Giuliani buddy Bernie Kerik faces 16 count fed indictment

[RebLem]

Giuliani Commissioner Kerik Indicted for Conspiracy

By David Glovin and Patricia Hurtado

Nov. 9 (Bloomberg) -- Bernard Kerik, the former police commissioner under New York City Mayor Rudolph Giuliani who withdrew his nomination to head the Department of Homeland Security, was charged with fraud and conspiracy.

Giuliani, a candidate for the 2008 Republican presidential nomination, appointed Kerik police commissioner in 2000. He turned down a 2004 offer to run the Homeland Security Department, a post Giuliani recommended him for, after it was disclosed that he failed to pay taxes for his housekeeper.

Kerik, 52, is accused in a 16-count indictment of receiving ``money and other things of value'' in return for lobbying city regulators on behalf of an unidentified New Jersey construction and waste-management company. The firm, called XYZ in the indictment, paid for the renovation of Kerik's apartment, according to the indictment.

``During the period that Bernard B. Kerik requested and received these benefits from XYZ, he assisted the company by contacting regulators and other public officials on XYZ's behalf so that XYZ would be permitted to do municipal-regulated business,'' prosecutors said in the indictment.

The indictment may complicate Giuliani's presidential aspirations as the first state primaries approach. Giuliani, 63, has a double-digit lead over his Republican opponents, according to a Nov. 5 Washington Post-ABC News poll. The two men also worked as partners in a security business that was part of Giuliani's consulting firm.

Conspiracy, Fraud

Kerik is charged with conspiracy, mail fraud, wire fraud, obstructing the Internal Revenue Service and making false statements. He is accused of depriving New York City of his ``honest services.''

The charges follow Kerik's July 2006 guilty plea to two misdemeanor charges for accepting $165,000 in home renovations and failing to report a $28,000 loan he received from a contractor with alleged ties to organized crime.

A state judge in New York City fined him $221,000. Kerik's name, which Giuliani added to the Manhattan Detention Complex after Kerik's term as corrections commissioner, was stripped from the jail the next day.

Giuliani said last week that Kerik's crime-fighting successes outweighed his legal problems, the Associated Press reported.

Kerik, born in Newark, New Jersey, began his career in law enforcement as a New York City police patrolman in 1986, became a narcotics detective and was eventually named corrections commissioner under Giuliani in 1997.

Kerik Autobiography

In his 2001 autobiography, ``The Lost Son: A Life in Pursuit of Justice,'' Kerik wrote about growing up in Paterson, New Jersey, and learning that his mother was a prostitute who abandoned him and his father. She was murdered in Ohio in 1964, he wrote.

Appointed New York's 40th police commissioner in August 2000, Kerik held that post until 2001, leaving after the Sept. 11 terrorist attacks. Kerik was later sent by the Bush administration to Iraq to oversee the formation and training of that nation's police force after the fall of Saddam Hussein.

Bush nominated Kerik to succeed Tom Ridge, the first secretary of the agency, after Giuliani recommended the former police commissioner. Kerik withdrew his nomination in December 2004 after it was revealed that he failed to file taxes and other legal papers for an immigrant he employed as a housekeeper and nanny.

Giuliani Support

Giuliani, who once held Michael Garcia's post as Manhattan U.S. attorney, is supported by a third of Republicans and Republican-leaning independents, putting him 14 percentage points above Senator John McCain and 17 points ahead of former Senator Fred Thompson, according to the Washington Post-ABC News poll.

Today's indictment follows what the Washington Post reported was Kerik's refusal in March to plead guilty in an agreement that would have required him to serve prison time.

``He turned down the plea agreement because he wasn't going to plead to something he didn't do,'' Kerik's lawyer, Kenneth Breen, said in an interview on March 31.

XYZ company was under investigation by New York City agencies over whether it had ties to organized crime, prosecutors said in the indictment. In 1998, the company enlisted Kerik to convince regulators that the firm had shed its ``mob ties,'' they said.

The next year, Kerik told a company employee that he'd purchased and planned to renovate an apartment in the Riverdale section of the Bronx in New York City, according to the document. Kerik ``asked for money to pay for the renovations.''

Apartment Renovations

The company paid more than $255,000 to an architect, designer and contractor to build walls and floors, a new kitchen, new marble bathrooms and make other renovations, prosecutors said.

In an e-mail to an XYZ employee shortly after Kerik lobbied city officials on the company's behalf in July 1999, Kerik wrote that he was putting ``my reputation and integrity on the line,'' the indictment says. Kerik wrote that he felt like he was on ``welfare'' compared to how the company employee lived, it says.

``I'm living on eggshells until this apartment is done,'' Kerik is quoted as writing. Kerik added that he ``had to beg, borrow'' to come up with the down-payment, according to the indictment.

Kerik failed to include XYZ's payments to his contractors on financial disclosure forms or tax returns and lied to city investigators probing them, prosecutors said.

The indictment lists other instances where Kerik is accused of lying on his returns. He didn't report more than $500,000 in income from 1999 to 2004 that a company he owned received for his speaking engagements and book royalties, it says. And he didn't declare that a real estate developer was paying $9,650 a month for a Manhattan apartment he lived in from 2001 to 2003, or that his company was paid $20,000 for consulting services, prosecutors said.

The case is U.S. v. Kerik, 07-1027, U.S. District Court, Southern District of New York (Manhattan).
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To contact the reporters on this story: David Glovin in U.S. District Court in Manhattan at dglovin@bloomberg.net ; Patricia Hurtado in U.S. District Court in White Plains, New York, at phurtado@bloomberg.net .

Last Updated: November 9, 2007 12:03 EST

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