Christie seeks transition from loan flap to Corzine's Wall Street record

By Matt Friedman | August 24th, 2009 - 1:22pm
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After a tough week answering questions about his loan to his former employee, career federal prosecutor Michele Brown, Republican gubernatorial candidate Christopher Christie this afternoon tried  to change the subject with an offensive on Gov. Jon Corzine, accusing the Democratic incumbent of engineering an income reporting loophole that allowed major corporations like Enron to hide debt.

When Corzine was CEO of Goldman Sachs in the 1990s, Christie said, he was integral in creating Monthly Income Preferred Securities (MIPS), which provided a way for corporations to make debt look like equity, and later lobbied President Bill Clinton in a letter, also signed by 34 others, against reigning the practice in.

"The Governor, as CEO of Goldman Sachs, personally lobbied to get a tax loophole for Enron to make debt look like equity.  What this did was contribute, as you all know, to the precipitous fall of Enron when things that looked like equity turned out to be debt," said Christie during a conference call with reporters."

The charge is nothing new, however.  Corzine faced the same charge four years ago, when he was running for governor against Republican Doug Forrester.  At the time, then-Assemblyman Kevin O'Toole (R-Cedar Grove) and state Sen. Diane Allen (R-Edgewater Park) brought it up, saying that "Corzine profited while the people of New Jersey paid."

Corzine's campaign responded back then that Goldman had not sold MIPS to Enron since the early 1990s, that they lost the Enron business to another firm in 1994 and that Enron's problems ate to the 1990s - well after any involvement with Goldman.

Christie said the collapse of Enron, which was able to disguise debt through MIPS, cost New Jersey's pension fund $61 million, but that Goldman Sachs made $69 million in fees from Enron, a client.

"Jon Corzine does not have a chief executive's mentality. He has a trader's mentality," said Christie.

When asked why he was bringing up something from over a decade ago, Christie said he didn't think it had been properly vetted.

Corzine's biography on the Web site for the governor's office notes that he co-authored the Sarbanes-Oxley Act of 2002, which was meant to crack down on corporate accounting fraud that led to the Enron scandal.  One reporter noted that former Senator Paul Sarbanes (D-Md) praised Corzine for his involvement.

Christie, however, said that the reform was equivalent to "closing the barn door that the horse has already ran out of."

But if Christie wanted to put the Brown loan behind him, most reporters on the call, who were miffed by Christie's avoidance of questions on the campaign trail after his mea culpa for not reporting the loan on his taxes and several disclosure forms earlier in the week, did not let him.  Most questions were still about the loan.

"There is nothing inappropriate about doing that and candidly I think this kind of continued drum beat on this in terms of the propriety of it is incredibly overdone. There is nothing wrong with a superior giving a subordinate a loan," he said.

Christie said that although he did not make himself available to the press every day last week, he did over the weekend, attending parades in Iselin and Jersey City.

Although Christie gave Brown a promotion to the offices No. 2 spot shortly before he resigned from the post, he said that she did not receive a raise - that, as a 14 year staffer, she had already reached the top salary, which was $100 less than he made as U.S. Attorney.  Brown's bonuses, Christie said, were the same as every other staffer.

"She did not get raises that coincided with her promotions because she was at the top of her pay scale," he said.

Tags:

Phrasing

Submitted by FormerlyAnonymous on August 24, 2009 - 12:37pm.

He did not make the loan to a "former employee." He made the loan to a "current employee" since the loan was made when he was her boss.

While your opening sentence is technically correct, it gives the impression of a time-frame that isn't accurate.

The story is that Chris Christie made a loan to someone whose continued employment and promotions depended on his good will, and maintained that loan after he decided to run for Governor and the person who owed him money could potentially do him favors like info on raids and/or responding slowly to FOIA requests.

"Don't let facts get in the way"....Corzine '09

Submitted by gorednj on August 24, 2009 - 1:07pm.

"Sloppy accounting is worrisome. But the heavy breathing by the Corzine campaign over the loan is unseemly, and looks for all the world like the pot calling the kettle black." Asbury Park Press editorial. (8/24/09)

 

"Don't let facts get in the way"...Corzine '09

What a Story Line

Submitted by roryar on August 24, 2009 - 3:59pm.

Christie: "I loaned one of my staffers 46k and neglected to include this on my tax returns. I'm sorry".

Corzine: "You should be sorry! Only 46k? I would have loaned her 470k and stonewalled efforts to make the e-mails between her and I public! Vote for me!".

Just Ask Todd

Submitted by Michael Illions on August 24, 2009 - 4:21pm.

Can't Chris just ask his brother Todd about anything related to Goldman Sachs?

It's sad...

Submitted by J_Joseph_Rivera on August 25, 2009 - 8:24am.

...that Jon Corzine is so deperate to keep his ship from sinking any further than it already has that he's trying to make an issue out of an innocent loan to a friend. Meanwhile, you never hear from him or his camp why he deserves another four years as Governor.

What's even sadder is when bitter little men have nothing better to do than to resort to cannibalism in order to get attention for themselves.

"Any fool can criticize, condemn and complain and most fools do."- Benjamin Franklin

Headlines vs. News

Submitted by Pat Caserta on August 25, 2009 - 8:29am.

At this point, it is reasonable to ask why this story is being written day after day. I have read numerous articles in many different media outlets but cannot find any real authority saying there is any actual impropriety here. It is noted that Mr. Christie did not report this transaction but he didn't hide it. The mortgage itself was recorded in the public records; available to everyone without any OPRA or FOIA requests. It has now been disclosed and reported. (I'm not even sure there was any income to report. $500 per month on a $46k loan means that it will take several years before the principal is repaid and the transaction begins to generate any profit.) - As to conflicts, Mr. Christie does not have any cases (personal or as legal counsel) pending before the US Attorney's office so where and how would he exert any undue influence. - Someone quoted a so-called ethics expert simply saying it was not proper. She didn't explain why and, in fact, I believe she is a Corzine appointee. How ethical is it for her to comment as an independent source? - This article says the press has been pressing Mr. Christie for answers. What is left to be said? The loan is public knowledge, the terms are public knowledge. He admits it wasn't timely reported on disclosure and tax statements. What else is there? Are you just trying to make this into something it is not? And, has the press done the same with the Governor? If so, where are the answers to similar questions that go back to the beginning of this administration? Since this loan story first came out, the bloggers made it clear that they see the disparate treatment here and we should recognize that concern. - Interestingly, this web page has three advertisements from the Corzine campaign and none from the Christie campaign. Is it proper to take money from the people you are supposed to cover objectively?

Hack insider losers have done it again!!

Submitted by formaja on August 25, 2009 - 4:19pm.

So now Corzine has a double political wammy so to speak. Christie says Carla Katz and now Corzine can not only say Todd Christie but Michele Brown as well. Yup, squeaky clean Christie, no problems at all.

The Christie/Bush ads are also working, and true by the way. The hacks are hystercial with this. I have seen stories that mention the amount of money. Um….ah….er…..wizards of smart liberals Republicans. $46,000 from Christie is the equivalent of the $500,000 Corzone lent based on each man’s actual income. Christie cannot afford $500,000, and Corzine walks around with $46,000.

Before I left for vacation, the Christie lead was SIX POINTS. I cannot wait until the next poll not from Shaftan. Granted this poll is a very small sample, but my guess is the next larger one to come out is going to be close to the same. Corzine will be in the margin of error. By the middle of September it will be over for Christie, as usual.

I hope you hacks are happy. GREAT job vetting the candidate you backed. I am not fan of name calling, but there is only one word that fits what you people did here, YOU IDIOTS! YOU BLEW IT! As usual.

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