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In Private Sector, Giuliani Parlayed Fame Into Wealth
Consultants or Advocates?
When Hess describes the work of Giuliani Partners, he says it is impossible to pinpoint a single specialty. But he did say, emphatically, that the firm has not tried to use Giuliani's political connections to influence federal officials.
"We don't do lobbying. And therefore that is not something where we are running to talk to a regulator or an agency," Hess said. "In terms of people he has known in the government -- whether city, state or federal -- we just don't do that."
In May 2002, Purdue Pharma, a Connecticut-based drug company, hired the firm at a time when two federal agencies -- the DEA and the Food and Drug Administration -- had begun investigating a wave of overdose deaths attributed to the firm's powerful and lucrative painkiller, OxyContin. The agencies were looking into the pain product's illicit use as a recreational drug and were probing lax security at the company's manufacturing plants in New Jersey and North Carolina.
In a news release, Purdue announced that Kerik would conduct a security review at Purdue's Totowa, N.J., manufacturing plant, while others in Giuliani's firm started designing an early-warning network to spot prescription drug abuse, develop national standards for prescription monitoring and try to increase public awareness.
Behind the scenes, Giuliani began reaching out to old friends in a position to influence the path of the investigation. Government officials said that the former mayor contacted then-DEA Administrator Asa Hutchinson, whom he had befriended two decades earlier, and that he also dialed up Karen Tandy, who headed a Justice Department task force and later took Hutchinson's place as DEA chief. In short order, Giuliani arranged a meeting in the conference room of Hutchinson's office to discuss the DEA's plans to keep the drug from being misused.
"The main thing I remember was his commitment to help the company develop safeguards," Hutchinson said. "He was going to bring his expertise to see where security needed to be improved and to provide confidence in the handling of a very dangerous drug."
Cynthia R. Ryan, who was serving as Hutchinson's counsel at the time, described Giuliani as "advocating for a client."
Laura M. Nagel, who then headed the DEA's office of diversion control, was not happy. "My reaction was that they went around me," she said of Purdue. "They went and got Rudy. I think they thought they were buying access and insight into how to manage things politically."
A week before the first anniversary of the Sept. 11 attacks, the former mayor joined Hutchinson and then-Attorney General John D. Ashcroft for the opening of a traveling DEA exhibit on drug trafficking and terrorism. Giuliani, who as a prosecutor and mayor had emphasized his record fighting crime, also spoke at a luncheon that day that raised about $20,000 for the DEA Museum Foundation. Bill Alden, the foundation president, said he did not learn until later that Giuliani was working for Purdue Pharma.
Ryan, the former DEA lawyer, said Giuliani's fundraiser "had no impact on the path of the case."
After the fundraiser, Nagel said she was summoned to accompany Hutchinson to a second meeting with the former mayor, this one in Giuliani's 24th-floor offices in New York. Hutchinson said the meeting was for the DEA's benefit.
"Giuliani and his team went through the details of his plan" to keep OxyContin out of the wrong hands, he recalled. "We were receivers of the information."