New Jersey Govenor Jon Corzine is coming under attack by Republicans for one of his investments in a hedge fund connected to an Atlantic City casino.
His critics contend the investment creates a conflict of interest and violates laws intended to keep gambling interests from controlling state politics.
The hedge fund in which Corzine is invested, TPG-Axon, is tied to the private equity firm Texas Pacific Group that owns Harrah’s Entertainment. Harrah’s has a casino in New Jersey’s Atlantic City. Corzine’s critics say this violates state laws which bar the governor and senior state officials from business relationships with casino operators, the Star Ledger reports.
The response from Corzine’s camp is that the hedge fund and PE funds are managed independently so that there is no conflict of interest or legal violation. But the governor’s political enemies have every intention to use this as ammunition against the governor in the upcoming election fight.
Former state Republican Chairman Tom Wilson, a Corzine critic, told the Star Ledger that the governor had run afoul of the law. “You cannot be in business with a casino licence holder and that’s exactly what’s happened here. To Jon Corzine, the rules are for other people to live by. But just because you’re rich doesn’t mean you get a pass on the rules,” he said.
So is Corzine is trying to get around the rule on a technicality? Certainly, if the law is seen as creating a strict wall of separation between politicians and casino interests–and TPG is a casino interest by virtue of its ownership of Harrah’s–then Corzine may have crossed the line. But Corzine isn’t profiting from the casino, since the hedge fund in which he’s invested doesn’t own that stake. We wouldn’t be surprised, however, if voters fail to see this distinction.