Another shoe has dropped in the New Jersey gubernatorial race. Assistant U.S. Attorney Michele Brown -- who took a $46,000 loan in 2007 from her then-boss Chris Christie, who is now the Republican nominee for Governor -- has resigned from her job in the U.S. Attorney's office, effective immediately.

"I am extraordinarily proud of all the work we have done and all the good we have accomplished on behalf of the people of this state," Brown wrote in her resignation letter. "I also know how important it is that we continue to pursue our mission, and I do not want to become a distraction from the critically important work we do."

Christie has gotten in trouble this past week over the loan, which he did not disclose in his ethics disclosure forms, and for which he did not report income from it on his taxes (though it was duly filed with a county clerk's office as a mortgage). Democrats have attacked the loan, and have also called on Brown to recuse herself from handling Freedom Of Information Act requests involving Christie's tenure at the office.

Christie has said the loan did not present any ethical problems, and was made between friends. Earlier today, he refused to end the loan, which is still being paid back in regular installments. "If she decides she wants to refinance the loan, that's always her choice," said Christie. "As long as she continues to pay the loan on a regular basis to me, that's the deal we made. It's up to (Michele)."

Late Update: Lis Smith, a campaign spokesperson for Democratic Gov. Jon Corzine, sends us this statement:

"Michele Brown's resignation today does nothing to put to rest questions about Christie's conduct both in and outside of the U.S. Attorney's office. Whether it was illegally laying the groundwork for his gubernatorial campaign from the U.S. Attorney's office with the help of Karl Rove, maintaining a secret financial relationship with the number two at the U.S. Attorney's office during his campaign, or rewarding political cronies with millions of dollars in no-bid contracts, Christie still must answer to serious legal and ethical questions. He can start by demanding the immediate release of public documents from his tenure as U.S. Attorney as requested by the Corzine campaign."

Late Late Update: Christie has released this statement:

"Michele Brown is a career prosecutor who has worked at the U.S. Attorney's office for 18 years, serving both Democratic and Republican presidents. Michele's long and distinguished record of public service is impressive, and during that time she's shown herself to be a fair and respected federal prosecutor among judges, adversaries and her peers. Her efforts have been instrumental to all the success the U.S. Attorney's office has had and her work ethic, determination and outstanding legal background will be missed by all those she has worked with over the years. I know Michele will continue to be a success at whatever she chooses for her next challenge."

Late Late Update: The Christie campaign is now trying to turn the narrative around on this story, with Christie's running mate Kim Guadagno releasing this statement blaming Corzine for smearing a good public servant:

"It is despicable that Jon Corzine has stooped so low to try to win re-election that he's aimed the negative attacks of his hired guns on a dedicated public servant who made it her life's mission to serve the people of New Jersey as a corruption-fighter. As candidates willingly running for office, we expect this kind of mudslinging, but we don't expect it to be aimed at someone who has made a career serving both Democrats and Republicans in the best interest of the public good. Jon Corzine should be ashamed that he has smeared a respected federal prosecutor's name and forced her to end an acclaimed career in the sole interest of scoring petty political points."