Originally appeared in the Trenton Times on 04/18/01
By PETER ASELTINE and JIM GOODMAN
Staff Writers

TRENTON -- Acting Gov. Donald T. DiFrancesco adamantly denied reports yesterday he may withdraw from the governor's race in the wake of a damaging newspaper article alleging he broke legal and ethical rules as township attorney for Scotch Plains.

DiFrancesco said he "absolutely" will continue his campaign, even as well-placed Republican sources disclosed that top advisers to DiFrancesco met yesterday to discuss options to respond to the front-page New York Times report, including DiFrancesco withdrawing from the governor's race.

The acting governor said reports that he behaved unethically as the attorney for his hometown are false and politically motivated.

"People recognize this for what it is, a political attack during a campaign season," DiFrancesco said. "I believe the Democrats are trying to make a big deal about it. It's designed to get me to back off, to leave, to really hurt my chances of running for (governor)."

Former U.S. Rep. Bob Franks, who narrowly lost the U.S. Senate race last fall to Democrat Jon Corzine, would be "willing" to replace DiFrancesco in the GOP primary if DiFrancesco were to withdraw, according to Republican sources.

At present, Franks is considered a likely candidate for the U.S. Senate race in 2002, in which Democratic U.S. Sen. Robert Torricelli is seen as vulnerable because of a federal investigation into the finances of his 1996 campaign.

For Franks to take DiFrancesco's place, the substitution would have to occur by 4 p.m. today, assuming the primary date remains June 5. That date is in question because, with Republicans in court challenging the state's new legislative map, the Assembly plans to vote Monday to postpone the primary until later in June, officials said.

When DiFrancesco filed for the primary last week, he designated a three-person "committee on vacancies" with power to replace him up until 48 days before the primary if he withdraws or dies, state officials said.

The potential deadline lent urgency to the meeting called yesterday morning at DiFrancesco's campaign headquarters in Lawrence, a Republican source said.

The meeting did not include DiFrancesco but did include his campaign manager, Charlie Smith; his chief of staff, Jeff Michaels; and his director of communication, Tom Wilson, the source said.

Those people also spoke by telephone to DiFrancesco's designee to become Republican state chairman, Sen. Joseph Kyrillos of Red Bank.

More than one person reported that DiFrancesco was at least weighing whether he should abandon his bid for governor, the source said.

Another prominent Republican familiar with the meeting said there is a "50-50 chance" that DiFrancesco would withdraw, "but I don't know right now what he is going to do and I don't know if he does.

"I feel certain that Franks will do nothing unless Don pulls out," he said. "But if you ask the question, `Is Donny being hurt by all these stories?' the answer is that he isn't being helped."

Kyrillos acknowledged there was a campaign meeting about the New York Times article but he would not discuss it or the conversations he had with other DiFrancesco advisers. He said the bottom line is DiFrancesco is in the race to stay.

"I spoke to the governor throughout the day and he is extremely focused on making the case for why he should continue to be governor for a full four-year term," Kyrillos said. "He is running. He is running hard."

Party leaders remain convinced that DiFrancesco can beat his primary opponent, conservative Jersey City Mayor Bret Schundler. But some Republicans fear DiFrancesco has been so badly hurt by newspaper reports alleging questionable financial deals and ethical lapses that he could lose badly against Democrat Jim McGreevey in the fall and potentially drag down Republican legislators trying to retain control of the Senate and Assembly.

According to yesterday's The New York Times report, Republican members of the township council in Scotch Plains were poised to fire DiFrancesco after 16 years as township attorney in 1998 based on charges he lobbied township officials to give his family members a zoning change they wanted, while failing to disclose his own financial stake in the real estate project.

Those charges concerned an ill-fated land purchase by his brother, Paul, and his cousin, Ernest DiFrancesco, which was made public earlier this year.

DiFrancesco was sued in 1992 by a law client whom he convinced to invest in the land. DiFrancesco, then Senate president, ultimately settled with the investor, using $225,000 paid by developer K. Hovnanian Companies as a down payment on the land.

In a report prepared by two special counsels hired by the township, a Democrat and a Republican, DiFrancesco also was accused of providing legal counsel to the township in matters involving Hovnanian after receiving that money.

After the township foreclosed on the property over $85,000 in unpaid property taxes, DiFrancesco filed an affidavit opposing the foreclosure on behalf of his relatives, arguing against his client, the township.

Later, as his relatives attempted to have the foreclosure reversed, DiFrancesco allegedly influenced township officials to drop plans for the township to build youth soccer fields on the land.

The special counsels contended all those instances involved clear violations of ethical rules governing lawyers. Republicans on the township council threatened to remove DiFrancesco over the allegations at the end of 1998, but Democrats took control in an upset in November 1998 and appointed their own lawyer, making the threat to DiFrancesco moot, officials reported.

DiFrancesco yesterday denied any ethical lapses. He contends he disclosed his financial interest in the deal, didn't rule on the matter involving Hovnanian that was cited and advised the township mayor of options about the soccer fields without taking a position.

"I recused myself in that area years before that, so it's absolutely not true," he said. He said the Democratic lawyer behind the 1998 report "intimidated" the Republican attorney to co-sign it.

One former township council member, William McClintock, yesterday disputed the newspaper report, saying council members were satisfied that DiFrancesco took appropriate steps to avoid a conflict of interest. McClintock accused Democrats of selectively releasing materials to make DiFrancesco look bad.

"What you have here is a mean-spirited, partisan attack," McClintock said.

Republican consultant Steve Salmore said whatever the origin of the report, it clearly is taking a real toll on the DiFrancesco campaign.

"The very fact that there are rumors circulating that there's active consideration of him dropping out means that this is serious business," Salmore said. "I would not be surprised if he does drop out at this point."

Rutgers University political scientist Ross Baker said pressure must be building from other Republican lawmakers for DiFrancesco to drop out of the race.

"If this isn't the nail in the coffin, it should be," Baker said. "I would think that any Republican leader who seriously wishes to avoid a complete bloodbath come November had better start looking for another candidate, somebody without these serious taints.

"I think that Republicans in the Senate and the Assembly have to be trembling in their boots over this because I think a tidal wave could sweep the party out of power and perhaps keep it out of power for years to come."

The Associated Press contributed to this report.

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