
Some actors I have suspicions
about. But the governor? Gay?
Whod-a-thunk it? Not me.
Tim Eustace, himself a gay
politician, said he believed that
the question of candidates sex
lives ultimately could make running for office too painful. The
discourse on peoples private lives
has become so coarse that its going to be difficult to find people to
run in the future, said Eustace, a
Maywood councilman. Its a
non-issue in some places, but a
bone of contention in others.
McGreeveys resignation does
nothing for gay people in New
Jersey, he said. I think its sad
that thats a reason to resign.

54 THE RECORD

JANUARY 2005

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Thursday, Aug. 19, 2004

Kushner pleads guilty

in sex-tape scheme
Power broker also admits tax fraud, lying to feds

THOMAS E. FRANKLIN/STAFF PHOTOGRAPHER

Charles Kushner, center, and wife Seryl at Newark courthouse. The developer faces up to two years in prison at sentencing Nov. 29.

By AMY KLEIN
STAFF WRITER

Democratic fund-raiser Charles Kushner

stood emotionless in a Newark courtroom
Wednesday and admitted that he hired a highpriced prostitute to seduce his brother-in-law on
tape in retaliation for cooperating with a federal probe into Kushners finances.
The prominent developer, wearing a pinstriped navy suit, acknowledged that he paid
$25,000 to a New York City call girl and two intermediaries who videotaped William Schulder
having sex with the prostitute.
Kushner then confessed to mailing the tape
and still photos of the act to his sister and Schul-

der shortly after Kushners business associates

were told they were targets of a federal grand
jury investigation.
Kushner, the top donor to Governor McGreeveys campaign in 2001, also pleaded guilty
to 16 counts of filing false tax returns and to
making false statements to the Federal Election
Commission.
Under the plea negotiation, which lawyers said
was completed minutes before Kushners courtroom appearance, the real-estate mogul will likely be sentenced to 18 to 24 months in prison.
This is a sad day, because, to be perfectly honest, I think one of the truly great and extraordinary men of this generation has just admitted to

criminal conduct, said Benjamin Brafman,

Kushners lawyer. From the very beginning of
this case, Mr. Kushner has wanted to accept responsibility for his criminal conduct.
The son of Holocaust survivors, Kushner, 50,
has made a name as a powerful donor to political campaigns and philanthropic causes. In recent years, however, his prominent position has
been overshadowed by an increasingly nasty
family feud resulting in lawsuits filed against
Kushner by his brother, Murray, and other former company executives.
Kushner will step down as chairman of
Florham Park-based Kushner Companies, which
See KUSHNER Page 55

JANUARY 2005

THE RECORD 55

Published Thursday, Aug. 19, 2004

Kushner: Faces up to 2 years in prison under plea deal

From Page 54
is valued at more than $1 billion,
his lawyers said.
His sentencing is scheduled for
Nov. 29.
U.S. Attorney Christopher J.
Christie hailed the guilty plea,
which came five weeks after
Kushners July 13 arrest, as another blow to political corruption.
Today is a very, very important day for the people of the state
of New Jersey and for our continued, concerted battle against the
corruption of public life in the
state, Christie said. There is no
question that Mr. Kushner was
one of the most powerful and influential sources on the scene.
Under the deal, Kushner is not
cooperating with authorities on
any other cases a point underscored by lawyers for both sides.
There has been no cooperations of Mr. Kushner yet, nor is
there any anticipated, Christie
said.
Although Kushners plea
agreement is unrelated to the
controversy surrounding McGreevey, who announced last
week that he is resigning over an
extramarital gay affair, Kushner
was closely linked to both the
governor and Golan Cipel, the
man identified as McGreeveys
lover.
Christie would not disclose any
details about an FBI investigation
into Cipel. Lawyers for McGreevey reported allegations to
the FBI last week that the former
aide had used the threat of a lawsuit to try to extort money from
the governor, sources said.
Brafman said Wednesday that
Kushner has not had contact with
Cipel for several years. After
Cipel was forced out of his
$110,000 administration job as
special counsel for homeland security, Kushner hired him to do
public relations, Brafman said.
Kushner also sponsored Cipels
work visa.
Kushner and his companies
have given $1.5 million to campaign accounts benefiting McGreevey since 1997, and the governor named Kushner to the Port
Authority of New York and New
Jersey in 2002. Kushner was
widely viewed as the next chairman of the bi-state agency, but his
growing legal problems forced
him to step down in February
2003.
As part of Kushners deal, the
government dropped charges of
obstruction of justice and conspiracy to promote an interstate
act of prostitution, which were included in the criminal complaint.
Kushner remains free on $5 million bail secured by two properties.
Kushner hired a prostitute last
fall and videotaped Schulder with
the prostitute in a Bridgewater
motel room in December, acCARMINE GALASSO/STAFF PHOTOGRAPHER
cording to the information submitted to the court.
Around May 9, shortly after grand jury investigation, Kushner counter be mailed to Schulder that Kushner turn over all copies
of tapes to the government,
Kushners business associates ordered that a copy of the tape and his wife, Kushners sister.
were told they were targets of a and still photographs of the enThe plea agreement stipulated Christie said.

THOMAS E. FRANKLIN/STAFF PHOTOGRAPHER

Above, Charles Kushner was flanked by wife Seryl and attorney Benjamin Brafman as he arrived at the federal courthouse in Newark.
Left, U.S. Attorney Christopher Christie, center, strode victoriously to
the courthouse for Kushner's guilty plea.
Even a good person can do
something wrong, Brafman said.
He offers no excuse for his criminal conduct.
The charges relating to Kushners financial misdeeds stem from
a 18-month investigation into his
campaign and tax practices.
A source close to the plea deal
said Wednesday that an earlier
draft of the agreement had Kushner admitting to conspiracy to defraud the Internal Revenue Service and the Federal Election
Commission. But during lastminute negotiations Wednesday,
Kushners lawyers worked out an
alternative deal that removed the
possibility of any co-conspirators,
the source said.
According to the information
filed with the court, in 16 instances Kushner contributed
more than $1 million to charities
and disguised them as office expenses for several partnerships he
controlled. The scheme cost the
government between $200,000

and $325,000.
Kushner also admitted to filing
a false statement with the FEC
that contained information about
campaign contributions made in
his partners names without their
knowledge.
In late June, Kushner agreed to
pay a $508,900 penalty to the
FEC to settle a lengthy investigation into his giving to federal
campaign funds. Kushner attributed the violations to clerical errors but acknowledged violating
federal campaign-finance law
that limits annual contributions
by one donor to a total of
$25,000.
Joseph Billy Jr., head of the
FBIs Newark office, said more
than 100 subpoenas had been issued and more than 100 people
interviewed in the Kushner investigation.
This is a victory for all lawabiding America, Billy said.
E-mail: kleina@northjersey.com

Business success, political connections, and scandal

Charles A. Kushner, 50, Governor McGreevey's
biggest campaign donor, pleaded guilty to tax violations and to charges stemming from a witnesstampering scheme in which he was accused of hiring a prostitute to seduce his brother-in-law. A rundown of his business dealings and political connections:

Personal history
Kushner's parents emigrated from Russia after
World War II. His father, Joseph, was a Holocaust
survivor. A carpenter by trade, Joseph began buying garden apartments and eventually became a developer. Charles Kushner was born in Brooklyn.
He and his brother Murray inherited the business.
Family: Wife, Seryl. Four children: Dara, Jared,
Nicole, and Joshua. They live in Livingston.
Education: Bachelor's degree, New York University, 1976; law degree, Hofstra University Law
School, 1979; M.B.A., New York University, 1979.
Career: Tax lawyer at Price Waterhouse &
Coopers, 1979-80; lawyer, Brach, Eichler in Roseland, 1980-84; chairman, Kushner Cos., 1985 to
present; chairman, NorCrown Bank, 1996 to 2004.
Member of the board of trustees at Hofstra University and Touro College.

Business empire
As one of the East Coast's biggest landlords,
Kushner owns or operates about 9 million square
feet of retail and residential space, including 22,000
rental apartments. The Kushner Cos. Real Estate
Group, headquartered in Florham Park, provides a
range of services, including property acquisition,
construction, sales and marketing, commercial and
industrial leasing, and accounting, financial, and legal services. The firm also manages office buildings,
shopping centers, and industrial complexes.
NorCrown Bank, based in Livingston, has a
dozen retail branches in North Jersey.
Kushner's businesses include Statfeld Vantage
Insurance/Highview Planning, which provides brokerage and consulting services, and Westmin Tech,
which builds telephone, cable, and Internet networks.
Last fall, a group led by Kushner and U.S. Sen.

PETER MONSEES/STAFF PHOTOGRAPHER

whom McGreevey had had an affair, leading to the

governor's decision to resign. Kushner sponsored
the work visa that allowed Cipel to stay in the United States.
In the past two years, Kushner has been sued
by his brother Murray as well as two former business associates, all of whom claimed a range of financial misdeeds. Among many charges, they said
Kushner had secretly steered his relatives' earnings
into political donations.
McGreevey nominated Kushner to the Port
Authority of New York and New Jersey in February 2002, intending him to lead the $4.5 billion
agency. A year later, Kushner resigned from the
agency's board amid scrutiny of his campaign donations and the lawsuits.
In July, federal authorities arrested Kushner for
allegedly hiring call girls to seduce witnesses testifying against him in campaign finance investigations. One of the witnesses was Kushner's brotherin-law. Kushner had the liaison videotaped and
mailed the tape to the man's wife, his sister.
Touro College, where Kushner serves as a
trustee, also figures in the McGreevey sex scandal.
McGreevey aides say Cipel's lawyers asked the governor to approve a new medical school for the college as part of negotiations to keep the affair quiet.
Cipel's attorney denied the story.

Charles Kushner at a New Jersey Nets game in November. He tried unsuccessfully to buy the team.

Quotable

Jon Corzine was one of two finalists attempting to

buy the New Jersey Nets basketball team for $300
million. They lost out to developer Bruce Ratner.
Kushner is a major philanthropist, serving on
the board of more than a half-dozen educational,
medical, and Jewish organizations.

I want to be one of the largest [property] owners in the country in the next 10 years.
Kushner, September 2000
I'm not interested in participating in backing
political people for my benefit. I back political people that give back to society. ... . It's a very important part of the way I raise my family.
Kushner, June 2002
Our system unfortunately discourages qualified
business people who can make a difference from
doing public service. That is truly a shame.
Kushner, February 2003, after resigning from
the Port Authority board
Kushner had become a financial version of
Golan.
Democratic insider, February 2003

Politics and scandal

Since 1997, Kushner, his family, and business
partners have given more than $5 million to federal, state, and local politicians and political committees. The bulk of that has gone to powerful and
influential politicians in New Jersey and New York.
The biggest beneficiary has been McGreevey,
whose campaigns have received $1.5 million from
Kushner and his companies. Corzine and U.S.

Sens. Hillary Rodham Clinton, Frank R. Lautenberg, and Charles Schumer, all Democrats, also
have received money, as did Republican Rudolph
Giuliani.
The Federal Election Commission said some of
Kushner's donations violated campaign finance
law. He was fined $508,900, one of the largest civil penalties the agency ever imposed. Kushner and
associates had given $541,000 in contributions to
candidates, despite a legal limit of $25,000 per
donor, the commission said.
Kushner has employed some of McGreevey's
top aides, including Golan Cipel, the Israeli citizen
and public relations executive whom the governor
named as a homeland security adviser. Last week,
McGreevey aides said Cipel was the man with

56 THE RECORD

JANUARY 2005

Published Thursday, Sept. 23, 2004

Democratic donor admits extortion

DAmiano tells of
Machiavelli plot
By AMY KLEIN
STAFF WRITER

Democratic fund-raiser David DAmiano admitted Wednesday to extorting $40,000 in campaign contributions from a Middlesex County man
trying to save his farm, and said he prompted Governor McGreevey to utter the code word Machiavelli to signal his willingness to help the farmer.
DAmiano, the 45-year-old owner of a trash recycling and mulching business in Carteret, acknowledged during a plea hearing that he had a
conversation with McGreevey in February 2003
that led to the governor saying Machiavelli at a
meeting that day with state officials, DAmiano,
and Mark Halper, who was seeking a better price
for his condemned farm.
DAmiano said Wednesday that he had met
with McGreevey and other officials on Halpers
behalf and that they were aware of Halpers payments.
During Wednesdays hearing at the federal
courthouse in Newark, DAmiano was asked: On
Feb. 18, 2003, did you have a conversation with
State Official 1 which gave rise to or prompted
State Official 1 then to use the word Machiavelli at a meeting that day among state officials,
Halper, and yourself? He responded, Yes, I did,
your honor.
Although McGreevey was not named directly in
the indictment against DAmiano or during the
plea hearing Wednesday, the governor acknowledged in July that he is the person referred to
throughout the case as State Official 1. The governor has characterized his mention of Niccolo
Machiavelli, a Florentine statesman and writer, as
an innocent literary reference.
But on Wednesday, U.S. Attorney Christopher
J. Christie who hailed the plea agreement as a
victory for the government said DAmianos
statements in court proved that McGreeveys utterance of Machiavelli was not a coincidence.
Christie, citing an ongoing investigation, refused to
comment on whether McGreevey knew the implications of the code word.
What is clear is that State Official 1 did not put
forward an innocent coincidental literary allusion
by using the word Machiavelli, Christie said.
A spokesman for the governor, however, said
Wednesday that the plea vindicated McGreevey.
Its clear from the plea and the facts presented in court that Mr. DAmiano introduced the
word into the conversation, and the governor simply picked up on the word and used it innocently, said spokesman Micah Rasmussen.
Michael Drewniak, a spokesman for the U.S.
Attorneys Office, responded that this was not an
accurate account of what happened.
Mr. DAmiano made clear in his admissions to
the court that it was pre-arranged that Machiavelli would be used in the subsequent conversation between State Official 1 and Mr. Halper,
Drewniak said when asked to comment on Rasmussens statement. That is the factual chronology.
DAmianos guilty plea to two counts of mail
fraud before U.S. District Judge William H. Walls
capped one of the most remarkable seasons in
New Jerseys political history. Shortly after McGreeveys announcement last month that he
would step down, a second Democratic fund-raiser, prominent developer Charles Kushner, pleaded guilty to federal charges.
DAmiano pleaded guilty to two of the 11
charges named in the indictment: mailing a $5,000
contribution from Halper to the Victory Fund and
reselling tickets to Democratic fund-raisers. Under
his plea agreement, in which he is not cooperating
with federal authorities, DAmiano faces 24 to 30

TARIQ ZEHAWI/STAFF PHOTOGRAPHER

David DAmiano listening as his lawyer, Edward Plaza, spoke to reporters outside courthouse.
months in prison.
During the hearing, DAmiano also admitted
that after he solicited and accepted $20,000 in
cash and $20,000 in political contributions, he
told Halper that the farmer would get a favorable
result regarding his land. Christie said his office
has not determined what happened to the cash.
DAmiano said he also pocketed $1,000 during
a scheme to resell tickets to a fund-raising event.
DAmiano raised $100,000 as a member of McGreeveys elite fund-raising committee.
Like a great many people, he made a mistake,
DAmianos lawyer, Edward Plaza, said after the
hearing. I and just about everyone else here
has learned that life can sometimes be unfair.
Christie, for his part, noted that although
DAmiano only pleaded guilty to two counts, he
also admitted his guilt in the bribery and extortion
scheme.
The 11-count indictment filed against DAmiano in July was filled with political intrigue and
caused an uproar in Democratic circles and in the
governors office.
The plea, however, effectively cleared McGreevey of any involvement in DAmianos dealings, Rasmussen said.
This plea puts to rest the idea that the governor
or any government official was involved in misconduct, Rasmussen said. The plea agreement
shows this was a case of theft, not of political corruption.
However, several sources familiar with probe
said McGreevey has not been cleared and that federal prosecutors continue to look into his role in
the Halper case. The sources said prosecutors also
are examining the circumstances surrounding the

governors hiring of Golan Cipel, whose threat to

file a sexual harassment suit forced the governor
to resign and admit that he had an extramarital affair with another man. Administration sources
have identified the man as Cipel, who served
briefly as McGreeveys homeland security adviser.
Nothing has been put to rest, one source said.
The investigation continues.
DAmiano, according to the indictment, used
his status as a fund-raiser to arrange a series of private meetings for Halper with Middlesex County
officials and the governor. Halper, who had been
fighting with Piscataway over the condemnation
of his farm since 1999, ultimately got a lucrative
preservation offer.
It was during the February 2003 meeting that
McGreevey introduced Halper to an aide and
pointed out that the farmer was reading from The
Prince by Machiavelli to learn how to deal with
the farm negotiations, the indictment said.
But a few hours before the meeting, DAmiano
promised Halper that he would arrange for one of
the state officials to use the secret code Machiavelli during the conversation, the indictment
said. The word would reassure the farmer that the
officials were sympathetic and could deliver on
their promise to preserve his farm.
Halper had been secretly working with the FBI
since early 2002 and tape-recorded hundreds of
conversations, including the one with McGreevey
at the East Brunswick Hilton last year.
Between July 2002 and December 2003, DAmiano demanded direct cash payments to himself or
political donations to the Democratic State Committee in exchange for meetings with top policy
makers in Trenton and Middlesex County who

would help Halper preserve his farm, according to

the indictment.
Halper, who ended up contributing $40,000,
was ultimately offered $7.4 million for the land
$3 million more than a previous offer. But the deal
was never completed.
In a statement, Halper said his familys efforts to
save their farm had been tainted by corruption,
and that a push by Piscataway officials to condemn the property should be halted.
If they do not, the Halper family will petition
the court to stay the condemnation process pending the outcome of the U.S. attorneys investigation, Halper said.
At the time of DAmianos arrest, the indictment
spurred finger-pointing from Democrats who
called the 47-page document a smear campaign
and accused Christie, a Republican, of trying to
further his political career.
One week after DAmiano was indicted, Kushner, the top donor to McGreeveys 2001 campaign, was charged with hiring two prostitutes to
try to seduce witnesses in a federal probe into his
finances.
Then came McGreeveys stunning disclosure of
a homosexual affair and announcement that he
would step down Nov. 15. Finally, Kushner pleaded guilty to retaliating against a federal witness and
filing false tax returns; he is expected to be sentenced to 18 to 24 months in prison.
DAmiano is free on $100,000 bond, secured by
two rental properties he owns in Woodbridge.
Sentencing is Dec. 28.
Staff Writer Mitchel Maddux contributed to this article.

Published Friday, Sept. 17, 2004

Published Friday, July 15, 2004

AN EDITORIAL
Getting closer
A fund-raiser ties McGreevey to Machiavelli

lthough the McGreevey administration is downplaying

it, this weeks guilty plea by
one of the governors top fundraisers was another torpedo hitting a rapidly sinking ship.
Since Governor McGreevey has
already announced he will resign
effective Nov. 15, the biggest question seems to be whether any
more projectiles are going to hit
his administration.
David DAmiano, the fund-raiser, pleaded guilty to mail fraud in
connection with an attempt to solicit $40,000 in campaign contributions from a Middlesex County
man attempting to sell his 74-acre
farm to the state for preservation.
In answer to a question during his
plea hearing, Mr. DAmiano drew
the governor deeper into the
scheme.
The Carteret waste-recycler testified that on Feb. 18, 2003, he had
prompted the governor to use the
word Machiavelli at a meeting
with the farm owner later that day.
The name was said to be a signal

that the governor was sympathetic to the effort to have the state
buy the farm. Ultimately, the farm
owner received a generous offer
from the state.
Mr. McGreeveys spokesman
maintains that the governor used
the name innocently, but U.S. Attorney Christopher Christie has
rejected that claim, insisting that
State Official 1 as prosecutors
designated Mr. McGreevey did
not put forth an innocent literary
allusion by using the word Machiavelli. Sources familiar with the
investigation say that federal prosecutors are still looking into Mr.
McGreeveys role in the DAmiano case, as well as the circumstances surrounding the appointment of Golan Cipel. For those
who missed it, Mr. Cipel is an Israeli national who served briefly as
the governors homeland security
adviser and who later threatened
to sue Mr. McGreevey for sexual
harassment forcing the governor
to announce his resignation and
admit to an extramarital affair

with a man, reportedly Mr. Cipel.

As for Mr. DAmiano, he had
amazing access to the governors
office for the first two years of his
term peppering the staff with
names of people he was pushing
for jobs, positions on state boards,
and judgeships. He also arranged
meetings with the governor for

people like the farm owner. That,

apparently, is what a $40,000
campaign donation bought in the
McGreevey administration.
Mr. Christie, who has aspirations to run for governor, has been
criticized for his zeal in going after
Mr. McGreeveys associates. Democrats say the U.S. attorneys

statements about high-level corruption are politically motivated.

But Mr. Christie has yet to be
proven wrong in any of the statements he has made.
Corruption is the largest stain
on this states reputation. Those
who successfully weed it out
should be applauded.

JANUARY 2005

THE RECORD 57

F R I E N D

O F

T H E

P E O P L E

I T

S E R V E S

www.northjersey.com

Published Thursday, Sept. 23, 2004

A strike at pay to play

McGreevey order turns the system on its ear

By MITCHEL MADDUX
and JEFF PILLETS
TRENTON BUREAU

ASSOCIATED PRESS

Governor McGreevey signing an order that will alter the way politics are played in a state where money has had a corruptive influence.

Governor McGreevey announced

Wednesday that companies doing business with the state will not be allowed to
contribute campaign funds to gubernatorial candidates or political parties.
He signed an executive order severely
curtailing the controversial swapping of
contributions for government contracts
a practice known as pay to play.
The announcement came in a deeply
personal speech laced with moments of reflection and self-criticism, with McGreevey attacking head-on the fund-raising practices that have tarnished his 32
months in office.
The wall, the separation, between politics and government, between campaign
finance and government operations, between state interest and personal interest
has disintegrated, McGreevey said. Political fund raising and the peoples business all happen in the same meetings over
the same table.
The announcement sent shock waves
across the states political landscape, angering some county political bosses and
sending attorneys hurrying off to analyze
the measures legality. One county leader
was said to have thrown a chair against the
wall when he learned of the new fund-raising restrictions.
But civic groups hailed the measure as
an important step toward reforming a system corrupted by big money.
The reach of the executive order is significant, and its likely to have significance
beyond its provisions, said Harry Pozycki, director of New Jersey Common Cause
and a leading proponent of pay-to-play reform. Its certainly a strong move by the
governor.
McGreevey made the announcement in
his outer office at the State House, delivering a finely crafted speech tinged with
emotion. The governor said that announcing his resignation Aug. 12 in the
wake of a sex scandal had provided him
with a personal and political freedom that
has enabled me to confront challenges I
have avoided in the past.
He spoke about human weakness
and temptation, describing humanity as
fallible and finite, references not just to
the lure of big campaign cash but to his
See PAY TO PLAY Page 58

Published Thursday, Sept. 23, 2004

AN EDITORIAL

Pay to play: Whats next?

When Codey takes over, he must take charge

overnor McGreeveys recent executive order banning certain kinds of campaign donations on the state level may be filled with loopholes,
but his comments about the insidious impact of big money on
politics in New Jersey have the
ring of truth. Its time to fix this
broken-down system.
Big money permeates politics at
nearly every level of government,
and it involves donations from
people, companies, and special interests who expect something in
return. That something in return
be it favorable legislation or a fat
deal for government work too
often comes out of the taxpayers
pockets in the form of unnecessary costs.
The problem has reached the
point where this sort of legalized
corruption is accepted as politics
as usual, and even the most honest office-holders are held in lower regard because of the problems
pervasiveness.
Call the idea nave, but this
newspaper hopes that the governors executive order and the

scandals that helped lead to his

resignation announcement will
compel the Legislature as well as
county and municipal governments to overhaul the ground
rules for campaign donations so
that New Jersey goes from national laughingstock to trail blazer.
Mr. McGreeveys executive order, which takes effect Oct. 15,
will limit so-called pay-to-play donations from people who do business with the state. But there are
so many loopholes and so many
other types of donations not covered that the measure amounts
to prescribing Tums in a dysentery
ward.
Consider: In last years legislative races, winning Democrats
and Republicans received $56
million in donations with the
Democrats outspending their rivals on average by a 2-1 margin.
In some local races, legislators of
both parties raised hundreds of
thousands of dollars to campaign
against challengers who were
lucky to raise $10,000. People didnt donate that much money to in-

cumbents because they thought

the legislators stood for good government. They donated because
they expected something in return.
In the 2002 Bergen County
races for executive and freeholder, the candidates spent a record
$6 million with Democrats
again outspending Republicans by
a 2-1 margin.
The anemic pay-to-play legislation that was passed in June actually made things worse because it
preempted tough reform measures on the local and county level. How pathetic.
State Senate President Richard
Codey, expected to replace Mr.
McGreevey on an acting basis on
Nov. 15, has so far made the right
noises about cleaning up all the
tainted donations. We should
take him at his word. After all, in
years past, the Senate has passed
comprehensive legislation to reform campaign finances, only to
see it go nowhere in the Assembly.
Wed like to think the public is
so disgusted with New Jersey politics and New Jersey politicians

that it will insist on reform. Mr.

Codey should use his new bully
pulpit to bring about this longneeded overhaul. A logical first
step is to repair the law passed in
June: The recently enacted state
law should not supersede tougher
local campaign-finance ordinances.
Mr. Codey must also press for
the comprehensive reform package that the Senate passed last
year to end pay to play at all levels
of government in the state. It
wont solve all the problems, but
its a major step forward. To settle for less would indicate that Mr.
Codey isnt serious about cleaning
up this mess.
At the county level, its long
past time for Bergen County Executive Dennis McNerney to stop
studying pay-to-play reforms and
propose to the freeholders an
overhaul that takes the big donations out of county decision-making.
Mr. McNerney has said he is inclined to follow the governors
lead and issue an executive order
on pay to play, but he plans to

take his time to make sure his reforms are thorough and comprehensive. He promised such reforms when he campaigned two
years ago. Its time he got serious.
Some cynics ask: Why bother
trying to reform campaign finances? They say that donors
with an agenda will always find a
way to buy influence. To a certain
extent, they are right. But that defeatist attitude is the surest way to
let big money prevail.
Consider this analogy. America
will never eliminate drug addiction or prostitution or child abuse
or domestic violence or any other chronic social problem. But
that doesnt mean government
shouldnt do all it can to protect
the public and minimize the damage.
As Mr. McGreevey said when
he signed the recent executive order, The wall, the separation, between politics and government,
between campaign finance and
government operations, between
state interest and personal interests has disintegrated.
Mr. Codey, rebuild that wall.

58 THE RECORD

JANUARY 2005

Published Thursday, Sept. 23, 2004

Political rivals applaud governors order

TRENTON BUREAU

Democrats concerned it could cut into funding lead

It isnt perfect.
Its riddled with loopholes.
And it may not stand the test of time or
a court challenge.
Thats the view of people throughout
New Jerseys political establishment about
Governor McGreeveys executive order
barring government contracts to certain
campaign contributors.
But despite all that, they also gave the reform generally good marks.
Mild praise came from some of McGreeveys harshest critics, including Republicans who have made pay-to-play
reform one of the key planks of their party platform.
Its about time, said Sen. Joseph Kyrillos of Monmouth County, who is also
chairman of the New Jersey Republican
State Committee. Finally free from the
burden of raising money for a reelection
campaign, Governor McGreevey has rightfully decided to endorse long-standing Re-

publican efforts to ban the practice of payto-play at least at one level of government.
McGreeveys order
would bar state government
contracts
of
$17,500 or more from being awarded to donors
who give contributions to
the governor, the party
committee he controls, or
any county organization. KYRILLOS
The executive order
does not cover municipal committees, and
it is not likely to curb the flow of contributions from major law firms, but it is far
more comprehensive than similar legislation McGreevey signed into law in June
and is closer to what many campaign finance reformers have sought for years.
It also represents a direct assault on the
county political bosses, who hold sway
over New Jerseys political system. Immediately, some Democrats expressed the fear

By CHARLES STILE

that the move will hamper their party,

which enjoys a significant fund-raising advantage over the Republicans. They are worried
that it will level the playing field in upcoming elections.
The state Democratic
Party, for example, had
$2.2 million in its account
as of July 15, more than ROBERTS
five times as much as the
Republicans had salted away. That figure
doesnt include funding from the partys
legislative leadership committees controlled by Senate President Richard J.
Codey who is in line to become governor
when McGreevey leaves office on his Nov.
15 resignation date and Assembly
Speaker Albio Sires.
How does he think well pay for campaigns now? asked an e-mail from one
Democratic county leader posted on Poli-

ticsnj.com, a popular political Web site.

Some lawmakers, including Assembly
Majority Leader Joseph Roberts, who has
strong ties to Camden County political
leader George Norcross, offered cautious,
muted praise. Roberts was among the Assembly Democrats who brokered changes
to the pay-to-play bill this spring by warning that a more sweeping measure might
not pass constitutional muster.
The governors executive order constitutes another significant leap forward in
the effort to curtail campaign spending
and limit the impact that special interest
money can have in the political process,
Roberts said in a joint statement with
Sires.
It is our intention to fully examine the
governors order for purposes of determining if it furthers our goals of protecting the
publics interest without inviting legal action that could render it a well-intended
E-mail: stile@northjersey.com
but ultimately unenforceable reform.

From disgrace, a
governor emerges

Pay to play
From Page 57
sexual relationship with a male
aide that prompted his resignation.
I take this action recognizing that
cynics may say that I am doing this
to create a legacy for myself a
Hail Mary pass of sorts to seek redemption, McGreevey said. One
may not be able to change the past,
but we can learn from it and we
certainly can change the future.
The measure, which takes effect
Oct. 15, goes beyond restrictions
passed by the Democrat-controlled
Legislature and signed by the governor in June.
Basically, it restricts campaign
donors from receiving any state
contracts worth $17,500 or higher
if they gave money to the governors campaign, the governors
state party account, or county
committees controlled by the governors party. Such donations cannot be made within 18 months of
the beginning of a state contract.
The order does not stop all
forms of pay-to-play, however.
Contractors seeking government work could still make contributions to the campaign accounts
of mayors and other municipal officials, a widespread practice in
New Jersey. The order also will not
stop large law firms from pouring
contributions into the system.
County Democratic leaders had
a mixed initial response to the governors order.
George Norcross, a former Democratic chairman of Camden
County who remains a powerful
force in South Jersey politics, issued a blistering statement claiming that the governors order is full
of loopholes. Norcross, a longtime
McGreevey ally, said the order fails
to remove the influence of money
from the states political system.
Norcross and others noted that
the order would not prevent municipal officials and school board
members from awarding public
contracts to their contributors.
Many lawyers in major firms also
are allowed to make maximum
contributions under McGreeveys
order.
If we are going to do it, we
should do it right. If we are going
to reform the political system, we
should go all the way, Norcross
said in a statement. We shouldnt
just reduce the role of money in
politics, we should eliminate it.
He added: True reform measures should not have gaps or loopholes that can be selectively or creatively exploited. Nevertheless,
other politicians said the measure
was strong and would dramatically alter current fund-raising practices.
In Bergen County, Democratic
Chairman Joseph Ferriero brushed
off suggestions that the executive
order was aimed at bosses like him.
Since the party took control in
Bergen in 2002, millions of dollars
in government contracts have been
awarded to attorneys, engineers,
architects, and other professionals
who provided tens of thousands of
dollars for Democrats campaigns.
It will have absolutely no im-

ASSOCIATED PRESS

Governor McGreevey, soon to leave office, approaching table to sign his landmark executive order.
pact on fund raising in Bergen
County, Ferriero said.
Ferriero insisted that pay-to-play
does not exist in the Bergen County Democratic Party, and he said
people give to the party because
they believe in its principles, not
because they are seeking influence.
People give to the Democratic
party in Bergen County because
they believe in what our party is
doing, Ferriero said.
Since McGreeveys earliest days
in office, his administration has
been bedeviled by criticism of its
aggressive fund-raising practices.
More recently, it is has beengreatly
damaged by the indictments of
some of the governors leading
donors in a string of federal corruption probes.
McGreeveys leading contributor, developer Charles Kushner, is
heading to federal prison after his
conviction on federal charges of
making illegal campaign donations.
Under McGreeveys control, the
Democratic Party has raised more
than $20 million in donations, far
more than any previous governor.
Much of that money has come
from developers, lawyers, and others who have received millions of
dollars in state contracts. In 2002,
Kushner himself received a lucrative appointment as a commissioner of the Port Authority of
New York and New Jersey. He has
since resigned the post.
Campaign finance attorneys
said McGreeveys order appears to

be a substantial advance, but that

they need more time to study the
details.
Its pretty far-reaching, and its
a sweeping change in the way contracts will be done in the foreseeable future, said William Pascrell
III, the Passaic County counsel.
Its certainly going to have a chilling effect on business whether
theyre providing goods or service
in terms of making campaign
contributions.
Some said the order is certain to
provoke legal challenges because
limiting political donations has
been viewed by some courts as limiting free speech.
All this stuff is going to be
looked at very carefully from a
constitutional standpoint, said
Dennis Oury, legal counsel to the
Bergen County Democratic Organization.
Members of the outgoing administration clearly enjoyed tweaking the powerful county party leaders, who only weeks ago tried to
push McGreevey from office before the Nov. 15 date he had chosen.
They said the executive order,
despite what critics say are its limitations, will cut deeply into the
duchies of influence that define
New Jersey politics. I understand
there are county bosses ... who are
literally throwing chairs at the wall
right now, said one senior administration official, who added that
he knows of one county boss who
did just that.

McGreeveys pay-to-play executive order

What does it do?
It restricts campaign donors
from receiving any state contracts
worth $17,500 or higher if they
gave to the governors campaign,
the governors state party account,
or county committees controlled
by the governors party in the 18
months before the contract negotiations began.
Why is it necessary?
Critics have long complained
that New Jersey is corrupted by a
modern-day spoils system in
which well-heeled donors are rewarded with lucrative contracts. In
political parlance, the practice is

Other Democrats were more stinging in

their criticism.
U.S. Rep. Robert Andrews, D-Camden,
who ran against McGreevey in the 1997
gubernatorial primary, described it as a failure, saying it will not stop pay-to-play maneuvering with municipal governments
and, indirectly, with regulatory agencies.
Nothing in this order stops the
telecommunications corporation that
seeks the favor of the Board of Public Utilities from financing the campaign of the
governor who appoints the BPU members, Andrews said.
Nothing in the order stops a professions lobbyists from seeking the favor of
the governor, the Senate president, or Assembly speaker to block or move legislation that protects that professions turf.
Others remained wary but watchful.
Like everything else, the words are
great, and well see how they live up to
their promise, said Sierra Club lobbyist
Jeff Tittel.

called pay to play.

Wasnt this already banned?
Legislation passed earlier this
year did attempt to limit some of
these practices, but Governor McGreeveys measure goes further.
McGreeveys new order, for example, would prevent contractors
from evading restrictions by routing money through county committees.
Are there loopholes in the new
executive order?
Yes. It would not stop contributors from giving to municipal campaign accounts. It would probably
not stop large law firms from pour-

ing contributions into the system,

because the ban applies only to
those with a 10 percent stake in
the firm. That means the firms
other lawyers still will be free to
make contributions.
Is this permanent?
McGreeveys executive order
will stay in effect unless another
governor repeals it with an executive order. McGreeveys successor,
Senate President Richard Codey,
vowed to honor the executive order while he is governor and
pledged to codify it with legislation. It also could face a court
challenge.

One prominent Democratic

Party leader who spoke on condition of anonymity called the reforms a step in the right direction, but questioned McGreeveys
timing. The scandal-scarred governor, he said, is simply trying to con
the press and public into believing
that he is a good guy after all.
This is like Richard Nixon proposing campaign finance reform in
the midst of Watergate, two weeks
before he resigns, the Democrat
said. Its the right message, but
hes clearly the wrong messenger.
In an Aug. 12 speech that
stunned the nation, the 47-year-old
McGreevey announced that he
was gay and would resign from office because of an affair with an unnamed man. Aides later identified
the man as Golan Cipel, an Israeli
national who was the governors
special adviser on homeland security. Cipel resigned in 2002, just
eight months into McGreeveys
tenure, amid protest that he was
not qualified for the $110,000 post.
When McGreevey scheduled
his own resignation for Nov. 15, he
was met with resistance from powerful Democrats who felt he should
leave earlier or risk damaging the
party. New Jerseys most respected
Democrat, U.S. Sen. Jon Corzine,
reluctantly supported the governors decision to stay but pointed
out on NBCs Meet the Press
that New Jersey now needed major
ethical reform to repair its tarnished image.
In recent weeks, advisers to the
governor have hinted broadly that
McGreevey was at work on several major executive orders that
would help cement his legacy. Administration and party sources said
the ethics bombshell has been under construction for the past three
weeks, under a tight veil of silence.
Very few people, with the exception of the incoming acting governor, state Sen. Richard Codey, and
a few close advisers, knew the order was being drafted, the sources
said.
Sources said much of the executive order was drafted by Angelo
Genova, the prominent Democratic attorney and fund-raiser who is
counsel to the state party. Genova
did not return a call placed to his
office Wednesday afternoon.

TRENTON
All of a sudden, Jim McGreevey is acting like a real
leader.
Last week he attacked global
warming. Wednesday, he took
on an another enemy of life in
New Jersey money in politics.
Has quitting
turned McGreevey into a
better governor? Maybe so.
The executive order he
signed
Wednesday
was as clear as
MIKE
the azure sky
KELLY
over this town
where cash and
politics seem all too comfortable. The order bars any person
or business contributing to gubernatorial campaigns or to
state and county political party
committees from getting large
state contracts.
There are loopholes. Surely
well-schooled lawyers lawyers
who ought to be using their legal talents for more noble deeds
are searching hard for them.
But such loopholes are not
nearly as important as the message McGreevey sent: If you
pay, you cant play.
That means many lawyers or
engineers, hoping for lucrative
state bond contracts, cant
throw buckets of cash into Republican or Democratic party
coffers. The same is true for contractors hoping to build roads or
fill potholes on the turnpike.
With just a flick of his gubernatorial pen, McGreevey may
have set in motion the most significant change in New Jersey
government since the sweeping
income tax legislation of the
1970s.
This is no penny-ante executive order. Indeed, the governor
already has a convert.
Barely an hour after McGreevey signed his order, here
was George Norcross, highpowered banker and one of
New Jerseys most adept political sugar daddies, announcing
that if we are going to do it, we
should do it right.
Had the suddenly saintly
Norcross just emerged from
some form of campaign cash rehab? We shouldnt just reduce
the role of money in politics,
Norcross said. We should eliminate it.
Whats next a new state slogan? New Jersey and you, honest together? This is clearly McGreeveys moment. He did not
have to draw up this executive
order. But, as various aides explained privately, the governor
feels driven to do something significant before his promised resignation on Nov. 15 that might
frame his legacy as more than
just a failed politician who left
office early because of a homosexual affair.
But what irony. Since he
strode into Trenton 33 months
ago promising to reform New
Jersey government, McGreevey
hardly came off as Mr. Clean.
Too often he seemed more like
a slick version of Frank Hague,
far too willing to approve of patronage in return for campaign
cash. Early on, the governors
staff was even charging lobbyists
for private sessions with McGreevey. The message: If you
pay, the governor will let you in
the room and listen.
And that was just the beginning.
Several close aides eventually

resigned after questionable

deals. Even McGreevey himself
was named in a federal investigation of an extortion scheme
involving a political fund-raiser
who used an ends-justify-themeans code word Machiavelli to signal that a deal was in
the works.
Wednesday, a new McGreevey emerged at least, a
McGreevey who is trying to be
new.
Yes, he stood in the same
room adjacent to his State
House office where he announced last month that he is a
gay American and felt compelled to leave office because he
feared shaming his family and
his administration. Yes, his
voice still carried traces of the
humility that framed his Aug. 12
resignation speech.
But his voice seemed to carry
a new passion, too.
For better or worse, recent
events have been a catalyst,
McGreevey began a none-toosubtle allusion to his decision to
leave office in 54 days.
He spoke of having a personal and political freedom that
has enabled me to confront
challenges I have avoided in the
past. And he added that his
dwindling days in office require
me to take quick action.
Corrosive and cancerous,
McGreevey said of New Jerseys
pay-to-play system that mixed
fat cats with politicians. Money
in politics, he added, is like an
addiction.
These are not just strong
words; they are words that can
cement a legacy.
McGreevey seems to know
this knowing, also, that some
may see his quest for a legacy as
nothing less than another joke
by a politician who lost his mandate. Almost as a reminder of
how far he has slipped, Quinnipiac University released a new
poll Wednesday showing that
only 30 percent of New Jersey
voters want McGreevey to
change his mind and stay in office. Sixty-one percent want him
to stick by his decision to quit.
I take this action recognizing
that cynics may say that I am
doing this to create a legacy for
myself a Hail Mary pass of
sorts to seek redemption, McGreevey said, adding that he did
not hold on to some hopeful
notion that I will be known for
much more than as the governor who resigned.
His voice cracked ever so
slightly.
McGreevey paused, then continued. I am at peace with
that, he said.
Moments later, he moved to a
small table.
McGreeveys staff had lined
up a dozen blue and gold pens
on a table for his ceremonial
signing of the executive order.
On the walls, the formal gubernatorial portraits of Christie
Whitman, Tom Kean, Jim Florio, Brendan Byrne, William
Cahill, Alfred Driscoll, and
Robert Meyner all governors
who declined to put an end to
the pay-to-play system looked
down.
McGreevey took just one pen,
his rapid, almost angry scrawl
punctuating the click-click-click
of cameras. When he finished,
he stood and looked over the
room one more time.
Thank you, McGreevey
said, turning to walk out.
But before he left, Jim McGreevey had one last gesture.
He smiled.

JANUARY 2005

THE RECORD 59

Published Thursday, Sept. 23, 2004

A promise kept, but 2 years late

If not now, when? Governor McGreevey said twice Wednesday in explaining his come-to-Jesus on pay to play.
The answer, frankly, could have been
more than two years ago when McGreevey took office.
Lets not forget that,
as a candidate in 2001,
McGreevey promised to
end the practice of government contracts being
awarded to big campaign contributors. He
then proceeded to hone
pay to play to an art
HERB
form while derailing a
JACKSON
potential ban in 2003
that was one vote away
CAPITAL
from reaching his desk.
GAMES
That bill did a lot of
what he did Wednesday
through executive order, and in some
cases did more.
Granted, the order McGreevey signed
Wednesday does a surprisingly thorough
job of blocking state contracts from going
to firms and businesses that make campaign contributions. It recognizes that
county party committees are de facto extensions of the state party fund-raising
apparatus by blocking state contracts
from going to firms that gave to state or
county committees in the previous 18
months.
It also plugs several holes in the law

that McGreevey signed with great fanfare

in July, making the new rules effective
next month, and applying them to contracts that are awarded through bidding.
The July law does not take effect until
2006, but McGreeveys order will affect
the money raised by candidates for governor next year. The July law also applied only to the no-bid contract process,
leaving many big donors such as construction and paving companies free to
keep on writing checks.
Those companies will now be barred
from contributing to state or county
committees if they want contracts from
the state or its agencies or authorities.
There are some flaws in the order. For
example, big law firms such as the one
run by the family of McGreeveys chief
counsel, Michael DeCotiis, could still
bankroll candidates and get government
contracts. Thats because the ban applies
to business entities and to individuals
that control more than 10 percent of the
profits of the entity. At a big law firm,
only be a few of the top partners may
have a 10 percent stake, leaving the rest
of the lawyers working there free to
make individual contributions and the
firm could still get government work.
The order does not affect contracts
awarded by counties, municipalities, and
school boards. Legal minds disagreed on
whether he could do that without legislative approval, since executive orders usu-

ally deal only with the operations of state

government.
And the order has no impact on the
vast sums of money that flow into state
politics from labor unions and interest
groups and corporations that do not receive government contracts. An analysis
by The Record of the 2003 election
found that 22 of the 27 contributors who
gave more than $200,000 did not receive
government contracts. Their political potency, especially that of increasingly powerful labor unions, will be increased if the
order succeeds in reducing the contractor money in the system.
The order could help boost the power
of legislative leaders relative to the previously imperial governors office because
it does not prevent most state contractors
from making contributions to legislators
or their leadership committees. To regulate the Legislature, McGreevey would
need to sign a bill that would pass both
houses.
But theres no disputing that this order
has some real teeth, and dont be surprised if some firm that loses out on a
contract files a lawsuit to question McGreeveys authority to issue it.
The section that says a firm cant get a
state contract if it contributes to a county
party organization made some county
bosses furious, according to people who
spoke directly with them Wednesday afternoon. These bosses are some of the

same people, by the way, who have been

getting rich on their government connections and were trying to push McGreevey
out before the end of August so that Senate President Dick Codey would not be
acting governor for more than a year.
They were worried about what Codey,
a free-thinker who has battled with the
bosses as much as played nice with them,
might do in that time. Apparently they
should have been more worried about
what a wounded McGreevey would do.
For his part, McGreevey admitted he
avoided any attempt at real reform while
governor, something he denied vehemently and repeatedly prior to his resignation announcement on Aug. 12. He
also admitted that pay to play is corrupting.
For better or worse, recent events
have been a catalyst, providing me with
the personal and political freedom that
has enabled me to confront challenges
that I have avoided in the past, he said
at the beginning of his no-questions-allowed press conference.
Political contributions are not bad, he
said, when someone gives to support a
candidates views, but when they are
used as a business development tool, they
become corrupting.
In county and state government,
elected officials have become all too
mindful as to who supports our political
success through fund-raising efforts, he

said. The wall, the separation, between

politics and government, between campaign finance and government operations, between state interest and personal
interests, has disintegrated.
But again, you have to ask: Whose
fault is that? Shouldnt people who hold
themselves out to be our leaders in elections be strong enough to keep that wall
standing? Perhaps Im blindly nave, but
Christie Whitman as governor did not
seem to be as much in the thrall of big
contributors. Indeed, party bosses and
legislative leaders who ran their own big
political committees during her tenure often spoke derisively about how foolish
the governors office was at times by focusing on things for policy reasons instead of political reasons.
McGreevey chooses to blame the system, saying humans are frail, and that
pay to play offers too much temptation.
We need to design a system which
accepts the condition of human frailty
and seeks instead to promote and encourage good, sound human behavior,
he said. We need to remove the temptation which is both natural and understandable and replace that temptation
with standards of governance, standards
of behavior, which appeal to our better
angels. And today we begin that process.
Sorry to those of you who thought that
electing McGreevey in 2001 began that
process.

ASSOCIATED PRESS

I take this action recognizing that cynics may say that I am doing this to create a legacy for myself a Hail Mary
pass of sorts to seek redemption. Critics will say what they will, but I tell you, I do not hold on to some hopeful notion
that I will be known for much more than as the governor who resigned and I am at peace with that.
GOVERNOR MCGREEVEY, SPEAKING BEFORE HE SIGNED EXECUTIVE ORDER 1000

We need to remove the temptation

Following is the text of Governor McPlease do not misunderstand I beGreeveys statement Wednesday on the lieve that our government systems work
signing of Executive Order 1000:
and serve the interests of the people of
New Jersey. I believe that the financing
For better or worse, recent events have of campaigns is a legitimate function. I
been a catalyst, providing me with a per- believe that the right of an individual to
sonal and political freedom that has en- financially support the candidate of his
abled me to confront challenges I have or her choice is a basic part of the Ameravoided in the past. Time will afford ican democratic experience. However,
plenty of opportunity for me as an indi- the pay-to-play system is much, much
vidual citizen to process my own per- different. It is not about freedom of
sonal issues. However, my few remaining speech, it is not about political participadays as your governor require me, in fair- tion, but rather it is about private entities
ness to you, the people I serve, to take contributing to political organizations,
quick action on governmental chal- not because of that candidates policies
lenges. One of the issues which has or principles, but for the hope of their
caused me discomfort but with which I election and a subsequent contract
had avoided is the pay-to-play system in award. It has taken civic engagement and
New Jersey.
twisted it into a business opportunity.
Today, the relationship between politIn county and state government, electical fund raising and government opera- ed officials have become all too mindful
tions has become corrosive and cancer- as to who supports our political success
ous. Legitimate lines of behavior are through fund-raising efforts. The wall
blurred, ethical ambiguities are the norm, the separation between politics and
and the need to sustain an all-consuming government, between campaign finance
fund-raising effort has become almost as and government operations, between
important as the function of government state interest and personal interests has
itself. Like an addiction, the fund-raising disintegrated.
culture takes hold of its participants and
Today it has become increasingly chalmakes them weak and unable to resist, as lenging to distinguish between the world
if the need to sustain it becomes an end of political fund raising and government
in itself. The requirement to amass stag- and between what we do and why we do
gering amounts of money has created a it. It has become a self-sustaining system
climate which has inevitably jeopardized with no beginning and no end. Political
the moral integrity of governments basic fund raising and the peoples business all
obligations.
happen in the same meetings over the

same table.
To be clear, most contractors and vendors who happen to be donors provide
outstanding service and do not expect a
quid pro quo. I have also seen, and believe, that most elected officials are honest, act with integrity, and distinguish
clearly between their elected office and
their political roles. However, the existence of the pay-to-play system raises the
possibility of line crossing. Perhaps even
more importantly, the existence of the
system has eroded the public confidence
in the integrity of the government.
The fault lies not merely in the person,
but in the system which now exists. The
system, by definition, appeals to human
weakness. It offers a temptation to elected officials and contractors to place their
respective personal interests ahead of the
interest of the state. You see, as fallible
and finite humans, in order to avoid any
ambiguity, we need to be supported, not
tempted. We need to design a system
which accepts the condition of human
frailty and seeks instead to promote and
encourage good, sound human behavior.
We need to remove the temptation
which is both natural and understandable and replace that temptation with
standards of governance, standards of
behavior which appeal to our better angels. And today we begin that process.
I am issuing an executive order today
which will forbid a contractor doing
business with the state of New Jersey

from contributing to a gubernatorial candidate or any state or county political organization. The order also restricts contributions by certain 527 organizations
and contains disclosure requirements.
You can read the complete order. This is
a profound change, which will take effect
on October 15th and will last as long as
this executive order is preserved. I do not
hold this out as the sole solution, nor as
the perfect solution. But I do it to start a
real dialogue and to force the state to engage an issue that has haunted us for
years. I have asked myself, If not now,
when? For a refinement of the system to
more perfectly allow appropriate campaign support while carefully limiting financing excesses it will take more than
an exiting governors pen. It will take
elected officials and it will take citizens
it will take all of us.
To my colleagues in government, I
know that this may cause consternation
and anger. Change can be uncomfortable. The goal is to liberate those who
seek to serve to do so unfettered by these
possible conflicts, and it will reassure the
people we serve that we do so honestly
and decently.
I take this action recognizing that cynics may say that I am doing this to create a legacy for myself a Hail Mary pass
of sorts to seek redemption. Critics will
say what they will, but I tell you, I do not
hold on to some hopeful notion that I
will be known for much more than as the

governor who resigned and I am at

peace with that. Others may say that I
am hypocritical, in biting the hand that
fed me. Believe me, I am more aware
than ever of my own frailties, but that
does not justify inaction. Others still may
say that it is too little too late but again
I ask, If not now, when? and does timing really take away from the merits of
the action itself? The beginning of a journey is the most difficult part, and I feel
certain that this change will be embraced
and strengthened by people of goodwill.
Apart from judging or determining the
moral framework of this action, this executive order itself will hopefully transcend all political carping and speculation about motives and will instead provide for a better New Jersey.
And finally, to the citizens of New Jersey, I have felt your goodness. I have felt
your kindness. I now know that we are
capable of doing great things. One may
not be able to change the past, but we
can learn from it and we certainly can
change the future. Today, finally, I am
seeking to put an end to politics as usual in Trenton. God knows I wish that the
circumstances were different, but they
arent. In a few minutes I will be signing
Executive Order number 1000, which
will provide the most sweeping campaign finance reform this state has ever
seen. And I know in my heart of hearts
that this is the right thing to do. Thank
you.

60 THE RECORD

JANUARY 2005

Published Tuesday, Nov. 16, 2004

Pay-to-play bill goes to Senate

By MITCHEL MADDUX
TRENTON BUREAU

Assembly OKs reforms by 75-2 vote

The state Assembly passed a bill Monday
that would let municipalities create laws
restricting political donations from those
seeking local government contracts.
The measure, which now goes to the
Senate for its approval, aims to halt payto-play practices in which deep-pocketed campaign contributors are rewarded with lucrative government contracts.
The Assembly bill allowing tougher
municipal laws, co-sponsored by Teaneck Democrat Loretta Weinberg, also
requires some firms and individuals entering into government contracts to disclose political contributions.
People deserve the highest level of
disclosure possible when public monies
are being expended for government contracts, Weinberg said.
The Assembly measure is intended to

Assembly OKs reforms by 75-2 vote

correct an oversight created last spring
when the Legislature passed a reform
law. That law canceled dozens of pay-toplay ordinances adopted by local governments across the state.
Assemblyman Bill Baroni, R-Mercer,
said Monday that he supported the bill.
But he stressed that the state government
is behind the curve, noting that some local governments had already put in place
tighter laws.
The Assembly bill, Baroni said, empowers cities and towns across New Jersey to do what we dont have the
courage to do.
The measure, which passed 75-2,
seeks to reduce the extent of the pay-toplay practices by increasing public
awareness.

The bill would require that details

about contributions made by contractors
be kept in public records maintained by
the state Election Law Enforcement
Commission, which has a Web site that
can be searched for information about
political donors.
Richard J. Codey, the Senate president
who became acting governor today, has
said he supports the bill, which is about
curtailing the amount of money in New
Jersey politics.
Earlier Monday, a Senate committee
cleared its companion version of the bill.
The committee also approved another
bill that will convert former Gov. James
E. McGreeveys landmark executive order curtailing contractor contributions
from state vendors into a permanent law.

The measure is to put to rest any new

concerns that it violated the state constitution.
But other legal concerns were raised
Monday, when the committee released a
letter from a regional official for the Federal Highway Administration asserting
that McGreeveys order may conflict
with federal regulations governing contracts for highway work that involve
money given by Washington.
Codey said he would not let the issue
delay New Jerseys reform efforts, and
threatened court action if necessary to
dispute the federal claim. Efforts to reach
officials at the Federal Highway Administration were not successful Monday
evening.
The bill codifying McGreeveys order

would restrict campaign donors from receiving any state contracts worth
$17,500 or more if they gave money to
the governors campaign, the governors
state party account or county committees controlled by the governors party.
Such donations cannot be made within
18 months of the beginning of a state
contract.
The Legislatures effort to reform and
tighten laws regulating political donations and awarding government contracts follow a wave of campaign finance
scandals that involved some of McGreeveys top political donors. Several
donors have pleaded guilty to federal
corruption charges.
McGreevey resigned Monday after he
admitted having an extramarital affair
with a man. But the scandals had also
clouded his political future as federal investigators began examining McGreeveys role in the campaign finance
cases and other matters.

Published Thursday, Nov. 18, 2004

Governor puts
focus on ethics

Recent reforms
Acting Governor Codey has put ethics and campaign-finance reform at the forefront of his agenda. Here is a look at some of his
actions so far.

Orders higher standards,

training for state workers
By JOSH GOHLKE
TRENTON BUREAU

Acting Governor Codey ordered a

comprehensive review of ethical standards Wednesday, his second day in office, appointing two legal experts to
strengthen the rules and design an ethicstraining program for state employees.
Codey chose former state Supreme
Court Justice Daniel J. OHern Sr. and
Seton Hall Law Professor Paula Ann
Franzese to conduct the top-to-bottom
ethics audit over the next four months,
the governor announced in a State
House press conference.
The ethics training will be mandatory
for all executive branch and state authority employees, the vast majority of
whom are not trained on the subject
now, Codey said.
In the past several weeks, I have announced new measures to help gain the
publics trust in government, said
Codey, the Democratic state Senate president who became acting governor after
James E. McGreeveys resignation Monday. Im making these changes because
ethics in government must be one of our
most important priorities.
The order was the latest in a series of
moves that could help Codey claim the
offensive on ethics, an issue that Republicans and others have used to criticize
McGreevey and the Democrats in recent

years. It earned mild praise from those

pushing the reform issue, although campaign-finance reform still looms as a top
issue for advocates and the Republicans.
We think its a good idea to look at
the ethics rules, said Heather Taylor,
spokeswoman for the good-government
advocacy group Common Cause New
Jersey. Its a good thing.
State Senate Minority Leader Leonard
Lance, R-Hunterdon, welcomed the order, but reiterated the need for a strict
prohibition of so-called pay-to-play political donations from those with government contracts. He referred to a stalled
bill sponsored by fellow Republican Sen.
Peter Inverso of Mercer County.
Obviously I favor Senator Inversos
bill banning pay-to-play across the
board, Lance said. He added that
Codeys order is a step in the right direction, and to that extent I support it.
Codey said the executive branchs ethical standards will apply to about 70,000
employees, compared with the 1.5 percent who are required to take ethics
training now.
We are far behind the rest of the nation on ethics training, the governor
said.
OHern served on the states high
court from 1981 through 2000 and before that was chief counsel to Gov. Brendan T. Byrne. Franzese has been a professor at Seton Hall since 1986 and is a

NEW RESTRICTIONS
ON CONTRIBUTIONS
WHAT IT DOES: Legislation would
freeze campaign contributions at current
levels. For example, current law would
allow contributors to donate up to
$43,000 to county committees next
year. Codeys bill would cap the amount
at $37,000, the current ceiling.
STATUS: The bill passed the Senate;
now in Assembly committee
BOTTOM LINE: Codey introduced the
legislation in September, setting the
tone for his upcoming administration.
The bill is largely symbolic, but could
prevent the already powerful county
party committees from gaining more
clout.

tends provisions of former Gov. James

E. McGreeveys executive order, issued
in October, designed to restrict the
pay-to-play practice of rewarding generous contributors with lucrative state
contracts.
TURNING PAY-TO-PLAY
ORDER INTO A LAW
WHAT IT DOES: Legislation would
convert McGreeveys executive order
into a state law. Codey sponsored the
Senate version of the bill.
STATUS: Passed the Assembly and
has cleared a Senate committee; awaiting vote by full Senate.
BOTTOM LINE: The bill is far more
sweeping than similar legislation that
McGreevey signed into law in June. Its
passage would also put to rest constitutional concerns raised by the executive
order.

place his private insurance business into

a blind trust and to suspend his broker
license while serving as acting governor.

BAN ON FEES
FOR BOND CONSULTANTS
WHAT IT DOES: Codey says he will
order the state Treasury to stop paying
contingency fees to consultants who
help financial firms secure lucrative
bond-underwriting business.
STATUS: Plans to issue an executive
order.
BOTTOM LINE: Underwriting in Trenton is a big business, with the state
Treasury issuing several billion dollars
worth of bonds every year. It would not
apply to bonds issued by independent
state agencies such as the Turnpike Authority and the Casino Redevelopment
Authority, which finance a wide range of
initiatives.

Senate committee this week, does not affect donations to campaign funds controlled by legislative leaders or municipal
party organizations.
We think its a significant piece of
legislation, and it will set the foundation
for meaningful reform, said Common
Causes Taylor.
In addition, Codey is supporting a bill
that would enable local governments to
enact their own pay-to-play bans. He has
also backed several smaller measures
meant to reduce the influence of money
in politics.
During Wednesdays press conference, Codey pointed out that he would
be paying for his own helicopter ride

from the League of Municipalities convention in Atlantic City to a friends funeral service today. In 2002, McGreevey
faced on uproar over his extensive use of
the state police helicopter.
Also Wednesday, Codey had introductory conversations with New York
Gov. George Pataki and Pennsylvania
Gov. Ed Rendell, said spokeswoman
Kelley Heck.
On Wednesday night, Codey hosted
his annual reception at the Irish Pub in
Atlantic City. Today, at the League of
Municipalities convention, which attracts most of the states politicians for a
week of hobnobbing every year, Codey is
to deliver his first major speech.

VOLUNTARY BAN
ON STATE VENDOR CASH
WHAT IT DOES: Codey, who will continue to serve as Senate president, announces that he would not take campaign contributions from state vendors
while serving as acting governor.
STATUS: Went into effect Tuesday.
BOTTOM LINE: His voluntary ban ex-

former member of the state Election Law

Enforcement Commission, which regulates political fund-raising and lobbying.
The two special counsels for ethics reform, as they are designated, will be
paid from the budget of the governors
office, but the amount was not available
Wednesday.
Codey is also sponsoring a bill that
would make law of a McGreevey executive order on campaign-finance reform
issued in September. It would prohibit
those benefiting from large government
contracts from giving money to the governors campaign fund or to the state and
county organizations controlled by the
governors party. The bill, passed by a

The trust will be supervised by a retired

federal judge who is a Republican.
STATUS: Went into effect Oct. 14.
BOTTOM LINE: Codey was not required by law to put his proceeds in a
blind trust. Any net proceeds will be
saved for him in an interest-bearing account until he leaves the governors office.

BLIND TRUST
WHAT IT DOES: Codey agreed to

Published Friday, Dec. 7, 2004

Codey bans bond-firm consultants

By MITCHELL MADDUX
TRENTON BUREAU

Governor Codey ordered state agencies Monday to stop dealing with consultants who help financial firms secure
lucrative bond-underwriting business in
Trenton.
Codeys executive order becomes effective immediately and is intended to
ban pay-to-play practices by consultants who seek bond contracts as a reward
for their campaign contributions.
I see real conflict in the fact that some
of these third-party consultants are receiving enormous commissions, in some
cases a percentage based on the state
contract itself, when the same consultants
are also able to make campaign contributions, Codey said.

Tells state agencies to deal with underwriters

The measure mandates that all state
government agencies and independent
authorities, such as the Turnpike Authority and the Casino Reinvestment Development Authority, must now deal directly with bond underwriting firms or their
registered lobbyists.
The executive order broadens an existing law prohibiting the state from paying
lobbyists contingency fees in government
bond deals. Codey, who remains the Senate president as he completes the final 14
months of former Gov. James E. McGreeveys term, was sponsor of the original legislation that led to the ban.
Underwriting in Trenton is a big busi-

ness, with the state Treasury issuing several billions worth of bonds every year,
officials said.
The vast majority of state bonds are issued by financial institutions to raise
money for such things as building highways and schools, and buying land for
preservation.
Consultants trade on their back-channel political connections and to help Wall
Street giants land contracts for big bond
issues. The consultant is paid a contingency fee if the firm is awarded a bond
deal.
When Codey announced his intention
to sign a ban on contingency fees last

firms are already required to notify the

board if they use consultants and provide
details of the consultants campaign contributions.
The move is the latest in a series of government reforms Codey has taken since
he assumed the governors post Nov. 16.
Among his stated top priorities is
restoring public confidence in New Jerseys elected officials and its government
after a variety of scandals marred the McGreevey administration.
It also follows last weeks announcement by U.S. Sen. Jon S. Corzine, D-N.J.,
that he plans to run for governor next
year. Codey has not ruled out a run for
governor and has said he will make a decision about a candidacy in January.

month, some critics said the measure

would be more symbolic than substantive, because it did not include sanctions
for violators.
However, Codeys new order contains
tougher language: It requires that underwriters certify as a condition of their contract with the state they did not use a consultant in securing the bond deal.
The development in New Jersey follow
efforts under way elsewhere to address
the issue.
The Municipal Securities Rulemaking
Board, a national agency that regulates
public bond deals, is drafting rules that
will take similar steps, officials said. Bond E-mail: maddux@northjersey.com

On Jan. 11, 2005, as this section was prepared for press, acting Governor Codey said in
his State of the State speech that he would seek Senate approval
of statutory reform in February.
I assumed this office at a time of political upheaval for the people of New Jersey,
Codey said. Our faith in government has been shaken. But this moment in history
has given us the opportunity to chart a new course.