By Mary Jacoby
Wall Street Journal
November 9, 2007
http://online.wsj.com/article/SB119457397805187472.html?mod=googlenews_wsj
The expected federal indictment of Rudy Giuliani's close friend and ex-business partner Bernard Kerik highlights a potential weak spot for the Republican presidential front-runner: his judgment in picking associates.
Federal prosecutors will hold a news conference today to announce the charges, the Associated Press reported. A federal grand jury had been weighing evidence of tax evasion, corruption and conspiracy concerning allegations that Mr. Kerik, a former New York police commissioner, may have received favors from a contractor who prosecutors believe may have had ties to organized crime.
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| Bernard Kerik |
In 2004, President Bush, at Mr. Giuliani's urging, nominated Mr. Kerik to head the Department of Homeland Security. At the time, Mr. Kerik was a name partner in the private security-consulting company Mr. Giuliani set up after leaving office as mayor of New York City. Mr. Kerik soon withdrew from consideration for the post, saying he hadn't paid taxes on a nanny for his children. Media reports of other past improper conduct soon followed.
Mr. Giuliani has said that because a grand jury is considering the case, it would be inappropriate for him to comment. On a personal level, he has stood by Mr. Kerik, reiterating his respect for his friend. But he says it was a mistake to recommend him for a cabinet position. On the stump in Iowa yesterday, he urged voters to look at the balance of his decisions as mayor, which reduced crime, and conclude that with the same record as president he would leave the country "in pretty good shape."
Mr. Kerik isn't the only Giuliani intimate facing questions about unethical or illegal actions. The common thread in these relationships is Mr. Giuliani's unswerving loyalty to people who have earned his trust. "Clearly there's a bond that he has with some people, as most of us do," said Fran Reiter, a former deputy mayor to Mr. Giuliani who now supports Hillary Clinton for president.
Many of the people in Mr. Giuliani's White House campaign and his business are longtime friends who worked with him in his mayoral administration. Some could be expected to be the initial brain trust a President Giuliani would draw upon if elected to the White House. Others might serve as an informal "kitchen cabinet" of friends to offer advice and discuss ideas.
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| Rudy Giuliani |
Msgr. Alan Placa, a childhood friend of Mr. Giuliani who is now a consultant to Giuliani Partners LLC, the candidate's consulting firm, went on administrative leave from the Roman Catholic Diocese of Rockville Centre, N.Y., in 2003 after allegations surfaced that he had conspired to protect priests accused of improper sexual contact with boys.
Msgr. Placa has acknowledged he is the person described as "Priest F" in a 2003 Suffolk Country, N.Y., grand jury report. The grand jury alleged that "Priest F" tried to grope teenage boys three decades ago and, in the 1990s, used hardball legal tactics to keep allegations of sexual misconduct against other priests out of public view.
No charges have been filed against Msgr. Placa, and Mr. Giuliani has said he stands by his friend. "I know him really well, and I have confidence in him. And the fact is, he hasn't even been formally accused of anything," Mr. Giuliani said in an interview with a Massachusetts television station last month.
A phone call to Msgr. Placa at the New York offices of Giuliani Partners was referred to the firm's spokeswoman, Sunny Mindel, who didn't have a comment.
Another close friend of Mr. Giuliani, Ken Caruso, a partner in the candidate's law firm, Bracewell & Giuliani LLP, is accused in a lawsuit pending in a New York state court of professional misconduct toward a client.
J. Virgil Waggoner, a wealthy Texan who lost $10 million in the 1990s investing with a now-defunct offshore bank that a Senate investigative report identified as fraudulent, described Mr. Caruso in the suit as being in league with the people who defrauded him. Mr. Waggoner accused Mr. Caruso of helping the people who defrauded him escape liability, even as he charged Mr. Waggoner for legal advice that went against his interests. Also named in the suit is the Bracewell & Giuliani law firm, where Mr. Caruso is a partner in the New York office headed by Mr. Giuliani.
Mr. Caruso has denied the allegations. The case is now before a state judge. Fred Warder, a lawyer for Mr. Caruso, called his accuser "a disappointed investor who's looking to cover his losses by scapegoating his attorney."
Mr. Caruso worked with Mr. Giuliani in the Justice Department in Washington in the 1980s and helped on his campaigns for mayor. Mr. Giuliani appointed him to two New York City commissions.
In his memoir, Mr. Giuliani said Mr. Caruso is the one who persuaded him to give up his 2000 Senate bid against Hillary Clinton to focus on beating prostate cancer.
As New York mayor in the 1990s, Mr. Giuliani weathered other scandals involving people in his political orbit.
Charles Hughes, a major union supporter of Mr. Giuliani, went to prison after pleading guilty in 2000 to stealing $2 million from union members.
Russell Harding, the son of a lobbyist and close political adviser to Mr. Giuliani, went to prison in 2005 for embezzling $400,000 from the New York City Housing Development Corp., where he was president. Mr. Giuliani had appointed him to the post.
Write to Mary Jacoby at mary.jacoby@wsj.com
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