THE RUNNER STUMBLES

By JOHN MOODY/NEWARK

The friends and enemies of Newark mayor Sharpe James can agree on one thing about him: he knows how to toss a mean birthday party. The annual shindigs in honor of Hizzoner are renowned for the open bar, catered buffet and Vegas-caliber pizazz. On one occasion, the glad-handing Democratic politician glided dramatically into the darkened room at the wheel of a vintage sports car. Another time he motored across a bed of ice on a growling snowmobile. At $200 a seat, or $500 during re-election years, the admission price was considered cheap because it also bought a few private words with the most powerful man in New Jersey's largest city.

The mayor indulged in a 59th birthday tribute earlier this year, but attendance was so low that some tables had to be removed. Even the guest of honor was subdued. "He looked like he was going through the motions, that's all," said one of the partygoers. "It reminded me more of a wake."

After nine brilliant years in office, during which he won plaudits as cheerleader-in-chief of this rusted industrial city on the Passaic River, James could be headed for a crash landing. The former high school track star, politically surefooted for 20 years, is trying to outrun an intensifying federal probe into his fund-raising tactics and his free-spending life-style. U.S. Attorney Faith Hochberg has peppered the mayor, his city hall subordinates and supporters with more than 100 subpoenas.

The investigation focuses on how the mayor and the Sharpe James Civic Association spent an estimated $3 million from nearly a decade of fund-raising activities, and on a series of bank loans the mayor received. If the admission fees for James' birthday parties and other events had been spent for political campaigning, James would have been legally bound to report them to the state election authorities. If, as James claims, they went to charitable causes, the mayor has another kind of explaining to do. Since 1986, when he was first elected mayor, James has bought a $160,000 yacht and a $300,000 beach house. He also bought and sold parcels of Newark real estate while putting two children through college.

James denies any wrongdoing, claiming he has merely enjoyed the fruits of wise financial investments. He insists that if he were a white politician, he would not be under investigation. This week he must respond to a 27-count complaint issued by the New Jersey Election Law Enforcement Commission. The panel charges that James failed to report on disbursements from his political war chest, and it has recommended fines of $44,000. "What's going on here is like a feudal system between lords and vassals," says Essex County Executive James Treffinger. "It's Jefferson's worst nightmare of what can happen in a democracy.''

When James ousted 16-year incumbent Kenneth Gibson in 1986, the new mayor radiated hope for a city still scarred by the 1967 race riot that killed 26 people and left the city a wasteland of empty, brick-strewn lots. His natural charisma bridged social strata. One morning he suavely persuaded a company's executives to remain in Newark, then spied a homeless man on the street. "He bought the guy lunch, gave him a pep talk and told him to clean up and report for work at the sanitation department," recalls a subordinate.

Since taking office, the mayor has broken ground for the $165 million New Jersey Performing Arts Center, which is scheduled to open in 1997. He has got a supermarket chain to agree to open a store in the crime-ridden central ward and has promoted the construction of affordable housing, including the widely admired low-rise Society Hill development.

But Newark is still in desperate shape. Breweries, chemical companies and small industries that once produced everything from zippers to pillows have fled. Car theft is so common that police no longer respond the same day to reports of missing vehicles.

Against that reality, questions about his wealth have cost James the support that won him unopposed re-election in 1990 and a third-term landslide last year. Contributors to his civic association clearly thought their dollars would buy influence. Says one veteran partygoer who now opposes the mayor: "I figured it would be used to support Sharpe and other candidates that he wanted to see elected. And I figured that in return for contributing, the doors of city hall would be open to me when I needed help."

James, who declined to be interviewed, has said the proceeds were used for charitable activities such as distributing Christmas baskets and turkeys in poor neighborhoods. But bank records obtained by the state election commission show that since 1988, checks drawn on the account of the Sharpe James Civic Association were used to funnel hundreds of thousands of dollars to the Committee to Re-elect Sharpe James.

The once garrulous James now keeps a low profile. He seldom appears at his office, which he fears is bugged. Earlier this year, he turned up at a dedication ceremony only after a police officer had inspected the site and found no journalists in attendance. When he does show up for work, James, like anyone who hopes to see him, must pass through a guarded basement-level entrance. The main doors of the 90-year-old Beaux Arts-style city hall are kept padlocked and chained. ^1