The Giuliani Papers

Giuliani and OxyContin

Of course, you could have read about it months and months ago right here, but The New York Times front page gets around to it today. Giuliani's cosy get rich deal with the makers of OxyContin.

In 2002, the drug maker, Purdue Pharma of Stamford, Conn., hired Mr. Giuliani and his consulting firm, Giuliani Partners, to help stem the controversy about OxyContin. Among Mr. Giuliani’s missions was the job of convincing public officials that they could trust Purdue because they could trust him.

...his work for Purdue, the company’s first and longest-running client, provides a window into how he used his standing as an eminent lawyer, a Republican insider and a national celebrity to aid a controversial client and build a business fortune.

Dennis Lee, the Virginia state prosecutor for Tazewell County, an area hard hit by OxyContin abuse, said he was stunned several years ago to learn that Mr. Giuliani was working for Purdue. He had a favorable impression of Mr. Giuliani, he said, and a poor opinion of the company, which he said had played down and dissembled about its drug’s problem.

“I was shocked,” Mr. Lee said, “that he would basically become a mouthpiece for Purdue.”

The crisis that brought Purdue to Mr. Giuliani in 2002 involved OxyContin, a time-released form of the narcotic oxycodone, which had turned into a blockbuster product with annual sales of more than $1 billion.

But along the way, the pain medication had also become a popular drug for abuse. Among the company’s critics were officials at the Drug Enforcement Administration who said OxyContin had been a factor in hundreds of overdose deaths. Some D.E.A. officials and others also charged that Purdue had hyped the drug’s resistance to abuse and then failed to act swiftly when its misuse became apparent.

Giuliani was picked as the perfect lobbyist to the DEA:

Asa Hutchinson, the director of the Drug Enforcement Administration in 2002, hardly needed an introduction to Mr. Giuliani. So it was perhaps not surprising that Purdue chose Mr. Giuliani as the person to meet with Mr. Hutchinson at a time when the drug maker was under intense scrutiny by the D.E.A.

“You need to have somebody who has clout to get in the door to legitimately make your presentation,” said Jay P. McCloskey, a former United States attorney in Maine who until recently worked for Purdue as a consultant.

After the meetings, Mr. Hutchinson, who generally did not get involved in individual investigations, asked D.E.A. officials several times to brief him on the inquiry, Laura Nagel, the official in charge of it, has said in previous interviews. She declined to comment for this article.

D.E.A. officials say Mr. Giuliani ultimately did not affect the inquiry’s course. But Purdue Pharma did succeed in favorably resolving the matter. In 2004, it paid a $2 million fine to settle the D.E.A. record-keeping charges without admitting any wrongdoing. The sum was far smaller than the amount first recommended by Ms. Nagel, which one former D.E.A. official said was $20 million.

More on Illegal Giuliani Partners Fees

The Times reports on the illegal fees Giuliani received from Seisent:

The Giuliani firm ultimately made about $25 million as a result of its deal with Seisint, based on fees, bonuses and the sale of stock options after Seisint was bought in 2004 by the Reed Elsevier Group, owner of LexisNexis.

Charles Tiefer, a professor at the University of Baltimore School of Law and an expert on government contracting, said federal law clearly prohibited a commission for a consultant or lobbyists in return for work on behalf of a company seeking a federal contract.

The law is intended to remove an incentive that might prompt questionable actions by lobbyists in trying to secure contracts.

Professor Tiefer said that because Giuliani Partners knew a primary sales target for Seisint would be the government, it should not have signed a deal with bonuses based on sales, even if it did not formally violate the law.

“It does not matter if it was a bonus based on sales milestones,” he said. “It fits the general definition.”

Giuliani Partners and Illegal Commissions

The money Giuliani made from pal, convicted coke smuggler Hank Asher, by lobbying Asher's database software to the Feds, is illegal, breaking federal law forbidding the payment of fees to solicit government contracts.

Steve Benen notes:

Giuliani and Asher met in 2002 when Asher demonstrated his Matrix database software for the former mayor, who was reportedly impressed enough to strike a business deal: Giuliani Partners would represent Asher’s company, Seisint, as part of a very lucrative arrangement. GP got $2 million per year, a commission on Seisint’s government sales, plus stock options that were worth a bundle after LexisNexis bought Seisint in 2004.

And Time reports:

In the first year, GP earned $6.5 million, Seisint records show, in part for what Brauser and Seisint's in-house lobbyist, Dan Latham, say were commissions for state and federal contracts. Giuliani "came through," says Brauser. "The doors were wide open. It was almost a flood of business opportunities." Latham says GP set up meetings in 2003 at the Department of Homeland Security at which Seisint executives pushed a data-mining program called the Multistate Anti-Terrorism Information Exchange, or MATRIX. The program looked like a promising law-enforcement tool that states could use in partnership with Seisint. The Federal Government spent $12 million to run the program, and eventually 13 states signed up to participate in it.

But the Seisint deal wasn't as perfect as it seemed. One problem: the payment of percentages or commissions to "solicit or secure" government contracts is prohibited by federal law and laws of some states. Tom Susman, ethics chairman of the American League of Lobbyists, says the bar on commissions is intended to eliminate incentives for middlemen to bend the rules to land a contract.

Giuliani Partners also made money by pumping the stock:

In most cases, it's impossible to say how much a specific contract has been worth to GP or Bracewell & Giuliani. That's one reason the Seisint case is interesting. By December 2003, Seisint was positioning itself to go public or be bought out. GP, according to Seisint's financial statements, agreed to waive $2.2 million of accrued commissions from its total bill of $6.5 million. In return, the firm received $5.5 million in cash and a much reduced exercise price on 1.7 million stock options that had been granted in the contract.

Seisint was sold to the British-Dutch firm Reed Elsevier. The sale netted GP $24 million, records show, with half of that made possible by the lower stock-option price. "A lot of people made a lot of money on the sale of Seisint," said Latham. "[Giuliani] was one of them."

Giuliani Still Working at Giuliani Partners in October in Violation of Election Law

The claim made by Peter Powers, Giuliani's high-school chum and supposed replacement at the top of Giuliani Partners, to the Wall Street Journal...:

The firm's new chairman, Peter J. Powers, said in an interview yesterday that the Republican presidential candidate stepped down from his management roles in the spring, shortly after launching his campaign. But there was never any formal announcement of the change.

...is contradicted by a story in the Washington Post in October where Giuliani Partners aides say:

...that he continues working part time at the firm. They declined to answer specific questions about the nature of his efforts, his compensation or the amount of time he spends there.

His firm has paid for Giuliani's campaign expenses for months, violating election law.

Federal election laws prohibit Giuliani's firm from absorbing costs or providing services that legally should be covered by political donations, campaign experts said.

"This is a lawyer's nightmare," said Republican political consultant Scott Reed, who ran the 1996 presidential bid of then-Sen. Robert J. Dole (R-Kan.) but is not aligned with a presidential campaign in this race. "I don't think the vulnerability is with voters on the level of his commitment to the race. The concern is really about FEC violations and whether anything this corporation does to help him essentially is making a contribution to run for president in the form of staff time, materials, travel billing or security."

Giuliani's Salary From Giuliani Partners May Be Illegal

An article in Vanity Fair raises many of the same questions all of us with eyes, ears and brains have been saying for a very long time and that MSM TV and newspapers have basically ignored.

One major point in the VF piece is related to Giuliani Partners, from which Giuliani has resigned operational involvement while maintaining his financial interest. This may be illegal:

These days Giuliani’s office sits mostly empty as he canvasses the country for money and votes in his bid to become the Republican nominee for president in 2008. Is he even still working for Giuliani Partners? It’s a relevant question, because if he isn’t—and, really, how could he be in these busy weeks of campaigning before the first Republican presidential primaries?—then he shouldn’t be drawing a salary from the firm. According to a former top Federal Election Commission official, that would be a breach of election law: the firm would in effect be making undeclared campaign contributions. The answer, from Giuliani Partners C.E.O. Mike Hess, is that “Rudy is no longer involved in the day-to-day operations of Giuliani Partners. He maintains his ownership interest.” To the point of whether Giuliani is still earning money from Giuliani Partners, the answer seems a bit delphic, especially after a Washington Post article from October 30, in which Giuliani Partners spokeswoman Sunny Mindel described Giuliani as still working part-time for the company.

To anyone who has followed Giuliani’s meteoric rise in business, that dodge is unsurprising. There are, it seems, at least two Rudolph Giulianis. One is the crusading former U.S. attorney and 9/11-bedecked ex-mayor of New York, cloaked in the six core values prominently featured on Giuliani Partners’ Web site: Integrity. Optimism. Courage. Preparedness. Communication. Accountability.

The other Rudy Giuliani is the one who has brazenly built a business on his 9/11 fame.

Giuliani Lies About Resignation

Giuliani quit his official position at Giuliani Partners after evidence of his firm's ties to Qatar and its ties to terrorrism:

Republican presidential hopeful Rudy Giuliani has stepped down as head of his consulting firm, Giuliani Partners, after months of refusing to disclose the firm's clients or the role he played.

However, Giuliani cannot even resign without lying about it:

The firm's new chairman, Peter J. Powers, said in an interview yesterday that the Republican presidential candidate stepped down from his management roles in the spring, shortly after launching his campaign. But there was never any formal announcement of the change.

As recently as two weeks ago, the firm's Web site identified the candidate as its chairman and CEO. Over the past few months, the firm didn't correct media reports that said Mr. Giuliani retained his positions at the firm while running for office.

Giuliani's Ties to Terrorism

Wayne Barrett's blockbuster in the Village Voice this week:

The contradictory and stunning reality is that Giuliani Partners, the consulting company that has made Giuliani rich, feasts at the Qatar trough, doing business with the ministry run by the very member of the royal family identified in news and government reports as having concealed KSM—the terrorist mastermind who wired funds from Qatar to his nephew Ramzi Yousef prior to the 1993 bombing of the World Trade Center, and who also sold the idea of a plane attack on the towers to Osama bin Laden—on his Qatar farm in the mid-1990s.

This royal family member is Abdallah bin Khalid al-Thani, Qatar's minister of Islamic affairs at the time, who was later installed at the interior ministry in January 2001 and reappointed by the emir during a government shake-up earlier this year. Abdallah al-Thani is also said to have welcomed Osama bin Laden on two visits to the farm, a charge repeated as recently as October 10, 2007, in a Congressional Research Service study.

Abdallah al-Thani remains a named defendant in the 9/11 lawsuits that are still proceeding in Manhattan federal court, but his Washington lawyers declined to address the charges that he shielded KSM, insisting only that he never "supported" any "terrorist acts." Asked if Abdallah al-Thani ever supported any terrorists rather than their acts, his lawyer David Nachman declined to comment further.

So far, MSM has ignored this story. Joe Conason suggests some questions for Giuliani:

1. Are your company's security contracts with Qatar negotiated and administered through the Qatar Ministry of the Interior, as a government spokesman confirmed to the Village Voice?

2. Are you aware that the interior minister appointed in 2001 and reappointed this year by the emir of Qatar is Abdullah al-Thani, the former minister of Islamic affairs and a strict Wahhabi Muslim who has been identified in U.S. press and government reports as a protector of Khalid Sheikh Mohammed?

3. Are you aware that Abdullah al-Thani, a strict Wahhabi Muslim, reportedly hosted Osama bin Laden on two visits to his Qatari farm?

4. Were you aware of that allegation against Abdullah al-Thani when you agreed to work for the Qatar government in 2005?

5. Are you aware that Abdullah al-Thani is a defendant in federal civil lawsuits brought by survivor families against officials deemed directly or indirectly culpable for the 9/11 attacks?

6. Are you aware that former CIA officer Robert Baer has accused Abdullah al-Thani of helping KSM escape from Qatar just before he was to be arrested in 1996 by the FBI?

7. Are you aware that Baer's account, based on the testimony of a former Qatari official, implicates the emir in KSM's escape as well?

8. Did you ever discuss Abdullah al-Thani's alleged terrorist ties with your friend Louis Freeh, the former FBI director, or with the two former FBI counterterrorism agents who work for Giuliani Security?

9. Were you aware when you agreed to provide security services to the emirate in 2005 that the U.S. State Department's annual report on worldwide terrorism released several months earlier had criticized Qatar for coddling Islamist extremists and permitting "members of transnational terrorist groups" to reside there?

10. Are you aware that the government of Qatar has hosted the leadership of Hamas and provides millions of dollars monthly to the Hamas authorities in Gaza -- and that the emir applauded Hezbollah's "victory" over Israel during last summer's war in Lebanon?

U.S. Attorney Prosecuting Giuliani Client OxyContin Told to "Slow Down," Then Put On To-Be-Fired List

This week The Washington Post reported that John L. Brownlee, the U.S. Attorney in Roanoke, Virginia, who was prosecuting Purdue Pharma, the maker of the painkiller OxyContin, was put on the DOJ list of attorneys to be fired after refusing to slow down his efforts against the drugmaker.

The night before the government secured a guilty plea from the manufacturer of the addictive painkiller OxyContin, a senior Justice Department official called the U.S. attorney handling the case and, at the behest of an executive for the drugmaker, urged him to slow down, the prosecutor told the Senate Judiciary Committee yesterday.

John L. Brownlee, the U.S. attorney in Roanoke, testified that he was at home the evening of Oct. 24 when he received the call on his cellphone from Michael J. Elston, then chief of staff to the deputy attorney general and one of the Justice aides involved in the removal of nine U.S. attorneys last year.

Brownlee settled the case anyway. Eight days later, his name appeared on a list compiled by Elston of prosecutors that officials had suggested be fired.

What the Post didn't note was that the lead negotiator on behalf of Purdue Pharma was Rudy Giuliani. In a story in The New York Times, Brownlee is quoted:

In a recent interview, John L. Brownlee, the United States attorney for the Western District of Virginia, described Mr. Giuliani as playing the central role in talks with federal prosecutors.

“When we had meetings, he was the lead counsel and the lead spokesman for the company,” Mr. Brownlee said.

Giuliani worked for Purdue Pharma in two ways: legal representative through Bracewell & Giuliani, a law firm located in Houston, and public relations via Giuliani Partners, a management consulting firm headquartered in New York.

Newsday reports how Giuliani was hired to improve the image of Purdue Pharma after the nationwide problems of OxyContin abuse became known.

On Oct. 23, 2003, Rudy Giuliani appeared with Rep. Curt Weldon in suburban Upper Darby, Pa., to announce a new program - called "Dime Out a Dealer" - that was designed to combat the growing scourge of prescription drug abuse by offering $1,500 rewards to anyone who turned in a pusher.

"Congressman Weldon's new program helps us go after the real villains here, the illegal dealer," Giuliani said, praising both Weldon (R-Pa.) and Purdue Pharma, the Stamford, Conn., drugmaker that was underwriting the program, according to a news release. "By doing so, we ensure that the patients who require these same life-saving and enhancing medicines are not denied access based upon the illegal conduct of others."

The appearance was one in a series of efforts Giuliani undertook over a five-year period after leaving City Hall in 2002 - from image-building and security-consulting to behind-the-scenes lawyering - that helped Purdue grapple with the fallout from widespread abuse of its blockbuster painkiller, OxyContin, by focusing attention on street criminals rather than corporate misconduct and lax regulation.

Giuliani Partners: An Overview

This past May, The Washington Post produced a good general look at how Giuliani's post-9/11 business, Giuliani Partners, was started, how it operates and who it benefits. The company's six words to live by, as exhibited endlessly on its website, are: Integrity, Optimism, Courage, Preparedness, Communication, and Accountability.

Included are the stories of:

- lobbying the DEA on behalf of OxyContin maker Purdue Pharma,
- smoothing the way for an admitted cocaine dealer and Giuliani pal to obtain multi-million dollar federal contracts for so-called anti-terrorist technology, and
- the not-so-integritous Giuliani Partners executives Bernard Kerik and former vice chancellor of the Rockville Center Diocese and accused child molester Alan Placa.

The complete article is here.