Giuliani Pal

A few months after Rudy Giuliani established himself as a private business consultant, he announced that he'd signed on as chairman of the advisory board for an investment firm run by former Massachusetts governor William Weld, his old pal from their days in the Reagan Justice Department. The May 6, 2002, press release described Leeds Weld Equity Partners (Weld's name has since been dropped) as the nation's largest private equity fund in the education and training industry and quoted Giuliani as saying that the fund would be part of the private sector's "increasing role" in "addressing national and global education and training needs." Other stars on the panel include two former U.S. secretaries of education and ex–Clinton adviser Thomas "Mack" McLarty.

So did Giuliani approve of the fund's multimillion-dollar investment in troubled Decker College, now the target of federal and state fraud investigations? Giuliani Partners spokesperson Sunny Mindel said Giuliani "had nothing to do" with the investment.

Whatever his role, it's not Giuliani's first acquaintance with trade schools like Decker accused of abusing federal student loans. Back in 1980, when he was a private attorney, Giuliani helped a trade school proprietor named Albert Terranova work out a misdemeanor plea to stealing from a federal job-training program. Giuliani then helped Terranova get a new license from New York State education officials, telling them that Terranova was "a dedicated and responsible" person. But in 1989, Terranova was indicted again, this time in a massive 235-count state fraud case for stealing from the schools Giuliani helped him establish. Terranova later pleaded guilty and paid hefty fines. Were they still in touch? Giuliani spokesperson Mindel demurred.