Giuliani dismisses report on expenses

By Brian C. Mooney, Globe Staff

Rudy Giuliani's presidential campaign said today 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 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. (Watch it here.)

While mayor, Giuliani was accompanied by New York police officers around the clock no matter where he travelled.

The Politico, citing city records obtained under the state's public records law, said that "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 still married to Donna Hanover.

Joseph J. Lhota, who served as budget director and later deputy mayor under Giuliani, in a telephone interview with the Globe today asserted: "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 non-transparency 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." However, neither Lhota nor Giuliani denied the Hampton trips were to see Nathan.

Responding to Giuliani's "hit job" comment, Politico 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."

While 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 has publicly commented today.