The political heavyweight has been beset since early last year by claims made by his brother, Murray, a former business partner, and Robert Yontef, his former accounting manager, that he misdirected company funds to become a massive political contributor in New Jersey. One of the beneficiaries of his largesse, New Jersey Governor James E. McGreevey, appointed the developer to the Port Authority board last year.

While Mr. Kushner has become a political lightning rod in New Jersey, he continues to gain influence over projects in New York. In recent weeks, Mr. Kushner served on the eight-person panel that ultimately decided to make Studio Daniel Libeskind and the New York–fronted team of architects known as Think the finalists in the design competition for Ground Zero. His influence will grow even wider when, as is widely expected, he assumes the chairmanship of the Port Authority in April. Not bad for a man referred to as a "political rookie" in a recent Star-Ledger editorial.

But some rookies have a veteran's instincts, and Mr. Kushner is no exception. A published report recently stated that former U.S. Senator Robert Torricelli was thinking of hooking up with Mr. Kushner as he plans a new career, perhaps as a lobbyist for real-estate interests. Through a spokesperson, Mr. Torricelli denied the link, but Mr. Kushner, through his spokesman, affirmed it. "Kushner and Torricelli have entertained the possibility of a business relationship," Howard Rubenstein told The Observer. "Under no circumstance will Kushner be in conflict as a result [of his relationship with Mr. Torricelli]. He's always asserted that and will be extremely cautious."

Meanwhile, Albany power brokers have been passing around articles from the Star-Ledger and the Record of Hackensack detailing Mr. Kushner's travails amid a chorus of "tsks." Nevertheless, the New Yorkers have honored the Port Authority tradition of non-interference in the nominations of New Jersey governors, who get to select the chairman of the bi-state agency's board.

But the tsk-tsking in Albany may become even louder soon. The Observer has learned that one of Mr. Kushner's business partners is considering taking legal action against him to leverage access to financial statements of three limited liability corporations in which he is an investor. In a letter to fellow investors in the three corporations, dated Nov. 15, 2002, but only circulated last month, Stanley Greenberg of Livingston, N.J., accuses Mr. Kushner of withholding financial statements from partners in the corporations, which manage real-estate properties in New Jersey.

"In order for him to release any information any more he wants me to sign a confidentiality agreement not to divulge the information to anyone else," the letter reads. "This leads me to believe that there is something to hide. According to our partnership agreement he is required to supply us with annual financial statements and keep us informed as to what is going on at each property."

The question of whether Mr. Kushner is indeed hiding something has become a political obsession in Trenton, the New Jersey state capital. He has become the man New Jersey Republicans love to hate. They cannot abide Mr. Kushner's rapidly growing power, and the seeming willingness of the McGreevey administration to defend his appointment to the Port Authority at all costs.

State Senator William Gormley has asked Mr. Kushner to appear before the body's Judiciary Committee to answer questions about recent news reports and allegations filed in New Jersey courts that allege he has made improper use of his company's funds. According to one source, Mr. Gormley is now preparing a letter to send to Mr. Kushner's fellow Port Authority board members advising them of Mr. Kushner's refusal to appear before his committee.

McGreevey spokesman Micah Rasmussen said that such an appearance would be "unnecessary," as Mr. Kushner's appointment has already been vetted-albeit behind closed doors-by the New Jersey State Attorney General's office. But that was before the lawsuits came to light.

"There are no do-overs. The guy's been confirmed," said Mr. Rasmussen. "I would say that if an individual senator has an individual concern that he wants to discuss with Commissioner Kushner, or if he wants to have a dialogue with Commissioner Kushner, then he should open up that dialogue. I am certain that Commissioner Kushner has a desire to be responsive to the State Senate."

And Mr. Kushner's world already has expanded beyond the confines of Trenton. Working alongside New York political and business heavyweights like Pataki aide Diana Taylor and Deputy Mayor Daniel Doctoroff, Mr. Kushner will become a critical figure in the increasingly murky leadership of the Ground Zero redevelopment process. Though Mr. McGreevey cited Mr. Kushner's keen interest in the redevelopment project when he appointed him to the board, his Port Authority colleagues and members of the Lower Manhattan Development Corporation have heard little new from him. But that may well change.

A Loud Voice

While negotiations about a possible land-swap involving Ground Zero and the city's airports have been led by the Port Authority executive director, Joseph Seymour, an appointee of Governor Pataki, Mr. Kushner very likely will have something to say about New Jersey's interests in the transaction when he takes over as chairman.

"Kushner is a guy who listens to all the staff information and tries to come to a decision, but he's not initiated anything new, really," said one source.

"He wants to bring something back for New Jersey and be a big hero," said another source familiar with the Port Authority's leadership.

Mr. Kushner will have to tangle with Mr. Doctoroff and a host of New York city and state power brokers to get his agenda through. And surviving Trenton politics could be a good training ground for him if he plans to become an effective member of the rebuilding junta. That will be difficult if the lawsuits-especially the ones that allege mismanagement of funds and potentially dirty political contributions-continue to surface.

Mr. Greenberg's letter, for instance, claims that Mr. Kushner was charging a 25 percent management fee against the accounts of the companies, significantly reducing the regular distribution checks investors in the three developments received. (Most companies charge management fees of 4 to 5 percent.)

"As far as I can ascertain he has been doing this for the last 10-12 years," Mr. Greenberg wrote. "That 20 percent difference would approximately double our distribution."

The charges mirror those made by others against Mr. Kushner, including his brother Murray, who is now in binding arbitration with Charles over management of their investment partnerships. The connection does not escape Mr. Rubenstein.

"Stanley Greenberg is a close friend of Murray Kushner," Mr. Rubenstein told The Observer . "Greenberg owns less than 3 percent in three small deals that he purchased more than 10 years ago and that have yielded him many multiples of his original investment. He is, sadly, jumping on Murray Kushner's litigation bandwagon." Indeed, many of the charges in that lawsuit are not public, since a judge has sealed the case. But more recently, a lawsuit by Mr. Kushner's former bookkeeper, Mr. Yontef, revisits many of Murray Kushner's complaints in the context of a whistle-blower lawsuit. Mr. Yontef claims that he was threatened and fired for providing testimony to advance Murray Kushner's case against his brother. That suit got new attention last week, when it was dropped in the Essex County courthouse and reinstituted at the federal level. Mr. Yontef's attorney, Ted Moskowitz, successfully argued before a judge in December that the evidence found in discovery by his client could not be made the subject of a court seal, making it appear likely that as discovery progresses over the next two months or so, specific allegations against Mr. Kushner will come to light.

As they arrange their arsenal against Mr. Kushner, New Jersey Republicans have not limited themselves to repeating the accusations made in the various lawsuits against the developer. A group of Republican Assembly members is looking at whether Mr. Kushner's campaign contributions were legal in the first place. A New Jersey statute holds that the majority shareholder in a bank cannot make political contributions or hold an elected or unelected position of public trust. Kushner Companies bought Norcrown Bank, according to its Web site, in 1996.

Clive Cummis, a lawyer who counseled Charles Kushner on his political contributions and the state's campaign laws, said that though Kushner Companies does indeed own Norcrown Bank, it doesn't disqualify Mr. Kushner from political contributions, fund-raising activities or holding a position on the Port Authority board.

"We have an opinion on those questions which we articulated to [Mr. Kushner] a year ago," Mr. Cummis said. "One, he is a trustee of a trust that holds stock in a bank, and as such in our opinion is not a majority shareholder within the meaning of the statute." He added that in Mr. Kushner's current position, it would be unconstitutional to enforce a law barring him from holding public office or making political contributions.

Assembly leader Alex DeCroce, who said that he and several colleagues are continuing to look into the matter, said that such answers should be given directly to the Senate Judiciary Committee. "To me, [trusteeship and ownership] seems like it's one and the same, but I'm not a lawyer," Mr. DeCroce said. "Regardless, whatever it is, if Mr. Kushner feels he is really ethically right in these things, he should go before Senator Gormley's committee and answer these questions, and then there will be no questions about his taking the position."

In a backhanded way, Mr. Rubenstein, Mr. Kushner's spokesman, seemed to acknowledge the political fallout of the Yontef suit, calling it a "transparent, media-directed effort to manipulate public opinion and the political process" by "a disgruntled and unfaithful" former employee looking for a monetary settlement.

Sources close to Mr. Yontef said that the 52-year-old would have come forward himself earlier if that were the case. Months after he provided testimony to Murray Kushner in his suit against his brother, the sources said, Mr. Yontef remained in the background, wanting simply to keep his job. It was only after he was "kicked upstairs" at the Kushner Companies, in what his lawyers call retaliation for providing his testimony, that Mr. Yontef came forward.

He was in a position to know something about the way the Kushner Companies' books were run, to be sure, which makes his allegations that much more compelling to Mr. Kushner's and Mr. McGreevey's political enemies. And they are not unrelated to Mr. Kushner's massive campaign contributions to the New Jersey governor and other Democratic campaigns and causes.

Fee for Clinton

The lawsuit alleges, for instance, that Charles Kushner diverted $675,000 from his business partners' accounts to pay for celebrity guest speakers at events at his home and at his synagogue, including former Israeli Prime Minister Benjamin Netanyahu, former Federal Reserve chairman Paul Volcker and former President Bill Clinton.

The lawsuit also alleges that Mr. Kushner paid $3.4 million to buy an insurance company, Highview Planning, from Gary Taffet, a close friend and personal adviser to Mr. McGreevey who became the Governor's first chief of staff in early 2002, 14 months after the sale. According to Mr. Yontef, $2 million of the money used to buy the firm was diverted from Mr. Kushner's business partners without their consent.

The suit also alleges that Mr. Kushner annually diverted millions of dollars from his partners' accounts to make political and charitable contributions. It is not clear whether contributions made to Mr. McGreevey are among the disputed funds.

Details of the allegations in Mr. Yontef's 35-page federal suit would be enough to make most politicians' hair stand on end-the kinds of details that must have made McGreevey administration officials heave a sigh of relief when the lawsuit filed by Mr. Kushner's brother was sealed by the court. But now, Mr. Rubenstein confesses, the Yontef lawsuit could bring out allegations that have been concealed from the public in the previous lawsuit.

"Mr. Yontef is a disgruntled, unfaithful former employee allied with Charles Kushner's jealous brother," Mr. Rubenstein told reporters last week. "Mr. Kushner is confident in the outcome of this lawsuit."

So, apparently, is Mr. McGreevey, who is pulling out the big guns to make sure that Mr. Kushner's elevation to the chairmanship of the Port Authority goes through without a hitch.

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 attachés 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.

It's a program that the Port Authority accelerated last August, at Mr. McGreevey's urging. And a real-estate deal in the Meadowlands hinges on just how much of the "dredge spoils" the scows produce, and who will compete to use the treated sludge to cap off toxic sites in New Jersey so that they can be developed into lucrative real estate.

A player in one such deal is Charles Kushner, the embattled Port Authority board member and real-estate magnate who is preparing to become chairman of the agency-the agency that is paying for the dredging in the first place. Mr. Kushner's spokesman, Howard Rubenstein, has confirmed that the developer is negotiating with EnCap Golf Holdings, a Florida-based company that builds golf courses on capped waste sites, to develop a residential development and golf course in a North Arlington, N.J., meadowland that was previously home to a waste-transfer station.

The Meadowlands deal has New Jersey Republican insiders furious with the McGreevey administration because, they say privately, it appears to benefit Mr. Kushner, increasingly a polarizing figure in Garden State politics and one of Mr. McGreevey's top fund-raisers. Mr. McGreevey appointed Mr. Kushner to the agency's board and is supporting his candidacy as chairman.

The State Assembly's Republican conference leader, Alex DeCroce, is sharpening his knives, trying to find a way to formally ask Mr. Kushner to stand down as a candidate for chairman. Mr. Kushner was expected to take the seat before next April; then a hailstorm of legal proceedings against him came to the attention of Republican lawmakers in New Jersey. But the controversies over a legal battle between Mr. Kushner and his brother became public after the New Jersey Senate's judiciary committee had approved his nomination to the Port Authority board in early 2002. Now, according to Port Authority rules, it only takes a vote from the rest of the board to make him the chairman.

But New Jersey and Albany political insiders say that Mr. Kushner's appointment isn't just raising eyebrows in New Jersey. On this side of the Hudson River, Governor George Pataki's Republican appointees to the Port Authority board are making unfriendly noises, too, sources say. "There's an old guard at the Port that maybe doesn't like the way Kushner does business," one source said.

A whispering campaign against Mr. Kushner in Albany has put pressure on board members to consider their vote closely, even though tradition has it that New York's Governor appoints the agency's executive director and New Jersey's Governor appoints the chairman, with no meddling in each other's appointments. But over the Christmas holidays, rumors abounded in New Jersey that the McGreevey administration was close to dropping Mr. Kushner as its choice for chairman-rumors McGreevey officials waved off in interviews with The Observer.

"We still stand by him," said spokesman Kevin Davitt, repeating his earlier statement that Mr. Kushner's legal troubles would be handled by the courts in due time.

One thing is for sure: Growing opposition on both sides of the Hudson will test the McGreevey administration's thus-far-unwavering commitment to Mr. Kushner. "Frankly, we think there may have been some mistakes made-and if they have, they should certainly be questioned," Mr. DeCroce said. "What we've said is that we thought he should stand aside until the ethics part of this whole thing is cleared up.

"We can certainly make some noise," Mr. DeCroce added.

Political enemies of Messrs. Kushner and McGreevey in New Jersey had been buzzing about the Meadowlands sludge deal for months. Last July, the New Jersey Meadowlands Commission, controlled by Mr. McGreevey, rewrote its deal with EnCap-the company with which Mr. Kushner is negotiating-to reduce the financial commitment the company would have to make to complete the development deal with the commission. While estimates vary on what the original plan would have cost EnCap, two independent accountants cited by The Record of Hackensack pegged it at $121 million over the 99-year lease term it envisioned.

The new deal rewrote an agreement made under former Governor Whitman's administration that would convert the brownfield into a golf course using dredge material from the New York harbor. Any developer seeking to build on the site, however, would have to find a way to cap the site so that toxins would not continue to leak from it, or contaminate whatever development they might erect on the site, especially housing developments. Meanwhile, over the years, engineers have found ways of treating dredge and making it into soil that can cap toxic sites. The development changed environmental tactics-groups that in the past had been opposed to harbor dredging now accept it grudgingly, as it can be used to convert brownfields like the one in North Arlington into clean sites with productive uses.

Developers in recent years have come to appreciate dredge spoils because they open up new development opportunities in brownfields-and because dredgers pay a fee to developers to take the dredge off their hands. The prices developers get to take the dredge have gone down in recent years. The Whitman deal, orchestrated by then–Meadowlands chief Alan Steinberg, was based on the developer receiving $63 per cubic yard for using the dredge spoils. Meadowlands officials have pointed out, however, that no deal to take the dredge spoils at that price has been worked out. With more developers competing to take dredge spoils and less of it to go around, the prices that dredgers pay has gone down, they say.

As a result, EnCap has revised its accounts of the costs of developing the Meadowlands site. And the Meadowlands commission has since amended the agreement, significantly reducing the financial burden that EnCap and its partners-including, potentially, Charles Kushner-will pay to develop the site.

But there is no guarantee that the sludge fees EnCap would receive will remain at that low level. Indeed, the price of dredge can vary wildly based on any number of factors.

"We paid $118 [per cubic yard] to take material to Utah; we've paid nearly $70 to go out to Pennsylvania, $50 for a number of projects in the region," said a spokesman for the U.S. Army Corps of Engineers, which is coordinating the dredging for the Port Authority. "Now we've got some competition in this market, and a few sites where folks are competing [to take dredge spoils], so it has brought the price down."

What's more, the dredgers' contracts-which are themselves based in part on the costs they incur finding placement for their dredge spoils-are ratified by the Port Authority in its capital plan. That's one reason the involvement of developers in the Port's capital plan has been controversial before: If the Meadowlands Commission approves EnCap's bid to increase the amount of residential units built on brownfields in North Arlington, Mr. Kushner is expected to sign on. Then he'll be part of a deal that depends for its profitability, in part, on a fee for taking dredge spoils that the Port Authority can determine. What's more, with competition raging for dredge spoils, there's no guarantee that any one project will win a contract with a dredger to take spoils-assuming, of course, that the developers are not in a position of influence in the harbor-dredging project.

Downtown Role

Mr. Kushner's expected appointment to chair the agency is particularly important for New York as disputes between Albany appointees on the Lower Manhattan Development Corporation, which controls funding for the redevelopment of the World Trade Center cite, and the Port Authority, which owns the site, continue to set a grumbling tone for the redevelopment of lower Manhattan.

Mr. DeCroce has previously noted Mr. Kushner's recent admission that he has made political contributions to Democratic causes throughout New York and New Jersey in the names of his employees and officers without informing them beforehand. In addition, The New York Observer and other news organizations disclosed potential conflicts of interest the developer would face as chairman of an agency with its own massive capital program for real-estate development.

The questions surfaced after Mr. Kushner was sued by his brother, Murray Kushner, and his former chief accountant, Robert Yontef. The suits detailed alleged misappropriation of company funds for charities and political causes. Mr. Kushner is a top Democratic donor in New Jersey, as well as in several downstate New York counties, and has been a major contributor to powerful medical and religious institutions throughout the area. Cardinal Theodore McCarrick, formerly the Roman Catholic Archbishop of Newark, calls Mr. Kushner a friend. Other Kushner friends include the Clintons, Rudolph Giuliani and Senator Charles Schumer.

But details of Mr. Kushner's campaign and business dealings have remained largely unavailable to the press, the Senate Judiciary Committee and the Port Authority. The earlier lawsuit filed by Murray Kushner was sent into binding arbitration by the judge at the agreement of both parties; also at their agreement, all evidence and transcripts relating to the arbitration are sealed. The new lawsuit, filed by former Kushner accountant Mr. Yontef, claims the accountant was fired after he provided much of the evidence used by Murray Kushner in his case against his brother. The whistle-blower case is being closely watched by Kushner rivals for the possibility it will bring out evidence sealed in the earlier lawsuit, which some Democrats suggest privately may have been the motivation for Mr. Yontef's suit. Indeed, on Dec. 23, Charles Kushner's attorneys argued before the judge in the Yontef proceedings that the case should also be sealed. The judge rejected the move, but reserved the right to rule on individual pieces of evidence as they come up. That means that much of Kushner v. Kushner is likely to come into the public record as the Yontef case advances.

Meanwhile, critics pound the selection of a real-estate developer with so many economic-development interests in common with the Port Authority. Several weeks ago, Mr. Kushner said he would recuse himself from any voting on the future of a proposed office tower above the Port Authority Bus Terminal on West 42nd Street, in response to questions from The Observer about his involvement with one of the designated developers on the building, Vornado Realty Trust. Mr. Kushner negotiated with Vornado to buy the Monmouth Mall in Monmouth County New Jersey just after his nomination to the board of the Port Authority.

Mr. Kushner said through a spokesman that he would recuse himself from voting on the matter.

Whether as chairman Mr. Kushner can remove his influence from these and other projects that are tied to his personal fortunes remains to be seen.

Mr. Kushner is facing a whistle-blower lawsuit that could jeopardize his appointment to head the Port Authority-an appointment he doubtless helped to secure through generous contributions to New Jersey Democrats. He was the single largest donor to Mr. McGreevey's campaign fund last year; to Hillary Clinton's in 2000 and 2001; and to Senator Robert Torricelli's in 1999 and 2001. Kushner companies collectively provided the largest bundle of contributions to Mr. Torricelli's legal defense fund.

But those very contributions could be his undoing. The New Jersey real-estate executive raised eyebrows last year when his brother and business partner, Murray Kushner, filed a lawsuit accusing him of diverting money from their joint concerns to political candidates, as well as other improprieties.

But the case was sent to binding arbitration and sealed by a state judge in March, before much of the discovery in the case was completed. That move kept most of the evidence Murray Kushner's lawyers had assembled out of the public eye-and away from the New Jersey Senate Judiciary Committee that approved his appointment in June.

Now, Charles Kushner's chief accountant turned whistle-blower, Robert Yontef, has sued him for unspecified monetary and other damages, charging that he was fired when he provided Murray Kushner and other partners with evidence that, he said, supported their case.

His testimony, under seal in the lawsuit between the brothers, could become a matter of public knowledge during the course of the current whistle-blower trial in Newark. Mr. Yontef will have to prove that he had reason to believe that Charles Kushner was involved in wrong-doing when he provided the company information to Murray Kushner's lawyers.

Whether Mr. Yontef's allegations actually become part of his court proceedings could become a point of argument when his attorneys square off with Mr. Kushner's on Dec. 13. Already, Mr. Kushner's spokesman, Howard Rubenstein, is arguing that the two cases are inextricably linked, and that the confidentiality agreement between the Kushners in their current litigation would cover the same matters in the Yontef suit.

"Any matter related to the arbitration between Charles Kushner and his older brother, Murray, is the subject of a confidentiality agreement by the parties and the court," Mr. Rubenstein wrote in an e-mail to The Observer , responding to questions about the lawsuit. "Inasmuch as Mr. Yontef is aligned and acting in conjunction with Murray Kushner and the questions involved relate to the arbitration, Charles Kushner will not be able to comment."

In the suit, Mr. Yontef says that after he complied with his superiors' orders to assemble the documents requested by Murray Kushner's lawyers in discovery motions-documents, he said, that supported Murray Kushner's claim that his brother Charles diverted money to political candidates to the tune of millions of dollars, among other alleged improprieties-CharlesKushner's lawyers claimed in arbitration that they

were lost.

Neither Mr. Yontef nor his attorney, Ted Moskowitz of McCarter & English, would comment for this story.

Mr. Kushner would only provide a general statement through his spokesman, Mr. Rubenstein, in which he expressed confidence that the case would be dismissed.

"As he has indicated previously, Charles Kushner states that this baseless lawsuit is filled with false accusations brought by Robert Yontef," the statement said, going on to characterize Mr. Yontef as "a disgruntled and disloyal former employee of the Kushner Companies."

The Observer has learned from sources familiar with the litigation between the brothers that a Hudson County Superior Court judge has appointed a receiver-the New York firm of Price Waterhouse Coopers-to "recreate" the documents without prejudice as to whether they were lost or stolen.

Also politically damaging is the charge in Mr. Yontef's lawsuit that misappropriated funds from the companies managed by Charles Kushner were used to purchase the Highview Planning Insurance Agency in September of 2000. The money was returned to the companies at an unspecified time after the purchase was mentioned in Murray Kushner's suit. The company had been owned by Mr. McGreevey's outgoing chief of staff, Gary Taffett. Except for the three years he owned Highview, Mr. Taffett has worked with Mr. McGreevey since the late 1980's. Mr. Taffett, who has said that he received more than $350,000 from the sale, announced in November that he was leaving Mr. McGreevey for personal reasons.

It wasn't the first time that Mr. Kushner had been linked to politically questionable moves inside the McGreevey administration. Shortly after taking office in January, Mr. McGreevey appointed Golan Cipel, whom he has said he met on a tour of Israel, as his homeland-security adviser. It turned out that Mr. Cipel is not an American citizen but an Israeli, and that federal agencies would not share national-security data with him. Mr. Cipel has since resigned. Mr. Cipel had previously been employed by Mr. Kushner, who sponsored him for a visa. He wrote corporate press releases from the Kushner Companies' offices in Florham Park, N.J. Mr. Kushner hired Mr. Cipel after he had served as the McGreevey gubernatorial campaign's outreach coordinator to Jewish voters.

In these incidents, political hay is made of friendships that play out against the backdrop of politics. In other instances, it is the potential for Mr. Kushner to use his political power-particularly as head of the Port Authority-to cement business and personal relationships that has caused alarm.

As a real-estate developer, Mr. Kushner's interests already coincide with many corporations that do business with the Port Authority. Several weeks ago, after an inquiry by The New York Observer, Mr. Kushner's spokesperson said that Mr. Kushner would recuse himself from any decisions regarding the proposed tower above the Port Authority Bus Terminal, which was being developed by a partnership including Vornado Realty Trust. Mr. Kushner had struck a deal with Vornado to buy the Monmouth Mall in Monmouth County, N.J., this fall, a deal that was not disclosed to the Port Authority. At the time, Mr. Kushner's spokesperson said that Mr. Kushner was eager to avoid "even the appearance" of impropriety.

Power and Influence

Charles Kushner's name isn't familiar to many New Yorkers, even though, if he does become head of the Port Authority, he will have extensive influence over massive development projects throughout the region-including the redevelopment of the World Trade Center site.

But Mr. Kushner is well known in political circles throughout New York and New Jersey as a philanthropist, a conduit to Jewish constituencies, a fund-raiser and a hefty donor to political campaigns. He serves on the boards of more than half a dozen charitable organizations-educational organizations, medical organizations and Jewish charities-and sits on the board of trustees of Hofstra University, his alma mater, where a building in the law school is named after him and his wife, Seryl. Al Gore has spoken at a Hebrew school in Livingston, N.J., that in 1986 was renamed to honor the memory of Mr. Kushner's father. In the fall of last year, when Mr. Kushner was honored at the Cerebral Palsy of North Jersey's annual "Steps to Independence" dinner, former Israeli Prime Minister Benjamin Netanyahu was among the guests. At that event, Mr. McGreevey called Mr. Kushner "a shining example of the difference our businesses can make throughout the state."

Mr. Kushner's businesses have certainly made a difference to Mr. McGreevey and other political candidates. A review by The Record of Hackensack found that over the last five years, Mr. Kushner, members of his family and the heads of businesses operated by him funneled at least $3.1 million to various political-action committees and politicians. Mr. Kushner's four children gave nearly $300,000 to various beneficiaries. A total of $237,000 poured into the state's Democratic Committee from Mr. Kushner or his associates on one day in March of last year. "No single politician has benefited from Kushner's open wallet more than McGreevey," The Record reported. "Since 1997, the Kushner network has contributed more than $1.5 million to political funds benefiting McGreevey."

These contributions-political as well as charitable-are at the heart of both the bitter lawsuit between Mr. Kushner and his brother Murray, and Mr. Yontef's more recent allegations.

Mr. Yontef alleges that Mr. Kushner would have one of his many limited-liability partnerships either directly make a political or charitable donation, or have the holding company, Westminster Management, send a check and then allocate it back to several or all of those partnerships. At the end of each year, Mr. Yontef would send the accounts to an outside accountant, Schonbaum, Safris, McCann, Bekritsky & Co., which listed all the contributions made. The completed tax returns that came back, Mr. Yontef alleges in the suit, "listed no charitable contributions whatsoever."

Mr. Yontef claims that he was ordered to miscode the contributions in the company's internal accounting system to conceal from which accounts the contributions originated.

The suit also repeats allegations that Mr. Kushner made donations in the names of individual principals in the partnerships without their prior consent, getting the money to the candidates in the name of say, a manager at one of his companies. Mr. Rubenstein, the spokesman for Mr. Kushner, conceded to The Observer that such donations were made in the past, but insisted that the matter had been corrected.

Specifics about which contributions were disbursed from which companies were not available, because they are subject to a gag order imposed on the suit between the Kushner brothers. Asked whether Mr. McGreevey might order his own review of the source of the $1.5 million in campaign contributions he has received from Charles Kushner and his affiliates, spokesman Kevin Davitt said, "Absolutely not."

"The Governor has full confidence in Mr. Kushner. Our attitude is, it appears to be a family squabble of sorts at this point, and … that's why God made the courts," Mr. Davitt continued.

Indeed, if Mr. Kushner's legal troubles threaten his hard-won political friendships, the developer would have far to fall. Last spring, according to The Record , Mr. Kushner was able to gather 1,000 friends and supporters on short notice to the Grand Ballroom of the Puck Building (which his company owns) to celebrate the bris of his 8-day-old grandson. The guests included Rudolph Giuliani and then ex-Senator Frank Lautenberg. Mr. McGreevey even managed to put in an appearance, despite a serious injury. He hobbled in on crutches.

That'sbecause CharlesKushner, a real-estate developer who is NewJersey Governor James E. McGreevey's choicetobecome theauthority's chairman, recently made a $164 million investment in a New Jersey mall with Vornado Realty Trust-the real-estate company that will develop the bus-terminal tower.

Mr. Kushner was approved for his position on the board of the Port Authority by the New Jersey Senate Judiciary Committee in mid-June, when the deal to buy the Monmouth Mall was still in progress.

An innocuous item on the Bloomberg newswire Oct. 11 announced that Mr. Kushner and Vornado had teamed up to buy the Monmouth Mall in New Jersey. But one senior source at the Port Authority said the bistate agency "had no record or knowledge of his partnership with Vornado in Monmouth County" when he was appointed to the agency's board. "It would be a conflict if it were not disclosed because of Vornado being the designated developer of the tower above the Port Authority bus terminal," the source told The Observer .

A Port Authority source told The Observer that the board depends on background checks and investigations conducted by the governor's office to identify conflicts and bring them to the attention of the Port Authority's chief legal counsel. But Democratic Party sources said that Mr. Kushner was spared a personal appearance before the State Senate Judiciary Committee, as his candidacy for the chairman spot was vetted not at a public hearing but in a closed-door meeting of the State Attorney General's office. Mr. Kushner's potential conflicts of interest did not surface at that time.

According to Mr. Kushner's spokesman, Howard Rubenstein, attorneys for Mr. Kushner hadn't identified the conflict.

"But as soon as the inquiry was made," Mr. Rubenstein said, referring to The Observer's questions about the Monmouth County transaction, "he made the disclosure."

Mr. Kushner "wants to avoid even the appearance of a conflict," and so he "will certainly recuse himself" from decisions regarding the bus-terminal project, Mr. Rubenstein said. "What he's doing is notifying the chief legal officer of the Port Authority, and he's making a disclosure."

A spokesman for the authority said merely that the agency "works closely with its commissioners to help identify and avoid any potential conflicts of interest." The spokesman pointed out that board members serve without compensation, and that their backgrounds in business, law, accounting and other fields are viewed as assets by the agency.

Mr. Kushner's move and the bus-terminal project itself speak to larger questions about the Port Authority's role in economic development projects in the region. Originally created to oversee transportation projects, the agency has become a powerful developer on both sides of the Hudson River. Recent statements from Governor George Pataki and Mayor Michael Bloomberg have encouraged the agency to return to its original mission and attempt to divest itself of its real-estate holdings. That's precisely what the authority was attempting to do more than a year and a half ago, when it sold a 99-year lease on the World Trade Center to developer Larry Silverstein.

To manage the Port Authority's vast real-estate holdings, or to supervise the leasing of them to developers, requires some knowledge of commercial real estate. But anybody with such knowledge-that is, a real-estate developer-would seem likely to run into real or perceived conflicts of interests. The head of the Port Authority, after all, has significant power to enrich developers, thanks to the agency's vast real-estate empire.

"Across the board, these things will arise," said Mr. Rubenstein. "And [Mr. Kushner] wants to avoid both an actual conflict and the appearance of conflict."

A spokesman for Mr. McGreevey downplayed the issue. "You want a businessman to be at the head of the Port Authority, and I'm not sure why people think otherwise," said Kevin Davitt, Mr. McGreevey's press secretary. "And if someone on the board finds himself in a conflict-and I don't think Mr. Kushner will be the only one-the proper thing to do is what he has done, which is to recuse yourself."

This doesn't mean that the Port Authority is used to keeping such a watchful eye. "People are much more conscious of potential conflicts," said one Port Authority board member, who asked not to be named. "And the community is much more aware of it than perhaps 30 years ago or 50 years ago, when you had the great titans of the metropolitan area on the board. People weren't as aware of conflicts, or maybe the community didn't hold their feet to the fire over conflicts. But, obviously, now it's a big deal."

At the moment, all eyes in New York are cast on the future of the 16-acre World Trade Center site, where Mr. Kushner will represent the interests of New Jersey and the Port Authority. But the Port Authority owns properties all over the city-including the bus terminal on West 42nd Street that the American Institute of Architects has hailed as "the city's vomitory." In March 1998, this unlikely place was unveiled as the site of an ambitious new project: a skyscraper that would earn the Port Authority $130 million in ground leasing to prospective tenants. A lot has changed since then: The first anchor tenant for the building, Cisco Systems, a creature of the Internet boom, backed out of the deal, and talks between the developers-Lawrence Ruben and Vornado Realty Trust, who were named in late 1999-and potential anchor tenants since then have not yielded many prospects.

What's more, the previous city administration was locked in a battle with the Port Authority over its New York properties, with Rudolph Giuliani insisting that the bus-terminal development be subject to city property taxes. Traditionally, the Port Authority was exempt from property taxes and instead provided the city with so-called "payment in lieu of taxes," also known as PILOT fees.

After Cisco bowed out, Deutsche Bank and Microsoft both snubbed the project, prompting real-estate experts to insist that the site wasn't attractive to the very blue-chip tenants that could make the building a success. Since last year, little has changed at the vomitory-and the appointment of Mr. Kushner to the agency's board, and Mr. McGreevey's campaign to have him elected chairman, very likely will not speed things along.

That appointment didn't appear to ruffle feathers in the New Jersey State Senate, which is equally divided between Republicans and Democrats. The Senate's Judiciary Committee, chaired by Republican State Senator Bill Gormley, reviews such gubernatorial appointments. According to published reports, Mr. Kushner was confirmed for both positions without facing a single question from legislators.

Political Connections

But a series of reports in The Record of Hackensack raised questions about Mr. McGreevey's motives for choosing Mr. Kushner, a politically connected developer who counted Mr. Giuliani, former U.S. Senator Frank Lautenberg and Mr. McGreevey among the guests at his 8-day-old grandson's bris at the Puck Building (a Kushner property) last March.

The report detailed how Mr. Kushner was able to exploit campaign-finance loopholes to donate at least $3.1 million to political candidates and causes since 1995-including more than $1.5 million to political funds benefiting Mr. McGreevey since 1997.

Mr. Kushner logged the contributions through some 85 different corporate entities and private individuals, many of them family members. His son Jared, a college student, has made $82,000 in contributions to mostly Democratic causes; Mr. Kushner's daughter Nicole gave $67,000; and the youngest contributor, Mr. Kushner's 17-year-old son Joshua, gave $44,000.

Many contributions were listed under the names of employees of some of Mr. Kushner's many companies. Mr. Rubenstein said that checks written in the names of employees were not always cleared with those employees beforehand, but contemporaneously or afterwards.

Mr. Kushner also has been connected to a minor scandal in the McGreevey administration earlier this year. Shortly after taking office in January, Mr. McGreevey appointed Golan Cipel, whom he has said he met on a tour of Israel, as his homeland-security adviser. It turned out that Mr. Cipel is not an American citizen but an Israeli, and that federal agencies would not share national-security data with him. Mr. Cipel has since resigned.

Mr. Cipel had previously been employed by Mr. Kushner to write press releases from the Kushner Companies' Florham Park, N.J., offices. Mr. Kushner took Mr. Cipel on after he had served as the McGreevey gubernatorial campaign's outreach coordinator to Jewish voters.

The governor named Mr. Kushner to the board of the Port Authority one month after his election, and publicly touted him as the next chairman of the powerful agency, which is grappling with Pataki appointees on the Lower Manhattan Development Corporation, a city-state entity, to determine what gets built at the former World Trade Center.

Further muddying the waters is an ongoing Kushner family feud. Charles Kushner was sued by his brother and business partner, Murray (who is, not incidentally, a fund-raiser for Republicans), in September 2001; the suit alleges that Charles Kushner kept part of the company profits for himself, ignored agreements made within the partnership and withheld accounting information. The suit called for Charles Kushner to make an accounting of all revenues and disbursements in the company since 1997. But in March of this year, the case was sealed, and the court appointed an arbiter to resolve the matter out of court. Therefore, the records of Mr. Kushner's fast-growing real-estate empire could not be presented to the Senate Judiciary Committee, which ultimately approved Mr. Kushner's elevation to the board of the Port Authority.

Spokespersons for the Kushners said the matter was still in arbitration.

Neither Mr. Galesi nor his broker, daughter Christina Galesi of Sotheby's International Realty, returned calls for comment.

The three-and-a-half-story, 12-bedroom, 18-bathroom castle sits on 10 acres with both ocean and bay frontage. Mr. Galesi, 71, bought what was then known as Dragon's Head from financier Barry Turpin in 1992 for $2.3 million, after Mr. Turpin went bankrupt. Mr. Turpin, who bought the place in 1984, enraged local residents by converting the once-stately mansion-built in 1929 by Henry DuPont-into a Gothic castle, replete with spires, turrets and an indoor saltwater aquarium. That's when the property's misfortunes began. Mr. Turpin was indicted for tax fraud before he could finish the renovations, and for a time the castle's only inhabitants were wild animals scurrying across the courtyard.

One broker told The Observer that locals had taken to calling it "Dragon's Breath."

When Mr. Galesi bought the place in 1992, he told Newsday that "the will of the people in this town is to breathe a sigh of relief that someone has stepped up to tackle that carcass. I'm going to take the curse out of it."

After months of debate with the Southampton village zoning board, Mr. Galesi was granted the variances he needed to scale the castle back to the dimensions of its first incarnation. He renamed the mansion Elysium.

When he's not working with WorldCom, Mr. Galesi, a 1953 Princeton grad, is the chief executive of the Galesi Group, an upstate New York real-estate development company. He made his fortune buying abandoned warehouses near Albany and turning them into industrial parks, and he's now one of the largest landowners in the capital region. In 1990, Forbes ranked Mr. Galesi 205th on its list of the 400 richest Americans, with a net worth estimated at $435 million.

Starting in the mid-80's, Mr. Galesi began investing in telecommunications companies. In 1989, he merged a consortium of those companies with another consortium headed by Bernard Ebbers. This new company would later become WorldCom. One of the people Mr. Galesi brought on board was a young accountant named Scott Sullivan. Today Mr. Sullivan, WorldCom's chief financial officer, stands accused of a multibillion-dollar accounting fraud, and he, Mr. Ebbers and Mr. Galesi-a long-standing director of WorldCom's auditing committee-have been hit by a dizzying volley of lawsuits against the now-bankrupt telecommunications giant.

While his redesigned house won some applause from appreciative neighbors, it hasn't been able to fetch its original astronomical asking price. And not everyone's in love: Hamptons scribe Steven Gaines wrote in his 1998 bestseller Philistines at the Hedgerow that the castle "remains an eyesore and a wonder, a remnant of an ugly time."

Clancy Agent Heads for the Hills

The man who discovered Tom Clancy is now discovering the joys of suburban life. Robert Gottlieb, one of the city's most powerful book-publishing agents, has put his Lincoln Center condo on the market for $3.25 million.

His office told The Observer that Mr. Gottlieb has moved to Westchester.

The former William Morris star, who started his own agency in September of 2000, is still on top of the game: He now represents big-sellers Dean Koontz, Deepak Chopra, Dale Brown and Janet Evanovich.

His 2,600-square-foot apartment on the 49th floor of 3 Lincoln Center has four bedrooms, three and a half baths, and stunning river and city views. It has a loft-like corner living room and a renovated kitchen that opens into a formal dining room.

The lower 15 floors of the 60-story tower houses offices for the adjacent Lincoln Center for the Performing Arts, making 3 Lincoln Center-built in 1989 and located between Broadway and Amsterdam avenues at 66th Street-one of the Upper West Side's most visible modern buildings.

upper east side

McGreevey Choice for Port Authority Drops $5.4 Million on Fifth Ave. Co-op

Charles Kushner, the largest political donor to New Jersey Governor James McGreevey and his choice to become chairman of the Port Authority of New York and New Jersey, is days away from signing a contract on a $5.4 million Upper East Side co-op.

Real-estate brokers familiar with Mr. Kushner's postwar building call it one of Fifth Avenue's more mediocre addresses.

"It's not considered one of the top-tier buildings," said Richard Steinberg of Ashforth Warburg Associates. "It's a little cheesy-it has low ceilings and no fireplaces."

But it's no little pied-à-terre . Mr. Kushner's apartment takes up the entire 12th floor, covers an estimated 3,300 square feet and has two bedrooms-one of which is a huge master bedroom. The living room, dining room and library have been combined to make one large open space. Mr. Steinberg said the apartment's park views are spectacular.

Mr. Kushner did not return calls for comment, and his spokesman, Howard Rubenstein, declined comment on the purchase, saying that Mr. Kushner "closely guards his private life."

The New Jersey real-estate magnate, with holdings of over $1 billion, was unanimously elected-without public debate-to the board of the Port Authority in June, after contributing what The Bergen Record estimated as $1.5 million to political funds benefiting Mr. McGreevey. Mr. Kushner's spokesman has denied that the appointment came as a result of the donations; in any case, Governor McGreevey has made it clear that Mr. Kushner is his first choice to succeed current Port Authority chairman Jack Sinagra when he steps down-a move that Mr. Sinagra has said he'll make if Mr. McGreevey asks him to do so.

That would be no small coup for Mr. Kushner, who would be in a bargaining position on one of the city's biggest redevelopment projects: the World Trade Center, currently owned by the Port Authority. Now that's no mediocre address.

upper east side

17 East 77th Street

Five-story townhouse.

Asking: $5.3 million. Selling: $4.5 million.

Taxes: $33,230.

Time on the market: six months.

MINI-MOGULS MAKE A DEAL A retired couple based in Washington, D.C., bought this townhouse as an investment in 1994 for $680,000, and rented out the top three floors while the property appreciated in value. Eight years later, they got an unsolicited call from Matthew Pravda, a broker at the townhouse specialty firm Leslie J. Garfield & Co. Mr. Pravda convinced them to take their house for a little spin. "They were just interested in exploring the market," he said, "to see if they could get a decent offer." The house stands a full five stories tall and has a backyard garden and greenhouse, but its main selling point is its address off Fifth Avenue. That said, the place needed a lot of work-especially the duplex unit on the first two floors. "The building was in absolutely horrendous condition," said Jed Garfield, who worked with Mr. Pravda on the deal. The owners gave the first two floors a gut renovation and found their buyers through Larry Kaiser of Key Ventures Realty. The new owners are also out-of-towners: The couple splits their time between London and Greenwich, Conn., and made their fortune in private investments-like the Upper East Side townhouse they recently sold for a huge profit. The sellers of the 77th Street townhouse, for their part, are happy with their near–$4 million profit.

"They didn't think we could get an offer this big," said Mr. Pravda.

upper west side

65 Central Park West

Two-bedroom, two-bathroom co-op.

Asking: $1.3 million. Selling: $1.27 million.

Maintenance: $1,412; 42 percent tax-deductible.

Time on the market: three days.

NOBODY'SFOOL They say that a lawyer who represents himself has a fool for a client. But the adage doesn't seem to apply to real-estate brokers. With less than a year on the job, Insignia Douglas Elliman sales agent Betsy Matthes not only sold her own 15th-floor, 1,200-square-foot apartment at 98 percent of her asking price, but she wrapped up the entire transaction in seven weeks. "It was the fastest thing I've ever seen in my whole life," said Ms. Matthes. Her husband is a composer and musical arranger who wanted to relocate to Shelter Island; some of his better-known work includes the theme to As the World Turns , Toyota jingles and music for Tony Award specials. Ready to sell, Ms. Matthes called her building's managing agent to get the paperwork. "He said there was an engaged couple who lived in the building and were looking for a bigger apartment," said Ms. Matthes. "They were getting married quickly and wanted to come and see the place immediately." The bride-to-be is an obstetrician at the Mount Sinai Hospital. Her fiancé, a director at Bank of America, is president of the building's co-op board. They made their offer 20 minutes after seeing Ms. Matthes' apartment; they signed the contract a few days later, just days before their wedding. "It was the most romantic closing I've ever been to," said Ms. Matthes. "They held hands through the whole thing." Their new apartment has north, south and west exposures, partial park views, inlaid parquet floors, and a renovated eat-in kitchen with Sub Zero appliances.

sutton place

440 East 57th Street

One-bedroom, one-and-a-half-bathroom co-op.

Asking: $650,000. Selling: $625,000.

Maintenance: $1,000; 50 percent tax-deductible.

Time on the market: seven months.

SUTTON PLACE: START SEEING TRADERS This Wall Street trader drives a 1,200-c.c. Ducati motorcycle, so when he learned that his department might relocate to Westchester, he figured it would make sense to relocate near the F.D.R. Drive for an easy reverse-commute each day. His broker, Michael Misisco of the Corcoran Group, pushed him toward Sutton Place because, well, you can't get closer to the F.D.R. than that. And even though it's a good four long blocks to the nearest subway, that didn't faze this 35-year-old bachelor. "People that are spending 600 grand on rent, they're not taking subways," said Mr. Misisco. "They're taking cabs." The Wall Street trader's new apartment has 1,110 square feet and was in triple-mint condition.

sag harbor

16 Widgeon Lane

Four-bedroom, two-bathroom house.

Asking: $439,000. Selling: $425,000.

Taxes: $3,000.

Time on the market: 60 days.

EAST END, ALOHA! A builder from Hawaii who was looking to establish himself as a Hamptons developer caught sight of this Sag Harbor salt-box house on the Internet and flew out to New York to take a look. The owners of the place-who just got married and were consolidating-are both high-school teachers (math and science) during the school year, and run Seven Ponds Orchards during the summer (it's a 30-acre pick-'em-yourself apple, pear and melon farm stand). This house has high ceilings in a living room overlooked by an indoor balcony, and the Hawaiian developer plans on expanding the house, putting in a pool and maybe offering it up for rent. "What sold them on the neighborhood," said Simon Harrison of Harbor Cove Realty, "is when they were looking, a golden Labrador came over to say hello." One of the sellers is looking to reestablish herself, too. "At the closing, while the lawyers and brokers were doing the paperwork, she was studying for a calculus exam to get her master's degree," said Mr. Harrison.

His name is Charles Kushner. Last year, Mr. Kushner, who has holdings worth billions, was the single biggest contributor to New Jersey Governor James E. McGreevey's campaign. Now, by all accounts, he's the man Mr. McGreevey wants to be chairman of the Port Authority, the bistate agency that owns the Trade Center site. Mr. McGreevey has nominated Mr. Kushner to fill a vacancy on the Port Authority's board, with the intention, insiders say, of making sure that his patron is elected chairman sooner rather than later.

What has some observers of lower Manhattan's redevelopment worried is the following fact: Mr. Kushner is a major New Jersey property owner. He's ambitious and he's expanding fast, gobbling up office space in a North Jersey office market swollen with refugees displaced by the destruction downtown.

So how will Mr. Kushner keep his dual roles-the public servant, and the developer who has said he hopes to be one of the country's biggest property owners-separate? And can he help lower Manhattan regain its stature as a thriving commercial center if it stands to hurt his bottom line?

The potential conflicts aren't just hypothetical. Shortly before his nomination to the Port Authority's board, for example, Mr. Kushner signed a big lease with a division of a financial-services firm once based in the World Financial Center.

"I think it raises a question," said Jonathan Bowles, research director of the Center for an Urban Future, an urban-policy think tank. "If he has a chance to benefit if companies don't come back to New York, will he be as vigorous in making sure that New York City, and lower Manhattan, returns to its former prominence?"

Mr. Kushner declined to be interviewed by The Observer . "The properties that he owns in New Jersey will not have any impact on the decisions he will help make to rebuild lower Manhattan," said his spokesman, Howard Rubenstein. "He accepted this as a total civic responsibility."

Many New York real-estate executives said that, on balance, the Port Authority would probably benefit from having a developer in charge.

"Historically, there has been tension between the two states relative to the resources of the Port Authority," said Richard LeFrak, a developer with major holdings in both New York and New Jersey. "Is the fact that he's experienced in development going to make him a sharper trader for New Jersey? I don't think so."

It's a hard fact, however, that what's bad for New York has, in this case, benefited New Jersey. While the city hemorrhaged jobs after Sept. 11, New Jersey swelled, gaining 15,400 jobs in October alone. Stalwart Manhattan companies like Goldman Sachs have, in recent months, announced plans to shift large numbers of employees to the New Jersey waterfront, where five million square feet of office space are under construction.

New York officials are desperate to stem the flow-so much so that when American Express executives recently announced that they would return to their headquarters in the World Financial Center, Mayor Michael Bloomberg vowed not to use any other credit card and, in his State of the City speech, asked all New Yorkers to do the same.

Yet Mr. Kushner's appointment highlights one of the central complexities of the redevelopment process. The World Trade Center may have been located in Manhattan, but the site is sovereign territory, owned by the Port Authority. New Jersey has half the votes on the authority's board-which means the Garden State will have a big say about what's going to be built at the site.

"The governor of New Jersey has essentially veto power over what the Port does-so Jersey has a very critical role," said Robert Yaro, president of the Regional Plan Association.

This means that the byzantine intrigues surrounding Mr. Kushner's appointment- Trenton politics, for heaven's sake-have immense implications for lower Manhattan.

Mr. Kushner's appointment as chairman is not yet assured. His appointment to the board still has to get by the New Jersey State Senate, where Democrats and Republicans are deadlocked, each with 20 members. Senate approval is a potential pitfall, as his intimate ties to the McGreevey administration have lately become controversial. Meanwhile, important Democratic power brokers in the state reportedly want to keep the current chairman, Jack Sinagra, in the job.

New Yorkers have had a good working relationship with Mr. Sinagra, one state official said, and wouldn't mind seeing him stay. But ultimately, it's not up to them.

Mr. Sinagra, who hopes to hang onto his job when the board votes a new chairman in April, says it's out of his hands, too. "That's a question you'll have to ask Governor McGreevey," he said.

A spokesman for Mr. McGreevey did not return several phone calls. But conventional wisdom holds that Mr. Kushner wants the job-and he'll get it, probably soon.

"This is an extremely wealthy person with very definite ideas about redevelopment, and the governor of New Jersey has a considerable debt to him," said one New York real-estate executive.

Mr. Kushner owns, in whole or in part, six million square feet of commercial space, most of it concentrated in North Jersey. That may be small potatoes compared to those of, say, Mr. LeFrak or public companies like Mack-Cali Realty, both leaders in the move to build "Wall Street West" in Jersey City. But, by all indications, Mr. Kushner-whose holdings have been valued at more than $1 billion-is looking to buy his way into the big leagues.

"I would like to be one of the largest owners in the country in the next ten years," Mr. Kushner told The Wall Street Journal in 2000.

In recent years, he's been on a spending spree, expanding from his apartment-building roots into commercial office space. In November, just days after he helped Mr. McGreevey get elected, he bought a package of 12 New Jersey office properties from Keystone Property, totaling about one million square feet, for approximately $80 million. He added those buildings to a portfolio that includes a pair of recently acquired office buildings in Newark, some property in Jersey City, and a new office complex in Florham Park that Mr. Kushner is building as a speculative development. (He also has some properties in New York, including the Puck Building on Houston Street.)

"He was known as a large apartment owner, primarily in New Jersey," said Jeffrey Dunne, senior vice president of investments at the real-estate firm CB Richard Ellis, which negotiated the Keystone Property sale. "He has become a significant commercial owner in the past three or four years."

Mr. Kushner was raised in real estate. His father, a Holocaust survivor, settled in New Jersey after the war and became a construction worker. He began building apartment buildings, gradually amassing a family empire that now includes 22,000 apartments, a bank, an insurance company and a construction firm.

The younger Mr. Kushner has made his mark, however, as a savvy businessman with an appetite for expansion-and a yen to be a political player.

"He's very charismatic," said Mr. Dunne, "and a smart, tough negotiator."

Mr. Kushner first came to prominence in national political circles as a top fund-raiser for New Jersey Senator Robert Torricelli. He raised millions for Democrats during the 1990's, including Vice President Al Gore. He calls former President Bill Clinton a friend. In October, NorCrown Bank, a small community lender based in Livingston, N.J., and owned by Mr. Kushner, sponsored a breakfast speech by the former President at the Park Avenue Club in Florham Park.

Return to Sender

Mr. Kushner's political contributions have caused him, and his favored candidates, some headaches at times. In 1999, Rudolph Giuliani returned $57,000 that Mr. Kushner raised for his (eventually aborted) Senate race, after revelations that the developer had made multiple donations under numerous different corporate names, in apparent violation of election law. Mr. Kushner's spokesman blamed the fiasco on an employee and said the developer was "embarrassed." But last year, Mr. Kushner made almost exactly the same mistake again in donating money to Alan Hevesi and Mark Green, two Democrats contending for New York's Mayoralty. The two men returned a total of $51,000 to Mr. Kushner after the questionable donations came to light.

None of the embarrassments dimmed Mr. Kushner's enthusiasm for politics, however. He threw himself wholeheartedly into Mr. McGreevey's race for governor, raising more than $350,000 for the campaign and giving nearly 35 percent of the money raised by his political-action committee, according to a recent investigation by The Record of Hackensack. He also hired two men who have since gone on to become top advisers to the governor, including his chief of staff. The links have made Mr. Kushner a lightning rod for Republican accusations of cronyism in the McGreevey administration.

What Mr. Kushner himself wants from the governor-and what, by most accounts, Mr. McGreevey wants to give him-is the chairmanship of the Port Authority.

"Charlie is a very good man, a very successful businessman and an independent thinker," said Port Authority board member Alan Philibosian, a New Jersey Republican who also serves as a director of Mr. Kushner's bank. "I think he'll bring good leadership."

And make no mistake: The Port Authority intends to lead. It lost 74 employees to the disaster on Sept. 11, and has kept a low profile on redevelopment issues. But insiders say it will eventually wield huge influence over what's built in lower Manhattan. It has money and bureaucratic expertise. As a practical matter, Mr. Silverstein-the developer who claims the right to rebuild the Trade Center, which he leased before Sept. 11-will need to secure Port Authority approval for his plans.

The Port Authority is set up to keep either state from having too much power. Each governor appoints half of the agency's board. The board chairman traditionally comes from New Jersey, while the agency's executive director is a New Yorker. The current executive director, Joseph Seymour, is a longtime friend of Governor George Pataki; he was the city manager of Peekskill, N.Y., back when Mr. Pataki was the city's mayor.

It's an unusual arrangement, and one that makes for tension. Three years ago, a dispute between Mr. Pataki and then-Governor Christine Todd Whitman over the division of the Port Authority's wealth (and, among other things, the proposal to lease the World Trade Center) led to a 17-month stalemate in which no board business was done. That's all in the past, said New York state officials, who say their colleagues across the river have deferred to Mr. Pataki's wishes on redevelopment issues.

Of course, the hard part is still to come. Mr. Kushner will have to make the difficult decisions, while maintaining the fragile peace between the two states.

He will also have to deal with the conflicts inherent in serving in public office at the same time he's running a development firm. There are tenants to woo, and billions of dollars of construction contracts to be given out.

Some big New York developers, including Peter Kalikow, who is also chairman of the M.T.A., and John Zuccotti, co-chairman of the company that owns the World Financial Center, demurred at opportunities to serve on the Lower Manhattan Development Corporation board for fear of appearing as though they were trying to use political influence for financial benefit.

Raised Eyebrows

"The idea of putting a real-estate developer in charge of a project involving large transactions of valuable real estate clearly raises some eyebrows," said Larry Makinson, senior fellow at the Center for Responsive Politics. "Especially when this real-estate developer has also demonstrated, via his political contributions, an interest in winning friends and influencing people. Usually when someone gives that much money, they make them ambassador to the Bahamas-they don't give them something of real substance."

"When he makes a decision affecting the Trade Center development-let's say a tenant is looking at something at the [redeveloped] Trade Center and at one of his properties-there may be an inherent conflict right there," said one New York real-estate attorney.

To take a real-world example: On Jan. 7, CIBC Oppenheimer announced plans to open a branch office in a new Florham Park office complex built by Mr. Kushner, staffed by 20 brokers who used to work in the World Financial Center. The financial-services firm is the first tenant to lease space in the speculative development.

For now, however, most of the New York politicos and real-estate players involved in the redevelopment process-many of whom know little about Mr. Kushner-are keeping an open mind.

"My theory is, as long as everyone understands who everybody is and what interests people have, that that will be dealt with at the table in the discussions of the board members," said Steven Spinola, president of the Real Estate Board of New York. "I assume this person, if he's prepared to take on the responsibility, will do so in an appropriate way."

"He'll have to bend over backwards to show he's not a partisan of New Jersey," said Kathryn Wylde, president of the New York City Partnership, a business group. "My guess is we come out of that pretty well."