BY DIANE C. WALSH

Last spring, a dozen leading merchants from Woodbridge's thriving Indian community munched on treats from the Ashoka Restaurant at a fund-raiser for Woodbridge Mayor Frank Pelzman's re-election.

Like his predecessor, Gov. James E. McGreevey, Pelzman has sought donations from the growing population of Indian merchants, who have injected new life into the Oak Tree Road shopping district in the Iselin section of the township.

And just as Roger Rajesh Chugh was at McGreevey's side at fund-raisers in the Indian community, so, too, was he at Pelzman's side.

Chugh, who was an assistant commissioner of the State Department at the time, spoke glowingly of McGreevey and praised Pelzman's administration, according to those who attended the April 30 event at the Knights of Columbus Hall in Woodbridge.

But unlike McGreevey, who actively courted Chugh as a fund-raiser, Pelzman said the Punjabi native has no role in his re-election campaign.

Pelzman, who is facing a challenge from Republican Vincent Martino, said Chugh, 49, was not invited to the fund-raiser and his appearance surprised everyone there.

"He never helped me with any fund-raising," Pelzman said. "I never sought out his help nor do I intend to seek it out."

Chugh, who resigned from his $85,000-a-year state job in June, has become the focus of state and federal investigation into his fund-raising for McGreevey and the Democratic State Committee.

Federal agents are investigating allegations that Chugh, a former taxicab driver who ingratiated himself with McGreevey, used fear, coercion and intimidation to extract campaign contributions from Indian entrepreneurs in Woodbridge who had been cited for building code violations or who needed help from town hall.

Chugh, in a brief telephone interview last week, said he "cannot answer any questions."

Peter Pradip Kothari, one of the more successful businessmen along Oak Tree Road in the Iselin section of Woodbridge, which is known as "Little India," said he and many of his fellow business people warned McGreevey about Chugh as early as 1997, when the governor was the mayor of Woodbridge.

Kothari said he and his colleagues warned McGreevey against relying upon him as a liaison to the Indian community.

When Chugh resigned from the state department, he faced $361,000 in tax liens, court judgment and other legal claims that dated back at least 10 years.

Kothari said he and others were bothered by the false promises Chugh made to the Asian-Indian community.

Kothari said McGreevey's relationship with Chugh was a factor in the "painful decision" made two years ago when he left the Democratic Party to become a Republican. Kothari was an unsuccessful Republican candidate for Middlesex County freeholder in 2001.

He stood at a podium Friday at the Mahatma Gandhi Plaza in the heart of Little India as Republican officials and candidates called for an independent prosecutor to investigate campaign contribution allegations.

Assemblywoman Arline Friscia, a lifelong Democrat who became a Republican after losing the 19th District primary in June, joined the chorus of Republican officials calling for an independent prosecutor.

Friscia said the inquiry being conducted by state Attorney General Peter Harvey does not instill confidence because he is a "political appointee."