New Jersey Gov. Jon Corzine may be wishing he steered clear of an ex-girlfriend that continues to be in legal trouble.

Carla Katz is under federal investigation for her management of the Communication Workers of America Local 1034, the largest state-worker union, The Star-Ledger reports today. The criminal inquiry is being conducted by the office of U.S. Attorney Christopher Christie, who the paper says is thought by some to be a leading GOP contender to challenge Corzine in next year's gubernatorial election. A Christie spokesman would neither confirm not deny whether a subpoena was issued or if an investigation is under way.

The New York Post says investigators from the Newark US Attorney's Strike Force unit - which investigates union corruption and organized crime - showed up at CWA headquarters in Washington, wanting the financial and management records of Katz.

Federal agents served a subpoena on the national headquarters of the CWA in Washington on Tuesday, three people familiar with the subpoena told the Ledger. Sources said authorities are focusing on an internal CWA probe that recently accused the Katz of misappropriating union money.

Katz and her attorney Paul Fishman said Wednesday they were not aware of any federal probe.

"I hadn't heard that, but it wouldn't surprise me given all the reprehensible things the national union has done," Fishman told the Ledger.
The CWA's leaders last week voted unanimously to oust Katz from her post and take over her local New Jersey operations, based in West Trenton. In federal court in Trenton Wednesday, a judge denied Katz's request to be restored to her position. U.S. District Judge Freda L. Wolfson said there was nothing to indicate the national CWA's takeover of Local 1034 violated the union's constitution.

But Katz is fighting back, calling her ouster a "travesty that ... tramples the democratic rights" of union members.

"This is a fight worth fighting," she said, denying the charges. "For the national union to walk in, lock the doors and kick out the leadership is absolutely wrong."

Kattz split with top CWA leadership last year amid controversy stemming from her former romance with Corzine. In May, Katz sued the union and some of its leaders, claiming they retaliated against her for opposing a state-worker contract negotiated last year.

CWA spokesman Robert Master said the judge's decision yesterday "affirms that the CWA national executive board acted in accordance with the union's constitution and federal law."

"An extensive internal review revealed probable cause to believe that the Local was engaged in ongoing financial malpractice, the misappropriation of union funds, a failure to comply with state and federal law, as well as the CWA Constitution, and the suppression of dissent," Master said in a statement.

The CWA says Katz is accused of:

-Misappropriating union funds to support her own election campaign for District One Vice President, recruiting people to campaign for her and using local dues money to pay for their travel, lodging and other expenses.

-Dispersing Local funds without oversight, including $700,000 in political campaign contributions to candidates in areas the Local group had few members

-Suspended an Executive Board member for voicing his concerns about Local policies and expenditures, and threatening a dissident member's employment, among other retaliatory conduct in violation of federal laws and the CWA Constitution.

-Failure to maintain legally-required time records to establish what she has been doing on behalf of the Local's members.

This is just the latest Katz headache for Corzine. The former U.S. senator has turned over some e-mails and other communication involving Katz and her role in a state-worker contract as a result of a lawsuit brought on by Republican state Chairman Tom Wilson. He also came under fire for giving his ex millions of dollars in gifts - including paying her mortgage - just before they broke up.