Nine days after registering his presidential exploratory committee last November, Rudolph Giuliani appeared in Singapore to help a Las Vegas developer make a pitch for a $3.5 billion casino resort.
Though the bid ultimately failed, and there was nothing illegal about the involvement, it drew Giuliani into a complex partnership with the family of a controversial Hong Kong billionaire who has ties to the regime of North Korea's Kim Jong Il and has been linked to international organized crime by the U.S. government.
Giuliani's participation as a security consultant in the Singapore gambling venture illustrates the challenge he faces while attempting to win the Republican presidential nomination with a law-and-order message while maintaining a far-flung, international business portfolio, an unknown portion of which remains in the shadows.
As a candidate, Giuliani is banking on his reputation as a hard-nosed prosecutor and a crime-fighting mayor, along with his performance after the Sept. 11, 2001, terrorist attacks, to trump doubts about his turbulent personal life, his tolerant stands on gambling, abortion and other social issues and perhaps some of the decisions he has made as a businessman.
So far, the strategy seems to be working, as Giuliani leads most polls of GOP presidential contenders.
But as the primary campaign nears its first electoral tests in Iowa, New Hampshire and other states in the coming weeks, new details of Giuliani's extensive business dealings since leaving office continue to emerge piecemeal.
Each revelation raises new questions for the first major presidential candidate in memory to build a multimillion-dollar business on the foundation of his time in elected office, and not the other way around.
Confidential candidate
Even today, more than a year after the former New York mayor signaled his intention to run for the presidency, it remains impossible to fully evaluate Giuliani's business dealings because he has declined to list all of the clients in Giuliani Partners, the consulting firm he founded and heads.
Questioned during a campaign appearance Tuesday in Chicago, Giuliani said that, "all of Giuliani Partners' clients, maybe with one or two exceptions, I'm not even sure that's right, are public. ... At least the ones that I was familiar with."
Confidentiality agreements prohibit disclosure of an unspecified number of clients, Giuliani said, "but somehow I think you -- you meaning the press in general -- have been successful in discovering. I'd have to check if it's every client. But just about every single client of Giuliani Partners. You'll have to check with them."
A spokeswoman for Giuliani Partners said that "a number of client relationships ... must remain confidential, as per the specific request of those clients."
She did not respond to questions about whether Giuliani was asking those clients to waive privacy in light of his presidential bid.
Giuliani's public involvement in the gaming bid began at a September 2006 news conference in Singapore hosted by Mark Advent, CEO of Eighth Wonder LLC, a Las Vegas development company heading one of three consortia competing to build the Sentosa Integrated Resort.
Giuliani Security & Safety LLC, a division of Giuliani Partners, was to provide security on a celebrity-studded, multibillion-dollar project featuring participation by soccer legend Pele, chef Alain Ducasse, New Age guru Deepak Chopra and designer Vera Wang, according to Advent.
Advent estimated that he spent more than $30 million to assemble and present his plans to Singaporean authorities.
He declined to disclose the fees paid to Giuliani, but described them as "fair and priceless."
Advent said he sought Giuliani's services because he was impressed by the way Giuliani ran New York, before and especially after the Sept. 11 attacks. "In my personal opinion, the mayor is the best crisis manager, post-traumatic event, of anyone I've ever seen," Advent said in a recent telephone interview.
'Tremendous due diligence'
Behind the scenes, Giuliani had been involved in the project for three months before his involvement was made public, and he had a 10-year agreement to provide "security management on all levels," including employee background checks, security features and disaster response, said Advent, who previously developed Las Vegas' New York, New York casino.
Giuliani participated in Eighth Wonder's presentation to Singaporean authorities last Nov. 29, according to Advent. That was nine days after the Rudy Giuliani Exploratory Committee Inc. registered with the Federal Election Commission.
Advent said he never discussed how the consulting arrangement would be affected if Giuliani ran for president. "At no time did Rudy ever talk politics with me," Advent said.
Advent described Giuliani as extraordinarily concerned about his firm's partners and associates.
"They did a tremendous amount of due diligence. ... They wanted to make sure they vetted everybody," Advent said.
But in a later interview, Advent said Giuliani's vetting only extended to Advent and his Eighth Wonder colleagues, and that Giuliani had no role in evaluating Eighth Wonder's outside partners.
Those partners would include Melco PBL, a joint venture based in Hong Kong which joined the project, with a 24.5 percent equity stake, in October 2006, according to Advent.
Melco PBL is a collaboration between Publishing and Broadcasting Limited, an Australian firm run by James Packer, son of the late media magnate Kerry Packer, and Melco International Development, run by Lawrence Ho, son of Stanley Ho, a colorful casino tycoon.
At 85, Stanley Ho remains the dominant player in the gambling industry on Macau, an 11-square-mile spit of land near Hong Kong on China's southeast coast.
A Portuguese possession for more than 400 years until it was returned to China in 1999, Macau has long been the gaming capital of Southeast Asia. For 40 years, until 2002, Stanley Ho held a monopoly on casinos there.
Even now, with the Macanese gaming market open to foreigners, including Americans, Stanley Ho and two of his 17 children, Lawrence Ho and Pansy Ho, have an interest in three of Macau's six casino licenses.
Although Stanley Ho has never been charged with a crime, the U.S. government's 2000 International Crime Threat Assessment described him as "a reputed organized crime figure."
A 2007 State Department narcotics and law-enforcement report noted links between casinos controlled by Stanley Ho and Chinese organized crime.
Ties to North Korea
In addition, Stanley Ho retains ties to the regime of North Korean dictator Kim Jong Il. In 1999, he opened a casino in Pyongyang.
In March 2003, the South China Morning Post, the main English-language newspaper in Hong Kong, reported that Stanley Ho conveyed an offer of asylum in North Korea by Kim to Iraqi ruler Saddam Hussein.
The State Department has designated North Korea a state sponsor of terror since 1988.
A spokeswoman for Stanley Ho declined to comment.
Advent and Giuliani's spokeswoman said Stanley Ho had no involvement in the Singapore casino bid, pointing out that Stanley Ho has no direct interest in Melco PBL.
"We did business with Lawrence Ho," Advent said. "It has nothing to do with his dad. ... He [Lawrence Ho] has a separate company."
A spokeswoman for Melco PBL said that "Dr. Ho was not involved in the Singaporean bid and he is not involved in the affairs" of Melco International, PBL or their joint venture Melco PBL.
According to Hong Kong regulatory filings, Stanley Ho resigned as chairman and director of Melco International, sold the bulk of his shares in the company and turned over leadership of it to Lawrence Ho, in March 2006, about seven months before Melco PBL's participation in the Singapore casino bid was announced.
But at the time of the bid, Stanley Ho and a firm controlled by him still owned more than 21 million shares of Melco International -- just under 2 percent of the shares outstanding.
In addition, regulatory filings in Hong Kong and the U.S. show a series of loans and contracts for computer services and gaming machines between Melco International and Stanley Ho-run firms.
Melco International reported spending about $2.4 million as its share of costs to pursue the Sentosa license through Melco PBL.
The Giuliani Partners spokeswoman termed the link between Stanley Ho and the Eighth Wonder partnership "a stretch."
The government of Singapore announced Dec. 8 it was passing over Eighth Wonder and another bidder and selected a consortium headed by Genting International Bhd, a Malayasian casino company.
Analysts studying the three bids for the project before the decision generally marked down Eighth Wonder for its relative lack of experience in developing an entire resort.
Such a deficiency might be enough to eliminate Eighth Wonder without considering other factors, but even a tenuous tie to Stanley Ho would give Singapore regulators pause, said William Eadington, an economics professor at the University of Nevada, Reno, who has extensively studied casino gaming in Macau.
"There were and probably still are Triad [Chinese organized crime] connections around Stanley Ho," said Eadington.
"I think anything very close to Stanley Ho they [Singaporean regulators] are going to have trouble with."
Andrew Zajac reported from Washington and Evan Osnos reported from Beijing. Tribune political reporter Rick Pearson also contributed to this report.
December 10, 2007 U.S. Edition
In March 2005, a suicide bomber linked to Al Qaeda set off a massive explosion at a British school in Doha, the capital of Qatar. The attack came on the second anniversary of the U.S. invasion of Iraq and stunned officials in the tiny Persian Gulf kingdom. Until then, Qatar, homebase for the U.S. Central Command, had been relatively immune from acts of terror. Not long afterward, the country's emir, Sheikh Hamad bin Khalifa Al-Thani, reached out to an international figure who was just then marketing his record as a fierce foe of terrorists: Rudy Giuliani. That July, Giuliani flew to Doha, visited the emir in his palace and, without a public announcement, entered into an unusual arrangement to provide the Qatari government with "strategic advice" on counterterror issues and protection of the country's oil and gas pipelines, ports and other facilities.
When Giuliani signed the contract with Qatar, he was acting as an international businessman--a role drawing increased scrutiny as he runs for president. After leaving office as New York mayor in 2002, Giuliani and close associates formed Giuliani Partners, a privately owned management-consulting firm that has proven lucrative: Giuliani earned $4.1 million from his firm between January 2006 and May of this year. He has insisted his business dealings are "totally legal, totally ethical." But he has never disclosed all of his clients, raising inevitable questions about financial ties that face all presidential candidates. Some campaign-finance experts say Giuliani's current posture--maintaining a major interest in a privately held international firm while seeking the presidency--is potentially unprecedented. "I can't think of another situation like this," says Kenneth Gross, a Washington lawyer who specializes in campaign finance and ethical issues (and who is not affiliated with a campaign).
So far, most attention has swirled around the Qatar contract. Although the country is now viewed by the White House as a strong ally in the War on Terror, that was not always the case. In 1996, FBI agents tried to arrest a top terror suspect, Khalid Shaikh Mohammed (later mastermind of the 9/11 attacks) who at the time was being employed by the Qatari Water Department. But the bureau's plans fell apart when he suddenly fled; FBI agents were convinced that a member of the royal family tipped him off. The contract between Giuliani Security, a division of Giuliani Partners, and Qatar "is a huge conflict of interest," says Bob Baer, a former CIA officer who tracked Mohammed. "He is metaphorically taking money from the same accounts that paid KSM." Giuliani Security officials involved in the Qatari business say the minister suspected of protecting Mohammed no longer has an active role in running the country.
Since the arrangement began, Giuliani Security has set up an office in Doha headed by Ali Soufan, a former top FBI counterterror investigator. He's hired former FBI agents, Special Forces members and others who train and advise Qatari security forces--an arrangement he believes has helped fend off attacks. "I believe we're helping U.S. citizens," says Pasquale D'Amuro, a former FBI counterterror chief who is president of Giuliani Security.
(Last week, Giuliani faced another potential ethics issue: Politico.com reported that when he was mayor, security expenses for trips to the Hamptons were put on the books of obscure city agencies instead of those of the police. The site suggested he was making at least some of the trips to see Judith Nathan, now his wife. Asked about the issue in last week's debate, Giuliani said that, as far as he knew, the expenses were handled "perfectly appropriately.")
Questions about Giuliani's businesses are likely to persist. D'Amuro confirmed a report in the Chicago Tribune that the security firm last year also provided strategic consulting for a Las Vegas developer who bid--unsuccessfully--to build a casino project in Singapore. One of the investors was the son of Stanley Ho, a controversial gambling tycoon based in Macau with ties to the North Korean government--a connection D'Amuro says he was unaware of when the deal was signed. Giuliani Security also recently received $131,212 from Giuliani's presidential campaign to protect the candidate. Peter Powers, the new chairman of Giuliani Partners, tells NEWSWEEK Giuliani has now given up an active role in his business and that "almost all" of the firm's clients have already been mentioned in media accounts. But he declined to provide a full list or say how much the company is getting paid. "We don't release private information," he says. The question for Giuliani is how long that answer will satisfy voters.
The Democratic National Committee issued the following news release:
After consistently exaggerating a myriad of facts and figures about his record as mayor of New York City on the campaign trail, Rudy Giuliani is at it again. Giuliani launched a new TV ad in New Hampshire today that overstates the details of the 1979 hostage crisis in Iran and fails to mention that Rudy has exaggerated his experience with Islamic terrorism.
The ad also fails to point out that Giuliani has done extensive work for clients such as the government of Qatar, Hugo Chavez, and businesses tied to organized crime that raise national security concerns.
"Whether it's exaggerating his experience with Islamic terrorism or misrepresenting history, Rudy Giuliani just isn't credible in the eyes of Granite State voters. His latest ad is another example of how far Rudy is willing to stretch the truth to score political points," said DNC Spokesman Dag Vega.
Title: "One Hour"Giuliani: "I remember back to the 1970s and the early 1980s. Iranian mullahs took American hostages and they held the American hostages for 444 days. And they released the American hostages in one hour, and that should tell us a lot about these Islamic terrorists that we're facing. The one hour in which they released them was the one hour in which Ronald Reagan was taking the Oath of Office as President of the United States."
* Exaggeration Alert. USA Today noted the morning the ad was released that Giuliani fudges the facts, writing that he "implies in a TV ad released today that it took Reagan just 'one hour' to win the release of Americans held hostage by Iran for 444 days from 1979-1981." USA Today pointed out that "Giuliani does not say that the Algiers Accord that ended the hostage crisis was negotiated by the outgoing Carter administration and had been agreed to the day before -- Jan. 19, 1981 -- as records posted at the State Department's website (here and here , for example) and elsewhere confirm." Similarly, the New York Times consulted their diplomatic correspondent from the era, who pointed out at the time that ""Iran appeared so eager to resolve the hostage crisis last September that it alerted Washington ahead of time to Ayatollah Ruhollah Khomeini's statement outlining for the first time Iran's four conditions for releasing the hostages" and in 2007 expressed skepticism that the release could be attributed to Reagan, saying the "release was negotiated over a period of months first in Bonn, and then in Algiers by Warren Christopher, who was the deputy secretary of State in the Carter administration." ["On Politics," USAToday.com, 12/5/07 (http://blogs.usatoday.com/onpolitics/2007/12/despite-histori.html)]
* Time Magazine: Giuliani Claim Of Years Of Experience With Islamic Terrorism "Exaggeration." "Giuliani and his aides have said he has been 'studying Islamic terrorism' for 30 years. This is an exaggeration." Time found that he had little real experience while a prosecutor, and that in 80 major speeches from 1993 to 2001, he made only one brief mention of terrorism 'in a brief reference to emergency preparedness.'" [Time Magazine. 8/22/07, http://www.time.com/time/printout/0,8816,1655262,00.html ]
* Flashback to 1989: Giuliani Distanced Himself From Reagan. Running for mayor, "Giuliani has tried to distance himself from the conservative [Reagan] Administration, pointing to occasions when he dissented from its policies and portraying himself as the candidate of a nonpartisan reform movement." Giuliani "maintained that he never embraced Mr. Reagan's broad conservative agenda." [The New York Times, 10/11/89]
* Giuliani On Agreeing With Reagan: "Of Course Not." Do I agree with everything Ronald Reagan did or all of his philosophy? Of course not." [Newsday (New York), 6/22/89]
Giuliani: "The best way you deal with dictators, the best way you deal with tyrants and terrorists, you stand up to them. You don't back down. I'm Rudy Giuliani and I approve this message."
GIULIANI HAS DONE EXTENSIVE BUSINESS WORK FOR CLIENTS RAISING NATIONAL SECURITY CONCERNS.
* Giuliani Tied To Qatar Government, Including Controversial Official Believed To Have Harbored 9/11 Mastermind. Reporting by the Wall Street Journal, Newsweek and the Village Voice uncovered that an arm of Giuliani Partners, Giuliani Safety and Security has extensive contracts with the Qatar government for various security projects, with the relationship beginning while the controversial Abdallah bin Khalid al-Thani was interior minister. Al-Thani in particular is widely believed to have helped Khalid Sheikh Mohammad escape the FBI when they attempted to arrest him in 1996. As the Wall Street Journal explained, "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." [Wall Street Journal, 11/7/07; Newsweek 12/10/07]
* Giuliani Did Business Deal With Figure Tied To Organized Crime, Kim John Il and Saddam Hussein. "Nine days after registering his presidential exploratory committee last November, Rudolph Giuliani appeared in Singapore to help a Las Vegas developer make a pitch for a $3.5 billion casino resort" by "a complex partnership with the family of a controversial Hong Kong billionaire who has ties to the regime of North Korea's Kim Jong Il and has been linked to international organized crime by the U.S. government." Stanley Ho, an investor in the project, also was reported to have "conveyed an offer of asylum in North Korea by Kim to Iraqi ruler Saddam Hussein" before the US invasion. [Chicago Tribune, 11/21/07]
* Giuliani Firm Lobbied For Bill Undermining Anti-Terror Efforts. "Although Rudolph W. Giuliani is campaigning as President Bush's staunch ally in the war on terror, his law office has lobbied Congress on behalf of legislation that the Bush administration calls a threat to antiterrorism efforts in the Horn of Africa" on behalf of the Coalition for Unity and Democracy. [New York Times, 12/4/07]
* Giuliani Business Ties To Hugo Chavez Revealed. Bloomberg reported that Giuliani's law firm, Bracewell & Giuliani netted $125,000 to $250,000 lobbying for Citgo, starting only weeks after Giuliani joined the firm. Citgo is controlled by Hugo Chavez, Venezuela's president and a "strident" critic of the US. This income was part of the 40-fold increase of the firm's lobbying income after Giuliani joined, jumping from $150,000 in 2004 to more than $6 million in 2005. [Bloomberg, 3/14/07; Boston Globe, 3/15/07; AP, 1/10/07]
* Flashback: 1989 Giuliani Campaign Troubled By His Business Ties To Noriega, Libya. During Giuliani unsuccessful 1989 mayoral bid, controversy emerged from evidence that his law firm, White & Case, did work for "the government of Panamanian Gen. Manuel Antonio Noriega," as well as personally doing work for a company thought to be "involved in the construction of an Libyan chemical-weapons plant." [Newsday, 10/29/89]