Giuliani Feels Kerik’s Draft

Razzle Dazzle

Giuliani Feels Kerik's Draft 

By RICHARD STEIER

It was merely a delightful coincidence that the Federal Election Commission officially recognized a committee seeking to draft Rudy Giuliani to run for President on the same morning that the city's daily papers reported that his former Police Commissioner had invoked his Fifth Amendment rights against self-incrimination.

"America knows Rudy Giuliani as a proven leader who has demonstrated success," stated Nicholas Tyszka, the co-founder of Draft Rudy Giuliani for President, Inc.

What America doesn't yet know is just how much trouble Bernie Kerik is in with the law, and how much that may affect the political career of the man who elevated him from campaign bodyguard to Police Commissioner in a dizzying seven-year period. Judging by the new details to emerge last week about Mr. Kerik's dealings with two brothers who are reputed organized-crime associates, and his use of the Fifth Amendment nine separate times when deposed by a New Jersey gambling regulator, the man made dizziest by that rapid ascent may have been Mr. Giuliani.

Bernie's Interstate Commerce

Officials at the New Jersey Division of Gaming Enforcement have alleged that Frank and Peter DiTommaso paid for more than $180,000 of the $200,000 expansion and renovation of a Bronx apartment owned by Mr. Kerik during a period from 1999 into 2000 when he was Correction Commissioner. Their firm, Interstate Industrial Corporation, also hired Mr. Kerik's brother Donald for an $85,000-a-year job and gave a more lucrative position to Lawrence Ray, the best man at Mr. Kerik's 1998 wedding who helped pay nearly $10,000 of its costs.

The quid pro quo for the hirings was supposed to be Mr. Kerik's use of his influence to have the city Trade Waste Commission give favorable consideration to Interstate's application for a license to run a waste transfer station in Staten Island. The Trade Waste Commission at the time was run by Ray Casey, a cousin by marriage of Mr. Giuliani's who today heads the city's Off-Track Betting Corporation.

Interstate had bought the transfer station from a company controlled by members of the Gambino crime family. Mr. Casey last year told the New York Times that he found it "weird" that Mr. Kerik would seek to intervene on behalf of a firm under suspicion of having mob ties, but he denied that the then-Correction Commissioner did anything improper to influence the Commission.

'THE WORLD'S BIGGEST FOOL': The claim by a lawyer for Bernie Kerik (left) that a major renovation of his Riverdale apartment cost only the $17,800 he personally paid prompted a lawyer for the contractor - which is reported to have gotten another $180,000 from a company that Mr. Kerik was helping - to respond that if he believed that, he was 'the world's biggest fool.' The new revelations about his former Police Commissioner could wind up damaging the presidential aspirations of former Mayor Rudy Giuliani (right). Rather, Mr. Casey said, Mr. Kerik sought to persuade him that Larry Ray was "a good, honest person" who would be responsive to any concerns about Interstate that were brought to his attention. In March 2000, around the time that the renovations of Mr. Kerik's apartment were being completed, that "good, honest person" was indicted as a conspirator in a mob-run stock fraud. Mr. Kerik severed ties with Mr. Ray, who apparently had his feelings hurt by the sudden distance between them just 16 months after he stood up for the Correction Commissioner, figuratively and financially, at his wedding.

Mr. Ray became a major source of damaging information to the Daily News, which ran stories following Mr. Kerik's withdrawal from consideration for U.S. Secretary of Homeland Security last December that made it clear that more than Mr. Kerik's stated reason of not paying taxes for a nanny was responsible for his decision.

Kerik Lawyer: He Paid Full Tab

Mr. Kerik was said by his lawyer, Joseph Tacopina, to be in Jordan last week, where he is serving as a consultant to that country's government. Mr. Tacopina took issue with the Division of Gaming Enforcement's claim - submitted as part of an effort to prevent Interstate from being able to do work on casinos in the state - that the DiTommasos had paid for any part of the apartment renovation work.

He said Mr. Kerik had dealt directly with the contractor, Woods Restoration Service, and was unaware of any dealings that firm might have had with Interstate. To Mr. Kerik's knowledge, Mr. Tacopina told reporters, the $17,800 that he paid the contractor was the full tab for the renovation work.

That claim prompted an attorney for Woods Restoration, Kyle B. Watters, to tell the Times that for Mr. Kerik to believe the project could be done that cheaply, "he'd have to be the world's biggest fool." The work entailed converting Mr. Kerik's apartment and an adjoining one in a Riverdale building into a single unit while installing marble baths, a large rotunda entry, and a renovated kitchen and new appliances, according to the Times.

Mr. Kerik in 2002 sold the property, which he had bought for $170,000 in 1999, for $460,000. Even in a robust real-estate market in one of the city's best neighborhoods, that kind of profit seemed to owe more to a costly renovation than a normal rise in property values.

One government official last week contended that if the gaming enforcement division's claim was accurate, it raised serious questions about whether Mr. Kerik was doing something for Interstate that went well beyond pleading its case before the Trade Waste Commission. Based on the practices of the Giuliani administration, this official said, a $10,000 payment to the right lobbyist would have been sufficient to get the DiTommasos a dinner meeting with the Mayor.

'Don't Give Away $180G'

"Guys like these," he said, "one hundred eighty thousand they do not give away for free. And they don't pay it on the come."

One person familiar with the situation said, however, that the urgency of getting a permit to operate the waste transfer station, as well as Mr. Kerik's connections in New Jersey law-enforcement circles dating from his days two decades ago as Warden of the Passaic County jail, might have convinced the DiTommasos that this investment in Mr. Kerik could clear up their business problems on both sides of the Hudson.

Mr. Kerik's ability to sell himself, combined with what in those years was his seemingly constant need for money, probably made his assurances convincing. Either his own financial situation was as precarious as Interstate's business position at the time, or he created that impression to avoid having to reach too deeply into his own pockets to finance an upgrade in lifestyle. Shortly before Mr. Kerik ended his association with Mr. Ray - and while the renovation was taking place - he persuaded Mr. Ray to have his wife write a check for $4,300 to an upscale furniture company to equip a nursery for the Keriks' about-to-be-born daughter.

What is particularly astonishing about this alleged financial help from the owners and an employee of a company seeking to do business with the city is that under the city's Conflicts of Interest Law, it is illegal for employees to accept gifts worth more than $50 from such persons. That is true even if the business is not being transacted with the employee's agency. All of this would have figured to come up in the summer of 2000, when Mr. Kerik was under consideration for Police Commissioner and was required to fill out a background questionnaire for the Department of Investigation that covered matters including financial holdings. Mr. Kerik didn't bother to submit the questionnaire, however.

DOI Let It Go

Completion of the form is supposed to be mandatory for all new appointees to top-level positions. The Department of Investigation didn't make an issue of it at the time, any more than it did upon learning in June 2000 that Mr. Kerik had a social relationship with Frank DiTommaso, notwithstanding the latter gentleman's alleged ties to organized crime figures.

When the DiTommaso connection surfaced last year in articles by Russ Buettner of the Daily News, Mr. Giuliani told the Times that since Mr. Kerik wasn't a new Commissioner, he didn't have to fill out the DOI form. The former Mayor added that DOI would have informed him of the relationship only if it believed that Mr. Kerik was doing something improper.

Among those who were skeptical that any DOI Commissioner would risk having the Mayor be surprised later rather than inform him as a precaution was former Mayor Ed Koch, who told this newspaper last December that there were only two possible explanations if the DOI Commissioner had not mentioned it to Mr. Giuliani.

"One is that they were incompetent; the other is, they didn't tell him because they knew he wouldn't care," Mr. Koch said.

Watchdog Became a Pet

The DOI Commissioner at the time, Ed Kuriansky, left city government when Mr. Giuliani did. The Inspector General assigned to the Correction Department both then and now was Michael Caruso, whom Mr. Kerik described in his 2001 autobiography as among "my closest friends and colleagues," someone who helped prepare him before he was interviewed by Mr. Giuliani for the Police Commissioner's job.

Correction union leaders have charged that Mr. Caruso's role as department watchdog was irretrievably compromised by that relationship with Mr. Kerik. They alleged that this was the reason that rampant favoritism and wrongdoing in the upper levels of the agency went unpunished and unreported until after Mr. Giuliani left office. The fact that Mr. Caruso is believed to be playing a key role in the ongoing probe of Mr. Kerik's activities by DOI and the Bronx District Attorney's Office has raised questions about whether a few stones will be left unturned, suspicions that won't subside unless Mr. Kerik is indicted and convicted.

It would have been so much simpler for Mr. Giuliani if for once during his administration he had allowed DOI to do its job properly. Or, for that matter, if he had simply looked at his choices for replacing Howard Safir as Police Commissioner in August 2000 based on qualifications and chosen Joseph Dunne, a 30-year NYPD veteran who had distinguished himself at the department's upper levels.

Hired Outside the Box

Instead, after going through the sham of a selection process, Mr. Giuliani chose Mr. Kerik, who lacked even the two years of college that the Mayor had made mandatory for rookie cops and whose background included a 1987 bankruptcy filing, a mysterious stint as chief of investigations at a Saudi Arabian hospital where the royal family was treated, and a few questionable associates.

That pedigree never bit Mr. Giuliani until he recommended Mr. Kerik to the Bush administration for the nation's top homeland security job, and suddenly his former aide's indiscretions started crawling to the surface.

Embossing Rudy's 'Brand'

In the 11 months after Mr. Kerik's nomination blew up like a gag cigar, he stepped down as a senior partner in Mr. Giuliani's consulting firm, and there was only an occasional mention of some newfound questionable behavior on his part. His misadventures did not seem to have damaged Mr. Giuliani in the eyes of the public or those paying millions of dollars to retain the Mayor's firm because, in the words of Odgen Mills Phipps, an heir to the Carnegie steel fortune, the name "is a good brand right now."

"So far it hasn't affected Rudy at all," political consultant George Arzt said last week.

Which was why, in its announcement of official status courtesy of the FEC, Draft Rudy Giuliani for President, Inc. noted happily that a poll a few days earlier of likely Republican voters showed the former Mayor running 2 points ahead of Arizona Sen. John McCain and 5 points ahead of Secretary of State Condoleezza Rice, the other early frontrunners for the 2008 GOP nomination for President.

His standing could plunge, however, if Mr. Kerik is indicted, particularly if a messy trial dredges to the surface additional embarrassing details.

'Glee Among Democrats'

"It will be used by both opponents in the Republican Party and Democrats," Mr. Arzt said. "Within political circles, already there is gleefulness on the part of Democrats."

The Mayor and his supporters might argue that Mr. Giuliani overlooked blots on Mr. Kerik's record over the course of his administration because their friendship had been tested starting with the 1993 mayoral campaign, when Mr. Kerik was his campaign driver and unofficial security chief, and continuing through his eight years as Mayor.

"Rudy's been very loyal to his friends," Mr. Arzt noted. But he added, "To some extent, [an indictment of Mr. Kerik] hurts his law-enforcement credentials; it tarnishes them a bit. It raises questions about his judgment."

One person who's particularly familiar with Mr. Kerik's unorthodox ways of doing business put it more colorfully in drawing a parallel to John Kerry's 2004 campaign troubles. Bernie, he said, could be the Swift Boat that torpedoes Mr. Giuliani's presidential hopes.