One of Gov. Corzine's personal investments has become the latest fodder for attacks in an increasingly bitter race between the Democratic incumbent and Republican candidate Christopher J. Christie.
Accusing Corzine of a "colossal error in judgment," Christie says the governor is invested in a hedge fund related to funds that have interests in four Atlantic City casinos and do business with the state pension system.
Corzine's campaign says the Republican charges are without merit.
"This is a wild-eyed conspiracy cooked up by the Christie campaign to distract from his own pattern of ethical failings," Corzine campaign spokesman Sean Darcy said yesterday.
Corzine invested in a hedge fund called TPG Axon. The funds involved in the casinos and pension system are in the Texas Pacific Group (TPG) family of funds. They are independent of one another, a company spokesman said.
"Gov. Corzine doesn't have one penny tied up" in the funds operated by TPG, Darcy said.
Republicans say if there is no relationship between the funds, Corzine has at least shown the appearance of a conflict of interest.
They point out that the state Casino Control Act forbids many New Jersey officials, including the governor, from having any financial interest in gaming companies. And state ethics laws prohibit officials from profiting from state work.
It is highly likely these arguments will show up in attack ads against the governor before the Nov. 3 election.
Corzine could have avoided this attack had he put his fortune in a blind trust, as many elected officials have, according to Seton Hall political scientist Joseph Marbach.
He said the governor has to ask himself "what's more important, running the state or running your portfolio?"
Marbach said while the governor, who headed Goldman Sachs & Co. in the 1990s, is a talented money manager, the governor's role in his investments means "you're going to run into some kind of conflict like this because the firms and funds are so diversified."
According to the governor's financial disclosure form, he has invested in the hedge fund TPG-Axon Partners L.P. since February 2005.
TPG, meanwhile, is part owner of Harrah's Entertainment which operates four Atlantic City casinos: Harrah's, Showboat, Bally's, and Caesars.
But TPG spokesman Owen Blicksilver said the Corzine fund, TPG-Axon, is independent of TPG.
And, he said, TPG-Axon is independent of the TPG funds doing business with the state pension system.
Chris Kittredge, speaking for TPG-Axon, said his company's only relationship to TPG is in marketing. When TPG-Axon was founded by Corzine's former Goldman Sachs associate Dinakar Singh, he used the TPG name for "marketing purposes only."
The Star-Ledger of Newark reported Sunday that TPG-Axon, the one Corzine invested in, and TPG share addresses in New York, Hong Kong, and Tokyo, and share investors.
State Sen. Bill Baroni (R., Mercer), a Christie surrogate, said the company and Corzine campaign statements mean little to average people.
"This stinks," he said in a call with reporters yesterday. "People can make all kinds of arguments. This fund has that name, the offices are next to each other. That may work on Wall Street, but it doesn't work on Broad Street in Hamilton."
Marbach said voters unhappy with the role financial firms played in the recession are unlikely to give Corzine the benefit of the doubt once Christie or his supporters push this tale into television ads.
"What voters, I think, will take out of it is there seems to be some kind of conflict of interest," Marbach said.