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Rudy calls report on Hamptons security 'a hit job'

BY TOM BRUNE AND CRAIG GORDON | tom.brune@newsday.com
craig.gordon@newsday.com

9:41 PM EST, November 29, 2007

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WASHINGTON - Rudy Giuliani and his presidential campaign moved quickly Thursday to limit damage from a Web report about mayoral security expenses during his extramarital affair with Judith Nathan, calling it a "hit job" and a "debate day dirty trick."

Acknowledging its potential harm, Giuliani gave several TV interviews to denounce the Politico.com story posted Wednesday afternoon as "false" and insist that the handling of the money was "perfectly appropriate."

"It's a typical political hit job, with only half the story told," he said, saying the expenses that totalled nearly $1 million in 2000 and 2001 were for a wide variety of travel.

But the explanations he and his aides offered Thursday left unanswered questions and still failed to explain why expenses were scattered among obscure mayoral agencies, such as the Loft Board, before the New York Police Department reimbursed them.

"On the face of it, I can't see any reason why the mayor's travel expenses should be allocated to the Loft Board, unless he is traveling to examine lofts in other cities," said Michael Granof, a University of Texas government accounting expert.

"Maybe they they thought if they put it in all these obscure departments nobody would notice it," he said. "They obviously didn't want transparency."

Giuliani denied his office was trying to hide anything.

"All of it on the record, all of it discoverable, all of it going on for five or six years, and perfectly appropriate," Giuliani said on CBS News, adding that three of his budget directors had approved of it.

He complained the story was five years old but appeared two hours before the CNN/YouTube debate in Florida, and that it focused only on expenses related to his Southampton visits to Nathan, now his wife.

The practice started when officers on his security detail complained that the police department was slow to reimburse them for rental cars and lodging, said former city budget director Joe Lhota. So the mayor's office paid with a pre-paid American Express credit card.

"City Hall would pay it first, then the police department would reimburse every single penny of it," Giuliani said.

The mayor and Lhota also insisted costs were not limited to visits to Nathan, and included Giuliani's then-wife Donna Hanover and her children.

City Comptroller Bill Thompson, who wrote the confidential January 2002 letter alerting Mayor Michael Bloomberg to the practice, Thursday called the accounting "a convoluted way to get things done."

He added, "That's not the way we operate these days, and that would not be the preferred way to do business."

Martha Doran of the Center for Accounting in the Public Interest at San Diego State University said, "It appears to either be seeking to avoid a dollar limit or scrutiny."

The latest Giuliani flare-up added an explosive new problem for the campaign trail: that a man who campaigns as a tight-fisted manager spent thousands in city funds while carrying on an extramarital affair, and aides shifted the funds outside normal channels.

Giuliani even announced a new TV ad Thursday claiming he cut government growth and "made government more accountable" as mayor.

Some political experts said Thursday the report could draw deeper voter scrutiny to Giuliani's personal life, because it cuts directly to questions of character and judgment.

"Arguably, the affair with Judith Nathan was his own business, but when his trips to Southampton involve public expenditures, then it became the public's business," said Jack Pitney of Claremont McKenna College in California.

Also, the new allegations could open the floodgates for a new round of reports that re-hash previous stories about Giuliani's behavior as mayor, such as his decision to provide a security detail for Nathan while they were dating -- and still paying for security for his then-wife Donna Hanover.

Team Giuliani hoped the story would pass quickly as old news. "Everything about Judith Nathan has been written about for the last year... You'd rather not have it, and unless there's more to it, and I'm convinced there's not, I think two weeks from now, we'll have forgotten the story," said Rep. Peter King (R-Seaford), a Giuliani backer.