Origially appeared in the Star-Ledger on Friday, August 29, 2003

BY JEFF WHELAN

An FBI agent hand-delivered a subpoena to the Democratic State Committee in Trenton this week as federal authorities stepped up the investigation of a former campaign fund-raising official for Gov. James E. McGreevey.

It was the second time federal authorities issued a subpoena to the state party this year. The first came in June as part of an ongoing probe into the private billboard business of two former top McGreevey aides.

The subpoena issued Tuesday sought documents relating to the activities and fund-raising efforts of Roger Rajesh Chugh, who served as Asian outreach coordinator for McGreevey's 2001 gubernatorial campaign. Chugh and the governor first grew close when McGreevey served as mayor of Woodbridge in the 1990s.

Kevin Hagan, who became chief executive officer of the Democratic State Committee earlier this year, said yesterday the party "did receive a subpoena and is working cooperatively with the authorities." Hagan said the subpoena sought fund-raising and personnel records related to Chugh, but he declined to describe the request in detail.

"We're confident in our rigorous review process and the high standard we set when it comes to the compliance of all of our fund-raisers and donors," Hagan said.

One federal official who requested anonymity said that for weeks the U.S. Attorney's Office and FBI have been investigating allegations that Chugh pressured and threatened Asian-Indian business owners to contribute to McGreevey's campaign accounts.

Chugh has denied the allegations and said they were trumped up by long-time political enemies. The governor has welcomed the investigation, saying he is confident that his campaign had the "strictest vetting process" for fund-raising.

The allegations against Chugh were first reported in the Record of Hackensack earlier this month. New Jersey Attorney General Peter Harvey is reviewing the allegations to determine if a state investigation also is warranted.

Chugh is not the first person to attract the interest of law enforcement officials through his fund-raising activities for the governor. Charles Kushner, a multimillionaire real estate magnate and McGreevey's top source of campaign cash, also faces federal and state inquiries on that front.

Federal prosecutors are reviewing allegations that Kushner siphoned company funds for personal and political use, at times making campaign contributions in others' names without their knowledge. Kushner, his family, employees and companies have contributed $433,550 to McGreevey over the years and $773,000 more to the Democratic State Committee.

Federal law enforcement sources say that investigation continues and that they have interviewed Kushner's former employees and reviewed his accounting records. The state attorney general in February also launched an inquiry into whether Kushner violated state law by making contributions to state and local candidates while controlling a small Livingston bank. Majority owners of banks are prohibited by state law from making contributions to state political candidates and political committees.

Kushner has denied the allegations.

McGreevey had appointed Kushner to the Port Authority of New York and New Jersey, but just as he was poised to become chairman, the wealthy developer stepped down amid the controversy.

In a separate investigation, federal authorities in June issued a subpoena to the Democratic State Committee seeking documents related to a $100,000 contract awarded to a South Jersey recruiting firm that screened job applicants for the McGreevey administration.

The firm was hired by McGreevey's former chief of staff at the urging of a South Jersey businessman who had agreed to advertise on a billboard being sold by that aide and his business partner, the governor's former counsel. The ad commitments increase the sale value by one-third.