McGreevey Donor Accused of Hiring Prostitutes

NEWARK, N.J. – Gov. James E. McGreevey's (search) top donor has been accused of hiring prostitutes as part of a scheme to scuttle a federal prosecution.

Real estate developer Charles Kushner (search) engaged a call girl to have sex with a witness, had someone videotape them, and then sent the man's wife a copy of the tape, U.S. Attorney Christopher J. Christie said Tuesday.

Kushner was trying to discourage the witness, a former employee, from cooperating further in a criminal investigation of Kushner for possible tax fraud and illegal campaign contributions, Christie said.

Christie said Kushner hired two prostitutes in December for $25,000 and had also targeted a second witness, also a former employee, but that witness declined the prostitute's advances.

"There is nothing, nothing more sacrosanct than the integrity of the grand jury system," Christie said.

Kushner, 50, was charged of conspiracy, obstructing a federal investigation and promoting prostitution. He posted $5 million bail and was ordered to wear an electronic monitoring bracelet.

"We are saddened to hear of the allegations," McGreevey spokeswoman Kathy Ellis said. "It would be inappropriate, however, to comment further on matters unrelated to this office."

Kushner did not speak in court and had no comment outside the courthouse.

"Charles Kushner is one of the most respected business leaders in the community and widely known as a very generous philanthropist," his lawyer, Benjamin Brafman, said in a statement.

"The charges filed today are entirely baseless. Mr. Kushner is confident that once the facts are fully disclosed in a courtroom he will be completely exonerated."

Last month, Kushner was fined $508,900 by the Federal Election Commission (search) for improperly contributing money to political candidates in the names of his companies.

Since his first gubernatorial campaign in 1997, McGreevey has received at least $369,050 from Kushner, family members and employees of Kushner's firm. The money accounts for nearly 5 percent of the $7.9 million in donations McGreevey has raised in the last decade. Kushner has also solicited donations from friends and business associates.

In February 2003, Kushner withdrew as McGreevey's nominee to head the Port Authority of New York and New Jersey (search). At the time, Kushner was the target of lawsuits contending he improperly used business funds for personal and political purposes.

Kushner denied any wrongdoing and McGreevey refused to back away from the appointment despite months of questions about the nominee's background and campaign donations.

Christie said Tuesday's indictment is not related at all to McGreevey.

"There is absolutely nothing in this criminal complaint which has anything to do with the governor of New Jersey," Christie said.

Last week a federal indictment charged another McGreevey fund-raiser with extortion, alleging he demanded money to help a farmer get a favorable sale price for his land in a farmland preservation program.

Although McGreevey himself was not mentioned by name, the governor has said he believes he is the "State Official 1" referred to repeatedly in the indictment.