Giuliani's business success may harm his political ambitions

Ever since his tenure as New York City's Mayor came to an end in late 2001, Rudy Giuliani has been on a money-making splurge. Beyond just his exorbitant speaking fees, his firm, Giuliani Partners, and its related affiliates, have their multiple tentacles in countless industries and highly lucrative transactions. That Giuliani wants to cash in on the 9/11 fame and admiration he earned is understandable after a couple of decades of living on a government salary, but that pursuit may end up sabotaging his Presidential ambitions.

At least in terms of his integrity -- one of the principal selling points for the former federal prosecutor’s candidacy -- Giuliani’s career has been unmarred. But any substantial venture into the private sector usually entails associations with less-than-pure individuals and transactions which, at the very least, can be cast in a negative light. If nothing else, Giuliani's extensive and diverse business activities are sure to provide ample fodder for opposition research on the part of any campaign looking to undermine his sterling image.

The starting point for Giuliani's troubles will, of course, be Bernie Kerik, one of Giuliani's closet friends and associates both during his tenure as Mayor (when he rapidly promoted Kerik to Police Commissioner) and afterwards (when he and Kerik were partners in Giuliani-Kerik LLC, an affiliate of Giuliani Partners). After enduring a painfully humiliating week during his doomed nomination for Homeland Security Secretary, which saw one seemingly credible accusation after the next against Kerik ranging from bribery solicitation to substantial mob ties, he was back in the news last week with accusations from New Jersey officials that Kerik, when he was NYC Corrections Commissioner (appointed by Giuliani), accepted kickbacks from a company connected to organized crime in exchange for municipal contracts. That same year, Giuliani made Kerik his Police Commissioner.

But Bernie Kerik is just the starting point, albeit a large one, for Giuliani’s problems. The New York Sun yesterday published an article detailing a failed Giuliani venture in Boca Raton, Florida, where Giuliani's firm was to oversee a much-hyped project to decontaminate the building formerly occupied by The National Enquirer, one of the targets of the 2001 anthrax attack. The project was a failure, and Giuliani’s company was replaced and then ended up in a messy dispute entailing the loss of millions of dollars in fees.

This is hardly a significant scandal, but it illustrates the hazards of Giuliani’s business ventures. As the New York Sun article put it:

[T]he ensuing contract dispute, and the fact that Bio-One has never been paid for its efforts, could contribute to questions about Mr. Giuliani's management of his business endeavors since leaving office at the end of 2001. If Mr. Giuliani goes ahead with a possible bid for the Republican presidential nomination in 2008, his business ventures, which are far flung and include legal and consulting work, are likely to come under increased scrutiny. Already, he has drawn critical press attention for his consulting work on anti-crime initiatives in Mexico City and his ties to a for-profit vocational college in Kentucky that recently shut down due to financial difficulties.

Giuliani made the choice to be out of the spotlight pursuing these business ventures while potential rivals like John McCain and George Allen are prominently inserting themselves in the news and will continue to do so. That is a disadvantage which the very well-known Giuliani could likely overcome. But for a politician whose biggest selling points are his integrity and attributes of leadership and management, close ties with intensely corrupt individuals like Bernie Kerik and a growing list of failed, messy business disputes would seem to pose some very serious problems for his candidacy.