Partners in Crime

by Jonathan Chait | December 31, 2007

In the spring of 2006, Rudy Giuliani had to quit the Iraq Study Group after failing to appear at several meetings. His resignation letter cited "previous time commitments," which turned out to be lucrative speaking engagements. Giuliani now says the obvious conclusion--he skipped the commission to make money--is unfair. The truth, he recently explained to NBC's Tim Russert, is that he left the commission to avoid a conflict of interest. "I was a possible and more than possible presidential candidate," Giuliani said. "As I started to get involved the first month or so, I realized that this would be a terrible conflict." It's not obvious to me why it would be a conflict for a presidential candidate to give foreign policy advice to a sitting president he supported. But that's just how exquisitely fine-tuned Giuliani's sense of ethical propriety is: He's so ethical he gave up the easy pleasures of serving on a blue-ribbon foreign policy panel and resigned himself to the drudgery of the six-figure speech circuit. As Giuliani and his hirelings are wont to point out, "ethics" is synonymous with the Giuliani name. His consulting firm, Giuliani Partners, is based upon the strength of Giuliani's reputation. As Giuliani Partners senior managing director Michael Hess explained a year ago, "We bend over backwards and are very careful about who we do business with, for the most obvious reasons--from the beginning, Rudy's brand of integrity and ethics always had to be preserved." To those uninitiated in Giuliani's business methods, it might sound odd to refer to integrity and ethics as a "brand," as opposed to, say, a value system. But Giuliani's reputation for unwavering ethics is precisely the commodity that his company sells. The buyers are various firms in sundry lines of work whose only connection is a desire to associate themselves with Giuliani's brand. Naturally, the intense demand for this brand has driven up the price. Since 2002, Giuliani has amassed an enormous fortune in the field of ethics. Strangely, for a man of his boundless integrity, Giuliani has refused to divulge his client list. Reporters have managed to unearth some of Giuliani Partners' clients, and what they have found gives a clearer sense of precisely what it is that Giuliani is selling. One Giuliani client, Hank Asher, had once smuggled planeloads of cocaine from the Bahamas. Asher has since created homeland security-related software, and Giuliani has argued that he reformed his ways. Alas, the defense suffered a setback when Asher was recently alleged to have given a $15,000 watch to the wife of a Homeland Security official who could potentially throw business his way. Another Giuliani Partners client has been linked to a reputed Hong Kong organized crime figure with ties to North Korea. Another is the Qatari government, elements of which had been implicated in supporting terrorism and which hired Giuliani Partners in the wake of an embarrassing, high-profile terrorist strike. Then there is the National Thoroughbred Racing Association, which turned to the firm in the wake of a betting scandal, to draw up a list of security procedures. None of those procedures was fully implemented, as The Washington Post later reported, but Giuliani's specific ideas about horse- racing security don't seem to be what the Association was really paying for. In 2002, Purdue Pharma faced a political and public relations crisis when its painkiller OxyContin resulted in a wave of overdose deaths and pharmacy break-ins by drug dealers. When the federal government investigated, Purdue Pharma hired Giuliani Partners. As The New York Times reported, "The company needed the political cover of an alliance with someone considered an unimpeachable American hero." When Giuliani started his firm in 2002, still basking in the warm afterglow of the September 11 attacks, it was simply assumed that he would make his business dealings transparent if he ever sought public office. ("Presumably, Mr. Giuliani will be more forthcoming if he runs for office," declared a New York Times news story at the time.) Instead, he has steadfastly refused, and his explanations for why he won't reveal all his clients do not totally reassure. Giuliani's first defense is that he cannot divulge his clients because they asked to sign confidentiality agreements. In fact, Giuliani Partners, not its clients, is the party that requests confidentiality. Giuliani also says we shouldn't worry, because most of his clients have been revealed in the press, anyway. "Just about every single client of Giuliani Partners, which is my security company, has been discussed, has been examined, certainly every significant one," he told Russert. Just about every client? This is approximately as reassuring as a murder suspect who tells the police they can search just about every room in his house. Giuliani has further insisted that every one of his clients is upstanding. "None of them," he told Russert, "amount to anything other than ethical, lawful, decent work done by both companies, sometimes of the highest standards, always ethical and decent." Not only is this obviously false, if you think about it, it has to be false. Giuliani is in the business of selling his reputation. What sort of firms need to buy that product? Not the Boy Scouts of America. It's drug smugglers, scandal-plagued firms, and others who need the imprimatur of Giuliani's 9/11 halo. You certainly can't question the shrewdness of Giuliani's business venture. Ground Zero bestowed upon him an image of integrity and courage. Years from now, the post-September 11 deification of Giuliani is going to look more than a bit ridiculous. (Already, the fact that he skipped out on the Iraq Study Group seems less scandalous than the fact that he was invited in the first place.) Having been bequeathed a highly valuable but rapidly perishable asset, he rapidly set out to convert it into financial gain. Hence Giuliani's decision to spend his post-mayoral years lending (or, more precisely, renting) his name to a series of unsavory characters and appearing at Get Motivated! seminars with Zig Ziglar ($225 a head, or just $49 if you order in advance) to recount his 9/ 11 heroism. It's slightly unbecoming, but hardly surprising, that Giuliani chose to cash in on his ethical reputation. What is surprising is that he did so and then turned around and ran for president on the basis of that same reputation. Putting your good name up for sale is like putting the family silver up for sale. Once you sell it, you don't get to keep it anymore.

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