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In Private Sector, Giuliani Parlayed Fame Into Wealth
"His name brings inherent value," said John Mason, chairman of BioOne Solutions, a Florida decontamination company that merged with Giuliani Partners. "If someone has a need in our area, it's unlikely they wouldn't take his call."
Creating the Corporation
Giuliani left office on Dec. 31, 2001, with relatively modest means. His final ethics report to the city listed gross assets of between $1.16 million and $1.83 million in 2001; most of that wealth was two Manhattan apartments and some retirement mutual funds. The lone source of income he listed besides his $195,000 mayoral income was $20,000 to $60,000 a year from renting one of the apartments.
His initial letter to the city's Conflicts of Interest Board asked permission to begin forming the firm in his final days as mayor with three aides he planned to take with him -- the lawyer Hess, chief counsel Dennison Young Jr. and chief of staff Anthony V. Carbonetti. Two others -- Police Commissioner Bernard B. Kerik and Fire Commissioner Thomas Von Essen -- were not mentioned but later joined the firm as senior vice presidents.
The firm opened for business in January 2002, its core values described on its Web site as "integrity, optimism, courage, preparedness, communication and accountability." From an initial group of about a dozen principals and support staffers, it has since quadrupled in size.
Giuliani, the chairman and chief executive, had little private-sector experience but early on entered into a strategic alliance with the accounting firm Ernst & Young, long a city contractor under his administration. The affiliation brought instant business know-how along with a stable of potential blue-chip clients.
In "Leadership," the best-selling book he wrote in 2002, Giuliani devoted a chapter called "Surround Yourself With Great People" to describe the people he picked to help run the firm. The core of the group comprised close political associates and City Hall advisers -- not seasoned businesspeople. And some had problems in their pasts.
Kerik took the lead building the Giuliani Partners security arm. But even before Giuliani left the mayor's office, city investigators had warned him that Kerik might have ties to organized-crime figures, a warning Giuliani recently testified that he did not recall. Kerik abruptly left the firm in early 2005, after his nomination to be homeland security secretary -- supported by Giuliani -- collapsed. That was a year before he pleaded guilty to a misdemeanor charge that he accepted free work on his apartment from a contracting firm accused of having ties to organized crime.
To replace Kerik, Giuliani turned to a respected former FBI executive, Pasquale J. D'Amuro, who had risen through the ranks as one of the bureau's savviest antiterrorism agents to become its third-ranking official. In 2004, a Justice Department inquiry into the controversial removal of souvenirs from the World Trade Center site disclosed that D'Amuro had asked a subordinate to gather half a dozen items from Ground Zero as mementos just weeks after the attacks, and D'Amuro later acknowledged that he kept one piece of granite that he received in June 2003. The FBI took no action against D'Amuro, and he donated his memento to the New York FBI office before retiring.
In 2003, Giuliani also brought into the firm Alan Placa, an old friend who resigned as vice chancellor of the Diocese of Rockville Centre on Long Island a week after being confronted by Newsday with allegations that former parishioners had been abused. The newspaper published portions of a 2003 Suffolk County grand jury report in which accusers said he used his position to stifle complaints of abuse by clergy. The firm would not make Placa available to comment, but the Long Island newspaper has reported that Placa denied the allegations, was not charged with a crime, and is going through a process within the church to clear his name. Placa has been described by the firm as a "consultant."
Over the years, Giuliani Partners formed several subsidiaries or strategic alliances. They included an investment bank called Giuliani Capital Advisors that counseled companies on bankruptcies and investments in the security marketplace. It was sold for an undisclosed amount as Giuliani was preparing his run for president.
The firm also created several security divisions over the years. The first, Giuliani-Kerik, advised companies on matters as diverse as making buildings more secure and marketing security products. In 2005, after Kerik left, it was renamed Giuliani Security & Safety. Giuliani Partners also created an overseas security arm called Giuliani Security & Safety Asia, which has done business in Japan similar to what the firm's U.S. entities do, and an overseas consulting unit called Giuliani Compliance Japan.
Right from the start, Hess said, Giuliani proved to be as "hands-on" as chief executive as he was as mayor. Giuliani demanded daily briefings at the firm that were "reminiscent of the staff meetings that we had in City Hall," Hess recalled.