Asked to clarify his intention to challenge McGreevey, Schundler told Malzberg, "It's official." For now, however, it's important to concentrate on re-electing President Bush and local New Jersey Republicans in 2004, the rising conservative star added.

The race would be a rematch for Schundler, who lost his first gubernatorial bid to the scandal-scarred Democrat in 2001.

Schundler's announcement comes amidst growing speculation that Democrats may dump McGreevey and run Sen. John Corzine instead.

"If a consensus emerges among the Democrats to dump McGreevey, Corzine just might do it," a longtime Democratic operative told the New York Post on Saturday.

A Democrat close to Corzine echoed the sentiment to the Philadelphia Inquirer, saying that the one-term senator will make the move "if the circumstances are right."

Publicly, however, Corzine is insisting that he has no interest in running, saying on Saturday, "I am not a candidate for governor in 2005 and will be supporting Gov. McGreevey's re-election."

The behind-the-scenes jockeying comes as controversy swirls around two McGreevey fund-raisers who have been implicated in pay-for-play scams.

New Jersey real estate developer Charles Kushner faced stunning federal charges earlier this week that he hired prostitutes to blackmail cooperating witnesses in an investigation into his own fund-raising practices, the Post said.

Another McGreevey crony, David D'Amiano, has been charged with extorting $40,000 in cash and contributions for the governor's 2001 campaign.

While McGreevey himself has not been charged, his voice popped up on an FBI surveillance tape, where he used a previously agreed-upon code word that suggested he had knowledge of the D'Amiano fund-raising scam.

Despite the governor's mounting troubles, however, Schundler said the Corzine replacement scenario seemed unlikely. Unless, that is, McGreevey himself is actually indicted.

"The theorizing about whether or not Corzine is going to come into the race, or some substitute Democrat - I don't think McGreevey is going to step aside of his own accord," he told Malzberg. "But you could certainly have something happen because of an indictment."

In the meantime, Schundler said, New Jersey residents are getting fed up.

"For years now our state has had a reputation for corruption, and in recent years it's gotten worse and worse," he complained. "It just makes people cringe."

To get Steve Malzberg's exclusive NewsMax.com column e-mailed directly to you, go to www.newsmax.com/malzberg.

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