Jersey Big Shots Second-Guessing Port Appointee

Even as New Jersey Governor James E. McGreevey stands by his candidate to head the Port Authority, Charles Kushner, political insiders in the Garden State are beginning to question how much longer the Governor can withstand the turmoil Mr. Kushner’s nomination has created.

The latest revelation, that Mr. Kushner, a real-estate developer, wants to build residential units on the former site of a waste-transfer station in the Meadowlands has elicited something less than a chorus of applause from the New Jersey Meadowlands Commission. Sources on the commission, which controls the site in North Arlington, N.J., where Mr. Kushner wants to develop 1,500 residential units, said that Mr. Kushner’s position as a Port Authority board member and his apparently imminent elevation to the position of chairman, should preclude his winning the right to develop.

The site is part of a larger Meadowlands-owned industrial tract that will be turned into a golf course and other amenities by EnCap Golf Holdings, a Florida-based firm that develops brownfields, as these kinds of toxic sites are called, into golf courses. The site would be remediated by capping it with soil dredged from the bottom of New York Harbor. That dredging project, in turn, is underwritten by the Port Authority, where Mr. Kushner could have the top spot as soon as April, when current chairman Jack Sinagra is expected to leave. The dredger pays real-estate developers like EnCap millions of dollars to accept their dredge material.

“Mr. Kushner will never get the contract here under the EnCap agreement,” a source at the commission told The Observer . “This is going to be getting dredge from the harbor, and Mr. Kushner is at the head of the Port Authority.”

According to the source, the commission first learned of Mr. Kushner’s interest in the site some six months ago, and was concerned about a potential conflict immediately.

Nevertheless, Mr. McGreevey isn’t backing down from his support for a man who was his top financial backer in last year’s campaign. “He’s a world-class businessman who we know will do a great job at the Port, and as importantly, he’ll be a strong advocate for New Jersey,” McGreevey spokesperson Kathleen Ellis said of Mr. Kushner.

Rumors swirled around the statehouse in early January that the McGreevey administration was on the brink of dropping Mr. Kushner-but whether that was just a Republican fantasy is hard to say. The gossip, after all, centered around the Governor’s new chief of staff, James P. Fox, as Mr. Kushner’s chief detractor. It’s a nice fit. Since his tenure began, Mr. McGreevey has shed two prominent campaign veterans: Chief of staff Gary Taffet was one, and Paul Levinson, his chief counsel, was another. With opinion polls plummeting and some embarrassing episodes behind this administration, Mr. Fox would seem to be the consummate ax-wielder. (The top of the governor’s press department has been cleared out.) Even as two longtime attachĂ©s of Mr. Fox’s have moved in, speculation mounts that the attorney general, Mr. Samson (who recused himself from the special interrogation of Mr. Kushner last spring), may step down; he never intended to serve a full term.

Ms. Ellis-herself a new hire under Mr. Fox-dismissed speculation her boss now had an eye out for Kushner.

“Jamie Fox is behind him 110 percent,” Ms. Ellis said.

In any case, critics of Mr. Kushner’s possible role in the Meadowlands may be speaking prematurely: While the commission does have the power to veto companies subcontracted by EnCap, the matter would not arise until after a final deal between EnCap and the Meadowlands Commission is struck and Kushner is formally named by EnCap as a subcontractor. Still, according to a source at the commission, the topic has been of concern to themfor some time.

If Mr. Kushner’s detractors on the Meadowlands project seem to be getting too excited too soon, they’re one step better than New Jersey Republicans. In early January, Alex DeCroce, the Republican conference leader in the state Assembly, began drafting letters to the New Jersey Senate Judiciary Committee and to the governor asking Mr. Kushner to step down as a candidate for Port Authority chairman, only to find the letters were being directed to the wrong people. Since Mr. Kushner is already sitting on the board, the New Jersey Senate Judiciary Committee has little say in whether he becomes chairman. That is determined by an up-or-down vote by the Port Authority board, which is not known to rebel against gubernatorial appointments.

The only chance Republicans had of blocking Mr. Kushner’s seemingly inevitable appointment to the Port chair took place last May, when the state Senate Judiciary Committee considered his appointment to the board. In a proceeding that lasted less than a minute, the committee approved the governor’s choice in a unanimous vote. Mr. Kushner was not required to appear before the panel.

But Mr. Kushner did, according to published reports, have to make a trip to Trenton for a two-hour meeting with the state attorney general’s office to answer questions in a last-minute and impromptu inquiry, ordered by the Senate Judiciary co-chairmen William Gormley, a Republican, and John Adler, a Democrat.

The state attorney general, David Samson, recused himself from the meeting because he had recently sold his interest in the law firm of which he was a founding partner, Wolff & Samson-the firm which personally represents Mr. Kushner.

According to published reports, at least three members of the Senate panel that confirmed Mr. Kushner’s appointment said after the vote that they were unaware of the meeting.

At the time, Senator Gormley told reporters that the attorney general’s office found no legal reason to object to Mr. Kushner’s appointment to the Port Authority board, but neither the senators who ordered the inquiry nor the attorney general’s office would elaborate on why the inquiry had been requested or what matters they had discussed.

Two months earlier, however, a Hudson County court had sealed a lawsuit that was put into binding arbitration between Mr. Kushner and his brother, Murray Kushner, a sometime business partner. The two had had a falling out the previous fall that led Murray to file suit against Charles, and though the suit has been dismissed by spokesmen for Mr. McGreevey and Charles Kushner as a family squabble, the contents of the suit have been unavailable to hungry Republicans seekingtosinkMr.Kushner’s appointment.

The suit initially alleged that money belonging to Charles Kushner’s business partners was diverted from the family company for outside purposes, but details did not emerge because the case was sealed.

But in November an Essex County suit filed by a former accountant for the Kushner Companies, Robert Yontef, alleged that the accountant was fired for providing testimony to Murray Kushner’s lawyers about the allegedly diverted funds.

The suit detailed allegations that millions of dollars in contributions made in Charles Kushner’s name and in the names of employees and principals in businesses controlled by the Kushner Companies to political campaigns and charitable causes were diverted from the company’s chest; that money on deposit from residents in Kushner-owned housing developments was being used to run the company; and that money belonging to the entities controlled by the Kushner Companies was diverted to purchase Highview Planning Insurance Agency, a company owned by Mr. McGreevey’s former chief of staff, Gary Taffet.

Without detailing any of the specific allegations, citing confidentiality requirements in the related fraternal dispute, spokespersons for Charles Kushner have called Mr. Yontef’s suit “baseless.”

In arguments on Dec. 23, Charles Kushner’s lawyers sought to suppress evidence in the Yontef suit from the public record, arguing that they were materially connected to sealed documents in the case between Charles Kushner and his brother, and that there were proprietary secrets that should not be divulged to the public. Proprietary secrets, like, say, the formula for Coca-Cola, may be suppressed in courts when their public release would harm the business of one of the litigants. While Judge Michelle Hollar-Gregory did not conclude that the entire case should be in the public record as a matter of course, she determined that particular items could be suppressed on a case-by-case basis if they divulged Charles Kushner’s proprietary secrets.

What that essentially means is that, as arguments in the Yontef case proceed, more details of the previously sealed lawsuit between Murray and Charles Kushner could come into the public record.

The prospect had Republicans salivating at year’s end, even though the case very likely will be dormant over the next three months as discovery and other motions proceed.

Loyal Governor

Still, even if the lawsuit contains some unseemly revelations, it seems clear Mr. McGreevey will not give up easily. He is nothing if not loyal to his closest allies and supporters. Take the case of Golan Cipel.

The sailor and poet served as a communications officer for the Israeli Consulate in New York before moving in 2001 to Lawrence Township, N.J., to work for the state Democratic Committee.

He served during the McGreevey gubernatorial campaign as an informal adviser on security matters and, more importantly, a liaison to the Jewish community. Without undergoing a background check Mr. Cipel became the homeland security adviser in the new McGreevey administration, at an annual salary of $110,000.

Political opponents seized upon the fact that Mr. Cipel was an Israeli national and therefore would have no security clearance with the U.S. government, denouncing the move as a patronage hire that was particularly ill-mannered in the context of the state’s deepening budget crisis.

Throughout, Mr. McGreevey defended the appointment-until Senator Gormley threatened to stop confirming any candidates through the Judiciary Committee until Mr. Cipel appeared before the panel to make a formal statement of his qualifications.

Insiders said such an appearance threatened to compromise Mr. Kushner’s accession to the Port Authority board, because it was Mr. Kushner who sponsored Mr. Cipel for his visa after he left the Israeli consulate, paying him $30,000 a year to write press releases for the Kushner Companies.

Then again, the insiders said, if Mr. Cipel sought to defy the Judiciary Committee, Mr. Kushner’s appointment would be jeopardized by the increased tension between the legislators and the Governor’s office.

Even then, Mr. McGreevey tried to find a way to keep Mr. Cipel as an advisor. He removed him from the security post, but retained him at the same salary in an unspecified consulting position. Mr. Cipel has since left that position and gone to work in the private sector for first one, then another New Jersey consulting firm.

Removing Mr. Cipel from the security position paved the way for Mr. Kushner’s smooth sailing past the Judiciary Committee (that is, once that secret matter at the Attorney General’s office was resolved).

While the Port Authority is not scheduled to vote soon on Mr. Kushner’s elevation, a formal announcement that the current chair, Jack Sinagra, will leave is expected soon.

And while the Port Authority board is generally loath to upset the governors of New York and New Jersey who appoint them, some quietly complain about Mr. Kushner’s business practices and political power.

“He’s tough,” said one source familiar with Mr. Kushner and the Port Authority board. “That’s why he is who he is. There may be an old guard at the Port Authority that’s, well, lazy.”

That’s one way of putting it, but it hardly seems a motivation for mutiny.