Alan Greenblatt is a GOVERNING correspondent.E-mail: firstname.lastname@example.org
Jon Corzine's political success has been based to a remarkable extent on one attribute: his enormous wealth. Part of it has been his willingness to spend his own money on elections--roughly $100 million so far--but that may not even be the most important part. Another crucial element in Corzine's victories for the U.S. Senate and the New Jersey governorship has been the confidence of voters that a man worth as much as he is--several hundred million--is simply beyond the reach of material temptation. In a state with a history of political corruption that never seems to end--11 public officials were arrested by the FBI on bribery charges in September in one sting alone-- Corzine's riches constitute a form of reassurance.
This is something he understands as well as anybody. "The public at some level believes if you don't need to take money, maybe you'll stay more focused on their business," Corzine said in an interview. "It gives me a sense of freedom that I'm not checking the contribution list when we're trying to make a decision."
When he became governor at the end of 2005, following the departure of fellow-Democrat Jim McGreevey in a sex-and-patronage scandal, significant numbers of people believed he might be not only incorruptible but invincible: able to solve long-standing state problems that none of his predecessors had dared to tackle.
And, in fact, Corzine has shown a consistent inclination to do this, to address not only the state's ethical climate but also its exorbitant property-tax rates and school funding problems, among other dilemmas. Most important, he has broken with his predecessors by ending old habits of borrowing against the state's future needs to prop up current-year budgets. "The governor certainly arrived on the statehouse scene with the right attitude and with an action platform," says William Dressel, head of the New Jersey League of Municipalities. "We've built a monument of problems here, and now we're looking for one man to ride his white horse down State Street saying, 'I've got the Rolaids bill that's going to spell relief.'"
But it is turning out to be a very difficult ride. Although Corzine's party controls the legislature--Democrats reaffirmed their majority status in both chambers during last month's elections--the governor has encountered resistance at nearly every turn. New Jersey's political culture is highly fragmented, dominated by legislators fixated on controlling their own turf, by public employee unions, by party chairmen in the counties and by myriad other interest groups intolerant of big changes in the way business is done. "He's working with the legislature and the bureaucracy that helped create the problems he's trying to solve," says Christian Bollwage, the mayor of Elizabeth. "That paradox alone makes it difficult in looking for a solution."
Corzine inherited a tough hand and a lot of problems, but there's one other factor that has puzzled many of his earlier supporters: his reluctance to insist on his own way. Corzine has spent much of his two years in office waiting rather than acting, promising to release bold plans to untangle perennial problems but arguing that a given issue requires more deliberation. "It takes a while," he says, for "people in an organization to buy into things."
Few would quarrel with the idea of formulating policy carefully and deliberately. But in several cases, Corzine has let the preparation period go on so long that his solutions have become targets and gathered opposition before he even released them. In other cases, he has made the bold announcement but backed down after presenting it, essentially yielding to New Jersey's deeply entrenched coalition for the status quo.
In many ways, Corzine's career offers a case study in the disparities between a governor's two roles--as a manager who formulates workable ideas and policies and as a politician who has to sell those ideas to other players in the political process and the public at large. "He's an honest public servant and took the governor's job with an agenda for making New Jersey a better place," says Ingrid Reed, of Rutgers University's Eagleton Institute of Politics, "and ran into political issues that he hadn't counted on. So far, there has not been any kind of real rigor that says, 'Look, this is what we're up against, and these are the hard choices we have to make.'"
Such criticism may be a little strong. Corzine has made some important changes. He's helped to reform the long-neglected agency that takes care of abused children. He devoted $1 billion to a pension fund that had been ignored for a decade. He negotiated an agreement with the major state workers' union that called on public employees to contribute to their own health care premiums for the first time. And he showed courage during his first year in office when he forced a brief government shutdown in order to ensure passage of a sales-tax increase he deemed necessary to put the state on firmer financial footing.
But even then, he traded away a substantial portion of the revenue increase in order to win passage of the tax. Corzine proved willing to accept half a loaf in the ethics package the legislature passed in response to the latest series of scandals, refusing to issue a provisional veto, as some suggested he should, to reshape it in the way he wanted. He backed off from a threat to call a constitutional convention if the legislature failed to produce "real reform" on the property-tax issue--even though all the legislature produced were temporary rebates and another commission to study it.
For months, Corzine has claimed to be on the verge of announcing innovative policies to address the state's finances, sentencing laws, energy consumption and school funding. But he held off on any such announcements or even broad outlines until after this fall's election- -letting his opponents define the possible effects of his proposals in whatever way they chose. Some of the delay was due to Corzine's near- fatal car accident last April, but he had recovered remarkably well within a couple of months and soon enough faced complaints that it was time to let voters know what he had in store for them. "These are critical issues confronting the state," says Leonard Lance, leader of the Senate Republicans, "and yet the administration has refused to release any of the details of the proposals."
Corzine's intentions on many of these issues are bound to become clearer as the legislature meets this month in a lame-duck session, in which more than one-third of state lawmakers will be on their way out of office and thus will be facing fewer immediate political pressures. New Jersey has a long history of tackling big bills in these sorts of post-election sessions. Next year, the governor will welcome many new faces to the legislative ranks, a source of encouragement that any reform momentum that builds in the lame-duck session may continue.
Close associates say that Corzine's brush with mortality in his car accident has strengthened his resolve to make the right decisions and push the right policies for his adopted home state. And, as the 60- year-old governor seeks to regain the initiative heading into the second half of his term, he faces a problem that may, perversely, turn out to be an advantage. Things are becoming so difficult that big steps will have to be taken.
Corzine has already said that the state will face a $3 billion shortfall as it prepares next year's budget, and he's ordered agency heads to plan for major reductions. One thing he is certain not to suggest is more borrowing: The state is already highly leveraged and devotes nearly 10 percent of its annual budget to debt service. Throw in pension and retiree health costs, and pretty soon you're talking about real money--well more than $100 billion in unfunded liabilities. The state's tax rates on property, income and sales are all among the nation's highest, making further increases unpalatable--especially at a time when job growth has been sluggish and more people are moving out of New Jersey to other states than are moving in, as a well- publicized Rutgers study pointed out in October. The study found that those who had left--a net departure last year of 72,000 residents-- took $680 million in potential sales- and income-tax revenues with them.
For Corzine to fulfill his potential as a reformist governor hoping to overcome the hesitations of an entrenched political culture, a crisis environment offers the best possible opportunity to push through major changes. "The problems are big, and the budget is going to be a Herculean task," says Hal Bozarth, a lobbyist for the state's chemical industry. "This may be the year when we see what the character of Jon Corzine really is, because it's not going to be pretty."
Jon Stevens Corzine had something close to a Midas touch during his long career on Wall Street. A product of central Illinois farm country, he went to work as a bond trader for Goldman Sachs in 1975, quickly rising to positions of real influence. Within a few years of his taking over bond-trading, which had been marginally profitable, he'd made it into the firm's first billion-dollar division. When he became CEO, Goldman Sachs was experiencing its worst quarter in decades, but two years later it was the most profitable privately held company in America. Soon after that, Corzine took the company public, earning vast sums for his partners and himself. Going public was sufficiently controversial within the firm, however, that Corzine was eased out of the top spot in favor of Henry Paulson, who is now the U.S. Treasury secretary. Corzine decided to enter politics and began a new life in the U.S. Senate before running for governor five years into his term.
In Trenton, Corzine has surrounded himself with several Goldman Sachs veterans--people who are, like him, universally praised for being smart, well-intentioned and diligent. Perhaps too diligent. Goldman Sachs was nearly unique on Wall Street in maintaining a partnership structure that discouraged rapid changes of course and fostered decades-long relationships with clients based on an in-house culture of concentration on the longer term. As Lisa Endlich notes in her history of the firm, it was a place where, when it came time for a major decision, "discussion had just begun [and] further study was needed."
It's this quality of prolonged deliberation and study that has proved most frustrating to many of Corzine's allies. Given the state's structural deficits, for example, Corzine has expressed interest in converting the long-term value of the New Jersey Turnpike and Garden State Parkway into ready cash. He began talking about the idea this past February, claiming that he would issue a proposal that was more sophisticated and advantageous than highway leasing plans adopted elsewhere. (Goldman Sachs has been a leading financier in the highway privatization field.)
But as the year dragged on, nothing specific was ever forthcoming, not even a more politically palatable name for the idea than "asset monetization." Opponents, whose ranks grew as the election season approached, didn't have to wait for specifics. They could point out, with likely justification, that any plan would translate into higher tolls. Public opposition to the privatization idea continued to grow and became a central campaign issue this fall.
Corzine might still get his way on this. The state is going to need the money. But the long months of delay--whether out of deference to the election season or the need to continue pondering a complex issue- -are in keeping with his administration's overall means of operating. There always seem to be months of internal deliberation, whether the issue is highways, school funding or crime prevention. Meanwhile, opponents siphon all the air they can from the various trial balloons. "It's a combination of letting the perfect be the enemy of the good," says Dan Pringle, an environmental activist, "and not having a good enough understanding or willingness to use the powers at the disposal of the governor."
In fairness to Corzine, the challenges he faces are enormous and complex. Massive income-tax cuts in the early 1990s propelled Republican Governor Christine Todd Whitman into the national spotlight but have left the state short of money ever since. Subsequent leadership has made matters worse, short-changing both the pension fund and the operating budget, borrowing money to fill the gaps. And straightforward financial mismanagement has been exacerbated by waste and fraud. Several billion dollars were misspent over the past five years by a state agency meant to satisfy a court order on school construction; the agency was abolished this summer.
McGreevey, Corzine's immediate predecessor, presided over an ethically compromised administration even before he startled the state by resigning, admitting that he was "a gay American" and had placed the object of his affection in a sensitive state job. McGreevey's regime had freely practiced "pay-to-play" with state contractors, treating campaign contributions as all but necessary to obtain major state business. That practice has not been fully eliminated from New Jersey government. Companies that received $5.4 billion in state and local contracts last year paid $11.6 million to candidates and fundraising committees, according to recently released disclosures required under a 2005 campaign finance law. The law bans campaign contributions from most state contractors to candidates for governor and other executive offices, as well as to the state parties. But contractors are still able to give to state legislators, legislative leadership PACs and local officials who can exert an indirect influence over contracts.
Since taking office, Corzine has talked often of the need for further measures to abolish conflicts of interest, but the ethics package enacted this fall fell far short of what reformers, and the governor himself, said they wanted. The main piece of legislation was a ban on dual officeholders--state legislators who simultaneously serve as mayors or hold other local posts. But the ban exempted existing legislators, as well as those first elected last month. And it didn't address the nearly 700 elected officials throughout the state who also hold non-elected public-sector positions. Legislators managed to pull off a classic run-around on the ethics question.
On item after item, Corzine has run into resistance not only from legislators but also from the local party bosses who stand behind them. New Jersey still is made up of a multitude of political fiefdoms, and legislators tend to feel more allegiance to the people who put them in office than to the nominal head of their party sitting in the governor's chair. The legislature is a part-time body, and, even when it's in session, the chambers meet only on Mondays and Thursdays, with most legislators driving home each night. This contributes to the inclination of members to remain beholden to local interests while short-changing the needs of the state as a whole.
And for a geographically small state, the number of local interests is staggering. New Jersey is home to 566 municipalities and more than 600 school districts. Many of the state's major problems--including property taxes, school funding and pay-to-play shakedowns--can be traced to this prevailing parochial culture. "State and local politics is often tainted," Corzine says. "When you have lots of local politicians like we do, you're more susceptible. We have to raise the bar."
Even a political opponent such as Lance gives Corzine credit for engaging in more honest budgeting than his predecessors. But the new batch of GOP senators elected in November has been talking about replacing Lance with someone who will take a more aggressive stance against the governor.
Corzine's instincts clearly are decent. He wants to govern as a chief executive without any commitment to the way things traditionally have been done. The question remains, however, how much credit Corzine deserves for trying--versus how much he can actually accomplish while the state faces a serious financial crisis.
Like so many other businessmen who have become politicians, Corzine has found that it's harder to impose ideas within the public sector because there are so many more players to be persuaded than in private industry. Still, Corzine has not consistently challenged legislators, the way neighboring governors Eliot Spitzer of New York and Ed Rendell of Pennsylvania have done, or shown much appetite for butting heads with local bosses and county chairmen. There are only so many fights a governor can pick before he's on a kamikaze mission, but Corzine generally has erred on the side of caution and bowed to the expectation that he would need their help more on some other fight.
During the recent election season, voters clearly considered Democrats to be responsible for the state's most recent corruption scandals. One poll found that 88 percent of registered voters viewed government corruption as a "very serious" or "somewhat serious" problem. Yet the same poll found that a majority of voters were no more likely to vote for Republicans as a result of the arrests of a disproportionate number of Democrats.
Nothing Corzine has done so far has dented the profound political skepticism of the electorate. The hopes that many voters may have harbored about this fabulously wealthy governor who would be free to generate real change have, so far, been unfulfilled. But Corzine is by no means out of time. He can do both the state and his own governorship enormous good if he's able to force such change during the coming budgetary battles. And in all likelihood, he can win a second term if he chooses to seek one in 2009.
Still, Corzine has to do a better job than he's managed thus far of convincing people not only that his diagnosis of the state problems is correct but also that his solutions will work. "People who observe politics closely felt that since he's not beholden to the political leaders, he might have the ability to shake things up in Trenton," says Patrick Murray, a Monmouth University pollster. But among the general public, Murray adds, there was an underlying fear that, in the end, a governor of enormous intelligence and promise might still accomplish little more than less impressive ones. Those fears are, as yet, nowhere near being put to rest.
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