Aides: Cipel Wanted $50M From McGreevey

The man who claims Gov. James E. McGreevey (search) sexually harassed him was pushing for a cash settlement of up to $50 million before the governor decided to announce that he was gay and had an extramarital affair, sources told The Associated Press.

Golan Cipel's (search) demands also included a last-minute push to have McGreevey's administration approve development plans for a private medical college in the state, two senior members of the administration said Saturday. Both sources spoke on condition of anonymity.

McGreevey's lawyer refused to negotiate, one of the sources said, and rejected repeated offers to pay cash to avoid a lawsuit that would detail the governor's relationship with Cipel, a former campaign aide whose appointment as a homeland security adviser with little experience provoked a major political controversy for the governor.

Cipel's lawyer first contacted McGreevey on July 23, asking for $50 million, one of the administration sources said. More offers were made, and the price dropped. Each time McGreevey's lawyer refused to agree and did not discuss the issue further, the source said.

Eventually that figure dropped to $5 million, both sources said, and the offers to avoid a sexual harassment lawsuit continued Thursday afternoon just as McGreevey made up his mind to declare his homosexuality and admit to an extramarital affair with a man.

Two sources close to McGreevey said Thursday that Cipel was the unnamed man the governor acknowledged having an affair with in his resignation speech that day.

The FBI (search) is investigating whether a former employee tried to blackmail the governor, according to law enforcement sources.

Investigators were notified after Cipel's lawyer asked that McGreevey intervene with a plan by Touro College (search) to build a medical school in New Jersey.

"Touro was a last-ditch effort when the money dropped," one of the administration sources said.

Representatives of the small Jewish school in Manhattan met with the state health commissioner in late 2002, but did not move forward with plans for a medical school, that source said.

Several calls by The Associated Press to the college Saturday were not returned.

The school's board members include Charles Kushner (search), a real estate developer who gave millions to Jewish organizations and politicians, including McGreevey and former U.S. Sen. Robert Torricelli (search), D-N.J.

Torricelli represented Touro College in its attempt to develop a new medical school in the state, said Sean Jackson, a vice president of Lambertville-based Rosemont Associates, a business venture involving Torricelli. Jackson said Cipel was not involved with the project.

"Neither Sen. Torricelli nor myself have ever spoken or met with Mr. Cipel. We find this whole matter quite bewildering," Jackson said.

Kushner was the sponsor for the work visa that allowed Cipel to come to the United States and gave him a $30,000-a-year job in public relations with one of his companies.

Cipel met McGreevey during a trip to Israel and then worked on his 2001 campaign. He became McGreevey's hand-picked homeland security adviser with a $110,000 annual salary but was unable to get federal security clearances because he was not a U.S. citizen.

McGreevey eventually moved Cipel out of that job but kept him on the payroll as an adviser. Cipel quietly left state government for a public relations job in August 2002.

Cipel's lawyer, Alan Lowy (search), did not return repeated phone messages left Saturday seeking comment.

On Friday, he disputed claims his client had threatened a lawsuit unless he received money. He said McGreevey's representatives offered Cipel money not to file a lawsuit.

"It was only at the insistence of the governor's representatives that I agreed to meet with them before filing a lawsuit," Lowy said. He added that "only time will tell" if Cipel pursues legal action.

McGreevey has made no public statements since his nationally televised admission on Thursday. The governor was unavailable for interviews Saturday, spokeswoman Kathy Ellis said.

He plans to leave office on Nov. 15, a delay that would allow state Senate President Richard J. Codey, a fellow Democrat, to be acting governor until McGreevey's term ends January 2006. Republican lawmakers have demanded that McGreevey resign now, which would make a special election necessary.