New Jersey Gov. James McGreevey had stayed a step ahead of the rumors for years. In down-and-dirty New Jersey politics, Republican opponents had tried to hint at his double life, sometimes none too subtly. One Republican opponent in a local election sent out a mass mailing with photographs of McGreevey's car getting late-night parking tickets in a particularly seedy area near New York City's Times Square.

McGreevey was nervous about exposure. When his opponent in the 2001 governor's race, Bret Schundler, hired "oppo men" who tried to get into McGreevey's sealed divorce papers (McGreevey married for a second time and has a child by each wife), McGreevey countered in classic New Jersey fashion: he sent an emissary to tell Schundler's operatives that he, too, knew some embarrassing secrets about his opponent. In a "gentleman's agreement," both sides backed off.

But the suspicions never went away. Shortly after he was elected governor, McGreevey fell and badly broke his leg in Cape May, N.J. He claimed that he had fallen off the boardwalk on a late-night walk with his wife. But his wife had been nowhere nearby; it turned out that McGreevey had dismissed his security detail. The word around the statehouse was that he had gone for a walk with his aide, Golan Cipel, whose good looks, high salary ($110,000 a year) and underemployment had long been muttered about by reporters and state employees.

To some observers, McGreevey seemed more relieved than anguished when he held a press conference last week to announce that he was a "gay American," and that he was resigning as governor as of Nov. 15. He confessed to a "consensual affair with another man"--emphasizing the word "consensual"--and said he was stepping down to spare the governor's office from "false allegations and threats of disclosure." McGreevey's lawyers let it be known that Cipel had threatened to sue the governor for sexual harassment--and claimed that Cipel had demanded $5 million to make the lawsuit go away. Not so, said Cipel's lawyer; his client had been the "victim of repeated sexual advances" from the governor. The idea for the hush money, Cipel's lawyer claimed, came from McGreevey.

It was a first in American politics: a sitting governor coming out of the closet.

The sordid story was made-for-cable: how could McGreevey's pretty blond wife, Dina, stand there smiling beside her man? Some gay activists praised McGreevey for coming out, but their applause was muted by a widely shared impression that damage control, more than personal integrity, was at stake. McGreevey's story is a human tragedy; he was always the sort of boy whom adults smiled on (his high-school teachers predicted that he would become governor) and his peers envied (they called him "Jimmy McGroovy"). Still, the drama may have revealed more about the chronically ill culture of New Jersey politics than it did about questions of sexual identity in the 21st century.

New Jersey's history of corruption has been rivaled by no other state, with the possible exceptions of Illinois and Louisiana. McGreevey embraced New Jersey's tradition of shameless patronage. Elected in November 2001, shortly after 9/11, he made Cipel (who was referred to by one member of McGreevey's security detail as "the governor's little friend") his adviser for homeland security. This despite the fact that Cipel, an Israeli citizen, had no security clearance and thus could not attend FBI meetings on terrorism.

A former altar boy and son of a Marine drill sergeant, McGreevey joined a long line of New Jersey politicians who promised to clean up politics in Trenton, the state capital, and ended up practicing what they once preached against. McGreevey's fall from grace was almost immediate. His first chief of staff and chief counsel were forced out amid vague allegations that they had misused their offices. His state police director was pushed aside after charges that he interfered with his own background check. McGreevey's biggest campaign contributor, Charles Kushner, a superrich real-estate developer, became the target of a state fund-raising probe. Another big McGreevey donor, trash hauler David D'Amiano, was charged on July 6 with shaking down a local landowner, Mark Halper, for $40,000 in cash and contributions. (Lawyers for Kushner, D'Amiano and McGreevey all deny wrongdoing.)

In the case of Golan Cipel, the U.S. attorney is treating McGreevey as a victim--at least for now. McGreevey apparently met Cipel in 2000 on a visit to Israel. The trip is almost a required stop for rising New Jersey politicians; Cipel was a PR man for one of the host mayors. Some kind of friendship blossomed, because Cipel was soon in the United States working on McGreevey's political campaigns. When McGreevey was elected governor in 2001, Cipel bought a $190,000 town house near the capital. He explained to the seller that he had to be close to the governor 24 hours a day. The woman selling the house was startled when the new governor himself arrived to look around the premises.

After McGreevey made Cipel his homeland-security adviser, Republican state legislators and statehouse reporters began looking a little closer at Cipel's qualifications, which consisted of a stint in the Israeli Navy and a job writing press releases for the Israeli Consulate in New York. Given the timing and circumstances, the choice of Cipel was preposterous. The outrage eventually forced McGreevey to let Cipel go. Cipel found some PR jobs, one with a New Jersey politician who had been best man at both of McGreevey's weddings, but Cipel apparently had trouble showing up for work on time and was laid off. Always carefully groomed, Cipel has expensive tastes; he lives in an apartment on New York's Upper West Side and at one time owned a Mercedes SUV.

The end of the affair remains murky. Law-enforcement sources say they are looking into the possibility that McGreevey dumped Cipel for another lover. Some of McGreevey's backers figured Cipel for a hustler, trying to make a quick buck. But others wondered if Cipel had been put up to it by McGreevey's enemies.

On Wednesday afternoon last week, McGreevey pulled together his closest aides in the library at Drumthwacket, the governor's mansion, and said, "Guys, this is a deeper thing; this is more than just an affair. I'm gay--I really think this is what it's about." An adviser who was in the room recalled to NEWSWEEK, "You could watch a burden lift off this human being. He had never said those words to anyone before." McGreevey told his aides, "When I was in high school, there were feelings that I was different."

McGreevey's advisers were agonized and sorely divided as they debated the governor's best move last week. Some advisers urged McGreevey not to resign, to fight it out against Cipel, to tough it out like President Bill Clinton did. Homosexuality, they argued, is no longer a sin in American politics. McGreevey was tempted, say knowledgeable sources. But in the end he couldn't stand the thought of a media circus. "I just can't do it to Dina," he said, referring to his 37-year-old wife. Dina, seeming composed, joined the group. A McGreevey backer who was in the room had the impression that she had only recently learned of his secret life. "It's not like their marriage was a sham," said the source. "There's love there." This friend said that McGreevey's speech the next day was "beautiful, so powerful... I thought to myself, This is Shakespearean." It is certainly New Jerseyan.