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SEPTEMBER 6, 2004

Profit Sharing

The scene has unfolded at least a dozen times over the past year. In some huge sports arena in a large U.S. city, a second-tier pop singer performs a series of patriotic anthems. After a pause, a burst of horns and the gossamer voice of Frank Sinatra fills the stadium. Start spreading the news ... A maelstrom of red, white, and blue confetti fills the air. Now, a roar surges through the crowd--Rudolph Giuliani has come into view. The standing ovation that greets him might last for a full minute before Giuliani finally cuts it off. After all, these people have paid good money ($225 at the door, $49 in advance) to hear him speak. Not just him, actually: At these "Get Motivated!" seminars, sponsored by a Tampa-based motivational speaker named Peter Lowe, a constellation of stars are on hand--Private Jessica Lynch! Zig Ziglar! Larry King! Goldie Hawn! Jerry Lewis! But no one is a bigger draw than America's mayor, the hero of September 11. As for Giuliani, he's come here (to Cleveland or Baltimore or San Francisco or any of the other cities visited by the Get Motivated! tour) to share his insights on "How to Lead in Difficult Times." This amounts to six principles: stick to core beliefs, optimism, courage, relentless preparation, humility and teamwork, and good communication. "It's not magic," Giuliani might tell his audience, as he did at Tropicana Field in St. Petersburg, Florida, last year. No kidding.

If you've been wondering what Rudy Giuliani has been up to since leaving the New York City mayor's office in early 2002, here's one answer: cashing in. In addition to dispensing his wisdom on the Get Motivated! tour, he has earned millions working the lecture circuit, hawking a quickie book, and running a lucrative consulting practice favored by big companies facing richly deserved p. r. problems.

But Giuliani has played his September 11 glory for more than financial gain. He's also turning a healthy political profit. On September 10, 2001, remember, Giuliani was a largely spent force. He had bailed out of a Senate race against Hillary Clinton after being diagnosed with prostate cancer. He had concluded a messy breakup with his wife. A series of police brutality scandals had tarnished his crime-fighting accomplishments. And, given his uneasy relations with state and national GOP leaders--who saw him as disloyal and too liberal-- no one was coming to rescue him.

Then came September 11, which, by turning him into a beloved political celebrity, marked a new beginning for Giuliani's career. Since that day, he has become one of the GOP's most loyal and valuable foot soldiers. Gone is the unpredictable, independent thinker, replaced by a campaign attack dog who dutifully recites GOP talking points and seems happy to endorse anyone with a pulse and an "R" after his name. And, while George W. Bush's presidency has ostracized GOP moderates in Washington, Giuliani will celebrate the president with a prime-time address at next week's Republican convention in New York. Bush, he insists, "will, in history, be one of our great presidents." What Giuliani doesn't say is that he may think the same thing about himself.

BEFORE Giuliani could concentrate on his return to politics, he had to focus on getting rich--fast. Within a year, he cranked out Leadership, a memoir and self-help hybrid that promises to demonstrate "how the leadership skills he practices can be employed successfully by anyone who has to run anything." He hit the lecture circuit, giving speeches to trade associations for $100,000 a pop (according to his 2002 divorce papers, he expected to garner about $8 million in annual speaking fees). But the really big money flows from Giuliani Partners, a consulting firm he opened in 2002 with a crew of former city government officials. Giuliani doesn't seem too choosy about his clients, which range from the National Thoroughbred Racing Association to a California-based company that specializes in the sale of low-priced wills and divorce papers. And, although Giuliani made his name in part by fighting Wall Street corruption in the 1980s, he was all too happy to help Merrill Lynch "negotiate" with New York Attorney General Eliot Spitzer in 2002 when Merrill was under investigation for letting investment-banking relationships taint its stock research.

There's little secret as to why such firms would want Giuliani on their payroll. Consider his work for Purdue Pharma, the maker of the painkiller OxyContin. In 2002, OxyContin--a cash cow for Purdue--was facing stricter federal regulation after reports that its misuse as a narcotic had led to more than 400 deaths. As detailed by The New York Times' Eric Lipton earlier this year, in March 2002, a Purdue spokesman told a group of p.r. executives that the company "had to switch over to using more political consultants" and was about to hire "a sort of rock star in that area." Soon after, Purdue retained Giuliani Partners. "We believe that government officials are more comfortable knowing that Giuliani is advising Purdue Pharma," the company's lawyer later said in a statement. A similar rationale was no doubt behind the recent decision of phrma--the national pharmaceutical trade association--to hire Giuliani's firm to prepare a report on the safety of reimported prescription drugs, at a time when the industry is desperately trying to kill reimportation legislation. That Giuliani has no particular expertise on the subject seems not to matter. "Folks on both sides of the aisle respect him for his leadership," a phrma spokesman told Newsday earlier this month.

And, while security consulting is a central focus of Giuliani Partners, one wonders about its credentials there, too. Though conscious of terrorism before September 11, Giuliani was hardly the Richard Clarke of Manhattan. Despite the 1993 bombing, he failed to foresee that the World Trade Center complex might not be the ideal location to build a new city government emergency-command bunker. Nor did he make sure police and firefighter radios could communicate with one another--a tragic footnote to September 11 that led Republican 9/11 Commission member John Lehman to blast the city's command-and-control system as "a scandal" and "not worthy of the Boy Scouts."

Giuliani's political sellout is even more striking than his financial one. It began on September 14, 2001, when Giuliani and Bush met for the first time after the Twin Towers fell. Just a few days earlier, such an encounter might have been awkward: Giuliani was never a Bush loyalist. He'd flirted heavily with John McCain's insurgent candidacy before officially endorsing Bush, and, even then, he backed McCain's struggle to get on the New York state primary ballot. And, when Bush supporters launched a malicious attack against McCain's record on funding for breast cancer research, Giuliani was "asked to join in the criticism," he writes in Leadership. He demurred. Given the primacy Bush's circle places on fidelity, such insubordination did not go unnoticed. "For a while some of the Bush people were suspicious of me," Giuliani recounts.

In fact, it wasn't a given that Giuliani would endorse a Republican in 2000 at all. As a candidate for New York City mayor in 1993, Giuliani had openly touted his liberal views on abortion, guns, and gay rights. In his first term he worked closely with Bill Clinton on federal crime and welfare legislation and with Governor Mario Cuomo on state budgetary aid for the city. He was so enamored with Cuomo, in fact, that he endorsed the governor for reelection in 1994 over Republican George Pataki--to the fury of GOP leaders. "He was not a loyal Republican in any sense," says a senior aide to one New York state Republican. Adds Peter Vallone, a former Democratic speaker of the New York City Council who got along famously with Giuliani, "The Republican leadership in New York state would have loved to see him disappear." Giuliani grew slightly more antagonistic toward Democrats in his second term--which, thanks to term limits, was his last--as he began contemplating broader horizons like a run for Senate or governor that would require support from upstate conservatives.

But even then, says Fred Siegel, a senior fellow at the Progressive Policy Institute and author of a forthcoming book on Giuliani, "he wasn't terribly partisan." But, when Bush and Giuliani met at a New Jersey Air Force base and then toured the ruins of Ground Zero, any tension between them seemed to vanish. "I have seen Air Force One at other times," Giuliani recounts in Leadership, "but as I watched President Bush exit that plane on that day it was hard to contain my tears of relief. I thanked him and told him how proud I was of how he was handling the country in this crisis." Bush asked Giuliani what he could do for him. "If you catch this guy, bin Laden, I would like to be the one to execute him," Giuliani replied. "I am sure he thought I was just speaking rhetorically, " he writes, "but I was serious."

In their shared thirst for vengeance, Bush and Giuliani finally connected and realized they could have a mutually beneficial relationship. By this point, after all, Giuliani was at least as popular as Bush. "The messianic hero met his moment in history," says Mark Green, who, as New York public advocate, was a longtime Giuliani adversary. "He became an apparent hero with a real villain. He was calm and sincere when Bush was flying around in circles. I watched him go from Nixon to Churchill within a twenty-four-hour period."

With the 2002 midterm elections coming, Republicans were eager to tap Giuliani's popularity. And Giuliani was happy to let them. He filmed commercials for 24 GOP candidates and took more than 30 political trips on their behalf. Doing so required brushing aside his ideological differences with social conservatives like Jim Talent of Missouri and even paleocon Bob Smith of New Hampshire. Similarly, Bush is now using Giuliani to bolster his own reelection campaign. Giuliani was part of a GOP team dispatched to Boston during the Democratic convention to take potshots at John Kerry, whom he mocked as "an indecisive candidate with an inconsistent position on the war on terror. " This week, Bush and Giuliani planned to campaign together in New Mexico before Giuliani's prime-time address at the GOP convention.

GIULIANI'S SERVICE to the party is not purely altruistic, of course. There is talk of his statewide ambitions and his potential interest in a second-term Bush Cabinet position (either attorney general or Homeland Security secretary). But many Republicans and Democrats, in both New York and in Washington, believe he intends to run for the White House in 2008. "Everyone who knows him comes back to me and says, 'He doesn't want to be governor, he wants to run for president,'" says a prominent New York Democratic fund-raiser. Cast through that prism, his surprisingly dutiful efforts for the party make perfect sense: His 2002 campaigning included convenient stops in Iowa and New Hampshire. His convention appearance, meanwhile, will be the most powerful reminder to date of his September 11 performance.

Loyalty, however, will only get Giuliani so far. As the New York fund-raiser puts it: "The question is, how does someone who is pro-gun control, pro-choice, pro-gay rights--and dresses in drag on occasion [at annual New York political comedy dinners]--run as a Republican?" The answer goes back to September 11. Thanks to his extreme hawkishness on terrorism and security, Giuliani doesn't sound like a moderate. In a May appearance at the Council on Foreign Relations, for instance, Giuliani appeared as strident as Bush: defending the war in Iraq, backing renewal of the USA Patriot Act, downplaying the Abu Ghraib prison scandal, and calling for democratization of the Middle East. This focus on foreign affairs allows Giuliani to mask his social liberalism. Asked on ABC in 2002 about his support for socially conservative candidates, Giuliani had a ready answer: "Well, they agree with me on some big issues," like Iraq and the Homeland Security Department.

It may be that Giuliani's metamorphosis is an authentic one, that he was radicalized by September 11 and driven deep into a partisan bunker. But Giuliani may also realize his best hope for a future in today's Republican Party flows from his September 11 stature and his militant attitude toward the war on terrorism. In today's GOP, the word "moderate" is typically used to describe someone with liberal social views. But, as national politics realigns around foreign policy, it could be that socially conservative internationalists like Chuck Hagel--another 2008 hopeful--become the moderates, while hawks like Giuliani overcome their social liberalism with unflinching rhetoric on the war on terrorism. For Giuliani, it is a gamble worth taking. And, if he's wrong, he can always go back to getting rich.

This article originally appeared in the September 6, 2004 issue of the magazine.

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posted in: baltimore, cleveland, new york city, san francisco, st. petersburg, tampa, washington, giuliani partners, purdue pharma, eric lipton, frank sinatra, george w. bush, goldie hawn, hillary clinton, jerry lewis, jessica lynch, john mccain, larry king, peter lowe, rudolph giuliani, rudy giuliani, florida, get motivated!, republican party, senate

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