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Giuliani also has massive conflicts of interest through his law firm with the Trans Texas Corridor.
Qatar Contract Offers Glimpse Into Giuliani Firm
Dealings Have Potential For Trouble If Ex-Mayor Receives Nomination
By MARY JACOBY
November 7, 2007
Rudy Giuliani is one of the few candidates ever to pursue the White House while maintaining a high-ranking role in a private-sector firm.
But since he became a candidate for president, the Republican front-runner has rebuffed all calls to disclose details about the clients and dealings of Giuliani Partners, the consulting firm he founded in 2002.
Some of those clients have controversial records. Among those he hasn’t disclosed is the government of Qatar, a Persian Gulf state to whom the firm provided security advice, according to the former U.S. ambassador there. Qatar is a strategic U.S. military ally and energy supplier, yet also a country that has been criticized for its conduct toward al Qaeda — a potential political pitfall for a candidate pitching himself as an uncompromising foe of Islamic terrorism.
Other potentially controversial dealings have been disclosed by the firm or by clients over the years. They include Purdue Pharma, a drug company that hired the firm in 2002 to help with a federal investigation into overdose deaths attributed to the pharmaceutical firm’s powerful OxyContin painkiller, and New York nuclear-power-plant operator Entergy Nuclear Northeast.
But more recent Giuliani clients aren’t known. Because the firm is closely held, Mr. Giuliani isn’t required to disclose much about his income and wealth, other than his holdings in the firm itself, where he remains chairman and chief executive and receives income in the form of guaranteed payments and partnership distributions.
Campaign watchdog groups say that raises some red flags. “Are there folks who might want to have greater influence with a potential President Giuliani? If so, they may be partnering with him now in the hopes of currying favor with him later,” says former federal prosecutor Melanie Sloan, head of Citizens for Responsibility and Ethics in Washington, a nonpartisan watchdog group.
Mr. Giuliani so far has fended off all queries. Giuliani campaign spokeswoman Maria Comella said the campaign wouldn’t comment on any matters to do with the candidate’s business, and said such questions should be answered by Giuliani Partners. A spokeswoman for Giuliani Partners, Sunny Mindel, said in an email: “We do not discuss our clients.”
Earlier this week, he reiterated that he wouldn’t release his client list in an Associated Press interview. “Everything I did with Giuliani Partners has been totally legal, totally ethical,” he said. “They are a very ethical and law-abiding business … There’s nothing for me to explain about it. We’ve acted honorably, decently.”
Still, Mr. Giuliani could face questions about his business ties if he wins his party’s nomination. The Qatar contract offers a window into the potential complications.
Many details of the deal aren’t known, including whether it is still in effect. It was signed with state-run Qatar Petroleum around 2005, according to Chase Untermeyer, who left a three-year term as President Bush’s envoy to Qatar in August. It involved a subsidiary, Giuliani Security & Safety LLC, which offered security advice to a giant natural-gas processing facility in Qatar.
Mr. Untermeyer provided the information after The Wall Street Journal asked him about a 2006 speech in which he said Mr. Giuliani’s firm had “important contracts” in Qatar.
He is a Republican who says he hasn’t endorsed any candidate in the party’s nominating contest; he hasn’t donated to any campaigns this cycle. A spokeswoman for Giuliani Partners declined to comment on the connection.
While Qatar is a U.S. ally, it has drawn scrutiny for its involvement in the U.S. effort to combat terrorism. In 1996, the Federal Bureau of Investigation went to Qatar to arrest al-Qaeda operative Khalid Sheikh Mohammad, then under indictment in New York for a plot to blow up U.S.-bound jetliners. But Mr. Mohammad slipped away, apparently tipped off by an al-Qaeda sympathizer in the Qatari government, U.S. officials told the bipartisan 9/11 commission. Mr. Mohammad went on to mastermind the Sept. 11, 2001 attacks.
Qatari officials have denied they tipped off Mr. Mohammad, and a State Department report says the country has offered “significant” counterterrorism support to the U.S. since the 2001 attacks.
Phone calls, emails and faxes seeking comment from officials at Qatar Petroleum in Qatar and at the country’s embassy in Washington went unanswered.
The emirate also hasn’t always followed U.S. wishes in recent years. The Bush administration has pressured Qatar to tone down the anti-American rhetoric of Al-Jazeera, the television station based there. But Qatar rebuffed the request, citing freedom of the press. Qatar also has lagged behind President Bush’s ambitious global-democracy agenda. While the emir has made limited moves toward elections, political parties remain banned and proselytizing by non-Muslims is illegal.
The public financial disclosure report Mr. Giuliani filed in May to run for president doesn’t require him to disclose such contracts as the one with Qatar. It requires him only to reveal his 30% equity stake in Giuliani & Company LLC, the holding company that is the umbrella corporate structure of Giuliani Partners, Giuliani Security & Safety and other related entities.
Other 2008 presidential hopefuls also have faced scrutiny of their private-sector ties and investments. Democratic hopeful John Edwards worked as a consultant for a private-equity fund before running for the 2008 nomination but has faced questions about his $16 million stake in the firm.
Former Massachusetts Gov. Mitt Romney helped found and run private-equity firm Bain Capital, but he retired from the firm in 1999 before holding public office. He still has stakes in Bain funds but has no say in how Bain makes or disposes of its investments, his financial-disclosure report says.
No candidate’s wealth is as closely tied to one entity as Mr. Giuliani’s. He earned income of more than $4 million from Giuliani & Company between January 2006 and May 2007, his financial-disclosure report shows. He values his 30% stake in the company at between $5 million and $25 million.
Barring disclosure from Mr. Giuliani, it isn’t known how much the consulting contract in Qatar contributed toward his income. In addition, Mr. Giuliani receives $1 million in guaranteed income each year from his law firm, Bracewell & Giuliani, which opened an office in Dubai, United Arab Emirates in June.