Feds Say Kerik Cheated, Lied, And 'Sold His Office'

By RICHARD STEIER

Less than two years after President Bush nominated him to be U.S. Secretary of Homeland Security, a Federal grand jury in White Plains nominated Bernard B. Kerik as America's Felon, handing up a 45-count indictment on charges that range from misusing his old positions as city Correction and Police Commissioner to tax evasion.

BERNARD B. KERIK: Jail return in his future?

He was accused of accepting $255,000 in home renovations from a company seeking to do business with the city - one that had previously been identified by Federal investigators as having ties to organized crime. In return, the indictment asserted, he took steps to convince city regulators that the contractors did not have mob ties and therefore should be given the permits that would allow them to operate a waste-transfer station for the city.

Charge Tax Frauds

He also allegedly cheated the IRS of significant amounts of taxes through schemes ranging from his failure to report the renovation funds and $236,000 in rent payments that were made for him on another apartment in Manhattan to the taking of approximately $80,000 in phony charitable deductions.

MICHAEL J. GARCIA: Says Kerik betrayed oath.

Mr. Kerik was arraigned Nov. 9 at the Westchester Federal Courthouse and pleaded not guilty to the charges. The indictment and a possible trial could have an impact on the presidential candidacy of former Mayor Rudy Giuliani, who elevated Mr. Kerik, a Third-Grade Detective at the time he served as his campaign driver during the 1993 mayoral race, to the city's top law-enforcement post just seven years later. Mr. Giuliani also recommended to President Bush that he pick Mr. Kerik to serve as Homeland Security Secretary - a nomination that was withdrawn a week after it was given as news reports of his questionable conduct began to surface.

Prosecutor: 'A Sad Day'

"It is a sad day when this office returns an indictment against a former lawenforcement officer, particularly one who served in positions as high as those held by Bernard Kerik," U.S. Attorney Michael J. Garcia told reporters in White Plains.

He accused Mr. Kerik of "selling his office," and noted that some of the improper payments by Frank and Peter DiTommaso - the heads of the mob-linked Interstate Industrial Corporation - for the renovation work were made after Mr. Kerik became Police Commissioner in August 2000.

RUDY GIULIANI: A stain on his leadership.

The charges connected to the brothers, as well as others that were handed up by the grand jury, expand considerably upon the allegations that produced a previous guilty plea to two misdemeanors in Bronx Supreme Court last year. But while Mr. Kerik escaped with no jail time in return for that plea, that is unlikely to be the case if he is convicted this time - the U.S. Attorney's Office noted that he faces up to 142 years in prison and nearly $5 million in fines.

Got $236G 'Free' Rent

The money paid by the DiTommaso brothers, according to the indictment, is $90,000 more than he admitted to accepting from them in the state case. Mr. Kerik was also accused of failing to report as income $236,000 in rent payments that were made in his behalf by a Manhattan developer with whom he agreed to do business after leaving the NYPD at the end of 2001.

According to the U.S. Attorney, he also did not report as income $75,000 that he received for writing that he did for a book connected to 9/11 and $20,000 he received from a computer software company. In addition to the $80,000 in phony charitable deductions Mr. Kerik is accused of taking, the U.S. Attorney said that he had taken a home-office expense deduction at a New Jersey home which he had not yet moved into.

Lied to White House?

He was also accused of making numerous false statements to the White House and other Federal officials while being considered for Homeland Security Secretary. In addition to failing to disclose his relationship with the DiTommaso brothers and the payments they made on his behalf, he did not report a $250,000 loan he took from a Brooklyn businessman who obtained the funds from an Israeli industrialist who did business with the Federal Government. When Mr. Kerik withdrew his name from consideration for Homeland Security Secretary, he gave as the reason his failure to disclose that he had not paid taxes for a nanny whom he employed. Once the other allegations surfaced, there was skepticism as to whether the "nanny problem" was a ruse, but the indictment seemed to confirm her existence by charging him with falsely stating he had no household employees and failing to withhold taxes from her wages.

Giuliani Changed Story

The case poses a particular liability for Mr. Giuliani's campaign because of the questions it raises about his judgment in selecting top staff. The former Mayor initially denied that he had been aware of Mr. Kerik's relationship with the DiTommaso brothers, but subsequently told a state grand jury that his former Investigation Commissioner, the late Edward J. Kuriansky, said he had informed him in June 2000 - two months before he named Mr. Kerik Police Commissioner - that Mr. Kerik intervened on their part with the city's Trade Waste Commission. A meeting involving Mr. Kerik and the commission's chief investigator at the time, Raymond Casey - who is Mr. Giuliani's cousin - played a key role in last week's charges.

Rudy: Weigh Everything

Mr. Giuliani said earlier in the week that his mistakes regarding Mr. Kerik should be weighed against his successes in office.

The indictment came slightly more than 16 months after the former Police Commissioner pleaded guilty to state charges pertaining to his acceptance of the home renovations from individuals seeking to do business with the city. Those crimes prompted Mayor Bloomberg to order that a lower Manhattan jail that Mr. Giuliani had renamed in Mr. Kerik's honor revert to its old identity as the Manhattan Detention Center.

At that time, Mr. Kerik acknowledged that he had allowed the DiTommaso brothers to pay for $165,000 worth of renovation work on his Riverdale apartment, contending that he believed that their firm was "clean." The two brothers were subsequently indicted for perjury because they had denied paying for the work in appearances before a grand jury.

Mr. Kerik also pleaded guilty in that case to accepting $28,000 for the downpayment on that apartment from Nathan Berman, a real-estate developer.

Abused Powers in Jails

Long before the Daily News revealed Mr. Kerik's relationship with the DiTommaso brothers and other questionable conduct on his part, ranking Correction Department employees and the union representing wardens had accused him of rampant abuses and favoritism when he ran the jail system.

Mr. Kerik carried on a long sexual relationship with a female Correction Officer, which later received widespread publicity when it was revealed that he used an apartment near Ground Zero that was meant as a resting place for rescue workers to carry on that affair and one with the publisher of his 2001 autobiography, "The Lost Son."

One of the numerous lawsuits the Bloomberg administration settled that dated from Mr. Kerik's time at Correction involved trumped-up sexual harassment charges that the department brought against a Captain who tried to discipline a friend of Mr. Kerik's lover. There were also several instances in which promotions were made or denied based on whether his subordinates were loyal to Mr. Giuliani and the Republican Party.