"American Idol" (page 3 of 4)
February 13: The royal treatment: With Prince Andrew and Judith Nathan, Giuliani shows off his honarary knighthood in London.

The dark-oak-paneled offices of Giuliani Partners are on the twenty-fourth floor of a new skyscraper at the corner of 42nd Street and Seventh Avenue, built by Mort Zuckerman as part of the Times Square redevelopment that Giuliani ushered along as mayor. Giuliani has the largest space, with a picture window with a spectacular view north. Directly across the street is the zipper building, One Times Square. Sometimes Giuliani looks out and remembers the day three years ago when he watched an emergency scene here: A giant mylar sign was flapping loose from One Times Square, and 20 floors off the ground a firefighter dangled to tie it safely back down. The firefighter was Terry Hatton, the husband of Giuliani's assistant then and now, Beth Petrone. Three weeks ago, Giuliani attended the christening of Petrone's 3-month-old baby daughter. Hatton died at the World Trade Center, never knowing his wife was pregnant.

When Giuliani walks the thick gray carpet leading from his suite, he sees many of the same faces who've orbited outside his office for twenty years. The other partners at what employees call G.P. are Denny Young, who goes back to Giuliani's eighties days in the U.S. Attorney's office; Michael Hess, most recently the city's corporation counsel; Tony Carbonetti, chief of staff in Giuliani's City Hall; and Teitelbaum. Tom Von Essen, the former fire commissioner; Richie Scheirer, former head of the city's Office of Emergency Management; and Kerik are senior vice-presidents. Sunny Mindel, communications director, is as potent a force at G.P. as she was as Giuliani's mayoral press secretary. The one prominent newcomer is Roy Bailey, a Texas financier, who came aboard to handle the firm's investments.

Giuliani Partners admits to only four clients; its other deals are either said to be "in formation" or confidential. The first, Merrill Lynch, came aboard in April. Giuliani has been friends with senior Merrill executives for decades. But his loyalty, and his eagerness to sign up a big-name client, led Giuliani into a mistake. When New York attorney general Eliot Spitzer went after Merrill for publicly hyping what its analysts believed to be overvalued stocks, Merrill asked Giuliani for help heading off both a possible fraud prosecution and a certain public-relations debacle. Giuliani called Spitzer -- and was promptly, embarrassingly snubbed. Giuliani was too late; Merrill caved, paying a $100 million settlement. Spitzer made his decision on the merits of the case, but Giuliani's call also triggered a sour memory: When Spitzer was elected attorney general in 1999, he placed a courtesy call to Giuliani. The mayor never called back.

In the next few months, when the reeling Arthur Andersen, Enron, and Tyco came calling, seeking a public-relations white knight and waving millions of dollars at Giuliani, the former mayor politely declined. Much of the consulting work done so far by Giuliani Partners sounds more like good old-fashioned lobbying. "Nextel is trying to broaden its use throughout police departments and public-service emergency departments throughout the nation -- sheriffs, police departments, fire departments," Von Essen says. "So we've been trying to talk to them on how we think they could do a better job of marketing their product."

That Giuliani Partners is selling itself as an expert in emergency communications is especially ironic given what New Yorkers have learned about the failure of the NYPD and FDNY to talk to each other before and during September 11. The recent McKinsey report on the flawed World Trade Center response angered Giuliani and company. "We talk about that a lot, about how people look back a year later and say, 'They should have, they would have, they could have,' " Kerik seethes. "Fuck that. Nobody can tell me what was right or what was wrong, unless you were standing next to me. There was only a couple guys standing next to me. And Rudy was one of 'em."

Giuliani's third police commissioner has been working with Purdue Pharma, the drug manufacturer plagued by the theft and abuse of its OxyContin painkiller. "The mayor and I just met with Asa Hutchinson, the director of the DEA; his staff; and people from Purdue," Kerik says. "We don't want Purdue put in a position where it winds up being taken over by the courts. Or they get put out of business. What I'd like to see come out of this is we set model security standards for the industry." Coincidentally, last week Giuliani raised $15,000 for the DEA's traveling museum.

"Is Rudy more relaxed?" Kerik says with a laugh. "No. At ease? No. Nothing's changed. Personally, I love the guy. He's the godfather of my daughter. We're very, very close. But there's never a time that you forget he's the boss." Lately, though, that power relationship seems to have grated on Kerik. He's pushed for the spinoff of a company called Giuliani-Kerik. "How'd you get that?" Kerik splutters. "The corporate papers aren't done yet!" He regroups to say the new venture isn't a sign of any itchiness. "We decided to create the firm as a competitor to the Krolls and Decision Strategies and other companies like that. It could be litigation support, dignitary protection, other security-consulting issues. Giuliani Partners is sort of a much-higher-level global consulting."



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