Chris “Nervous Wreck” Christie

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The reporter that broke the story of Chris Christie’s unusual loan to his subordinate, Michele Brown, raises some interesting questions in a blog post, mostly about why the US Attorney’s office is at the same time refusing to comment, but also claiming that "everyone" knew of this unusual loan. (h/t mb)

There is also this lingering question about who in the office knew what and when. Christie says Ralph Marra, the Acting US Attorney knew about it, as did the “whole front office.” Well didn’t someone question the wisdom of this? I mean aren’t these people supposed to be the cleanest and most ethical people in NJ???? We have now determined that Christie was thinking about a run for Governor as early as 2006 when he spoke to Karl Rove on the phone. Christie also says the question came up so many times during his tenure that he once needed to issue a press release denying that he was planning to run.

A spokesman for the US Attorney’s Office said they won’t have any further comment since they like to keep the office separate from the “political season.” Well, that seems like a wise idea…but then why does everyone in the front office know about this financial arrangement between the now Republican Gubernatorial Candidate and Michele Brown? If this loan was made purely as an act of friendship ( as Christie claims ) it shouldn’t be anyone else’s business. And if all these people in the office knew about it, why wasn’t it properly disclosed?

Finally, Christie promoted Brown twice…once before the loan and once afterwards. We have heard some grumbling complaints about favorable treatment toward Brown in the office, but I wouldn’t hold my breath waiting for anyone to go public.

Someone very close to Christie told me that last night that Christie was a “nervous wreck.” I wonder why. [my emphasis]

I will repeat a comment I’ve made in threads: Christie’s financial relationship with Michele Brown closely resembles the alleged relationship between Margaret Chiara (the US Attorney from Western Michigan) and her subordinate, Leslie Hagen. (The two were also accused of a lesbian relationship.) Chiara and Hagen both got fired (though Hagen has been rehired); Christie and Brown did not, and Brown has been promoted since and remains at the US Attorney’s office in spite of taking an inappropriate loan.

So what explains the disparate treatment?

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33 replies
  1. Citizen92 says:

    If “everyone knew about it” then how about some evidence? Some emails from “everyone”? A greeting card signed by “everyone” saying how wonderful he was loaning money, perhaps?

    At minimum, wouldn’t Christie have run the possibility of such a financial arrangement by an in-house attorney, just to make sure it was ethical and to check the box? Or maybe though it was more than sufficient to only run it by Ms. Brown, who was “counsel to the US Attorney” during her tenure.

    Bad lawyering.

  3. brendanx says:

    emptywheel:

    This “I will repeat a comment I’ve made in threads” segue/analogy is very nicely done. Thanks for your implacable grinding.

  4. Rayne says:

    Oh come now, you know “teh gay” is utterly unacceptable, while relations between any Republican man of “the chosen” with any woman is acceptable!

    But I’m sure it’s not this simple. Sure would love to hear from somebody in GR who has more skinny on the USAs’ office there; they have been awfully tight-lipped, not like the folks in Christie’s office.

  5. pajarito says:

    Federal employee ethics rules bar all but trivial gifts, even among co-workers and especially staff and supervisors. A loan of this amount, depending on interest and terms, is a substantial gift.

    WTF, why no ethics action?

    • scribe says:

      1. There would have been an ethics investigation, but Christie quit before it got underway.

      2. Avoiding the appearance of a gift would explain the need to (a) secure the loan with a mortgage and (b) charge interest approximating market rates.

      Most federal attorneys are really strict about avoiding even the appearance of a gift. When you litigate cases, you wind up working in a more-or-less collegial manner with many (not all – some are just assholes) of your adversary counsel. You go out for coffee and lnch at breaks, particularly during discovery (like days of deps). When I have dealt with the feds’ attorneys in litigation, at the coffee shop I will say something to the effect of “I’d buy you a cup of coffee, but given the gift rules you’ll just have to settle for the sentiment.” I only do that with collegial folks, and those almost always get a chuckle out of it.

  7. pretzel says:

    I’ve been trying to catchup with all of this and sorry if this is a duplicate question or it’s a non-issue at all, but if anyone who has been checking the Morris County records have any of you come up with a Satisfaction of Mortgage recorded?

    • scribe says:

      No one seems to have been searching by the property, as opposed to by name. The property would be searched either by street address or, more likely, by lot and block (as defined in the municipal tax map). If you serach by lot and block, you get to see all the stuff filed as to that property, including satisfactions of mortgage.

      But, you have to understand that in New Jersey, it is incumbent on the borrower to make sure the lender files the satisfaction – lenders often do not automatically file a satisfaction. That’s a very frequent occurrence when it’s a private loan (as opposed to a commercial lender) – no one among these amateurs knows about filing a satisfaction or they forget or balk and then there’s an open “unsatisfied” mortgage of record still on the books (even though it might have been paid off years ago) and it’s messing up the title. If it’s a refinance, the succeeding lender will make sure the preceding lender files a satisfaction, to preserve the priority of the succeeding lender’s lien.

      Anyway, though, since the loan has until 2017 to run, why would there be a satisfaction of mortgage? It hasn’t been satisfied yet.

      • pretzel says:

        Thanks for the reply.

        The reason I asked about the satisfaction is that (in my view anyway) a quick and easy way to give an appearance of an arms length transaction would be to float a loan (in this case a second mortgage) and quickly satisfy it. It gives the appearance that any Promissory Note associated with the loan (in this case a mortgage loan) was tendered and repaid.

        If I’m reading what’s happened to the loan and if Christie hasn’t reported income from the Note (assuming there is one) that the loan was forgiven, not repaid in full. That would make Christie’s involvement in the loan no longer valid. If I’m the holder of the first, I’d want to know that to make sure title is still clean.

        I guess I’m still trying to figure out if this is indeed an arms length transaction.

        • scribe says:

          You’re not making a lot of sense.

          1. Filing a satisfaction of mortgage is conclusive proof that the note was paid. It doesn’t “give the appearance of” being paid in full – it ends any discussion over whether it was paid in full.

          2. Arguably, it was not an arms-length transaction because they were superior and subordinate in a workplace. This is one of those places in the law where lawyers can try to count how many angels are dancing on the head of that pin – whether it’s an arms-length transaction or not depends on what definition and which principles you use to define “arms-length”.

          I say it wasn’t one. In politics, that’s all that matters – the appearance….

          3. Floating the loan and then quickly satisfying it would give exactly the opposite impression – that it was bogus, not arms-length.

          Why dontcha go read all the stuff on Oury and Ferriero and then compare their situation to Christie’s. That would be a more productive use of your time.

  8. scribe says:

    Everyone knew about it because Christie was loaning them money, too, maybe?

    The thing which has been bugging me, and which no one seems to have really addressed, is the core question: Where did Christie get all this money from?

    Let’s look at him.

    He was not quite 40 when he was appointed to be the US Attorney. He had been a partner in a law firm, but one needs to remember that for all the status that might have given him, the firm was not a “BigLaw” law firm, the kind of firm where starting associates’ salaries get profiled and ranked in the legal newspapers. It was a relatively small law firm – Dughi, Hewitt etc. – which did neither the kind of big-money deals nor the big-money litigation which would justify paying partners into the mid-to-high 6 figures. More like the low 6 figures, more likely. By and large, Dughi Hewitt does stuff like medical malpractice defense, insurance defense, etc. Stuff that pays solidly, but not extremely well. Work there as a partner and you get a nice bougie life but you don’t get rich.

    Even though his wife worked for Cantor Fitzgerald, it seems apparent she has been spending most of the last decade-plus dealing with 4 kids. Plus, without being too blunt about it, Cantor was a boys’ club and the boys were the ones who made the real money there. As a University of Delaware grad, she was not likely to have been one of the high-fliers in that firm. More likely, a supporting role. The high-flier roles go to the Ivy grads.

    In short, he and his wife had a relatively limited work history in that they had not worked for a bunch of years at however high their incomes were before he took the job of US Attorney. As law jobs go, that one is underpaid. They had nice, upper-middle class incomes, but had not had the time to accumulate a level of saved/accrued income which would support loaning out tens of thousands of dollars.

    Remember, Christie said yesterday that he’d made other loans, too.

    So, the question keeps coming back: where did he get the money to loan?

    And the subsidiary questions: Who did he loan it to, how much, and what was the security for those loans? Because, if he was going to compel a subordinate to give him a mortgage against her house, it stands to reason that he would not have given out unsecured loans to others who were not as close to him.

    And then there’s the whole separate issue about not reporting the loans in all sorts of required disclosure forms. To see a good reason he’s shitting bricks over that, one should look at the cases of Dennis Oury and Joe Ferriero.

    Christie used to refer to Dennis Oury and Joe Ferriero as numbers 129 and 130. As in the 129th and 130th “allegedly” “corrupt” “public officials” his office had indicted.

    They are two prominent Democrats from Bergen County. Oury was the counsel to the Bergen County Democratic organization and Ferriero its head. Christie had them indicted last year about this time.

    Here’s a whole series of posts about Dennis Oury, Dem and former counsel to the Bergen Co. Dems. Basically, Christie had him indicted for pretty much the same kind of chicanery as it looks like he may have been tangled up in, save that Oury is alleged to have formed a nonprofit to facilitate funneling fed money to a municipality or something.

    The thing is, the Oury-Ferriero indictment came in advance of last year’s election, when Rabbi Shulman (the blind guy) was taking on uber-wingnut Scott Garrett in the NJ-05 Congressional race. NJ-05 is primarily in Bergen county and is usually Republican, but Shulman had a shot at Garrett, at least before the county Dems got tossed into turmoil over Oury and Ferriero.

    The original indictments landed just after Labor Day last year, i.e., when the average Joe starts paying attention to the campaign.

    Then, this summer, the latest – a new indictment

    The new indictment.

    Christie set this off by (a) making ethics the centerpiece of his campaign and (b) having given Dems every reason to have their knives sharpened by hunting Dems almost to the exclusion of everything else, and (c) being a loyal toady to Karl Rove. He brought this down on his own head and has a lot of reasons to be shitting bricks.

  9. Mary says:

    OT – from cqpolitics, DHS is stating flattly (like it did on the Maryland fiasco, where it lied) that it did not receive any of the Military Domestice Spying and Incitement workproduct initiated by Towery.

    http://blogs.cqpolitics.com/sp…..rmy-s.html

    • LabDancer says:

      With Dungeons Dick & Dragons Don having had control over or unimpeded access to federal agency bureaucratic power for 70% over a 40 year period, it got to the point where it’s now only safe practice to assume there’s a B side to every DOJ disclosure & every USG response to a FOIA request, and proceed accordingly. A lot of the advantage enjoyed by ex-prosecutors in helping their clients deal with government prosecutions can be attributable to knowing that to be so, as well as often having a better idea of where it’s buried.

  10. Citizen92 says:

    As EW referenced in the previous post, that video when Christie talks about his “other loans” could be telling. Teh reporter asks the question, then he sort of grimaces, pauses, rolls his eyes and head back and then answers, haltingly. It was almost like asking a mortgage banker to recall the details of how many loans are outstanding and who owes.

    I think he has loaned a bunch of $.

  12. Citizen92 says:

    The Christie Family Foundation’s biggest aid recipient, year to year, and by far in dollar amounts, has been the St. Barnabus Hospital (Medical System). St. Barnabus settled with the US Government for $265M, “the largest Medicare fraud settlement in history” for overbilling Medicare.

    Christie recused himself “because his family foundation gives to St. Barnabus.” It was prosecuted by his second in command, Ralph.

    Here’s the article: http://www.redorbit.com/news/h…..index.html

    Did “everyone know” what was going on in this case too?

    What is the Christie family’s interest in St. Barnabus?

    • Citizen92 says:

      Important detail left out, but certainly implied in context… it was Christie’s USA office that prosecuted and agreed on the settlement with St. Barnabus.

      • scribe says:

        It’s St. Barnabas.

        FWIW, they have a big intensive care type operation, as well as a big burn center. It’s NJ’s largest hospital in terms of patients seen per year.

        Located in Livingston, Saint Barnabas Medical Center is New Jersey’s oldest and largest nonprofit, non-sectarian hospital. The institution traditionally treats more patients annually than any other facility in the state and is ranked among the top 5 percent of all hospitals in the country.

        Who knows why he wants to give money to a hospital.

  13. JimWhite says:

    More info on his office “reorganization”:

    As soon as Christie took the job in 2002, he made two things clear: His top target was corruption, and he planned to make big changes in the office. He promoted people he liked, passing over or demoting top senior lawyers to promote new hires with little or no experience and leaving the day-to-day case handling to chiefs, deputies and line assistants.

    Five months into the job, top veterans were dumped or transferred, including former Frauds Division chief Michael Guadagno, the 30-year career prosecutor who started the corruption investigation that brought down Sen. Robert Torricelli.

    Christie named Charles McKenna as his executive assistant, the No. 3 job in the office, in April 2002, and elevated Paula Dow to counsel, the No. 4 slot. When Dow left to became Essex County prosecutor in October 2002, Christie replaced her with Michele Brown.

    He also demoted top lawyers, including Stuart Rabner, first assistant under former U.S. Attorney Robert Cleary, who was replaced by Christie’s own No. 2, Ralph Marra. Rabner eventually became chief of the Criminal Division before Corzine tapped him to be chief counsel and later attorney general.

    Further down in the article:

    But Christie has been a lightning rod for outside criticism, principally for his use of deferred prosecution agreements, which allow companies to avoid criminal prosecution and remain in business if they clean house, cooperate with government efforts to prosecute responsible individuals and waive some attorney-client and work-product privileges.

    Christie is an unabashed advocate of their use, saying they allow government to order necessary changes and dismissing criticism that the agreements leave corporations at the prosecutor’s mercy.

    And here we have him playing Rove’s playbook to the letter:

    As with former U.S. Attorneys, Christie’s investigations of opposite-party political figures has raised eyebrows.

    One such instance was the decision by Christie — a Bush-appointed Republican — to subpoena Democratic congressman Robert Menendez in the middle of his race for the U.S. Senate. In September, the media got wind of Christie’s inquiry into whether officials at an antipoverty agency, the North Hudson Community Action Corp., agreed to lease a building owned by Menendez in exchange for his promise of continued funding for the program. Menendez has denied wrongdoing.

    Oh, and by the way, the article title:
    “New Jersey Law Journal’s Lawyer of the Year: Christopher Christie”

    Gotta love Joisey. In going after “corruption”, he throws out the people with real experience and then does some inoculations through DPA’s to keep the good Republican companies churning along. Then he goes after Democratic politicians in the heat of an election season. Rove through and through.

    • scribe says:

      You missed the fact that Stuart Rabner, who Christie demoted, is now the Chief Justice of the New Jersey Supreme Court

      • JimWhite says:

        Ooh, cool. It seems to me that some of those folk unceremoniously dumped might just have a few nuggets of wisdom to share with enterprising investigators. Just sayin’.

  14. Boston1775 says:

    I love this line:

    “We don’t want to put them out of business,” said Marra, noting that the fraud had no impact on patient care. “That wouldn’t be good for the people of the state.”

    Now let’s see: St Barnabus is accused of getting an extra half a billion.
    They pay back $265M.

    Add the $245M to the $1,000 in 2001,
    $200,000 in 2002,
    $120,000 plus $97,319 in 2004,
    $50,000 in 2005,
    $30,000 in 2007 and
    $100,000 in 2008 from Christies Charitable Trust.

    Not bad.

    • Citizen92 says:

      http://www.nytimes.com/2006/08…..gewanted=1

      St. Barnabas received more federal Medicare money from the pool of outlier money than some national chains 10 times its size. In 2001, the aid accounted for more than 15 percent of St. Barnabas’s total revenue, at least five times a typical percentage, and, according to depositions from former employees, the hospital system’s bookkeepers were ordered to hide the money elsewhere in the budget to avoid arousing the suspicions of auditors.

      • Boston1775 says:

        By systematically inflating the bills for their sickest elderly patients, the prosecutors said, the executives of the St. Barnabas Health Care System bilked the federal government of at least $630 million from 1995 to 2003.

        From the same NYT article.

          • Citizen92 says:

            http://www.saintbarnabasfounda…..report.pdf

            Also, according to that annual report, brother Todd Christie is a member of the Saint Barnabas Medical Center Board of Trustees.

            The Christie Foundation’s regular contributions to may have something to do with that. Trustees (serving in nonprofit roles) are usually expected to fundraise to keep their Board positions.

            But as a member of the Saint Barnabus Medical Center Board of Trustees, Mr. Christie would be involved in the corporate governance, financial planning and operations of the hospital.

            I wonder how long he has been a trustee.

  16. cinnamonape says:

    Here’s something interesting…Bush-appointed US attorney Colm Connolly spent five years hounding two Delaware officials (both Democrats) on a whole “Starr-Chambers” worth of charges…only to have all but one against one defendent (Sherry Freberry) thrown out. That one, whether a loan from a third party was a gift or not, and reported incorrectly, might be relevant in this case. Seems that the Bush appointees were making loans to their own staff, and raising far more “conflict of interest” issues…while they were going after Democrats for more trivial (and non-COI) loans.
    http://abclocal.go.com/wpvi/st…..215″>Connolly’s Case Fizzles

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