The financial crisis was the main topic of discussion on Sunday’s Meet the Press, so it only made sense that Jon Corzine, the New Jersey governor and former Goldman Sachs chairman, was called on to speak for the Democrats in a discussion that also included Rob Portman, a former Bush administration budget chief.
But three weeks before Election Day and at a time when his financial expertise carries unusual political value, Corzine’s highly public turn as an Obama campaign surrogate produced a predictable question, which the National Journal’s blog expressed thusly: “Is N.J. Gov. Jon Corzine auditioning to be Barack Obama’s Treasury sec. this a.m. on MTP?”
Such speculation underscores how satisfyingly redemptive this moment could be for Corzine. Just nine years ago, he was humiliatingly ousted as Goldman’s chairman after a years-long campaign to take the investment house public. The fellow Goldman executive who twisted the knife in his back? None other than Henry Paulson, George W. Bush’s much-maligned Treasury secretary. Paulson will be out of a job come Jan. 20, but the rescue package he helped push through Congress will vest his successor with considerable new authority. Wouldn’t Corzine love to take over his old tormenter’s office – and to claim credit for cleaning up his mess?
Of course. But it may not be that easy.
The first problem stems from the time-honored political tradition of new presidents using their appointment powers to take care of their loyal friends and supporters. When it came time for Corzine to pick sides in the Obama-Hillary Clinton race, he went with the former first lady.
Those who know him say Corzine was genuinely torn. At least rhetorically, he prefers “reformer” candidates and also enjoys championing women and minorities seeking office. When he ran the Democrats’ U.S. Senate campaign committee in 2004, he worked to line up support for Obama, then an unknown state senator running in Illinois.
But, probably because of his fund-raising connections, Bill and Hillary began cultivating Corzine early. They both actively campaigned for him in his 2005 gubernatorial campaign, and as Corzine’s endorsement decision neared early last year, Bill Clinton, according to one Corzine associate, phoned the governor on a daily basis. Corzine also faced pressure from New Jersey’s Democratic establishment, party regulars who love a sure thing and thought they had one in Hillary. In the end, this was all too much for him, and Corzine snubbed Obama. (Of course, he had his regrets. This past winter, he advised at least one uncommitted Democrat to back Obama over Clinton.)
Maybe none of this will matter to Obama if and when it comes time to pick a cabinet. After all, it’s not as if Corzine went out of his way to undermine him during the primaries, and there is the matter of the help Corzine gave Obama in ’04.
But even if Corzine’s Clinton endorsement isn’t a deal-breaker, there is a much larger obstacle to his potential selection as Treasury secretary: The near-certainty that his nomination would produce an ugly, protracted and potentially losing Senate confirmation fight.
In this era, the opposition party typically identifies one appointee of an incoming president against whom to wage a nomination fight – sort of as a way of proving its relevance, both to the new president and to the American public. When George H. W. Bush took office in 1989, Democrats scotched John Tower’s nomination as defense secretary. When Bill Clinton came to town in 1993, Republicans forced him to withdraw Zoe Baird’s nomination for attorney general. And when George W. Bush took office in 2001, Democrats furiously tried (but failed in the end) to stop the nomination of John Ashcroft as A.G.
If Corzine is nominated for treasury secretary, there’s good reason to believe he’d be the G.O.P.’s chosen target. At issue would be his relationship with Carla Katz, the woman for whom Corzine left his wife after winning his Senate seat in 2000. Until the union’s national leaders removed her three months ago, Katz was the president of C.W.A. Local 1034 – which represents about half of New Jersey’s state workforce.
Corzine and Katz ended their romantic relationship in 2004, before he was elected governor, but it wasn’t that simple. In 2005, as he was campaigning for governor, it was revealed that Corzine forgave a $470,000 personal loan to Katz as part of their breakup, raising further questions about whether he could credibly negotiate with her as governor (he insisted he could). Then, after he was elected, it was further revealed that he provided her with what amounted to a lucrative separation package when they broke up, including a lump-sum cash payment, a new car, and a college trust fund for her children. Press reports estimated this was worth, in total, $6 million.
Predictably, Corzine’s administration and Katz’s union (which has negotiated stunningly lucrative contracts for its members through the years) ultimately did butt heads. During the impasse, Katz was in regular e-mail contact with Corzine, a revelation that has resulted in lengthy and still unresolved litigation, with the state Republican Party seeking the release of all of their correspondences. A final ruling could come next month.
The endless Katz saga has affected Corzine’s standing in New Jersey. Two months ago, it was reported that a poll commissioned by Corzine found that half of the state’s voters believe his relationship with Katz raises questions about his integrity. His approval rating is regularly matched by his disapproval rating in polls. Head-to-head trials against U.S. Attorney Christopher J. Christie, the likely 2009 Republican candidate, show a dead heat – this in a state in which Republicans have won exactly one election by more than one percentage point in the last 36 years.
If Obama were to nominate Corzine for a high-profile slot, Senate Republicans would leap at the opportunities presented by the Katz saga. The basics of the story are hardly new to New Jerseyans, but the rest of America would be hearing them for the first time. How long would it take for the G.O.P. to demand that Katz be called as a witness at Corzine’s confirmation hearings? Given the paramount importance of the Treasury Department right now, the prospect of protracted confirmation fight would probably turn off the Obama administration – even if they believed that they’d have enough votes to prevail, in the end.
A lesser post, like an ambassadorship, could plausibly be offered to Corzine, but almost certainly he’d refuse that. If he were offered Treasury, he could plausibly claim to be answering an urgent call to service – and not simply escaping from a governorship that has been far more complicated, and far less fruitful, than he ever imagined. If he doesn’t end up in an Obama administration, Corzine will almost certainly seek a second term as governor in 2009. Those who know him agree that he sees walking away as an admission that his critics were right.
So he’d fight on, if only for the vindication of winning in November. But here’s the ultimate irony: Since 1985, both New Jersey and Virginia (the two states to hold gubernatorial elections the year after the presidential election) have consistently chosen governors from the party that doesn’t control the White House. Some of this is coincidental, but it also points to the electoral backlash that most presidents face in their first midterm election.
Corzine is already in deep trouble in his home state now. It’s just possible that an Obama presidency is the last thing he needs.