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Friday, August 21, 2009

The Bank of Christie

Chris Christie fails to report income on his 2007 and 2008 tax returns from a loan. But it's not just any loan and not just any borrower. Christie made the loan while U.S. Attorney, and the loan (principal amount approximately $46,000) is to his #4 subordinate in the U.S. Attorney's Office, Michele Brown. (UPDATE: Ms. Brown was the #2 deputy in said office when this blog entry was made; on August 25th she resigned, effective immediately.) Christie is granted back a mortgage on Ms. Brown's house.

Credit to NJN for being first with the story. Good for taxpayer-funded NJN! Link to report here at http://www.youtube.com/watch?v=Rr1K81Yigf0.
News Item 1-A: Christie fails to disclose said loan/relationship on either the required federal forms for federal employees, or on state reporting forms for state candidates.
Christie now admits it was a mistake...but only after discovery of the loan and its nondisclosure. And that's a problem.

Comment: This is a controversy with legs. Not good for a one-trick candidate who just pulled a rotten fish out of the magic hat. And it dovetails nicely (or badly, depending on your perspective) with the admission that Christie spoke with Karl Rove about his campaign while still U.S. Attorney (likely violating the Hatch Act), the not-going-away accusations of Jersey-style pay-to-play in the no-bid selections by U.S. Attorney Christie of certain corporate monitors with megamillion-dollar contracts to oversee wayward corporations pursuant to deferred prosecution agreements, and another continuing, years-long water-drip of accusations that Christie's U.S. Attorney's Office used political considerations in selecting whom to investigate and prosecute (and perhaps, whom not to).*

* As with Nixon's "enemies list," being a Republican is no insurance. (See: Treffinger, James.) In fact, if the theory of political considerations driving decisions to investigate, prosecute or take no action proves correct, then could anyone who is not an ally of the list-keeper risk being classified as an obstacle to the list-keeper's achievement of his objective? Accordingly, being a "non-ally" or "disloyal" Republican would tend to put one in greater danger by virtue of being in greater proximity to the list-keeper (by being in the same party, being able to compete among the same contributors, organizations, etc. for support).

The controversy about the Bank of Christie may really not be about a loan. It most certainly is about his judgment. Observers are entitled to view the years-long non-disclosure as a form of a coverup. Just like Watergate and Bill Clinton's perjury, it's the coverup that's the issue. A really curiously-concealed loan (albeit one documented in a recorded mortgage), made to a curious recipient who just coincidentally enough was a direct subordinate. And that's a problem.
It creates a strong appearance of impropriety and cronyism. When you purport to be the ethics candidate and have no other issues, this could kill the campaign. And that's a problem.

But it's not just Christie's ethics and integrity which are now suspect. It's Christie's judgment, the judgment that let him make this totally questionable loan in the first place, and then let him think it would be so minor that he did not take the requisite steps to make sure it would be disclosed. In some provinces, bad judgment gets turned into a felony. And that's a problem.
What on earth was Christie thinking, bailing out a subordinate's husband's financial mismanagement? Why is Deputy U.S. Attorney Michele Brown going to the U.S. Attorney for a loan?

You mean there was no one else she could turn to? For $46,000? (As Len Dykstra said, "that's ashtray money, bro.") You mean there were no teaser rate credit card offers going to the Brown residence? You mean they couldn't do a refinance / cash out / subprime negative amortizing loan? You mean there wasn't some Amero-Nigerian bank willing to offer a bridge loan from the Most Honorable Prime Minister Smith looking for a trustworthy American? I guess the morning Brown woke up, desperate and realizing Christie was the Lender of Last Resort, she didn't check her e-mail and never saw the oodles of spam us mere "little people" -- you know, we who, like, pay taxes -- receive daily/hourly/every 30 seconds.

Even if all these arrangements were legal, regular common sense dictates they not be done. Political common sense -- rare with Republicans -- dictates a big red light flashing "STOP." An attorney with regular common sense (or a regular, in-check "id") should consider the risk of the appearance of impropriety. The risk alone mandates saying "No" -- unless you're the type of attorney who measures this risk against the likelihood of getting caught.

If you're making that kind of cost-benefit analysis, you're in Peter Cammarano territory. Mayor-for-one-month Peter is an attorney too (and just like Christie a self-declared "reformer" and connected, politically-ambitious Seton Hall Law grad who seems to be missing something in the judgment category). Unless you've been in a different solar system, you know it hasn't been a good summer for Peter the Reformer, who awaits his turn to be ground into powder by our justice system.

So the analysis comes down to this: Did Christie not think for a moment that at some point this would be discovered?? Wasn't he thinking?? Or, maybe he was thinking... that no one would mine the Morris County records... that he could get away with it. Maybe he took that old Traveling Wilbury's song "Tweeter and the Monkey Man" (sung by Bob Dylan) to heart: "In Jersey everything's legal...as long as you don't get caught."
And that's a problem.

Eric Dixon is a New York lawyer and strategic analyst who engages in crisis management and other matters. Mr. Dixon cautions readers that this article is not legal advice. Mr. Dixon may be contacted for further comment through edixon@NYBusinessCounsel.com, or at 917-696-2442.


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