By Albert Samaha
By Steve Weinstein
By Devon Maloney
By Tessa Stuart
By Alison Flowers
By Albert Samaha
By Jesse Jarnow
By Eric Tsetsi
The main events in the always fascinating saga of Rudy Giuliani and his once-beloved lawman, Bernie Kerik, came to a close late last year. Kerik copped a plea in November in federal court to fraud and tax charges stemming from favors he collected from a mob-tied contractor.
Giuliani finally ended his own tease just before Christmas, taking himself out of the running as a candidate for statewide office, at least for the immediate future.
All of which tended to lower the often-feverish temperatures of those of us who have closely followed the career paths of the volatile ex-mayor who tried to become president, and his one-time sidekick, the former police commissioner who nearly became the nation's Homeland Security secretary. But buried in court legal papers that were not released until weeks after Kerik's guilty plea are some strong hints of the lumps that the reputation of New York's legendary former chief executive might have taken had the Kerik case gone to trial.
Giuliani, who started out as a rackets-busting prosecutor, has always been fuzzy about his own knowledge of Kerik's ties to Interstate Industrial Corp. The contractors were desperately trying to convince city regulators that their business dealings with organized-crime figures were incidental, and that they should not be denied lucrative city contracts worth some $30 million. The city's concerns had been sparked after Interstate bought a large waste-transfer station on Staten Island from a Gambino crime family soldier named Edward "Cousin Eddie" Garafola, and then kept the gangster's wife and sons on the payroll as mob-owned trucks rolled through the gates.
Kerik helped contractors Frank and Peter DiTommaso relay their side of the story to city officials. The grateful builders in turn secretly funded a quarter-million-dollar renovation of Kerik's new Bronx apartment. All of this happened even as Giuliani was promoting his former driver and bodyguard from head of the city's Corrections Department to police commissioner.
When Kerik's Homeland Security nomination blew up in a tempest of scandal in 2004, the ex-mayor insisted that he knew nothing about his top cop ever going to bat for the mob-tainted contractors. But back in 2007, the Times' William Rashbaum got hold of a transcript of Giuliani's April 2006 testimony before a Bronx grand jury that was the first to probe the episode. Giuliani, the transcript showed, admitted that he was briefed more than once by his own top investigations chief—but then forgot all about it.
It took a lot of forgetting. Among the exhibits that prosecutors were prepared to introduce as evidence in the federal case were three pages of never-released notes that Kerik typed out in March 2000 regarding his involvement with Interstate. The memo—in detective-style jargon of initials and free-form punctuation—was written, prosecutors explained, for then city investigations commissioner Edward Kuriansky, who was regularly briefing Giuliani about his agency's activities.
The notes show someone who, as the government said in its motion, was "peculiarly well-informed about the nuances" of the investigation that city officials were then conducting:
"FD [Frank DiTommaso]," typed Kerik, "believes that perception about [the transfer station] emanates because of acquisition from EG [Edward Garafola] he was EG's primary customer when NYCTWC [the city's Trade Waste Commission] cancelled EG's license. EG contacted him, explained that his license was pulled and that he needed to sell the company. FD's analysis reveals that it's beneficial to acquire based on their needs and structures deals within 30 days to avoid losing license. Part of agreement is that EG's wife and two sons stay on for 4 weeks to familiarize incoming team with business. NYCTWC makes request to interview EG's relative, they walk out. $2M to $1,750,000 w/ 5 year payout."
City officials had good reasons to be concerned that a top law-enforcement officer was involving himself with a contractor doing business with a gangland figure like Garafola. At the time, Garafola was in charge of the construction division of John Gotti's crime family, overseeing union shakedowns and contractor extortion. He later pled guilty to racketeering in a multimillion-dollar fraud scheme aimed at the MTA and to having helped murder one of his cousins. Garafola was also indicted in a mob stock fraud case in Brooklyn in 2000; among his co-defendants was Lawrence Ray, Kerik's then best friend who had been hired by Frank DiTommaso as a consultant on Kerik's recommendation. It was that indictment, prosecutors stated in court papers, that prompted investigations chief Kuriansky to quiz Kerik about his complicated relationships with Interstate and its associates.
In his discussions with Kuriansky, prosecutors noted, Kerik also told the investigator about a controversial 1999 lunch at Walker's Restaurant in Tribeca with the head of the city's Trade Waste Commission, which was overseeing Interstate, and a Corrections Department investigator. Everyone present agreed that the subject was Interstate's ongoing licensing problems, although just how heavily Kerik advocated for the company later became a matter of dispute.
The important issue for city investigators, however, had to be just why Kerik—then the city's Corrections Department commissioner—was involved in any of this. Kuriansky, the key figure at the time, has since died. But prosecutors and FBI agents who participated in the federal probe quizzed city investigators closely about how things worked. One of those they questioned was Walter Arsenault, who served as first deputy commissioner for the Department of Investigation (DOI) from 2003 to 2008.
"During the Giuliani Era at DOI," Arsenault told the FBI, according to a memo compiled for the case, "Edward Kuriansky had to inform the Mayor of the details of what was going on at DOI. During this time, Kerik provided details to Kuriansky about the Walker's meeting, and other aspects of what Kerik was involved in, yet no one did anything to look into it further."
The opportune moment to look into it further was in the late summer of 2000, as Giuliani was preparing to name Kerik the city's 40th commissioner of police. But no one did. As was later acknowledged when the Kerik scandal broke full-bore in late 2004, the new commissioner wasn't told to fill out a new background questionnaire, a standard city procedure.
Even at that point, four years later, Interstate was still battling hard to overcome city objections. To help make their case, the DiTommaso brothers hired as their lobbyist one of Giuliani's most stalwart political supporters, former Staten Island Borough President Guy Molinari. As their attorney to testify that they'd cleaned up their act, they brought on another veteran Giuliani loyalist, former deputy mayor Randy Mastro. As a City Hall aide, Mastro had helped create the Trade Waste Commission and served as its first chairman where he helped produce the tough scrutiny that it used on private waste carters. It was all part of the mayor's avowed crackdown on mob influence in the industry.
In December 2004, as the scandal was breaking, the Voice asked Mastro if he'd learned about Kerik's role at Interstate. "At some point, I was told by people at the company," he said. Had he shared that knowledge with Giuliani? "No," he said. "It wasn't an issue that I ever discussed with anyone."
For his part, Kerik is currently under house arrest at home in New Jersey, an electronic ankle bracelet monitoring his movements. He's due to keep it on until his sentencing on February 18 by Judge Stephen Robinson in court in White Plains. Prosecutors have agreed to a prison term of 27 to 33 months. The judge could go higher if he chooses.