White House Looked Past Alarms on Kerik

Gi­u­liani, Gon­za­les Pushed DHS Bid For­ward

The Washington Post Sunday - - Front Page - By John Solomon and Peter Baker

When for­mer New York mayor Ru­dolph W. Gi­u­liani urged Pres­i­dent Bush to make Bernard B. Kerik the next sec­re­tary of home­land se­cu­rity, White House aides knew Kerik as the take-charge top cop from Sept. 11, 2001. But it did not take them long to com­pile an ex­ten­sive dossier of dam­ag­ing in­for­ma­tion about the would-be Cabi­net of­fi­cer.

They learned about ques­tion­able fi­nan­cial deals, an ethics vi­o­la­tion, al­le­ga­tions of mis­man­age­ment and a top deputy pros­e­cuted for cor­rup­tion. Most dis­turb­ing, ac­cord­ing to peo­ple close to the process, was Kerik’s friend­ship with a busi­ness­man who was linked to or­ga­nized crime. The busi­ness­man had told fed­eral au­thor­i­ties that Kerik re­ceived gifts, in­clud­ing $165,000 in apart­ment ren­o­va­tions, from a New Jer­sey fam­ily with al­leged Mafia ties.

Alarmed about the raft of al­le­ga­tions, sev­eral White House aides tried to raise red flags. But the nor­mal in­ves­ti­ga­tion process was short-cir­cuited, the sources said. Bush’s top lawyer, Al­berto R. Gon­za­les, took charge of the vet­ting, re­peat­edly grilling Kerik about the is­sues that had been raised. In the end, de­spite the con­cerns, the White House moved for­ward with his nom­i­na­tion — only to have it col­lapse a week later.

The se­lec­tion of Kerik in De­cem­ber 2004 for one of the most sen­si­tive posts in gov­ern- ment be­came an acute but brief em­bar­rass­ment for Bush at the start of his sec­ond term. More than two years later, it has reemerged as part of a fed­eral crim­i­nal in­ves­ti­ga­tion of Kerik that raises ques­tions about the de­ci­sions made by the pres­i­dent, the Repub­li­can front-run­ner to re­place him and the em­bat­tled at­tor­ney gen­eral.

A re­con­struc­tion of the failed nom­i­na­tion, as­sem­bled through in­ter­views with key play-

Bush met Kerik in the de­bris of the World Trade Cen­ter and was so im­pressed that he later sent him to Iraq to train po­lice. The bald, mus­ta­chioed street cop ap­pealed to Bush, who ad­mired his can-do per­sona. By 2004, Kerik was sent to the Demo­cratic Na­tional Con­ven­tion as part of an op­po­si­tion war room, given a prime speak­ing slot at the Repub­li­can Na­tional Con­ven­tion and tapped to ap­pear with the pres­i­dent on the cam­paign trail.

Kerik did not fit the but­ton-down model of the Bush ad­min­is­tra­tion. A high school dropout and son of a pros­ti­tute ap­par­ently killed by her pimp, Kerik be­came an un­der­cover nar­cotics de­tec­tive with pony­tail and di­a­mond ear­rings. He joined Gi­u­liani’s 1993 cam­paign as his driver and was later given top ap­point­ments, in­clud­ing cor­rec­tions com­mis­sioner and even­tu­ally po­lice com­mis­sioner. Af­ter of­fice, Gi­u­liani and Kerik be­came part­ners in a se­cu­rity con­sult­ing firm.

So when Gi­u­liani tele­phoned Bush to rec­om­mend that he make Kerik his sec­ond-term home­land se­cu­rity sec­re­tary, the pres­i­dent jumped at the idea. The sheen of a 9/11 hero seemed to be just what was needed to take on a trou­bled new de­part­ment strug­gling to in­te­grate 22 agen­cies and 180,000 em­ploy­ees to pro­tect the na­tion’s ports, borders and air­ports; en­force im­mi­gra­tion and cus­toms laws; and re­spond to ma­jor dis­as­ters. Only a few aides, in­clud­ing then-Chief of Staff Andrew H. Card Jr. and se­nior ad­viser Karl Rove, were clued in to the pres­i­dent’s de­ci­sion.

As with ev­ery nom­i­nee, Kerik was given de­tailed fi­nan­cial dis­clo­sure and per­sonal his­tory ques­tion­naires to fill out, all in­tended to un­earth any­thing that might prove em­bar­rass­ing in a con­fir­ma­tion hear­ing. Gi­u­liani’s firm as­sisted in fill­ing out the forms, ac­cord­ing to a source familiar with the sit­u­a­tion, and the pa­pers are now an is­sue in the fed­eral crim­i­nal in­ves­ti­ga­tion. Kerik, his at­tor­ney and Gi­u­liani Part­ners spokes­woman Sunny Min­del de­clined to com­ment.

Pres­i­den­tial nom­i­nees typ­i­cally go through a fullfledged FBI back­ground in­ves­ti­ga­tion be­fore their ap­point­ments are an­nounced. But be­cause it is hard to keep Cabi­net se­lec­tions se­cret for so long, they are vet­ted only by the White House coun­sel’s of­fice be­fore be­ing made pub­lic. The FBI then con­ducts its full probe be­fore Se­nate con­fir­ma­tion hear­ings be­gin.

The coun­sel’s vet­ting de­pends heav­ily on hon­est re­sponses from a nom­i­nee, of­fi­cials said. Yet in Kerik’s case, a quick FBI search and re­search by the White House turned up a host of prob­lems in the cou­ple of weeks be­fore the nom­i­na­tion was an­nounced. Ac­cord­ing to the sources, who spoke on the con­di­tion of anonymity be­cause of White House pol­icy against dis­cussing per­son­nel mat­ters, Bush aides dis­cov­ered that: K Kerik was fined $2,500 by New York City for us­ing po­lice de­tec­tives to help him with his au­to­bi­og­ra­phy. He was also a de­fen­dant in a civil law­suit ac­cus­ing him of re­tal­i­a­tion against a cor­rec­tions of­fi­cial who had dis­ci­plined a fe­male prison guard with whom Kerik was hav­ing a re­la­tion­ship. Kerik was sched­uled to give a de­po­si­tion in the case right af­ter his nom­i­na­tion was to be an­nounced. K One of Kerik’s for­mer top deputies was con­victed of steal­ing money from a foun­da­tion that Kerik ran while serv­ing as Gi­u­liani’s cor­rec­tions chief. The foun­da­tion was funded by re­bates from to­bacco com­pa­nies sell­ing cig­a­rettes to prison in­mates. K Kerik, who filed for bank­ruptcy as a po­lice of­fi­cer, be- ers, pro­vides new de­tails and a fuller ac­count of the episode — how Gi­u­liani put for­ward a flawed can­di­date for high of­fice, how Bush rushed the usual process in his ea­ger­ness to in­stall a po­lit­i­cal ally and how Gon­za­les, as White House coun­sel, failed to stop the nom­i­na­tion de­spite the many warn­ing signs. “The vet­ting process clearly broke down,” said a se­nior White House of­fi­cial. “This should not hap­pen.”

Fed­eral prose­cu­tors have told Kerik that they are likely to charge him with sev­eral felonies, in­clud­ing pro­vid­ing false in­for­ma­tion to the gov­ern­ment when Bush nom­i­nated him, sources have told The Wash­ing­ton Post. Kerik re­cently turned down a pro­posed agree­ment in which he would plead guilty and serve time in prison be­cause, his at­tor­ney said, he would not “plead to some­thing that he didn’t do.”

The in­ves­ti­ga­tion has put Gi­u­liani’s re­la­tion­ship with Kerik back in the spot­light at a time when the for­mer mayor leads the Repub­li­can pres­i­den­tial field in na­tional polls. Dur­ing an ap­pear­ance in Florida last week­end, Gi­u­liani told re­porters that they had a right to ques­tion his judg­ment in putting Kerik in charge of the New York Po­lice De­part­ment and rec­om­mend­ing him to Bush. “I should have done a bet­ter job of in­ves­ti­gat­ing him, vet­ting him,” Gi­u­liani said. “It’s my re­spon­si­bil­ity, and I’ve learned from it.”

The White House ex­pla­na­tion has shifted sig­nif­i­cantly. Just af­ter Kerik with­drew, White House spokesman Scott McClel­lan said that “we have no rea­son to be­lieve” he lied and that it “would be an in­ac­cu­rate im­pres­sion” to say the vet­ting was rushed. Now cur­rent and for­mer White House of­fi­cials as­sert that Kerik lied “bald­faced,” as one put it, and say they erred by speed­ing up the nom­i­na­tion.

Aides said they now be­lieve they were lulled by Kerik’s swag­ger­ing Sept. 11 rep­u­ta­tion, and were too pas­sive in ac­com­mo­dat­ing the pres­i­dent’s de­sire for se­crecy and speed and too will­ing to trust Gi­u­liani’s judg­ment.

“There is no ques­tion the mayor’s sup­port for Kerik was im­por­tant,” said White House spokesman Tony Fratto. “But Kerik was also known to some de­gree within the ad­min­is­tra­tion for his work in Iraq. If we had this to do over again, it cer­tainly would have been done dif­fer­ently. We prob­a­bly moved more quickly than was ap­pro­pri­ate, but for­tu­nately the nom­i­na­tion was with­drawn.”

From 9/11 Hero to Nom­i­nee

came rich al­most overnight af­ter leav­ing of­fice. Just be­fore his nom­i­na­tion, he made a quick $6.2 mil­lion with­out in­vest­ing a dime by ex­er­cis­ing stock op­tions from his ser­vice on the board of Taser In­ter­na­tional, a stun-gun firm seek­ing busi­ness with home­land se­cu­rity agen­cies. K Kerik’s ten­ure in Iraq gen­er­ated strong crit­i­cism of his man­age­ment. Iraqi of­fi­cials com­plained to U.S. au­thor­i­ties about $1.2 bil­lion Kerik spent to train Iraqi po­lice of­fi­cers in Jor­dan, spend­ing they called waste­ful. Iraqis also ques­tioned why Kerik spent tens of mil­lions of dol­lars to buy weapons for Iraqi trainees when the U.S. mil­i­tary had con­fis­cated plenty of such weapons af­ter the in­va­sion.

“There were alarm bells all around,” said a for­mer White House of­fi­cial.

A Friend Ac­cused of Mob Ties

The loud­est alarm bell was Kerik’s re­la­tion­ship with Lawrence Ray. The best man at Kerik’s wed­ding in 1998, Ray went to work for a New Jer­sey con­struc­tion com­pany, In­ter­state In­dus­trial Corp., that was seek­ing a big New York City con­tract and try­ing to over­come con­cerns inside Gi­u­liani’s ad­min­is­tra­tion that it had mob ties.

Ray, who told friends that he worked with the FBI, mil­i­tary and intelligence agen­cies in the 1990s, was in­dicted in 2000 along with or­ga­nized-crime fig­ures in what prose­cu­tors de­scribed as a scheme to ma­nip­u­late the stock mar­ket. He pleaded guilty and was spared prison time.

The White House had the per­fect per­son to ques­tion Kerik about his re­la­tion­ship with Ray: Julie My­ers, who ar­rived in the White House per­son­nel of­fice in Novem­ber 2004 and had worked in the same U.S. at­tor­ney’s of­fice in Brook­lyn that pros­e­cuted Ray. She flagged the re­la­tion­ship and other con­cerns about Kerik for her White House col­leagues, sources said. She ag­gres­sively ques­tioned Kerik about Ray and other af­fil­i­a­tions. He bris­tled at her tone, sources said.

In an in­ter­view last week, Ray said he had told the FBI and U.S. at­tor­ney’s of­fice as early as 1999, as he tried to stave off in­dict­ment, that he had in­crim­i­nat­ing in­for­ma­tion about Kerik. Af­ter his guilty plea in 2001, Ray said, he told the FBI that Kerik had agreed to help In­ter­state In­dus­trial and its own­ers, the DiTo­masso fam­ily, try to win city busi­ness de­spite their al­leged ties with or­ga­nized crime. At the time, Kerik so­licited and re­ceived gifts from com­pany sources, in­clud­ing $165,000 in ren­o­va­tions for his apart­ment.

“They knew 100 per­cent of it,” Ray said. “There was no way they didn’t. I was driv­ing the ball on that.”

Kerik told the White House that the al­le­ga­tions were un­true, sources said. “He was told many times, ‘Be hon­est,’ ” said one per­son familiar with the process. My­ers, pres­i­den­tial per­son­nel di­rec­tor Dina Pow­ell and oth­ers raised con­cerns in the West Wing, ac­cord­ing to the sources. They were “very, very adamant about how se­ri­ous the vet­ting needed to be,” one source said.

Gon­za­les, then the White House coun­sel, who was about to be­gin his own con­fir­ma­tion process for at­tor­ney gen­eral, took charge of ques­tion­ing Kerik, grilling him for hours on sev­eral oc­ca­sions, the sources said. At one point, Gon­za­les called while Kerik was hav­ing lunch at a New York steak­house and talked to him on his cell­phone for an hour and a half. Nanette Everson, then the White House ethics coun­sel, was kept on the side­line for the heavy-duty part of the vet­ting.

But in the end, White House of­fi­cials knew that Kerik had been head of the na­tion’s largest po­lice de­part­ment and had a se­cu­rity clear­ance for his work in Iraq. He was a hero of Sept. 11. He was well liked by the pres­i­dent. No one checked with key of­fi­cials at the Home­land Se­cu­rity, De­fense or State de­part­ments or else­where in the gov­ern­ment. Even within the White House, the choice was kept se­cret so Bush could make a splash.

“The loop on it was ex­tremely small,” said a for­mer of­fi­cial. “That’s a pres­i­dent-of-the-United-States, ‘I don’t want any­one to know, I want to an­nounce it on Fri­day’ [deal]. It drives peo­ple to not fol­low all the nor­mal pro­ce­dures.”

Bush sum­moned Kerik to the Oval Of­fice for a per­func­tory in­ter­view Dec. 1 and, with­out ask­ing any pol­icy ques­tions, asked if he wanted to be home­land se­cu­rity sec­re­tary. Kerik ac­cepted. “He told me he wanted some­one to go in there and ‘break some china,’ ” Kerik later told New York mag­a­zine. Kerik walked out and called Gi­u­liani to tell him the news. Two days later, Bush and Kerik ap­peared to­gether to make the nom­i­na­tion pub­lic. Only then did the china start to break.

The Past Comes to Light

The ini­tial re­views were pos­i­tive. New York’s Demo­cratic sen­a­tors, Hil­lary Rod­ham Clin­ton and Charles E. Schumer, is­sued lauda­tory state­ments. But from cor­ners of Wash­ing­ton and New York, calls be­gan pour­ing in to the White House and to news­rooms.

Sto­ries be­gan cir­cu­lat­ing about Kerik’s time in Iraq, about an ar­rest war­rant is­sued when he failed to re­spond to a civil law­suit, about his ex­tra­mar­i­tal af­fair with book pub­lisher Ju­dith Re­gan, about his trysts in a city apart­ment meant as a place for po­lice of­fi­cials to rest near Ground Zero. Ray went pub­lic with his al­le­ga­tions about Kerik’s gifts from the DiTo­masso fam­ily. Kerik and the White House tried to ride it out. Gi­u­liani ad­vised Kerik through the po­lit­i­cal storm.

But then peo­ple at the Gi­u­liani firm who were scour­ing Kerik’s fi­nances dis­cov­ered that he had not paid So­cial Se­cu­rity taxes for a nanny who ap­par­ently was an il­le­gal im­mi­grant, Kerik later said. By Kerik’s ac­count, Gi­u­liani told him he had to call the White House, and by the end of the day on Dec. 10, they agreed he had to pull out. State­ments were is­sued af­ter the evening news, and Gi­u­liani came to con­sole his friend.

“I made some ma­jor mis­takes, and they catch up to you,” Kerik told New York mag­a­zine a few months later. “I didn’t fo­cus enough on eth­i­cal is­sues. But I still be­lieve that my suc­cesses over my 30-year ca­reer out­weigh the er­rors in judg­ment.” Ex­cept for the nanny, he said, “ev­ery­thing that’s come out is stuff I ei­ther told the White House about or they al­ready knew.”

But more was to come. Af­ter Kerik with­drew, Ray be­came the cen­tral wit­ness in sev­eral in­ves­ti­ga­tions. The New York De­part­ment of In­ves­ti­ga­tion and the Bronx dis­trict at­tor­ney’s of­fice opened probes into Kerik’s gifts us­ing wire­taps, grand jury tes­ti­mony and nu­mer­ous e-mails Ray gave them.

In the e-mails, Kerik ap­pears to be solic­it­ing Ray for money. “I was go­ing to ask you if we had be­tween 18 and 2,000 avail­able,” Kerik wrote in 1999. An­other time, Kerik men­tioned fi­nan­cial dif­fi­cul­ties and the apart­ment. “I’ve got to make sure we can do the ren­o­va­tions,” he said. Sources familiar with the in­ves­ti­ga­tion said Kerik may chal­lenge the au­then­tic­ity of the e-mails if fed­eral charges are filed, but the Bronx dis­trict at­tor­ney’s of­fice au­then­ti­cated the e-mails as it brought its case against Kerik, ac­cord­ing to lead in­ves­ti­ga­tor Stephen Bookin.

New Jer­sey gam­bling-en­force­ment au­thor­i­ties also filed a com­plaint in 2005 ac­cus­ing Kerik of mis­us­ing his Gi­u­liani ad­min­is­tra­tion jobs to so­licit gifts from the DiTo­mas­sos, who have fought al­le­ga­tions of mob ties, while help­ing them try to win city busi­ness. Kerik as­serted his Fifth Amend­ment right not to an­swer some ques­tions in the pro­ceed­ings. He pleaded guilty to two mis­de­meanors in New York court last sum­mer, ac­knowl­edg­ing that he had ac­cepted the apart­ment ren­o­va­tions.

In the White House, there is still re­sent­ment to­ward Gi­u­liani for foist­ing the prob­lem on the pres­i­dent. “There are two peo­ple who are to blame for what hap­pened — Rudy Gi­u­liani and Bernie Kerik,” said one for­mer White House of­fi­cial. Still, a se­nior ad­min­is­tra­tion of­fi­cial ac­knowl­edged some re­spon­si­bil­ity as well. Bush wanted “a hard-charg­ing per­son­al­ity” to get the de­part­ment in line, he said. “In­stead, we ended up shoot­ing our­selves in the foot.” Staff writ­ers Matthew Mosk and R. Jef­frey Smith con­trib­uted to this re­port.

BY KEVIN LAMARQUE — REUTERS

In De­cem­ber 2004, Pres­i­dent Bush chose Bernard B. Kerik to be the next home­land se­cu­rity sec­re­tary. The nom­i­na­tion soon un­rav­eled as al­le­ga­tions and crit­i­cism sur­rounded Kerik.

BY KATHY WIL­LENS — AS­SO­CI­ATED PRESS

From left, New York City Emer­gency Man­age­ment Di­rec­tor Richard Scheirer, Mayor Ru­dolph W. Gi­u­liani and Po­lice Com­mis­sioner Bernard Kerik at Ground Zero in De­cem­ber 2001. Kerik is now the sub­ject of a fed­eral crim­i­nal in­ves­ti­ga­tion, and his re­la­tion­ship with Gi­u­liani, which be­gan dur­ing the 1993 may­oral cam­paign, is un­der new scru­tiny.

BY MAN­ISH SWARUP — AS­SO­CI­ATED PRESS

In 2003, Pres­i­dent Bush sent Kerik to train po­lice in Iraq, where his ten­ure gen­er­ated com­plaints of mis­man­age­ment. The next year, he spoke at the Repub­li­can con­ven­tion and was tapped for cam­paign ap­pear­ances with Bush.

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