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Christie forced to discuss brother's old SEC case

As New Jersey Republican gubernatorial candidate Christopher J. Christie rolled out his ethics plan yesterday, two Democratic congressmen pushed back with a bill aimed at embarrassing the former U.S. attorney.

As New Jersey Republican gubernatorial candidate Christopher J. Christie rolled out his ethics plan yesterday, two Democratic congressmen pushed back with a bill aimed at embarrassing the former U.S. attorney.

Christie, the perceived front-runner in the Republican primary field, also was forced to answer questions about a stock fraud scandal that involved his brother after his hometown newspaper published a story on the now-resolved case.

The Securities and Exchange Commission in April 2005 accused Christie's brother, Todd, of making a series of improper trades of America Online Inc. and International Business Machines Corp. stock between 1999 and 2003. In October 2008, Todd Christie settled with the SEC, admitting no wrongdoing but agreeing to stop improper trading practices, according to a copy of the settlement.

The company Todd Christie headed, Spear, Leeds & Kellogg Specialists L.L.C., settled with the SEC and agreed to pay a $16.4 million civil fine, according to a March 2004 SEC news release.

Yesterday, the Mendham Observer-Tribune published a story noting that Christie, as U.S. attorney, he gave a lucrative no-bid contract to David Kelly in September 2007. Kelly was the U.S. attorney who investigated the stock fraud case that included Todd Christie.

Kelly, former U.S. attorney for the Southern District of New York, was out of the office yesterday and did not return a message left with his secretary.

Christie said yesterday that he had never had a conversation with Kelly about his brother's SEC problems. He said he gave Kelly the monitoring contract because "he was a great prosecutor who ran one of the biggest offices in the country and I needed a tough guy."

That monitoring contract and a few others were the focus of a bill announced by New Jersey Democratic Reps. Frank Pallone and William Pascrell to regulate deferred prosecution agreements.

Federal prosecutors hire law firms to monitor people or organizations charged with wrongdoing but who agree to change in lieu of a costly trial.

While U.S. attorney, Christie hired his old boss, former Attorney General John Ashcroft, to monitor a company that manufactured knee and hip implants. The company was charged with giving kickbacks to doctors for recommending the devices to patients. He gave his friend Herbert Stern, a former federal judge, a contract to monitor the scandal-ridden University of Medicine and Dentistry of New Jersey.

And he gave a monitor contract to Kelly, the prosecutor in the case that involved Todd Christie.

The contracts are valued in the millions of dollars but the full tab is unknown because none of the parties is obligated to disclose the fees.

The Pallone bill would have the attorney general issue written guidelines for future deferred prosecution agreements, have federal judges and not prosecutors select the monitors, have a standardized fee schedule for the monitors, and require public reporting of the monitors' fees and activities.

Christie dismissed the legislation, saying, "This is all just made-up political stuff by people who want to play gubernatorial politics."

This is the second week Democrats have been attacking Christie, and the attacks come as Democratic Gov. Corzine is stuck in a rough patch. He has sagging performance ratings from voters and has introduced a bare-bones state budget.

The point of the attacks is to raise questions about Christie's fitness to become governor and his reputation as a high-profile prosecutor. As U.S. attorney, Christie secured convictions or guilty pleas from 130 elected and appointed officials.

Other attacks have included Democratic challenges of Christie to give more details on his fiscal plans for the state and to return campaign contributions from Stern, one of the monitors Christie hired.

Christie, meanwhile, held a conference call with reporters at noon yesterday to discuss his ethics platform. Playing off the opening days of the corruption trial of former State Sen. Joseph Coniglio (D., Bergen), Christie promised to support legislation that would force lawmakers to disclose whether they had a financial interest in laws they pass.

Coniglio is charged with steering state money to Hackensack Hospital in exchange for a job.