Giuliani As Access Capitalist

by | October 30, 2007

Now this is what you'd call a good ole fashioned bind. On the one hand, there are obvious reasons--potential conflicts of interest, etc.--that Rudy Giuliani would want to put as much distance between himself and his consulting firm as possible. Which is why you get him saying stuff like this (via today's WaPo):

During an interview in June with CNBC's Larry Kudlow, Giuliani said that he was spending no more than 10 percent of his time doing work for the firm while he was campaigning and that he planned to take a leave of absence.

"I would have thought during the general election, but it seems to me nowadays, with all these things moving up, probably sometime during the primaries," Giuliani said about the timing of his leaving. "But right now I'd say I'm 95 percent campaigning, maybe 5 to 10 percent trying to settle up last-minute things." 

On the other hand, I suspect it's important for the firm's bottom line to be able to tell clients Rudy is still pretty involved. So you end up with stuff like this (via the same piece):

"When Rudy is here, he is hands-on," Hess said in late April. "He does discuss all the different matters. When we get a client, sometimes they are people Rudy knows and sometimes others of us know or hear about them. Invariably, a new client will want to meet with Rudy, and this was frequent a while ago, and it has become less frequent as he is going around on his campaigning."

Hess said Giuliani also tries to attend the firm's strategic meetings when he is in New York, gatherings that resemble the early-morning staff meetings he held as mayor.

"Over the years since we've been here, we do have frequent meetings. They varied with the time Rudy has. Sometimes Rudy is in New York a lot, and sometimes he is here less," Hess said. "They are reminiscent of staff meetings that we had in City Hall. He was somewhat famous for having the 8 a.m. meeting with about a dozen or 15 commissioners. Likewise, we have staff meetings here." 

I would have thought this conflict would have been resolved by now, but apparently not--the piece says Giuliani still works for the firm. The situation reminds me of Michael Lewis's great "Access Capitalist" piece in TNR, in which Lewis interviews David Rubinstein, one of the founders of The Carlyle Group. At the end of a long Rubinstein monologue, Lewis writes:

He then went on shallow background to dispute what I thought I had learned about The Carlyle Group. First he argued that he and his partners, most of whom had no previous expeirence in finance, had made so much money that they would never be able to spend it all. Then he reversed himself, sensing perhaps that quick success was implicitly damning: the more successful they were the more loaded the question of whether Jim [Baker], Frank [Carlucci], Dick [Darman] and the others had been exploiting their connections. The conversation flipped back and forth. One moment Rubenstein was rich, the next he was poor. One moment The Carlyle Group was struggling to make ends meet, the next it had amassed profits of more than $1 billion in just six years. Four or five times he stopped himself to say, apropos of nothing, "I don't spend money. I don't enjoy spending money. The car I drive is an 11-year-old Honda." On and on this went, while outside, the rush-hour traiffc on Pennsylvania Avenue collected and then dispersed.  

--Noam Scheiber

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