Gov. James E. McGreevey (search) took office as a straight-arrow former prosecutor bent on putting an end to the corruption for which New Jersey was notorious. But lately, one associate after another has been engulfed in scandal, with allegations of prostitutes and payoffs, code words and sweetheart deals.

So far, McGreevey's name has come up in an alleged extortion plot. But he has not been charged, and he has denied any wrongdoing and accused New Jersey's chief federal prosecutor — a Republican mentioned as a possible candidate for governor — of trying to smear him for political reasons.

While the 46-year-old Democrat is not up for re-election until next year, Republicans are relishing his administration's troubles. Democrats are worrying about his political future and thinking about possible replacement candidates. And New Jerseyans are wondering what other allegations are about to come out.

"Usually, New Jerseyans are fairly tolerant," said Cliff Zukin, public policy professor at Rutgers University. "But you get this sort of stuff day after day and it really seeps into the political culture. I don't know if he's hit it yet, but there's a point of no return, where public opinion just gets set and you have an image you can't recover from."

McGreevey took office 2 1/2 years ago, and despite inheriting a $5 billion budget deficit, he steadfastly refused to boost income taxes for most New Jerseyans, instead raising taxes on millionaires, casinos and cigarettes. At the same time, several friends and members of his administration have gotten into trouble:

— His first chief of staff, Gary Taffet (search), is under investigation, along with former McGreevey counsel Paul Levinsohn (search), for securing contracts to put up billboards on public property at the same time they were running McGreevey's campaign. Taffet has also been charged with insider trading in an unrelated case.

— Attorney General Peter Harvey (search) was fined $1,500 in February and agreed to reimburse two boxing promoters $2,200 after obtaining free ringside passes for his wife and two guests in Atlantic City.

— Democratic fund-raiser David D'Amiano — a former high school classmate of McGreevey's — was indicted on July 6, charged with trying to extort $40,000 in campaign donations from a dairy farmer in exchange for help in getting a better price from the county for his land. Prosecutors said an unidentified state official — McGreevey later said it was he — was secretly tape-recorded using the code word "Machiavelli" for the alleged extortion scheme; McGreevey said his reference to the 16th-century Italian author of "The Prince" was a coincidental literary allusion, nothing more.

— McGreevey's commerce secretary, William Watley, quit earlier this month amid reports he funneled money to businesses owned by him and family members.

— The most sensational allegations came last week in the case of real estate developer Charles Kushner, 50, who as McGreevey's biggest campaign contributor has given millions to his campaigns and was once nominated by him for the top job at the Port Authority of New York and New Jersey. Kushner was charged with trying to thwart a federal campaign-finance investigation by luring a grand jury witness — his own brother-in-law — into a compromising position with a prostitute and sending video and photos to the man's wife.

"NJ Gov Pal in Hooker Setup," screamed the headline in the New York Post. The New York Times likened the plot to something out of an Elmore Leonard novel.

U.S. Attorney Christopher Christie emphasized that the charges against Kushner had nothing to do with McGreevey.

On a recent radio talk show, McGreevey declared, "This administration acted ethically, honestly and legally." As for the charges against some of his associates, he said: "In any human organization, there will be individuals that make mistakes."

Still, state GOP Chairman Joseph Kyrillos said McGreevey bears some responsibility for creating an atmosphere conducive to graft: "It's a superheated, money-crazed, anything-goes culture where people walk right up to the line — or cross it."

In a state where Democrats control both houses of the Legislature and outnumber Republicans among registered voters, McGreevey remains a force.

Sen. Jon Corzine, mentioned as a potential replacement on the Democrats' 2005 gubernatorial ticket, said he is not a candidate and that he will support McGreevey's re-election. Political observers said a Corzine candidacy is a longshot — unless the taint of corruption reaches McGreevey himself.

"There's been indications here and there about what we could do and who could be a player, but most people are holding firm," said former Atlantic County Democratic chairman Chuck Chiarello, mayor of Buena Vista Township. "They're behind the governor. That would be a last resort."