Kerik, Indicted on Corruption Charges, Pleads Not Guilty

Former senator Fred D. Thompson (Tenn.), meanwhile, told reporters at a Washington news conference that he didn't know enough about the Kerik case to address it.

Responding to McCain, Randy Mastro, a deputy mayor under Giuliani, invoked the senator's involvement in the Keating Five scandal in the 1980s, when McCain and four other lawmakers were tied to Charles Keating, a corrupt savings-and-loan official. Mastro made the case that no politician is perfect, saying, "It's no fairer to judge Rudy Giuliani on the basis of this one issue than it would be to judge John McCain on the basis of the Keating Five scandal."

Giuliani, who has been dogged by Kerik's expanding legal problems, said Thursday that he made a "mistake" in not investigating Kerik's background. But he has continued to praise Kerik.

Friday's indictment charges that within months of his appointment by Giuliani as New York City's prisons commissioner, Kerik was accepting payments from a New Jersey company eager to shed its mob reputation to win lucrative contracts with the city. The company, which is not identified in the indictment, was under investigation by four government agencies for ties to organized crime when it spent more than a quarter of a million dollars on marble bathrooms, a whirlpool tub and a grand marble rotunda in Kerik's Bronx apartment.

Both the company and Kerik hid the expenses in order to conceal their relationship, the indictment alleges. In exchange, Kerik set up meetings with city officials as recently as 2005 to vouch for the company's reputation.

According to the indictment, over a six-year period, Kerik failed to report $500,000 in income to the Internal Revenue Service and falsely claimed tens of thousands of dollars in tax deductions. The indictment charges Kerik with "selling his office" for hundreds of thousands of dollars when he was prisons commissioner and police commissioner, then lying to cover up the schemes. He is also charged with asking witnesses to lie to investigators about the payments and with providing false information to a state grand jury investigating similar charges.

The indictment is peppered with references to business dealings Kerik had with at least eight unnamed and unindicted co-conspirators, including the owners of the contracting company, the Israeli industrialist and the Brooklyn businessman, whose loan was repaid in mid-2005.

Investigators obtained e-mails and recorded hundreds of hours of Kerik's phone calls, capturing his complaints about feeling as though he was living on "welfare" compared with the wealthy contractors who were shoveling money his way.

The indictment capped a stunning fall for Kerik just three years after Bush nominated him to be homeland security secretary, hailing the former police chief as "one of the most accomplished" law enforcement officers in the nation. At the time, New York's U.S. senators, Democrats Hillary Rodham Clinton and Charles E. Schumer, joined the city's mayor, Michael R. Bloomberg, in championing the appointment.

But Kerik's fortunes soon began to unravel in the vetting process, and he was forced to withdraw his nomination.

Staff writer Alec MacGillis in Washington contributed to this report.