Bernie Kerik's Bad Company

Another Giuliani aide went to bat for troubled construction firm

The allegedly mob-tied firm at the center of the storm swirling around ex-city police commissioner Bernard Kerik hired another former top Giuliani aide when it wanted to show regulators it was cleaning up its act, the Voice has learned.

Interstate Industrial Corporation hired former deputy mayor Randy Mastro, who served as Giuliani's top gun in chasing down mobbed up outfits doing business with the city. But Mastro said he never told his former boss—or anyone else—about what he learned of Kerik's dealings with the firm, including the former top cop's recommendation to the company that it hire a close pal named Larry Ray, who was later indicted in a mob stock fraud scam.

"Larry Ray predated my time. That had already occurred; he was gone," Mastro said. "There was no retrospective review."

Homeland insecurity: Ex–top cop Kerik (right) and patron Giuliani
Homeland insecurity: Ex–top cop Kerik (right) and patron Giuliani

Giuliani has said he knew nothing about Kerik's connection to Interstate until the recent explosion of news reports in the wake of Kerik's decision to withdraw as President Bush's nominee for Homeland Security director—a post he initially won with Giuliani's enthusiastic backing.

Mastro said he learned about Kerik's association with Interstate during his "two or three years" with the firm as a kind of inside watchdog, reviewing new deals and hires for any mob taint.

"At some point I was told by people at the company [about Kerik]," he said. "I don't recall exactly when."

Asked if he ever discussed the matter with Giuliani, Mastro said: "No. It wasn't an issue that I ever discussed with anyone."

Mastro's hiring came as the construction firm was desperately battling for the right to hold city and state contracts despite allegations of mob dealings made by several oversight agencies—including a business integrity panel that was launched by Mastro when he was still at City Hall.

Interstate was also facing a tough challenge by regulators of New Jersey casinos who said the company should be barred from Atlantic City because it had a long history of conscious involvement with organized-crime figures.

In a controversial decision this summer, the state's Casino Control Commission rejected the state attorney general's advice that Interstate be denied a license for casino work. In recommending approval for the company, the commission cited Mastro's "impressive professional pedigree" as a onetime federal prosecutor and former chairman of the city's Trade Waste Commission as evidence that the company was on the straight and narrow.

The licensing decision outraged state attorney general Peter Harvey, whose office has filed suit to block the move, saying the approval of Interstate was "not just wrong, but dangerously wrong."

Mastro, a partner in Gibson, Dunn & Crutcher, also served under Giuliani in the Manhattan U.S. attorney's office. He said he was brought to Interstate by their attorneys, Tom and Chauncey Durkin, and that his job there was to scrutinize "certain high-level hiring and major transactions" undertaken by the Clifton, New Jersey-based company.

"I can tell you that there was never any recommendation made by this firm that wasn't followed," he said.

But Mastro said he left the company earlier this year after the Casino Control Commission initially OK'd Interstate's application. "There didn't seem to be any further reason for us," he said.

It was during the casino license inquiry, Mastro said, that he learned about Kerik's company ties—and his recommendation that Interstate hire his close friend Ray.

A former insurance and financial-services salesman, Ray was the best man at Kerik's 1999 wedding, and even helped the apparently cash-strapped former cop pay for the event, according to reports by the Daily News' Russ Buettner and the Times' William K. Rashbaum and Kevin Flynn.

Kerik also went to bat for the firm with a top official of the Trade Waste Commission, the body established by Giuliani to weed out mob-tied carters and headed by Mastro until he left the administration in 1998. Later that year, when Interstate was awaiting approval to operate a waste transfer station it had purchased from mob figures, Kerik—at the time the city's corrections chief—spoke with Raymond Casey, the commission's top enforcement officer. According to the Times, Kerik told Casey that his friend Ray was now working with Interstate and that Ray was "an honest person with a security background" and "someone we could work with."

Kerik's dealings with Interstate and Ray were later the subject of an inquiry by the city's Department of Investigation—a probe that Giuliani has said he was never told about even as he promoted Kerik to police commissioner.

Interstate co-owner Frank DiTommaso has acknowledged that he was friendly with Kerik and often visited him at his city offices, even hiring Kerik‘s brother for a job with his company. DiTommaso said he hired Ray for a $100,000-a-year post after Kerik said he could vouch for him. According to DiTommaso, Ray said he had "law enforcement experience" and could help with the company's regulatory problems.

But officials of the New Jersey Attorney General's Division of Gaming Enforcement later pointed out that Ray's prior dealings with Interstate would hardly have inspired confidence: A recommendation Ray made to DiTommaso concerning the company's insurance policies had resulted in a "financial disaster" for the firm, according to the attorney general. Just prior to his hiring by DiTommaso in 1998, Ray had left the insurance business and had set up his own business, "providing security to celebrities and dignitaries," according to the casino probe.

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