Rudy's Dirty Money (Page 2)

By Ari Berman

This article appeared in the October 29, 2007 edition of The Nation.

October 11, 2007

By the time Giuliani joined Bracewell in 2005, the firm was regarded as "the most well-known face of aggressive energy-industry lobbying in DC," says John Walke, head of the clean air division at the Natural Resources Defense Council. The DC contingent has done little to tone down its advocacy since Rudy's arrival. In the wake of record oil industry profits, they lobbied against a tax on windfall revenue. At a recent EPA hearing in Philadelphia, physicians, state officials, environmentalists and even an asthmatic family testified about the need to reduce smog levels. But Holmstead, now Bracewell's star expert, brushed aside such concerns. "If you change the standard, it's not going to have any impact whatsoever," he said.

Research support was provided by the Puffin Foundation Investigative Fund of The Nation Institute.

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Rudy didn't come cheap. Bracewell paid Giuliani Partners $10 million for his services and Giuliani a base salary of $1 million a year, plus 7.5 percent of the firm's New York revenues. (Former New York City Mayor Ed Koch once said, "You can get rich, or you can get elected." Giuliani is trying to do both.) In return, Rudy performed a variety of tasks. He spearheaded the opening of the New York office, bringing over talent like Michael Hess, New York City's chief lawyer under Giuliani, and Marc Mukasey, the son of US Attorney General-designate Michael Mukasey, to head the firm's white-collar defense practice. In more than two years, the firm has grown to roughly forty lawyers, with annual revenues estimated at $27 million.

Giuliani says he's never lobbied in Washington. But he has helped in other ways. He traveled to London to meet with executives from Shell Oil. He recruits new associates. As of last year he worked on "three or four cases" a year, he told Bloomberg News.

Rudy was once widely considered one of the premier lawyers in the country. He was the youngest associate attorney general ever, under Ronald Reagan, and as district attorney in Manhattan he made a name for himself by prosecuting crooked congressmen, Wall Street schemers and mob leaders. Yet he's always had trouble balancing his law career with his politics. In 1989 Giuliani joined the New York firm of White & Case. The firm had a list of controversial clients, including the government of Panama, home to drug-dealing dictator Manuel Noriega; foreign banks that gave large loans to the apartheid regime in South Africa; and an Italian construction firm that helped build a chemical weapons plant in Libya.

When Giuliani launched a run for mayor that same year, he was blindsided by bad press. "White & Case represented all sorts of dictators and scumbags," says veteran political consultant Hank Sheinkopf. "Rudy could never understand why that would be a problem." Politicians of both parties called on Giuliani to release his client list. Billionaire businessman Ronald Lauder, who ran against Giuliani in the Republican primary, aired a television ad featuring side-by-side pictures of Giuliani and Noriega. Nelson Warfield, Lauder's spokesman at the time and a current adviser to presidential candidate Fred Thompson, sees parallels between then and now. "It was an issue for him in '89, and it's an issue for him in '07," Warfield says of Rudy's clients. (Thompson, it should be noted, has his own questions to answer about his lengthy career as a Washington lobbyist.)

The Giuliani campaign is anticipating such scrutiny. In a leaked campaign dossier obtained by the New York Daily News in January, the word "business" appeared at the top of a list of potential vulnerabilities, ahead of his ex-wife Donna Hanover. The concern was justified. After the 2004 election Giuliani saw the nomination for Homeland Security czar of a protégé, former New York City Police Commissioner Bernard Kerik, crash and burn when the press uncovered Kerik's affairs, unpaid back taxes and ties to the mob. "Rudy will be held to a higher standard," predicts GOP strategist Tony Fabrizio. "This is stuff he did after becoming America's mayor."

Bracewell & Giuliani presents a host of potential sore spots, on the left and the right. Operatives from rival GOP campaigns were quick to exploit the fact that the firm represented Citgo, the state oil company of Venezuela, one of the current bêtes noires of the right wing. Bracewell helped Rupert Murdoch's News Corp. block "indecency" laws on television, thwarting a pet issue of Christian conservatives. The firm provided counsel to the defense fund of disgraced former House majority leader Tom DeLay--at the same time that it was lobbying DeLay and Congress to grant immunity to the makers of the toxic gasoline additive MTBE, which faces hundreds of lawsuits for contaminating drinking water. Clients abroad have included repressive regimes such as Saudi Arabia and Kazakhstan (Bracewell has two offices representing American oil companies in Kazakhstan; Rudy's Bracewell supporters recently held a campaign fundraiser there). A few years ago its biggest client was Enron.

Giuliani has accepted more money from the energy industry--$477,208 through the first half of 2007--than any other presidential candidate. These ties likely won't hurt him with GOP primary voters, who welcomed Bush and Cheney with open arms. But it could arouse the suspicions of moderate and independent voters in a general election, many of whom don't look forward to the idea of Halliburton clones dictating policy in the next White House.

About Ari Berman

Ari Berman is a contributing writer for The Nation, covering national politics and the 2008 election, and an Investigative Journalism Fellow at The Nation Institute. more...
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