Feds launch probe of Carla Katz

Wednesday July 16, 2008 Star Ledger

Federal authorities have opened an investigation of Carla Katz, the ousted leader of New Jersey's largest state worker union and former girlfriend of Gov. Jon Corzine.

The inquiry into her union activities came into public view Tuesday afternoon when federal agents served a subpoena on the national headquarters of the Communications Workers of America in Washington, D.C., according to three people familiar with the subpoena.

Investigators are seeking records connected to Katz's management of Local 1034, the largest state-worker union, said the sources, who declined to be identified because they were not authorized to discuss the probe. Authorities are focusing on an internal CWA probe that recently accused Katz of misappropriating union money, the sources said.

The CWA accusations were first laid out last week by the organization's governing body when it voted unanimously to oust Katz from her post and take over the operations of the New Jersey local she ran.

CWA spokeswoman Candice Johnson declined to comment on the subpoenas.

The criminal inquiry is being conducted by the office of U.S. Attorney Christopher Christie, who has made politcal corruption the focus of his crime fightng efforts for several years. Some observers say Christie is the leading Republican contender to challenge Corzine in next year's gubernatorial election.

Christie spokesman Michael Drewniak said he would not - as a matter of Justice Department policy - confirm or deny whether a subpoena was issued or if an investigation is under way.

Katz and most of Local 1034's ousted executive board have filed a lawsuit against the CWA to stop the takeover of the local chapter and have themselves reinstated. They say her removal was sparked by political opponents inside the CWA.

Paul Fishman, Katz's attorney and a former federal prosecutor, was not immediately available for comment.

Katz has denied the union's charges and said her ouster "is a travesty that...tramples the democratic rights of the members of our union under the deceptive guise of protecting democracy."

Her split with the union was an offshoot of her romance with the millionaire-governor, which ended just before Corzine announced he would seek his current office. Before they broke up, Corzine gave Katz millions in gifts, which, in turn, led to questions of whether the governor and his team could properly run a state government in which thousands of employees are represented by Katz.

Republican state Chairman Tom Wilson sued the governor last year seeking e-mail traffic between Corzine, his staffers and Katz sent during negotiations that yielded a new state-worker contract in 2007.