Monday, November 12, 2007

Rudy, they barely knew ye

Client base

Giuliani Partners has been categorized by various media outlets as a lobbying entity capitalizing on Giuliani's name recognition.[10][11] Clients of Giuliani Partners are required to sign confidentiality agreements, so they do not comment about the work they get done or the amount that thay have paid for it.[1] Giuliani himself has refused to talk about his clients, the work he did for them, the compensation he received from them, or any details about the company.[1]

One of Giuliani Partners' clients during this time included an admitted drug smuggler and millionaire founder of companies that perform electronic information gathering (datamining) on individuals, Hank Asher, who according to a shareholder in the company, hired Giuliani for his "influence with the federal government to enable Mr. Asher to take an active role in Seisint as a chief executive officer despite the allegations about his drug dealing." Giuliani helped Asher's company get $12 million in government grants.[1] After Asher's past was publicly revealed, he resigned from the company; Giuliani defended him to newspapers without mentioning that Asher was a paying client.[1] After Asher's resignation, investors in the company, Seisint, looked into how much Giuliani Partners had been paid: $2 million a year in fees, a commission on sales of Seisint products, and 800,000 warrants for Seisint stock, which would prove valuable when Seisent was sold to Lexis Nexis for $775 million. One investor sued the board, claiming that Giuliani's contributions had not been worth the large amount paid.[1][12]

In representing a pharmaceutical company, Purdue Pharma, maker of OxyContin, in a case against the Drug Enforcement Administration, Giuliani Partners negotiated a $2 million fine and no further penalty for what the DEA called "lax security" at plants that produced OxyContin, which the DEA said was being used as a recreational drug. The lead DEA investigator later said that Purdue Pharma got off easily in the case because of Giuliani's connections to government officials.[1] Giuliani later represented Purdue Pharma in a recently settled case in which the DEA accused the company of marketing OxyContin by playing down its level of addictive properties. Giuliani met with government lawyers six times to help negotiate a settlement in the case.[1]

Forbes reported in November 2006 that Giuliani Partners accepted fees from penny stock firms, made alliances that have gone nowhere and formed pacts with businesses and individuals that have come under scrutiny by regulators and law enforcement officers.[13] For instance, Giuliani Capital Advisors accepted 1.6 million warrants from Lighting Science Group at 60 cents, a fee of $150,000 and a promise to raise cash. The company went bankrupt, losing $412,000 on sales of $137,000 in the first part of 2006. Another venture CamelBak, started out under Giuliani's consulting arrangement with $31 million in sales, but was run into the ground with various missteps, including having the disgraced Bernard Kerik sit on its board. Forbes said Giuliani's most controversial deal was throwing in with a 2004 project with Applied DNA Sciences. Its backer, Richard Langley Jr. had previously pleaded guilty to conspiracy to commit wire fraud and commercial bribery in another penny stock scam.[14][15]

Mexico City hired Giuliani Partners to consult on its crime rate, hoping for a drop in crime like that New York City had experienced in the 1990s. Giuliani toured the city for a day and Giuliani Partners produced a report analyzing ways in which crime could be reduced. However, in the year after the plan was implemented, crime dropped 1% and some city officials expressed regret at hiring Giuliani for a $4.3 million fee. Some called it a "$4 million publicity stunt".[1] Some of the recommendations that were put into place included using Breathalyzers on drunk drivers and targeting "squeegee men".[16]

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