Christie Court Pick Kwon Says Mother Wasn’t Evading Taxes

A Chris Christie nominee to the New Jersey (STONJ1) Supreme Court became the first in modern times to be rejected by state lawmakers after a Democrat-led confirmation hearing the Republican governor called a “partisan circus.”

Phillip Kwon’s nomination to one of two court vacancies was rebuffed in a 7-6 vote, largely along party lines, after Democrats questioned a $160,000 settlement of U.S. government allegations that family members sought to avoid financial reporting requirements tied to their business.

Democrats, who control the Legislature, have vowed to fight harder against the governor, who they say has bullied them to get his way. Midway through his first term, the two sides are at odds over tax-cut plans. A court on March 8 overruled Christie’s abolition of a housing agency, and 27 groups filed a legal appeal yesterday of his policy to waive environmental regulations in some cases.

“To see what Phil went through today is frankly not only a disappointment for me personally but also a disappointment for the state, the process and the judicial system,” Christie said following the vote. “They didn’t act like officeholders or statesmen. They acted like politicians, and that’s what the people hate.”

Christie told reporters he didn’t have a backup for Kwon, who would have been the court’s first Asian-American justice. The governor said he didn’t anticipate changing his criteria for judicial candidates.

Former Republican

Committee members accused Kwon, a registered independent who was formerly a Republican in New York, of being part of Christie’s plan to stack the court. If Kwon and Republican Bruce Harris, the governor’s other nominee, were confirmed, the balance would be three Republicans, two Democrats and two independents, Christie has said.

Kwon’s rejection was the first time a nominee for the high court was turned down by the Senate Judiciary Committee since the modern Constitution of 1947, according to Winnie Comfort, a spokeswoman for the New Jersey courts.

“The power that’s vested with the governor is not unbridled,” Committee Chairman Nicholas Scutari, a Democrat from Linden, said in an interview after the vote. “There were a lot of questions with finances and unfortunately things just didn’t add up.”

Christie said Democrats used yesterday’s hearing to appeal to public employee unions and solidify their base after angering government workers last year when they backed Christie on a pension overhaul.

‘Push a Bit’

“Christie has made the broadest use of gubernatorial powers of any governor in recent times,” David Redlawsk, director of the Eagleton Center for Public Interest Polling at Rutgers University (26542MF), said in an e-mail before the vote. “From time to time it is likely that he’ll push a bit further than the courts allow or than Democrats will tolerate.”

The judiciary panel, which has eight Democrats and five Republicans, didn’t take up Christie’s second nominee, Harris. If confirmed, the 61-year-old mayor of Chatham would be the first openly gay justice.

Most of the hearing centered on the Justice Department settlement with Kwon’s mother and wife, who own a liquor store in Mount Vernon, New York.

U.S. prosecutors filed complaints related to two bank accounts in June 2011 and seized $290,236, asserting the business illegally “structured” 222 cash deposits to avoid breaching a $10,000 threshold that triggers currency transaction filing requirements.

The business, KCP Wines & Liquor Corp., settled with the U.S. Attorney’s Office in Brooklyn, New York, forfeiting $159,630 without admitting wrongdoing.

‘Red Flags’

In the hearing, Kwon said he advised his mother that structuring the deposits might raise “red flags” with the banks involved. He said his subsequent involvement was confined to helping her obtain a lawyer.

“My mother was not evading taxes,” Kwon said. “She made a mistake.”

Democrats on the committee said Kwon should have advised his mother of the reporting requirements and told her to make larger deposits. Christie has defended his choice of Kwon, saying in January that the lawsuit didn’t involve him “in the least.”

The governor has criticized the state’s highest court for “legislating from the bench.” He’s cited examples such as the Abbott v. Burke school-funding cases and Mount Laurel affordable-housing rulings.

Changes on Bench

Christie, a former U.S. attorney, was criticized by Democrats after he denied reappointment to John Wallace, the court’s only black justice, in 2010. That sparked a standoff that lasted a year and delayed hearings on Anne Murray Patterson, Christie’s Republican nominee. Christie and Sweeney later agreed to let Patterson replace Justice Roberto Rivera Soto, who retired in September.

Kwon would have filled one of the vacancies created by the departure of Wallace and Justice Virginia Long, who stepped down March 1 after reaching the mandatory retirement age of 70.

The seven-member Judicial Advisory Panel, which includes former Justice Peter Verniero, unanimously endorsed Kwon and Harris, according to a letter from the group released by the governor’s office. Christie also circulated a letter from a group of former federal prosecutors endorsing Kwon.

To contact the reporters on this story: Terrence Dopp in Trenton at tdopp@bloomberg.net; Elise Young in Trenton at eyoung30@bloomberg.net

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net

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