A two-man state ethics panel headed by former Red Bank Mayor and Associate Supreme Court Justice Daniel O’Hern has ruled that Gov. Jon Corzine’s relationship with ex-girlfriend and labor leader Carla Katz should not have barred him from participating in contract negotiations with the one of the state’s largest public unions earlier this year, the Star-Ledger reports.

In its 37-page report, though, the panel warns that relationships such as Corzine’s and Katz’s “can easily lead to the appearance of conflicting interests” when the principals become involved in matters having to do with the governor’s official duties, the Ledger reports.

O’Hern, a Little Silver resident, and former New Jersey Attorney General John J. Farmer, Jr. comprise the Governor’s Ethics Advisory Panel, established under a 2003 executive order that laid out a gubernatorial code of conduct. Their inquiry was prompted by complaints from Bogota Mayor Steve Lonergan, and by a request from Corzine himself, after reports that Corzine’s financial relationship with Katz may have outlasted their romance.

From the Ledger:

In the future, anyone with such a relationship and an interest in public issues involving the governor should establish a “point of contact” with the governor’s office right from the start, the report said. The panel… suggested the governor’s chief counsel or ethics liaison officer be that point of contact.

In a letter to Kenneth Zimmerman, Corzine’s chief counsel, O’Hern and Farmer write:

“Although we are not loath to discuss our role, we regard our end product as similar to a legal opinion. When it is filed, the opinion must speak for itself. The Panel will respectfully decline to elaborate further on the Inquiry.”

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