Garden State Patriot

The NJ-GOP is taking aim at Governor Corzine for an investment in a hedge fund with ties to a casino ownership group. If it were to be proven that Corzine has a financial relationship with a gambling company it would be a potential violation of the state’s conflict of interest laws*. From NJ.com:

Gov. Jon Corzine has a stake in a private hedge fund related to the corporate owner of four New Jersey casinos, an investment Republican critics contend presents at least the appearance of a conflict for a multimillionaire governor who has vowed to steer clear of them.

Corzine and his advisers say the investment was properly reported and does not violate state regulations that bar the governor and senior state officials from business relationships with casino operators. They say the hedge fund’s holdings are kept separate from those of its founding company, which bought Harrah’s Entertainment in late 2006.

The Corzine hedge fund is TPG-Axon, while its founder is Texas Pacific Group (TPG). They share the same address and some of the same people as well as the same name. Republicans plan to raise the issue in the gubernatorial campaign as Corzine seeks a second term.

“No objective or authoritative source armed with the background and details of the Governor’s interest in TPG-Axon hedge fund can conclude that there is a ‘question’ that Governor Corzine has touched upon any statutory, regulatory or ethical guidelines or restrictions governing casino interests or even has come ‘close to the line’ on those guidelines,” Corzine’s chief counsel, William Castner, wrote in a memo to The Star-Ledger.

It’s not quite so clear to Corzine’s political opponents.

“Any way you slice it, Jon Corzine has run afoul of the law and certainly afoul of the standard he set for himself,” said former state Republican chairman Tom Wilson, who has long criticized Corzine for how he uses and manages his personal finances. “You cannot be in business with a casino license holder and that’s exactly what’s happened here. To Jon Corzine, the rules are for other people to live by. But just because you’re rich doesn’t mean you get a pass on the rules.”

Ethics and finance experts said it was not immediately clear whether the relationship between Texas Pacific and TPG-Axon constitutes a violation for the governor. They said they would need to analyze hedge fund and corporate records to make such a determination. New Jersey’s conflicts of interest law bans governors and other senior state officials from having financial relationships with gambling companies.

*In reading the state’s conflict of interest law, whether Corzine is in fact in violation appears to rest on his ‘interest’ (stake) in the holding:

 g. “Interest” means (1) the ownership or control of more than 10% of the profits or assets of a firm, association, or partnership, or more than 10% of the stock in a corporation for profit other than a professional service corporation organized under the “Professional Service Corporation Act,” P.L. 1969, c. 232 (C. 14A:17-1 et seq.); or (2) the ownership or control of more than 1% of the profits of a firm, association, or partnership, or more than 1% of the stock in any corporation, which is the holder of, or an applicant for, a casino license or in any holding or intermediary company with respect thereto, as defined by the “Casino Control Act,” P.L. 1977, c. 110 (C. 5:12-1 et seq.). The provisions of this act governing the conduct of individuals are applicable to shareholders, associates or professional employees of a professional service corporation regardless of the extent or amount of their shareholder interest in such a corporation.

Furthermore, this ethical violation carries with it the following punishment:

h. Any person who willfully violates the provisions of this section is a disorderly person and shall be subject to a fine not to exceed $ 1,000, or imprisonment not to exceed six months, or both.

Cross-posted at Red County and Conservatives with Attitude!