Newspaper reports tell us that Giuliani Partners (GP) is not doing well. In addition, they tell us that the former mayor is seriously exploring a run for governor. Neither of these two things should come as news. Based on my conversations with Tony Carbonetti in 2001, 2002, and 2003, GP wasn't exactly a fraud from its inception - not a criminal conspiracy - but it was premised on the ignorance and gullibility of its clients, call that what you will. The premise, as he explained it in 2001, was to form a web of interrelated companies with each partner holding a different percentage of shares in each company based on his 'expertise' and intended commitment to that company. The problem from the beginning was that there was no expertise. Maybe hard to remember now, but back in December 2001 Rudy Giuliani was - to paraphrase the Beatles - bigger than Jesus Christ. In fact, Tony and I referred to it as the Jesus Effect. Rudy walked on water back then and could do no wrong. People would line up and pay handsomely to touch the hem of his garment. I think the hope of GP was to line up all these clients and then learn on the fly how to do what it was they were expecting of them for all those millions. But they never delivered. The problem became loss of focus and greed. When people are throwing huge sums at you and seemingly expecting no results, then your desire to produce them wanes.
The list, if we actually could see it, of GP clients is no doubt impressive over the last 7 years. The results from all those contracts is less clear. You read with great regularity of the signing of these clients but you rarely heard of any accomplishments on behalf of them. We all heard with great fanfare the signing of Mexico as a GP client to recast their police and law enforcement. I think we all know how that worked out. Australian readers of this blog regularly send me information on the sale of a GP subsidiary, Giuliani Capital Advisors, to Macquarie Bank. Big press releases when it was announced. But as we now know the company has lost millions for the bank. Apparently the deal was predicated on Rudy becoming President and privatizing thousands of miles of US roads, a major financial interest of Macquarie. That is why Macquarie vastly overpaid for what was an empty vessel - Giuliani Capital Advisors. We all know how that worked out too. The business plan of Giuliani Partners shifted from seemingly well intentioned, albeit perhaps naive, to something of a fraud. They realized quickly that they could build up these various Giuliani entities with clients and paper assets, then sell them off for high prices; although the fundamentals underlying the companies didn't really exist. There was never any there, there.
That
was the greed part. The loss of focus occurred naturally once he
decided to seek the presidency. Giuliani Partners without Giuliani is
just a bad consulting firm. That's what clients started to realize.
It is no surprise to me, as the papers report, that most of their
remaining clients are overseas. Foreigners are the last to realize
that an American politician has lost his marquis status. I would be
more interested in knowing who the remaining American clients are. That
to me would be a sign of the health of GP. Do American companies
continue to seek and value GP's advice? Not so much, I fear. The
irony is that Rudy used to boast about his private sector credentials
by talking about the steel mill he ran while he was Associate Attorney General. He cut payroll, trimmed the fat, restructured and turned the
company around. Were GP to focus its talents in actually doing some
real work, Rudy's claimed CV talents would seem a natural fit in this
economy. Turning around failing, poorly managed businesses - who
doesn't need that these days? But they don't want to work at GP.
They're still stuck in the last economy of creating phony wealth. And
I suspect Rudy doesn't want to work at GP either. Like his hero, George W. Bush, he
prefers the adoration of crowds at $75,000 a pop to the drudgery of
office work.
After the defeats of 1960 & 1962 Richard Nixon too wanted to make some serious bucks. But he did it the right way. He joined a law firm, practiced law for real and argued a number of landmark cases including before the Supreme Court. You didn't hire Nixon merely for his name, you also hired him because he was a damn good attorney. He made a lot of money for the time, but did it honorably. People tend to forget that about Nixon. But what GP and Rudy do isn't honorable. They add no value to the companies that retain them. At the end of the day, isn't that what a successful consulting firm does - they add value? Where are the GP successes on that score? I am convinced that by the end of 2007 Peter Powers and Tony Carbonetti saw a win in the presidential race as the only thing that was going to save GP from a day of reckoning. Rudy apparently much prefers his law firm to Giuliani Partners. I am sure the reason for that is that there he can still make rain. A few phone calls to friends in Congress or some state legislator on behalf of a client is sure easier than figuring out how to restructure a failing company. Although unlike Nixon, Rudy has never used his considerable legal talent and intellect for a client in court. It would do him so much good if he did. He'd be 'in the arena' once again mentally. Instead he chooses to give these inane, pablum stump speeches to National Associations of Podiatrists or whomever.
As for the race for governor, were Andrew Cuomo to be hit by a bus tomorrow it would be Rudy's to lose. But Andrew Cuomo isn't going to be hit by a bus tomorrow. So where does that leave Mr. Giuliani? He's in an interesting position. For as long as many of us can remember Albany was a politically divided town - you could always blame the other guy. Not anymore. Now it is a solely one party town. And that party, the Democrats, are making a royal disaster of things. If ever there were going to be a transformational election in NYS, it would be in 2010. If ever a white knight were needed it will be 2010. If we ever needed a man who can make hard decisions and balance a budget honestly it is now. But this is not 1993, although at GP I think they think it is. Inept black man, failing economy, bad poll numbers and a ballooning deficit. Sound familiar? Except Paterson is not Dinkins and no one takes the Governor seriously as a candidate in 2010, which was not true of Dinkins in 1993. Rudy had a wounded, out of touch incumbent to run against back then. I suspect that will not be the case this time.
As I've said before, the Rudy Giuliani of
1993 was no accident. He was a much matured, smarter, candidate and
politician then in 1989. He sought very hard to become one in those
intervening four years. The Rudy of 2009 is much closer to that of
1989 then 1993: smug, condescending, nasty, self-righteous,
unrestrained, and wholly non-genuine. And what about the Rudy of
2007-2008; the candidate who sought to be the most right-wing in a
pretty conservative pack of candidates. What happens to him? Rudy sold
his soul in 2007, not knowing he was going to need it back in 2010.
Spending 9 or 10 months running around NYS yelling 9/11 and War on Terror isn't going to cut it. He could talk about his record of accomplishment as mayor, but as I've said before the Randy Levine strategy of turning Rudy into Dick Cheney or Sam Brownback took all the luster off of that. So what to do? He needs a come to Jesus moment or speech in which he explains why he strayed and apologizes to NY for it. He needs to explain 2007-08 before he can move on to talk about 2010. Because make no mistake, the right-wing conservative policies espoused by candidate Giuliani in the Republican primaries are completely out-of-step with the vast majority of New York State voters. They are a platform for total defeat and quickly. And candidate Cuomo will replay them in ads over and over again.
At the moment he is a non-credible person. I wouldn't believe much of what he's going to say. Trust me, if I actually thought candidate Giuliani in 2009 was akin to candidate Giuliani of 1993 or 1997 I would strongly consider voting for him, in fact I would. I love my state that much and the challenges are direly serious. But he's not - he's not even close to being that person anymore. Money, fame, adoration, have all changed him. Unfortunately his defeat wasn't humiliating or prolonged enough for him to have learned anything from it. Losing by two stolen points can be a strong motivator for change. Coming in 7th isn't going to inspire much self-reflection. Further, the combination of Rudy nemesises: Cuomo, the Clintons, Obama, all lined up against him, wow - that will be powerful stuff. Throw in some mischief making by my old boss Alfonse and Rudy is much more handicapped then it appears right now.
The last and possibly most damaging turn to a Giuliani candidacy is that he's gotten soft. I honestly believe that Rudy thinks the press will treat him like it did post 9/11 or the national press did in the presidential race. The NY press is salivating to tear him to shreds. They hate his persona and resent the free ride the national press corps gave him in 2007. Rudy thinks - honestly believes - that press coverage is Hannity, Rush, Fox News and CNBC. He goes on, makes some nonsensical statement on world economic policy, giggles a lot and then moves on. Those daily tete a tetes in the Blue Room made him muscular; they toughened him up. He's soft and lazy now - with an even thinner skin - and the press, unlike then, has no fear of him.
But, with all of that said, if Attorney General Cuomo should contract Dungy Fever or meet that bus head-on, notwithstanding all I've said, there is no Democrat in the potential field who can match Rudy. He would win by default. And at the moment that should be a very scary prospect. Trust me, you don't want 1989 Rudy, or worse yet 2009 Rudy, running our state.
What about your dad, and how Rudy Giuliani would NEVER have ever been elected Mayor of New York City except for the fact that your dad and the liberal party got him 50,000 votes on the liberal party line back in 1993.
What do you say about that now? And your dad too?
Posted by: Jim | April 16, 2009 at 03:32 PM