The $5 million gift, one component of a larger agreement between the company and prosecutors, was hailed by the school, in South Orange, N.J., as a cornerstone of its new center on business ethics.
In Washington, however, Christie’s superiors in the George W. Bush administration were uneasy about it, worried that it could look to the public like a U.S. attorney using his authority to benefit a pet cause.
Christie said the idea was not his but rather part of a negotiation between his prosecutors and the firm. In any case, spurred on by the Seton Hall deal and several other out-of-court settlements negotiated by Christie’s office, Justice Department officials ultimately enacted new rules limiting prosecutors’ discretion in reaching such agreements.
“It was something you wanted to tamp out before every U.S. attorney in America built a new summer camp,” said one former Justice Department official involved in reviewing new rules, who, like two other senior officials, spoke on the condition of anonymity to describe internal deliberations. “It needed to be nipped in the bud.”
During his nearly seven-year stint as a federal prosecutor, Christie perfected a leadership style that enabled him to vault into the governor’s mansion from a job that is not frequently used as a steppingstone to higher office.
Along the way, he honed a brand of politics built largely on transactional relationships with supporters and adversaries alike. His approach has appealed to many voters. And yet, as the Seton Hall agreement demonstrated, Christie and his aides showed an early penchant for pushing boundaries in ways that have had ramifications.
Now Christie is embroiled in a scandal over allegations that a massive four-day traffic tie-up on the George Washington Bridge in September was an act of political revenge by aides against a Democratic mayor. The controversy threatens to derail his potential run for the Republican presidential nomination in 2016.
Christie has denied any wrongdoing in the bridge matter, and his aides say the types of settlements he negotiated as a prosecutor have been an accepted practice for years.
A spokesman, Kevin Roberts, said Christie, as a U.S. attorney, used the agreements as a tool to “hold corporations accountable without punishing innocent employees who were not at fault in any corporate wrongdoing.”
“They continue to be used today by prosecutors across the country and remain highly praised by the Obama administration for exactly that reason,” Roberts said.
Won over skeptics
Christie was sworn in as a U.S. attorney in January 2002. He had spent two years as a lobbyist, made an unsuccessful run for the state legislature and been voted out of office after one unpopular term as a county freeholder. Looking at his résumé, some deemed him unprepared to become the top federal law enforcement officer in New Jersey. Many attributed his appointment to his fundraising prowess for Bush.
But he won over most skeptics on his own staff. Former assistant U.S. attorneys who worked under Christie say he gained their respect in part by acting professionally and in part with the personal touch he brought to the job. In his first weeks, he called each of the 120 or so prosecutors into his office individually and asked their advice.
“His background was a little different than most appointees — he had more political experience,” said Jeffrey Clark, an assistant U.S. attorney who prosecuted public corruption and white-collar crimes under Christie until 2004. “But he was a very quick study. I never once saw, or got any hint, that he let politics affect a case or his judgment of a case. Democrat, Republican — it didn’t matter. If there was evidence, we’d bring the case, and if there wasn’t, we wouldn’t.”
Christie had taken an oath to uphold a critical public trust, by prosecuting public corruption and fraud in a state infamous for both, and to be above political influence or bias.
But he held this powerful, apolitical post at a time when he was building a political future for himself, laying the groundwork for his gubernatorial campaign.
Even as his office was investigating Democratic fundraising irregularities, Christie was spotted around Trenton lunching with Republican fundraisers, politicians and power brokers. Although he was early in his tenure, he already was the subject of speculation about a run for governor. The Star-Ledger in Newark took note of one lunch he had in 2004 with Bill Palatucci, his former law partner and mentor, and Richard Bond, a former chairman of the Republican National Committee.
The three had worked together and been friends for years and the lunch was a “purely social” get-together, Palatucci said.
“Rich was in Trenton on business and so we took his being in NJ as an opportunity to catch up on family, friends, and old colleagues,” Palatucci said in an e-mail.
But the venue guaranteed people would see Christie and talk. Pete Lorenzo’s Cafe was a lobster-and-steak restaurant frequented by Trenton’s political class.
“The message wasn’t lost on anyone,” said a former Democratic state official who spoke on the condition of anonymity because his employer conducts business with the state.
Back in Washington, Christie’s bosses were concerned about the appearance of several deals he struck with corporations that agreed to change their ways if they weren’t charged in cases involving financial irregularities.
These out-of-court deals, once rare, started becoming more common among federal prosecutors under the Bush administration.
Typically, U.S. attorneys appoint independent monitors, who often receive millions of dollars in fees paid by the companies.
Justice Department officials were uncomfortable about seven agreements Christie signed over the years, because he had appointed political allies and supporters as monitors in some of the cases.
One group of cases in particular drew a lot of attention. Five makers of orthopedic devices were found to have paid what prosecutors characterized as kickbacks in the form of consulting fees to surgeons who used their products. The monitors chosen to oversee each company’s progress were considered close to Christie. Among them was former state attorney general David Samson, whom Christie eventually would appoint to the Port Authority of New York and New Jersey, where he still works as its chairman.
Another Christie-appointed monitor was Republican John D. Ashcroft, who as U.S. attorney general had been Christie’s boss. The fees for Ashcroft’s firm to oversee Zimmer Holdings were not cheap — an estimated $28 million to $52 million for 18 months of work.
The 2007 deal drew criticism from Democratic lawmakers and became national news, leading then-Deputy Attorney General Craig Morford to review these deals at U.S. attorney’s offices nationwide.
Consulting fees to surgeons
Morford and his colleagues were worried about the department’s image after publicity over several U.S. attorneys being fired, as well as controversies about domestic surveillance and the alleged torture of suspected terrorists, said the three former senior agency officials. They said that Christie’s agreements could have been appropriate but that the high fees paid to Ashcroft’s firm lent the appearance of the department enriching its friends. Justice Department leaders also wanted to head off Congress, where there was talk of new legislation to govern such deals.
Morford concluded that it was time to put up “guardrails” for when and how to appoint monitors in these agreements, as he told department officials then, so nobody could accuse the agency of playing political games.
Their concerns about the agreements were underscored by the Seton Hall deal.
“People torquing around folks for their favorite charity?” said one former senior Justice Department official, recalling agency leaders’ reactions. “We’re just not going to do this. It will corrode our institutional credibility. It’s way too easy to have that look really bad, really quick.”
Morford laid out new rules in a 2008 memo that, among other changes, required that monitor appointments be approved by the deputy attorney general, the agency’s second-ranking official, and that monitor candidates be reviewed by committees from U.S. attorney’s offices to prevent prosecutors’ handpicking their favorite candidates.
Seeking to avoid arrangements like the Bristol-Myers Squibb professorship at Christie’s law school, the department issued a ban in May 2008 on requiring companies to make special payments to unrelated outside groups as part of their settlements. Payments were allowed only if the recipients were harmed by the alleged crime or would help address the specific problem caused by the conduct.
Although Justice Department officials did not mention Christie in their public pronouncements, it was clear to many at the time that his practices had been a primary factor in prompting the changes.
“A handful of New Jersey cases threw the project of monitorships into serious jeopardy,” said Brandon Garrett, a law professor at the University of Virginia who has an upcoming book on the practice, called “Too Big to Jail.” “They made useful changes to the guidelines because of the New Jersey cases. It was because of how [Christie] was using them.”
Over two decades, U.S. attorneys have signed about 300 of these agreements, most of them after 2000, Garrett said. New Jersey was among the top five U.S. attorney’s offices nationwide to use them at the time.
For Christie, controversy over his agreements continued beyond the new Justice Department guidelines, particularly as he stepped officially into the political fray with his first run for governor.
In 2009, a congressional subcommittee called Christie to testify about the agreements. He had resigned as U.S. attorney at the end of 2008 and was the Republican nominee for governor. He would go on to oust incumbent Jon S. Corzine, a Democrat.
In exchanges that were universally characterized as “testy,” Christie described Ashcroft as the best-qualified monitor available and said the fees were negotiated with the company. Democrats on the panel pressed Christie about the high fees paid and accused him of cronyism. Republicans said he deserved a medal and accused Democrats of grasping for ways to embarrass a rising GOP star.
Christie later described the hearing as a “political circus.”
For more than two hours, Christie jousted with Democrats, demonstrating the in-your-face style that has become a hallmark of his persona. He accused the lawmakers of ignorance about legal negotiations. At one point, he accused one lawmaker of insulting Italian Americans after the member said Christie made the companies “an offer they can’t refuse.”
Then, declaring that he was finished and had a train to catch, Christie abruptly stood up and walked out.
Alice Crites and Jennifer Jenkins contributed to this report.