"Knowledge will forever govern ignorance

 and a people who mean to be their own governors

 must arm themselves with the power which knowledge gives."

Wednesday, August 10, 2005

The Corzine - Katz Deal: The Best Of Both Worlds

Last week The New York Times uncovered an unusual financial transaction between New Jersey Senator Jon Corzine and Carla Katz, a New Jersey state employee union president.

On December 18, 2002, Corzine provided a $470,000 loan to Katz through JSC Investments, a company owned solely by the Senator. In December 2004, one week before Corzine formally announced his run for the Democratic Party nomination for governor, he forgave the loan and paid gift taxes for a total of $615,600.

So what’s the big deal? Corzine is a rich and generous man who wanted to help a friend in financial trouble. When originally confronted, Corzine said the transaction was completely above board and disclosed as required by senate ethics rules. It was later reported Corzine had failed to report the transaction with Katz on his federal financial disclosures.

Corzine’s story then changed. He now claims, on the advice of legal counsel, he did not believe he was obligated to report the loan because his relationship and loan to Carla Katz was personal. However, it was reported later, Corzine had properly disclosed at least two other personal loans made to acquaintances during the same time period as the loan made to Katz.

When asked to explain the difference in the two loans he reported on his Senate disclosures and the loan to Katz that he didn’t, Corzine said: “"I knew them as human beings, not as romantic, serious relationships." Senate ethics rules and federal disclosure forms instruct senators to "not report a transaction involving property used solely as your personal residence, or a transaction between you, your spouse, or dependent child." Federal disclosure laws and Senate ethics rules do not provide an exclusion for transactions involving non-relatives or other “human beings” a senator may be involved with romantically or otherwise.

Clearly, Corzine understood federal disclosure requirements and senate ethics rules, choosing instead to ignore them when it came to the Katz transaction. Why would Corzine want to hide the transaction with Carla Katz and why did she need the money?

According to reports, Katz used the money from Corzine to buy out her ex-husband’s, share of their Alexandria Twp home, situated on 10-acres in Hunterdon County. Katz’s ex-husband, Lawrence McKim, is a high school art teacher and shares custody of the couple’s two children. Who knew that a union leader and a high school teacher with two school aged children could afford such expensive real estate? “Working families” in New Jersey must be better off than we’ve been led to believe, but that a subject for a future post.

It was further revealed Katz does not live in the house located in Alexandria, but in the luxury apartment building known as the Hudson Tea - the same building as Jon Corzine. Corzine said he gave Katz the $615,000 gift after two “broke-up” because: "I didn't want to leave her with a difficult financial burden." Very generous, but does it make sense for Corzine to loan Katz the money when the two were dating, but give her the money when the relationship ended?

Does anyone else find it strange that a woman suffering financially can afford property taxes, outstanding mortgage payments and all the other expenses that go along with owning a home, plus rent and expenses for a luxury apartment? Rent for an apartment at the Hudson Tea ranges from $1,780 to $4,950 per month. Property taxes for a home on 10 acres in Hunterdon County, has to be a minimum of $8,000 per year. That’s at least $30,000 out of pocket just on those two bills.

If you were hurting financially, would you add to your financial woes by renting a luxury apartment in Hoboken, especially if your office was located in West Trenton? Wouldn’t you either give up the apartment or sell the house? Heck, even if your finances were in good shape, would you need or keep both places? Why would someone place themselves in a financial bind and burden themselves with a 121 mile round trip commute? Something is wrong with this picture.

Is Carla Katz still receiving support from Senator Corzine? Corzine campaign spokesman Tom Shea refused to answer that question, saying: "He's just chosen not to discuss a private relationship." A simple, truthful, no would have been the expected answer if there were no additional financial ties between the union president and the Senator. Refusing to answer the question speaks volumes.

Previous Posts:
Carla Katz Has Big Plans
Why Did Corzine Forgive The Loan To Carla Katz?
Corzine, Carla Katz And An Odd House Transaction Near D.C.

Blog Buzz:
DynamoBuzz: The Bergen Record Names Corzine "Senator Bling"
eCache - NY Times Takes On Corzine
Michelle Malkin – N.J. & Sleaze: Perfect Together
Mister Snitch! - This Senator blings in the headlines
NJ Conservative - Corzine-Katz and Taxes
Powerline - A Special Relationship, Take 2
TigerHawk - CorzineGate


At 10:19 AM, Blogger NJCons said...

Hunterdon County taxes at 100% of fair market value. The tax rate for Alexandria in 2004 was about $2.35 per hundred.
Since the money used was for half the house, she owns roughly a $700,000 house. Assuming that she is not farmland assesed (the 10 acres qualifies if she works it.) she should be paying about $16,500 per year in property taxes. If she has a farmland assesment it would be about $5000 less as she would be assed on the house and one acre, not 10 acres.

At 10:20 AM, Blogger NJCons said...

or assesed whichever you prefer

At 9:10 AM, Anonymous roberto said...

Katz also had enough money lying around to make about $5000 in political contributions over a year or two. Not bad, given her salary and expenses. Unless the $5000 came from the Corzine "gift".

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