How Giuliani Made $30 Million Without Even Trying

Rudy Giuliani has quite a few questionable relationships with a motley crew of dubious characters, but Hank Asher, a former drug-runner, business partner, and "close friend" of Giuliani's, bears special attention right now.

Giuliani and Asher met in 2002 when Asher demonstrated his Matrix database software for the former mayor, who was reportedly impressed enough to strike a business deal: Giuliani Partners would represent Asher's company, Seisint, as part of a very lucrative arrangement. GP got $2 million per year, a commission on Seisint's government sales, plus stock options that were worth a bundle after LexisNexis bought Seisint in 2004.

Giuliani's association with Asher became somewhat controversial lately, after Asher's name popped up in a California public corruption indictment. But the business partnership looks even more interesting today, in light of this report in Time.

GP pulled in more than $30 million for just one year's work on Seisint's behalf, company records show.... But the Seisint deal wasn't as perfect as it seemed. One problem: the payment of percentages or commissions to "solicit or secure" government contracts is prohibited by federal law and laws of some states. Tom Susman, ethics chairman of the American League of Lobbyists, says the bar on commissions is intended to eliminate incentives for middlemen to bend the rules to land a contract. A GP official who refused to be named insists that the firm never received "commissions" from Seisint -- despite what Brauser and Latham remember and despite the fact that payments to GP are labeled "commissions" in both the minutes of a Seisint board meeting and a key financial statement.
Instead, says the official, GP earned "special bonuses" based on the achievement of corporate "milestones."
Please. Giuliani's firm lobbied to help Seisint secure lucrative government contracts. Seisint, in turn, paid the firm "commissions." But now Giuliani's team want to redefine the word, in order to make it legal -- they weren't "commissions," they were "special bonuses." Even by Giuliani standards, this kind of lying is just insulting.

Wait, it gets worse.

Seisint was using Giuliani's name to open doors and secure contracts, but Giuliani insists he was never a lobbyist, and never registered as a lobbyist.

But this doesn't add up. Giuliani's firm pulled in $30 million thanks to Seisint. How, exactly, does Giuliani justify all of this money? If it wasn't money earned by commission, and it wasn't generated by lobbyist fees, what was Seisint paying $30 million for?
Rudy never registered as a lobbyist because even though he and his clients were using his name to advance their interests with the federal and state governments, he claimed he never actually lobbied. And now the commissions he got for securing government contracts through his savvy "not lobbying" aren't really commissions but "special bonuses."
Nice work if you can get it. Unless it all turns out to be illegal.
Which, in this case, given all the lobbying Giuliani did, it might very well be.

Enjoy this piece?

… then let us make a small request. AlterNet’s journalists work tirelessly to counter the traditional corporate media narrative. We’re here seven days a week, 365 days a year. And we’re proud to say that we’ve been bringing you the real, unfiltered news for 20 years—longer than any other progressive news site on the Internet.

It’s through the generosity of our supporters that we’re able to share with you all the underreported news you need to know. Independent journalism is increasingly imperiled; ads alone can’t pay our bills. AlterNet counts on readers like you to support our coverage. Did you enjoy content from David Cay Johnston, Common Dreams, Raw Story and Robert Reich? Opinion from Salon and Jim Hightower? Analysis by The Conversation? Then join the hundreds of readers who have supported AlterNet this year.

Every reader contribution, whatever the amount, makes a tremendous difference. Help ensure AlterNet remains independent long into the future. Support progressive journalism with a one-time contribution to AlterNet, or click here to become a subscriber. Thank you. Click here to donate by check.

DonateDonate by credit card


Don't Sit on the Sidelines of History. Join Alternet All Access and Go Ad-Free. Support Honest Journalism.