Photo: AP Photos

Less than 24 hours after New Jersey developer Charles Kushner pleaded guilty to retaliating against a federal witness and filing both false tax returns and false campaign-finance reports, the would-be political kingmaker was in his office on Columbia Turnpike in Florham Park. Shamed, humiliated, and facing at least a year and a half in jail, he was discussing his predicament with defense attorney Ben Brafman, marveling at how fast his life had unraveled. Wasn’t this the same man who had built Kushner Companies into a billion-dollar real-estate empire that controlled office buildings, condominiums, and apartments in half a dozen states? Hadn’t he skillfully crafted a role for himself as a major power broker with unfettered access by contributing millions of dollars to politicians?

It was no accident that when Bill Clinton was president, he made several appearances at Kushner functions in Florham Park. So had former Israeli prime minister Benjamin Netanyahu. And so, especially, had Governor James McGreevey, who, more than any of the others, was a political creature built of his will and cash. Kushner, 50, was also a towering figure in the Jewish community, building schools, helping synagogues, and contributing freely to a broad variety of causes both here and in Israel.

But there he was on that midsummer morning several weeks ago, forced to contemplate how, in what seemed like the blink of an eye, he had destroyed so much of what he had spent years working so hard to build. On June 30, he had to pay a $508,900 fine to the Federal Election Commission, one of the highest penalties ever assessed. Less than a week later, rather than be arrested, he turned himself in to the FBI to face a litany of criminal charges.

Now he has stepped down as chairman of his company. His days as a political force both nationally and in New Jersey are over. Saddest of all, he has shattered his once close-knit family. The days when the Kushner clan—Charles and his three siblings and all their spouses and kids and grandkids—would travel to Miami together for Passover are long gone. He and his older brother, Murray, have not spoken in more than two years as a result of a bitter lawsuit over money Murray believed Charles owed him from deals they had done together—a lawsuit that Charles Kushner’s supporters claim opened the door for the U.S. Attorney’s investigation into his campaign-finance activities.

And, of course, to add to the horror, the federal witnesses he had attempted to retaliate against were his sister and brother-in-law, who were cooperating with that same investigation. Kushner paid a prostitute $10,000 to lure his brother-in-law to a motel room at the Red Bull Inn in Bridgewater to have sex with him. A hidden camera recorded the activity, and Kushner sent the lurid tape to his sister, making sure the tape arrived on the day of a family party.

As he sat in his office less than 24 hours after his guilty plea, the phone rang. The caller couldn’t have been more unexpected—it was Governor Jim McGreevey. Though Kushner had given the governor more than $1.5 million for his two races and was instrumental in his rise to power, the two had barely spoken in months.

There is a strange symmetry to the fall of the two titans. Exactly one week before, McGreevey had also lost nearly everything he had worked his whole life to achieve. In an even more public, more personal, and more heavily scrutinized admission of guilt, McGreevey stood in the statehouse in Trenton, flanked by his oddly smiling wife and his parents, and admitted his own lies, deceptions, and sensational bad judgment. “My truth,” he said, “is that I am a gay American.”

Kushner’s split with McGreevey had occurred almost nine months earlier, when Kushner was competing with Bruce Ratner to buy the New Jersey Nets. During a conference call that included the governor and two officials of the New Jersey Sports and Exposition Authority, Kushner laid out his proposal for the basketball team, and asked for a $25 million subsidy from the state.

According to sources familiar with the call, McGreevey responded in a very un-McGreevey-like way: He said no, a word he rarely spoke to anyone. Thoughtfully, he explained why the state couldn’t spend vast sums of public money to keep the Nets in New Jersey. Perhaps surprised by the governor’s intransigence, Kushner was “angry and bitterly disappointed,” according to someone on the call, and he apparently lost it. He went into a screaming tirade—everyone was stunned. When Kushner hung up, McGreevey calmly said to those around him, “Well, I guess I won’t have to put up with Charles Kushner anymore.”

“The McGreevey administration was without adult supervision,” says one insider. “All the guys who could provide a compass were pushed out.”

But now there were no histrionics. “It was a very warm, personal conversation,” says Brafman, “between two close friends going through some very public problems. They talked about what they’ve each been going through, and they just wanted to support one another.”

In the middle of February, about a month after being sworn in as governor, Jim McGreevey made two appointments that would change the course of his career. He gave a seat on the board of the Port Authority to Charles Kushner, and he named Golan Cipel an adviser on homeland security.

McGreevey, who had been the mayor of Woodbridge, had always been viewed as a pleasant if uptight policy wonk. He worked hard, had very little fun as best as anyone could tell, and had an almost obsessive ambition, nursed since adolescence, to become governor. “He had a propensity for saying yes and being on both sides of the issues,” says one insider. “He would’ve called it being political.”

In an era of Internet fund-raising, instant polling, and a 24-hour news cycle, New Jersey still practices diner politics—deals are still brokered in vinyl-covered booths over coffee served by waitresses who call people “doll.” “The McGreevey administration is really a throwback,” says Jon Shure, who served as Jim Florio’s press secretary and now heads a policy forum called New Jersey Policy Perspective. “Up until the seventies, the way to become governor was by a handful of powerful county leaders deciding to pick you as the candidate. This is what happened in McGreevey’s case. The county chairs in Union, Essex, Middlesex, and Camden got together and said, ‘This is who we’ll back, this is who we’ll rally behind.’ ”

Kushner made essentially the same decision after McGreevey narrowly lost to Christine Todd Whitman in 1997. He decided to solidify and amp up what had been a casual relationship, believing McGreevey would win the next time around.

It was a perfect marriage. The only thing Kushner craved more than wealth was access to power. For his part, McGreevey, like all politicians, needed money. He also needed a way to keep his political team together until the next campaign began in 2001. So he started an organization called Committee for Working Families, which employed his key people and was largely funded by Kushner.

The Kushner family is part of a New Jersey phenomenon known as the Holocaust builders. In the post–World War II wave of survivors who came to America was a small group of men who settled in northern New Jersey and became extraordinarily successful builders and real-estate developers. In addition to the Kushners, there are the Wilfs, the Rosens, and the Zuckerman and Pantirer families. (Zuckerman and Pantirer were saved by Oskar Schindler, and everything they build has a street or a building named for Schindler.)

The families operate like clans, with sons and daughters and sons-in-law and grandkids all working in the business. They are active in communal Jewish life, and outside of the occasional mention in one of the Jewish newspapers, they work very hard to fly under the radar.

Kushner’s high profile was always an irritant to the other families. He has been referred to as the Dapper Don of the Holocaust builders. Not only did he have the silver hair, impeccably tailored suits, and the swagger, but like John Gotti, he brought far more attention to his community than any of the others were comfortable with. “In New Jersey, you contribute money not for access but results,” says Alan Marcus, founder of the Marcus Group, a political-consulting company. “Anybody who doesn’t admit that is lying.”

One insider told me that he was asked, as a favor, to have lunch with Gary Taffet, McGreevey’s campaign manager, before McGreevey was even elected governor. “While we’re at lunch, his cell phone keeps going off, and to show his immaturity, he keeps taking the calls,” the source says. “One of the calls was from Kushner, and he was, in very strong and angry terms, letting Taffet know he wanted the deal to redevelop the waterfront in Perth Amboy. It was a huge deal, worth hundreds of millions of dollars, and it had gone to another developer.

“While I’m sitting there, Taffet calls the mayor of Perth Amboy and puts in a big play for Kushner, talking about how ‘he’s our guy and how important he is to McGreevey.’ The mayor then said something about Kushner losing the bid. Taffet said, ‘Is there anything we can do?’ And guess what? Kushner eventually did get part of that deal.”

New Jersey politics is a tangled web. McGreevey’s current chief of staff, Jamie Fox, used to be Robert Torricelli’s chief of staff. MWW, the public-relations firm that hired Golan Cipel when his career in government was over, was actually started by Torricelli and Jim Florio. The law firm of State Senator Ray Lesniak, McGreevey backer and confidant, was chosen by then-Mayor McGreevey to represent the town of Woodbridge.

“From day one of the McGreevey administration, everything became a fix again,” says Marcus, a voluble political veteran in a white shirt, gold cuff links, and Gucci loafers, who was only 21 years old in 1968 when he was an assistant to Richard Nixon’s campaign manager. “You couldn’t discuss a policy issue with them. They were only interested in who the contributor was and who they had to take care of.”

Though the locus of this story is McGreevey’s sexuality, it is the overlay of corruption and abuse of power that makes it a uniquely New Jersey tale. Though corruption happens elsewhere (witness Connecticut), it is as much a part of New Jersey as Princeton, Atlantic City, and Bruce Springsteen.

Part of the problem is the fragmentation of local politics. New Jersey has more than 600 school districts and 566 municipalities. And each one of them has to hire a lawyer and an accountant and an administrator. This is where the “pay to play” issue takes hold: These jobs are often parceled out to the people who contribute the most to local politicians.

New Jersey is also a newspaper state in an electronic world. There is no network-affiliated television station serving the state, and as a result, voters often elect people they don’t know very well. TV advertising is exorbitantly expensive, because candidates have to buy time on New York or Philadelphia stations, where 70 percent of the people they’re paying to reach aren’t Jersey residents.

The near-prohibitive cost of running for office is a principal reason Senator Jon Corzine has become the white knight of New Jersey politics. Not because of policy initiatives but because he had the financial muscle to spend $65 million of his own money to get elected. But even without the encumbrances that come from having to raise huge sums of money, Corzine is still completely entangled in the web of New Jersey politics. His mentor and political rabbi was disgraced senator Robert Torricelli. He was business partners with Charles Kushner in the failed attempt to buy the Nets. And he is close to McGreevey as well.

The appointment of Golan Cipel went way beyond the normal practice of rewarding a faithful supporter with a sinecure. It was, in its way, McGreevey’s Gary Hart moment. Though he didn’t actually issue a verbal challenge to the media like Hart did—“If you think I’m up to something, follow me. I dare you”—he might as well have. “I think that giving Cipel that job was borderline insane,” says David Twersky, the head of international affairs for the American Jewish Congress, who knows McGreevey well. “Either the governor was just so arrogant about this that he lost all sense of judgment, or he was so torn up inside about his sexuality that he simply couldn’t take it anymore and he purposely put him where everyone would find him.”

They found him quickly. Within days of the Cipel appointment, the Bergen Record ran a story asking who this unknown Israeli named Golan Cipel was and why, given his obvious lack of credentials, he had been named to a homeland-security post. The story even went so far as to describe Cipel as the governor’s traveling companion.

And there it was. It was subtle, but for the first time, a window on the governor’s sexuality had been opened. From there, it didn’t take long before an Associated Press reporter stood up at a press conference in March of last year and bluntly asked the question everybody in Trenton was gossiping about: He asked McGreevey if he was gay. The governor, of course, dismissed the question as ridiculous.

Without the Cipel appointment, McGreevey undoubtedly could have continued his double life. There had been rumors about his sexuality as far back as his ’97 race against Whitman. And they were raised again in 2001 by Torricelli’s people when, for a bruising twelve-day period, the senator decided he wanted to push McGreevey aside and run for governor himself.

Near the end of 2002, McGreevey named Kushner to head the Port Authority. It is one of the most powerful posts in New Jersey, a job that would give him extraordinary control over hundreds of millions of dollars in development contracts—just as the redevelopment of downtown Manhattan was about to begin.

Kushner, however, was never confirmed. Within weeks of McGreevey’s announcement, William Gormley, head of the State Senate’s Judiciary Committee, demanded that Kushner come to Trenton to answer questions about potential conflicts of interest and other issues or else he’d move to block the appointment. Kushner didn’t blink. He had no intention of submitting to any kind of review. He simply resigned.

When the Port Authority appointment blew up, it was a pivotal moment for both Kushner and McGreevey, though it didn’t seem so at the time. It raised Kushner’s profile significantly at a moment when his brother Murray’s lawsuit was already causing people to ask questions about his political contributions. And his very public refusal to submit to any kind of review process undoubtedly raised a flag at the U.S. Attorney’s office.

Kushner had grown increasingly arrogant over time. The more important he became and the more he was able to act with impunity, the more chances he took. Kushner’s descent began when he let his lust for political influence spiral out of control. Specifically, he came up with a clever mechanism to circumvent the limits on campaign contributions.

In the development business, every time someone like Kushner starts a new project, he creates what is essentially a new company with a new name. It’s done for liability reasons. Kushner, for example, controls more than 100 separate partnerships. He began to make political contributions on behalf of each of these entities. But Kushner didn’t make them only in his name: He made them in the names of his partners in each of these deals as well. And he did this without telling them. It enabled Kushner to give much more money and to leverage his contributions. The lion’s share of these went to McGreevey, but he also contributed to Corzine, Torricelli, and Bill Bradley.

Kushner ran into a problem, however, when some of the partners began to find out what he was doing. One of these was Murray, who believed Charles owed him money and sued to get a full accounting of their various partnerships. Though their dispute eventually went to binding arbitration and both the results and all of the filings were sealed—Charles reportedly paid Murray a substantial settlement—the lawsuit shone a light on Kushner’s maneuvering.

Though Murray has a reputation as a quiet, unassuming fellow who, in keeping with the ethos of the Holocaust builders, completely shuns the spotlight, Charles, according to one ally, blames Murray for a great deal of what’s happened to him. According to this source, the dispute was a classic sibling rivalry taken to insane extremes. “Charlie was the fair-haired one, the boy wonder, the stunning success,” he says, “and Murray, egged on by his second wife, was unable to live peacefully with Charlie’s success. Even though he’s become very rich as well.”

Fueled by greed and envy, Murray set out, according to this account, to destroy his younger brother. And his weapon of choice was civil litigation. Those who side with Charles claim that Murray had a mole inside his brother’s company—a man named Robert Yontef, who was the company accountant. They charged during the arbitration that Yontef was stealing documents at night and giving them to Murray’s lawyers. Yontef ended up filing his own suit against Charles when he was fired, claiming age discrimination. Murray’s lawyer declined to comment on any specifics of the case, since everything has been sealed. (Yontef, by the way, was the other man Kushner paid a hooker to seduce. Unlike the brother-in-law, however, Yontef resisted the advances.) All of which leads to the astonishing act of mailing the videotape to his sister, Esther. Though even the spin masters working for Charles admit—how could they not?—that the act was indefensible, they argue that it didn’t happen in a vacuum.

“McGreevey said no, a word he rarely spoke. Kushner became apoplectic. When he hung up, McGreevey said, ‘Well, I guess I won’t have to put up with Charles Kushner anymore.’ ”

Charles and Esther, his younger sister, grew up the closest of siblings. Her husband, Billy, worked for Charles at Kushner Companies. But Billy was, according to one of Charles’s representatives, a somewhat less-than-perfect husband. “For years, Charles worked with Esther and Billy to try to save their marriage. He even went with them to counseling sessions,” says the source. “But finally Billy’s behavior became a problem at work. First he was demoted, and then Charles had to fire him. As a result, Esther, who had been on Charles’s side in his battle with Murray, turned against him.“Sending the tape was obviously an awful, offensive thing to do,” the source says. “But they had pushed him so far that Charles Kushner went over the edge. He simply couldn’t take it anymore.”

For McGreevey, naming Kushner to head the Port Authority meant alienating one of his staunchest backers—Middlesex County political leader John Lynch, a man who’d been with McGreevey since his days as mayor of Woodbridge and was instrumental in his successful run for governor.

Lynch had his own pick for the Port Authority post, but it was more than that. He didn’t like Kushner. Unlike the younger members of McGreevey’s inner circle, who were dazzled by Kushner’s money, Lynch saw the developer as a growing problem. The friction over the appointment and Kushner’s widening influence resulted in Lynch getting pushed out of the governor’s inner circle. “Once Lynch left, the McGreevey administration was without adult supervision,” says Marcus. “There was no sense of history, no sense of right and wrong. The governor needs someone close to him who can shut the door and tell him he’s wrong. McGreevey had no one like that. All the guys who could provide a compass were pushed out. If Lynch had still been around, the whole Cipel thing might’ve gone very differently.”

McGreevey was having an awful summer even before Cipel made his threats. In one two-week period at the beginning of July, Kushner, his top fund-raiser, was arrested. David D’Amiano, another key fund-raiser, was arraigned for extorting campaign contributions from a farmer in exchange for arranging a better price for some land he was selling to the state. In the 47-page indictment, there are repeated references to the involvement in the deal of “State Official 1,” later revealed to be the governor.

The indictment detailing D’Amiano’s plot reads like a bad B movie. State and county officials involved in the scheme would indicate they were onboard by using the code word “Machiavellian.” During a meeting with the farmer, which was taped by investigators, McGreevey just happens to mention the book The Prince, by Machiavelli. In this same two-week period, McGreevey’s Commerce secretary resigned when faced with a variety of accusations involving funneling state money to businesses owned by himself, his family members, and friends. In addition, Gary Taffet, McGreevey’s first chief of staff, and Paul Levinsohn, his chief counsel, are the subject of an ongoing federal investigation related to, among other things, several million dollars they purportedly made selling billboards on government land while they were managing McGreevey’s transition.

Given the storm of corruption that was threatening to engulf McGreevey, it doesn’t take much to put together a scenario in which one of these scandals was about to touch him directly. Rather than go down in flames over the corruption, he chooses, after a lifetime of inner conflict, to admit to the world he’s gay and resign his office in semi-heroic fashion.

The AJC’s Twersky believes there may very well be a missing piece to the story. “Cipel’s case was incredibly weak and didn’t comport with any of the facts as I knew them. Remember, their relationship didn’t start when Cipel got the homeland-security job. That appointment was made in February 2002. McGreevey met him in Israel in March of 2000, long before he was governor. Cipel came here six months later, with Charles Kushner as his sponsor, in September. So there’s a long period of time when they’re just having sex. So where’s the harassment?”

Consequently, Twersky wonders why, if it was only the question of Cipel and the threat of a lawsuit, McGreevey didn’t simply tough it out. “You don’t understand how much this man wanted to be governor,” Twersky says. “For fifteen years, it was all he thought about. So why not just say, ‘Look, I’m gay. I’m sorry I hurt my family, and I’m sorry I lied to you, but we live in a world where I believed if I told you during the campaign, you wouldn’t have elected me. For the rest of my term, I’ll be the best governor possible, and you can decide if I should stay in 2005.’ ”

As far as giving Cipel a job on the state payroll goes, Twersky argues that politicians put relatives and friends and contributors in jobs all the time as payback for their allegiance. “Is it okay when it’s a payback for money but not for sex?” he asks.

One story line making the rounds in Trenton is that Kushner realized he was going down and decided that he wasn’t going alone. It was Kushner, then, who got Golan Cipel to threaten McGreevey with a lawsuit and force the governor’s resignation. There is, this theory goes, no other way to explain such incongruous details as Cipel’s demand that any settlement include a charter for a Touro College medical school. Everyone knew that Kushner was a Touro benefactor and wanted to help fund a medical school he could name after his mother.

“I want to be very clear about this,” says Brafman, carefully enunciating every syllable. “Charles Kushner had absolutely nothing to do with the recent controversy surrounding the governor and Golan Cipel. I was with Charles Kushner when he learned through the media that the governor was going to resign. He was stunned and visibly upset for his friend.”

One McGreevey consultant told me that Cipel’s threat to sue was the “irrational action” of a spurned lover. “When the governor finally ended their relationship, Cipel went off the rails,” he said.

In retrospect, there are questions about the seriousness of Cipel’s intention to ever file a lawsuit—and whether McGreevey’s lawyers should’ve recognized this. How determined to sue could he have been, given that he was represented by Allen Lowy, an entertainment lawyer not even licensed in New Jersey? And as soon as the story broke, Cipel bolted for the shelter of his home in Israel.

Indeed, there was something bizarre about that entire three-week period when the parties were trying to negotiate a settlement. Cipel’s demands changed several times, and at some point during negotiations McGreevey’s representatives contacted the FBI. Why would they do that unless they thought they were being extorted or believed they were being set up—that perhaps the whole thing was a sting? And as if to illustrate how tenuous a grip each side had on what was going on, there was the episode involving a lawyer and supposed friend of Cipel’s, who showed up for the negotiations and sat at the table, without anyone knowing who he was. Each side assumed he was with the other team.

“You know how they have the clowns at the circus riding in those little cars chasing each other?” says Marcus. “That’s what this was like. Going to the FBI was the dumbest decision anyone’s ever made. We have formed a firing squad in a circle, and we’re ready to shoot.”

When Jim McGreevey knew he had to finally tell the truth about his sexuality, the first straight person he told was State Senator Ray Lesniak, one of the architects of his political career and a close friend. He told him on a walk in the garden at Drumthwacket, the governor’s mansion in Princeton, less than 24 hours before the press conference.

“I think I’m gay,” the governor said to Lesniak.

“You think you’re gay?”

“I am gay,” he said, and the two men embraced.

The next morning, Lesniak returned to the mansion, anticipating that the governor was going to publicly announce he was gay, he’d had an affair with Golan Cipel, and he would not seek reelection. But things didn’t quite go that way. “There were five political consultants there that morning,” Lesniak says. “The governor’s regular consultant, his pollster, Hank Sheinkopf from New York City, and two Clinton-Gore people who’d flown in to help with the strategy.”

While there was lots of discussion, ultimately there was no disagreement, and somewhere around 12:30, the governor began to write his statement. “To a person, they all said the governor has to resign,” Lesniak recalls. “If he didn’t, everyone believed he’d probably be impeached by the Democratic Legislature, because they wouldn’t be able to stand the heat. If he fought this, it would’ve completely consumed him and he would’ve died a thousand deaths over it. The governor has been brought down by his sexual conflicts. That’s why he resigned. No other reason.”

McGreevey, according to Lesniak, has been transformed since that afternoon in the garden: “He has been totally liberated by this. He has exorcised his demons.”

Lesniak says McGreevey is ready to move forward with his life. They have talked almost daily since the revelation, with the governor focusing primarily on his early years. “He has talked about how difficult it was growing up in an Irish Catholic family and going to parochial school and being told over and over again what was expected of him and knowing he couldn’t be that way. He’s talked about the pain he went through thinking there was something wrong with him, that the feelings he had no control over made him a bad person. It became the driving force within him to be what he was expected to be, and, of course, he succeeded. But guess what? The feelings never went away.”

The governor, he says, will write a book and do the lecture circuit when he leaves office. “He’ll talk about how his liberation can serve as an example for other people who have been repressing these feelings and what can happen when you hold these feelings back. He’s not exactly going to be a gay activist, but he won’t shy away from what he sees as a real duty and responsibility to talk about his personal experience.”

It is no small irony, given their shared path to power, that the story of their relationship ends with McGreevey having been liberated—and Kushner on his way to prison.