Kerik, Indicted on Corruption Charges, Pleads Not Guilty

Prosecutors Allege Years of Fraud and Lying

WHITE PLAINS, N.Y., Nov. 9 -- In 2003, while Bernard B. Kerik was in Baghdad to rebuild Iraq's beleaguered police force, his bank accounts back in New York were allegedly being filled by friends eager to expand their dealings with the city and the federal government.

A Brooklyn businessman supplied Kerik with a personal, interest-free loan of $250,000 -- money allegedly borrowed from an Israeli industrialist whose companies sought business with the federal government. Kerik, according to federal prosecutors, failed to disclose the loan on tax returns. He also left it off the White House forms he filled out nearly a year later when President Bush nominated him to lead the Department of Homeland Security.

On Friday, federal prosecutors unsealed an indictment against the former New York City police commissioner and onetime close aide to Republican presidential candidate Rudolph W. Giuliani, charging him with 16 counts of corruption, mail and tax fraud, obstruction of justice, and lying to the government.

Kerik, 52, pleaded not guilty at an arraignment here and vowed to fight the charges.

"I am disappointed that the government has brought forth this case. This is a battle I'm going to fight," he said outside the federal courthouse in White Plains, north of New York City. He was released on a $500,000 bond, and he surrendered his passport and personal firearms.

Prosecutors said the charges against Kerik carry a maximum sentence of 142 years and more than $5 million in fines. Justice Department officials had hinted that he was under widening federal investigation for improperly accepting apartment renovations and failing to report hundreds of thousands of dollars in income.

But Friday's 30-page indictment, and the stinging condemnation of prosecutors, went much further -- painting Kerik as a corrupt public official since before he came to national prominence.

"Time and again Kerik was asked specific questions about his financial dealings, and time and again he lied," said Michael J. Garcia, U.S. attorney for the Southern District of New York.

Hours after the indictment was unsealed in federal court, Giuliani's Republican presidential rivals -- most notably Sen. John McCain (Ariz.) -- said the former mayor's friendship with Kerik highlights what they see as his lack of judgment.

McCain focused his remarks not on the corruption allegations but on Kerik's brief tenure in 2003 as the person in charge of training Iraq's police force, an endeavor that has been widely judged a failure.

"Kerik was supposed to be there to help train the police force. He stayed two months, and one day left, just up and left," McCain told reporters in New Hampshire, according to the Associated Press.

Giuliani's other chief competitors were more muted. Speaking in New Hampshire late in the day, former Massachusetts governor Mitt Romney called the indictment "very sad and disappointing," according to the Associated Press. "You expect people who assume the public trust to abide by it and to live by high standards of ethical conduct," Romney said. He added: "It's not for me to say at this point what the implications are for Mayor Giuliani."