As he prepares for a re-election attempt, Gov. Robert L. Ehrlich Jr. unveiled the most significant staff changes of his administration yesterday, announcing the resignation of his longtime chief of staff and the promotion of the state budget secretary as a replacement.
Steven L. Kreseski, who was chief of staff when Ehrlich was in Congress and continued after the 2002 election, will leave the executive office in July to take a Washington lobbying position.
Replacing Kreseski in the critical position will be James C. "Chip" DiPaula Jr., secretary of the state Department of Budget and Management. DiPaula managed the governor's previous campaign and has earned the respect of lawmakers of both parties with his handling of state finances.
Kreseski described his move as voluntary, but it has been the source of State House speculation for more than a year. Sources familiar with the administration have long talked about disagreements between Kreseski and first lady Kendel Ehrlich.
Ehrlich supporters who believed that the administration was not addressing their concerns would often blame Kreseski because of his senior position as a gatekeeper for the governor and turn to Kendel Ehrlich for assistance, sources said.
Ed McDonald, a former Ehrlich deputy chief of staff who now works for a North Carolina congressman, acknowledged that it was not always harmonious at the upper levels of state government.
"When you have strong-willed people, you are going to sometimes have disagreements," he said. But it never got to the point of animosity. They always respected and admired each other's abilities."
An even-tempered manager known for working long hours and his devotion to the governor, Kreseski said he has wanted for some time to return to lobbying, his career before joining Ehrlich's congressional staff in 1995. "He understands that this is something I've wanted to do," Kreseski said of the govenor.
A release from the governor's office said Kreseski had "accepted a position in Washington," and would continue as an informal adviser. But in an interview with The Sun, Kreseski said he had "multiple offers" and was deciding which to take.
His successor, DiPaula, has helped Ehrlich fulfill a campaign pledge of balancing the state budget for three years without raising sales or income taxes.
"Chip is a very smart guy. Even when he was at DBM, he had a broad portfolio," said Kevin Igoe, a Republican strategist. "As chief of staff, he can be more effective."
Cecilia Januszkiewicz, the top budget deputy, will be DiPaula's replacement.
DiPaula's move could complicate the structure of the governor's expected re-election campaign, however. It was unclear yesterday whether DiPaula would repeat his role as campaign manager, and whether taking a leave of absence to handle political matters would be more difficult in his new role.
Ehrlich's inner circle and management team have been largely stable since his election, but there have been several departures. In addition to McDonald's departure, former state police Superintendent Edward T. Norris resigned after federal prosecutors charged him with improper use of a supplemental police account from his time as Baltimore police commissioner. Health and Mental Hygiene Secretary Nelson T. Sabatini retired last year, a move that had been expected.
Kreseski said the timing was right for him to leave, before the campaign starts in earnest. "We're at that time before the wind shifts," he said.
Sun staff writer Andrew A. Green contributed to this article.