Senator and gubernatorial candidate Jon S. Corzine lent the president of New Jersey's largest state workers union $470,000 when the two were romantically involved three years ago, then forgave the debt last year.
Corzine defended the transaction, first described in reports Thursday in the Newark Star-Ledger and the New York Times.
Corzine turned the 10-year mortgage into a gift to Carla Katz last December, according to court documents. The move came a week after he kicked off his campaign for governor and several months after the two stopped dating.
Katz, 46, is president of Local 1034 of the Communications Workers of America. The union local represents 9,000 state workers.
Corzine's involvement with Katz is significant because the two could find themselves on opposite sides of the bargaining table if he wins the November election. Corzine is a Democrat who was elected to the Senate in 2000, and he announced in December that he would run for governor.
The Republican candidate for governor, businessman Doug Forrester, said Corzine's gift to Katz "suggests an all-too-familiar pattern in New Jersey of public officials entangling themselves in relationships that are not private matters but in direct conflict with the public interest."
Speaking after a news conference Thursday on an unrelated matter, Corzine said the loan would not hamper his administration's ability to negotiate with the union.
"I don't think there's a conflict," said Corzine, 58. "The relationship has ended."
The mortgage was found among public documents and land records filed with Hunterdon County. Katz was living in a more than 200-year-old home at the time of the loan and used the money to buy out her ex-husband.
Corzine, a former chief executive of Goldman Sachs, is estimated to have personal wealth of as much as $261 million. He split from his wife of 33 years in 2002.
In separate interviews with the two newspapers, Katz and Corzine both said they were confident the matter would not compromise their constituents in negotiations.
Corzine, who met Katz in 1999 during his Senate campaign, declined to discuss terms of the loan or details of his relationship with her. The Democrat said he forgave the loan after his romance with Katz ended in July 2004 because she did not have the means to repay it.
He declined to say whether he had given Katz or any of her relatives any other financial help.
"I'm a public official, but I also have a private life," Corzine said.
Katz did not disagree with Corzine's account of the mortgage but declined to discuss the matter with the newspapers.