THIS STORY HAS BEEN FORMATTED FOR EASY PRINTING

Giuliani blasts expense story as 'a hit job'

Adviser says costs were not ruse for affair

Email|Print| Text size + By Brian C. Mooney
Globe Staff / November 30, 2007

Rudy Giuliani's presidential campaign said yesterday that internal bookkeeping practices - not an attempt to conceal an extramarital affair - were the reason tens of thousands of dollars for security expenses were allocated to obscure city agencies while he was New York mayor.

Giuliani said they were "completely legitimate expenses" and that a report about them, which appeared on the website of The Politico just hours before Wednesday night's Republican debate, "was like a hit job."

"I kind of got the idea that it was not a legitimate story," he said in an interview with CNN.

While mayor, Giuliani was accompanied by New York police officers around the clock regardless of where he traveled.

The Politico, citing city records obtained under the state's public records law, said "the mayoral costs had nothing to do with the functions of the little-known city offices that defrayed the tabs, including agencies responsible for regulating loft apartments, aiding the disabled, and providing lawyers for indigent defendants" and that the expenses occurred between 1999 and 2001 "when he was beginning an extramarital relationship" with Judith Nathan. She became his third wife in 2003.

The Politico, however, said it was "impossible to know" whether the purpose of all 11 summer trips to the Hamptons was to see Nathan. Giuliani long ago acknowledged the affair with Nathan, which began while he was married to Donna Hanover.

Joseph J. Lhota, who served as budget director and, later, Giuliani's deputy mayor, said yesterday in a telephone interview with the Globe: "There's nothing wrong here. There was total transparency . . . There's no basis in fact that this had anything to do [with] hiding costs related to a relationship."

Giuliani's security detail used a mayor's office American Express card to pay expenses, which were then apportioned among numerous agencies under the mayor's office, Lhota said. Later, the New York Police Department reimbursed the mayor's office, and "these divisions were never deprived of any monies," he said.

"No one was trying to do anything here but make sure there were timely payments off this credit card," said Lhota, who is an adviser to the Giuliani presidential campaign. "If we had made NYPD pay directly, there would be nontransparency because they would argue this is a security issue."

Lhota said the trips to the Hamptons were "a small snippet" of the travel costs of his security detail and were emphasized "just to make the story salacious." But neither Lhota nor Giuliani denied the Hampton trips were to see Nathan.

Responding to Giuliani's "hit job" comment, Politico's editor-in-chief, John F. Harris, said in a statement: "This was a fair and carefully reported story. We gave the Giuliani campaign ample opportunity to dispute the story or comment on our reporting before publishing and they did not do so. Since the story ran, we have not heard from the campaign disputing any substantive aspect of the story."

Although the expenses could resurrect issues that Giuliani has sought to dismiss by acknowledging he has made mistakes in his personal life, none of his Republican rivals publicly commented yesterday.

The expenses at issue occurred during Giuliani's final years as mayor and included gasoline and hotel charges for his police detail. Giuliani's out-of-city travel also included expenses from his abbreviated campaign for an open US Senate seat in 2000.

The expenses were flagged in early 2002 by city Comptroller William C. Thompson Jr., whose auditors "were unable to verify that these expenses were for legitimate or necessary purposes," according to a letter to Mayor Michael Bloomberg, Giuliani's successor. The letter also noted that "non-local travel expenditures" for mayoral agencies on the account soared 151 percent in one year.

In a prepared statement, Stu Loeser, Bloomberg's press secretary, said: "During the Giuliani Administration, we believe that security expenses that were originally paid by the mayor's office were ultimately reimbursed by the Police Department."

In an interview, however, he said Bloomberg's policy is to have the police department pay those departments directly.

After Giuliani left office, some members of his mayoral security detail went on to perform similar duties at his consulting firm, Giuliani Partners, and continue to accompany him on the presidential campaign trail today. Reports filed with the Federal Election Commission show that Giuliani's campaign paid Giuliani Partners $131,212 in September for security services.

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