Giuliani's Kerik Woes Resurface Through Informant

FBI documents show that while Ray has served as a confidential informant, agents have at times questioned his credibility. He can ramble for hours, weaving conspiratorial theories with folksy tales about his high-flying days as Kerik's buddy and his secretive work for the FBI and U.S. military.

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Ray was described as a "calculating, manipulative and hostile man" in a psychological evaluation conducted by an expert his wife hired for the divorce case.

Ray's expert provided a more favorable analysis. Earlier this year, federal officials gathered evidence suggesting that he had, for a second time, violated his probation in connection with his conviction in an earlier organized-crime securities fraud case. They declared him a fugitive, even as Ray continued talking to and e-mailing the FBI.

U.S. marshals spent weeks tracking Ray's cellphone traffic across New York, with agents working 24-hour shifts until they caught his signal in July in an apartment on the city's Upper East Side. Five marshals burst in, pinned him to the floor and handcuffed him, breaking his arm. Inside, they found two computers, six cellphones and photographs of Kerik. As they hauled Ray away, one marshal recalled hearing his 18-year-old daughter scream, "Police corruption! This is because of Mayor Rudy Giuliani and Bernard Kerik!"

His legal problems aside, Ray has supporters in government circles who say that over the years he assisted them with delicate matters. Ray's court files include a letter from NATO thanking him for his "efforts to ensure good communication and understanding between ourselves and the Russian leadership" in reaching a deal to end bombing during the Kosovo crisis in the late 1990s. FBI files reflect his help with organized-crime cases.

"One of the problems with Larry's story is it is so complex," said retired three-star Marine Gen. Charles H. Pitman, a Purple Heart recipient who befriended Ray a decade ago. "It is like reading a novel, you can't put it down but it goes on and on. In fact, he has been straightforward. He was anxious to help the government. He was kind of a wannabe minuteman."

The Evidence

Larry Ray began providing New York authorities with evidence of Bernard Kerik's wrongdoing in December 2004 when the former New York police commissioner was nominated for the post of homeland security secretary. The nomination was pulled within days because of questions about Kerik's background.

Ray turned over voice recordings, e-mails, photographs, city documents and other items outlined in a 33-page roster of evidence. That material offers new details about the Interstate matter.

Records, for instance, show that Interstate first faxed a copy of its application to the Giuliani administration to Kerik in November 1998. A separate affidavit that Ray filed with New Jersey gambling authorities, which rejected Interstate for business, also alleges that Kerik arranged for meetings between company representatives and gambling authorities.

Kerik told Ray repeatedly that Giuliani was aware of Interstate's desire to secure city contracts, Ray alleged in an interview with The Post. Ray added that he once sat in Kerik's office as Kerik discussed the matter in a phone call with Giuliani. After hanging up, Ray said, Kerik went over to City Hall to meet with Giuliani.

Connolly said that Giuliani never had a conversation with Kerik regarding Interstate at the time. "The only conversation he recalls ever having with Bernie regarding Interstate occurred in December 2004 when the press was reporting that relationship in connection with events at the time," Connolly said, adding, "There were never any one-on-one meetings with Larry Ray and Rudy Giuliani ever."

On April 29, 1999, Kerik sent Ray an e-mail titled "Important!!!!!!!!!!!!" that said that the mayor had appointed Raymond Casey, one of his relatives, to a top job at the city's Trade Waste Commission, which Interstate was trying to influence. The e-mail was turned over to authorities and The Post.