Gold9472
05-13-2007, 05:07 PM
In Private Sector, Giuliani Parlayed Fame Into Wealth
Candidate's Firm Has Taken On Controversial Executives, Clients
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/12/AR2007051201270_pf.html
By John Solomon and Matthew Mosk
Washington Post Staff Writers
Sunday, May 13, 2007; A01
On Dec. 7, 2001, nearly three months after the terrorist attack that had made him a national hero and a little over three weeks before he would leave office, New York Mayor Rudolph W. Giuliani took the first official step toward making himself rich.
The letter he dispatched to the city Conflicts of Interest Board that day asked permission to begin forming a consulting firm with three members of his outgoing administration. The company, Giuliani said, would provide "management consulting service to governments and business" and would seek out partners for a "wide-range of possible business, management and financial services" projects.
Over the next five years, Giuliani Partners earned more than $100 million, according to a knowledgeable source, who spoke on the condition of anonymity because the firm's financial information is private. And that success helped transform the Republican considered the front-runner for his party's 2008 presidential nomination from a moderately well-off public servant into a globe-trotting consultant whose net worth is estimated to be in the tens of millions of dollars.
In crafting its image, the firm took care to burnish its most valuable asset: the worldwide reputation Giuliani had earned for his composure and leadership in the days after the terrorist attack on the World Trade Center. "No client is ever approved or worked on without a full discussion with Rudy," said the firm's senior managing partner, Michael D. Hess, former corporation counsel for the city of New York.
Not surprisingly, a firm that markets Giuliani and is run by Giuliani has taken on the characteristics of the politician, who even by New York standards was known for his self-confidence and sometimes defiant insistence on doing things his way.
Famously loyal, Giuliani chose as his partners longtime associates, including a former police commissioner later convicted of corruption, a former FBI executive who admitted taking artifacts from Ground Zero and a former Roman Catholic priest accused of covering up sexual abuse in the church.
Giuliani, grounded in the intricately connected world of New York politics, has been more than adept at making the system work for his clients. They have included a pharmaceutical company that, with Giuliani's help, resolved a lengthy Drug Enforcement Administration investigation with only a fine; a confessed drug smuggler who hired Giuliani to ensure his security company could do business with the federal government; and the horse racing industry, eager to recover public confidence after a betting scandal.
Clients of Giuliani Partners are required to sign confidentiality agreements, so they do not comment about the work they receive or how much they are paying for it. Though now running for president, Giuliani refuses to identify his clients, disclose his compensation or reveal any details about Giuliani Partners. He also declined to be interviewed about the firm.
Because of this secrecy -- a request to visit his wood-paneled offices overlooking Times Square was turned down -- a complete picture of the firm and its business is difficult to obtain. This report is based on a review of corporate, government and court records, along with scores of interviews with clients and government officials who have interacted with Giuliani Partners.
Hess, the one official authorized to speak for the firm, said Giuliani Partners does not want its clients to exploit Giuliani's name and does not engage in lobbying. He said the company carefully chooses whom it hires and represents.
"We're cautious in the right sense of that term, in terms of who we work for. We always want to make sure it is a company that is doing the right thing, that we're proud to represent," he said.
For many clients, hiring Giuliani delivered the political equivalent of a Good Housekeeping seal. Start-up companies or clients enmeshed in controversy gained instant credibility as well as the potential to access a vast Rolodex of contacts Giuliani and his partners have amassed over the years.
"His name brings inherent value," said John Mason, chairman of BioOne Solutions, a Florida decontamination company that merged with Giuliani Partners. "If someone has a need in our area, it's unlikely they wouldn't take his call."
Creating the Corporation
Giuliani left office on Dec. 31, 2001, with relatively modest means. His final ethics report to the city listed gross assets of between $1.16 million and $1.83 million in 2001; most of that wealth was two Manhattan apartments and some retirement mutual funds. The lone source of income he listed besides his $195,000 mayoral income was $20,000 to $60,000 a year from renting one of the apartments.
His initial letter to the city's Conflicts of Interest Board asked permission to begin forming the firm in his final days as mayor with three aides he planned to take with him -- the lawyer Hess, chief counsel Dennison Young Jr. and chief of staff Anthony V. Carbonetti. Two others -- Police Commissioner Bernard B. Kerik and Fire Commissioner Thomas Von Essen -- were not mentioned but later joined the firm as senior vice presidents.
The firm opened for business in January 2002, its core values described on its Web site as "integrity, optimism, courage, preparedness, communication and accountability." From an initial group of about a dozen principals and support staffers, it has since quadrupled in size.
Giuliani, the chairman and chief executive, had little private-sector experience but early on entered into a strategic alliance with the accounting firm Ernst & Young, long a city contractor under his administration. The affiliation brought instant business know-how along with a stable of potential blue-chip clients.
In "Leadership," the best-selling book he wrote in 2002, Giuliani devoted a chapter called "Surround Yourself With Great People" to describe the people he picked to help run the firm. The core of the group comprised close political associates and City Hall advisers -- not seasoned businesspeople. And some had problems in their pasts.
Kerik took the lead building the Giuliani Partners security arm. But even before Giuliani left the mayor's office, city investigators had warned him that Kerik might have ties to organized-crime figures, a warning Giuliani recently testified that he did not recall. Kerik abruptly left the firm in early 2005, after his nomination to be homeland security secretary -- supported by Giuliani -- collapsed. That was a year before he pleaded guilty to a misdemeanor charge that he accepted free work on his apartment from a contracting firm accused of having ties to organized crime.
To replace Kerik, Giuliani turned to a respected former FBI executive, Pasquale J. D'Amuro, who had risen through the ranks as one of the bureau's savviest antiterrorism agents to become its third-ranking official. In 2004, a Justice Department inquiry into the controversial removal of souvenirs from the World Trade Center site disclosed that D'Amuro had asked a subordinate to gather half a dozen items from Ground Zero as mementos just weeks after the attacks, and D'Amuro later acknowledged that he kept one piece of granite that he received in June 2003. The FBI took no action against D'Amuro, and he donated his memento to the New York FBI office before retiring.
In 2003, Giuliani also brought into the firm Alan Placa, an old friend who resigned as vice chancellor of the Diocese of Rockville Centre on Long Island a week after being confronted by Newsday with allegations that former parishioners had been abused. The newspaper published portions of a 2003 Suffolk County grand jury report in which accusers said he used his position to stifle complaints of abuse by clergy. The firm would not make Placa available to comment, but the Long Island newspaper has reported that Placa denied the allegations, was not charged with a crime, and is going through a process within the church to clear his name. Placa has been described by the firm as a "consultant."
Over the years, Giuliani Partners formed several subsidiaries or strategic alliances. They included an investment bank called Giuliani Capital Advisors that counseled companies on bankruptcies and investments in the security marketplace. It was sold for an undisclosed amount as Giuliani was preparing his run for president.
The firm also created several security divisions over the years. The first, Giuliani-Kerik, advised companies on matters as diverse as making buildings more secure and marketing security products. In 2005, after Kerik left, it was renamed Giuliani Security & Safety. Giuliani Partners also created an overseas security arm called Giuliani Security & Safety Asia, which has done business in Japan similar to what the firm's U.S. entities do, and an overseas consulting unit called Giuliani Compliance Japan.
Right from the start, Hess said, Giuliani proved to be as "hands-on" as chief executive as he was as mayor. Giuliani demanded daily briefings at the firm that were "reminiscent of the staff meetings that we had in City Hall," Hess recalled.
End Part I
Candidate's Firm Has Taken On Controversial Executives, Clients
http://www.washingtonpost.com/wp-dyn/content/article/2007/05/12/AR2007051201270_pf.html
By John Solomon and Matthew Mosk
Washington Post Staff Writers
Sunday, May 13, 2007; A01
On Dec. 7, 2001, nearly three months after the terrorist attack that had made him a national hero and a little over three weeks before he would leave office, New York Mayor Rudolph W. Giuliani took the first official step toward making himself rich.
The letter he dispatched to the city Conflicts of Interest Board that day asked permission to begin forming a consulting firm with three members of his outgoing administration. The company, Giuliani said, would provide "management consulting service to governments and business" and would seek out partners for a "wide-range of possible business, management and financial services" projects.
Over the next five years, Giuliani Partners earned more than $100 million, according to a knowledgeable source, who spoke on the condition of anonymity because the firm's financial information is private. And that success helped transform the Republican considered the front-runner for his party's 2008 presidential nomination from a moderately well-off public servant into a globe-trotting consultant whose net worth is estimated to be in the tens of millions of dollars.
In crafting its image, the firm took care to burnish its most valuable asset: the worldwide reputation Giuliani had earned for his composure and leadership in the days after the terrorist attack on the World Trade Center. "No client is ever approved or worked on without a full discussion with Rudy," said the firm's senior managing partner, Michael D. Hess, former corporation counsel for the city of New York.
Not surprisingly, a firm that markets Giuliani and is run by Giuliani has taken on the characteristics of the politician, who even by New York standards was known for his self-confidence and sometimes defiant insistence on doing things his way.
Famously loyal, Giuliani chose as his partners longtime associates, including a former police commissioner later convicted of corruption, a former FBI executive who admitted taking artifacts from Ground Zero and a former Roman Catholic priest accused of covering up sexual abuse in the church.
Giuliani, grounded in the intricately connected world of New York politics, has been more than adept at making the system work for his clients. They have included a pharmaceutical company that, with Giuliani's help, resolved a lengthy Drug Enforcement Administration investigation with only a fine; a confessed drug smuggler who hired Giuliani to ensure his security company could do business with the federal government; and the horse racing industry, eager to recover public confidence after a betting scandal.
Clients of Giuliani Partners are required to sign confidentiality agreements, so they do not comment about the work they receive or how much they are paying for it. Though now running for president, Giuliani refuses to identify his clients, disclose his compensation or reveal any details about Giuliani Partners. He also declined to be interviewed about the firm.
Because of this secrecy -- a request to visit his wood-paneled offices overlooking Times Square was turned down -- a complete picture of the firm and its business is difficult to obtain. This report is based on a review of corporate, government and court records, along with scores of interviews with clients and government officials who have interacted with Giuliani Partners.
Hess, the one official authorized to speak for the firm, said Giuliani Partners does not want its clients to exploit Giuliani's name and does not engage in lobbying. He said the company carefully chooses whom it hires and represents.
"We're cautious in the right sense of that term, in terms of who we work for. We always want to make sure it is a company that is doing the right thing, that we're proud to represent," he said.
For many clients, hiring Giuliani delivered the political equivalent of a Good Housekeeping seal. Start-up companies or clients enmeshed in controversy gained instant credibility as well as the potential to access a vast Rolodex of contacts Giuliani and his partners have amassed over the years.
"His name brings inherent value," said John Mason, chairman of BioOne Solutions, a Florida decontamination company that merged with Giuliani Partners. "If someone has a need in our area, it's unlikely they wouldn't take his call."
Creating the Corporation
Giuliani left office on Dec. 31, 2001, with relatively modest means. His final ethics report to the city listed gross assets of between $1.16 million and $1.83 million in 2001; most of that wealth was two Manhattan apartments and some retirement mutual funds. The lone source of income he listed besides his $195,000 mayoral income was $20,000 to $60,000 a year from renting one of the apartments.
His initial letter to the city's Conflicts of Interest Board asked permission to begin forming the firm in his final days as mayor with three aides he planned to take with him -- the lawyer Hess, chief counsel Dennison Young Jr. and chief of staff Anthony V. Carbonetti. Two others -- Police Commissioner Bernard B. Kerik and Fire Commissioner Thomas Von Essen -- were not mentioned but later joined the firm as senior vice presidents.
The firm opened for business in January 2002, its core values described on its Web site as "integrity, optimism, courage, preparedness, communication and accountability." From an initial group of about a dozen principals and support staffers, it has since quadrupled in size.
Giuliani, the chairman and chief executive, had little private-sector experience but early on entered into a strategic alliance with the accounting firm Ernst & Young, long a city contractor under his administration. The affiliation brought instant business know-how along with a stable of potential blue-chip clients.
In "Leadership," the best-selling book he wrote in 2002, Giuliani devoted a chapter called "Surround Yourself With Great People" to describe the people he picked to help run the firm. The core of the group comprised close political associates and City Hall advisers -- not seasoned businesspeople. And some had problems in their pasts.
Kerik took the lead building the Giuliani Partners security arm. But even before Giuliani left the mayor's office, city investigators had warned him that Kerik might have ties to organized-crime figures, a warning Giuliani recently testified that he did not recall. Kerik abruptly left the firm in early 2005, after his nomination to be homeland security secretary -- supported by Giuliani -- collapsed. That was a year before he pleaded guilty to a misdemeanor charge that he accepted free work on his apartment from a contracting firm accused of having ties to organized crime.
To replace Kerik, Giuliani turned to a respected former FBI executive, Pasquale J. D'Amuro, who had risen through the ranks as one of the bureau's savviest antiterrorism agents to become its third-ranking official. In 2004, a Justice Department inquiry into the controversial removal of souvenirs from the World Trade Center site disclosed that D'Amuro had asked a subordinate to gather half a dozen items from Ground Zero as mementos just weeks after the attacks, and D'Amuro later acknowledged that he kept one piece of granite that he received in June 2003. The FBI took no action against D'Amuro, and he donated his memento to the New York FBI office before retiring.
In 2003, Giuliani also brought into the firm Alan Placa, an old friend who resigned as vice chancellor of the Diocese of Rockville Centre on Long Island a week after being confronted by Newsday with allegations that former parishioners had been abused. The newspaper published portions of a 2003 Suffolk County grand jury report in which accusers said he used his position to stifle complaints of abuse by clergy. The firm would not make Placa available to comment, but the Long Island newspaper has reported that Placa denied the allegations, was not charged with a crime, and is going through a process within the church to clear his name. Placa has been described by the firm as a "consultant."
Over the years, Giuliani Partners formed several subsidiaries or strategic alliances. They included an investment bank called Giuliani Capital Advisors that counseled companies on bankruptcies and investments in the security marketplace. It was sold for an undisclosed amount as Giuliani was preparing his run for president.
The firm also created several security divisions over the years. The first, Giuliani-Kerik, advised companies on matters as diverse as making buildings more secure and marketing security products. In 2005, after Kerik left, it was renamed Giuliani Security & Safety. Giuliani Partners also created an overseas security arm called Giuliani Security & Safety Asia, which has done business in Japan similar to what the firm's U.S. entities do, and an overseas consulting unit called Giuliani Compliance Japan.
Right from the start, Hess said, Giuliani proved to be as "hands-on" as chief executive as he was as mayor. Giuliani demanded daily briefings at the firm that were "reminiscent of the staff meetings that we had in City Hall," Hess recalled.
End Part I