As the “Shag Fund” scandal continues to unfold, more reporters at more outlets are beginning to recognize the seriousness of Rudy Giuliani’s latest scandal. Worse, the former mayor’s presidential campaign has struggled to come up with coherent explanations, offering contradictory accounts. Worse, it’s insisting that Ben Smith’s original report is “false,” but it can’t say why.
The NYT is finally on the case.
Late in his tenure as mayor of New York, Rudolph W. Giuliani billed tens of thousands of dollars in travel expenses to little-known city agencies as he was beginning an extramarital affair, a political Web site reported yesterday.
The report, on the Politico Web site, cited documents obtained under the New York State Freedom of Information Law. But it was unclear from those documents whether Mr. Giuliani allocated those travel costs, from 1999 through 2001, to obscure city offices in an attempt to conceal expenses associated with the relationship or for some accounting purpose.
The New York Daily News follows up, as well, noting that yesterday’s defense — that the hidden accounts are a standard operating procedure — has unraveled.
Joe Lhota, a deputy mayor in Giuliani’s City Hall, told the Daily News Wednesday night that the administration’s practice of allocating security expenses to small city offices that had nothing to do with mayoral protection has “gone on for years” and “predates Giuliani.”
When told budget officials from the administrations of Ed Koch and David Dinkins said they did no such thing, Lhota caved Thursday, “I’m going to reverse myself on that. I’m just going to talk about the Giuliani era,” Lhota said. “I should only talk about what I know about.”
Speaking of former mayoral administrations, Ed Koch’s Budget Director Alaire Townsend offered a helpful perspective: “Money might get moved around within the mayor’s office, but I don’t know why an expense of the NYPD would get recorded that way unless you just didn’t want people to find it.”
In other Shag Fund news…
* Bernie Kerik is defending Giuliani: “There would be no need for anyone to conceal his detail’s travel expenses. And I think it’s ridiculous for anyone to suggest that the mayor or his staff attempted to do so.” (How bad is Giuliani’s situation? Kerik is defending him. He’s a reliable character witness, right?)
* Several blogs have noted that former New York State Comptroller Alan Hevesi was forced from his post not too long ago for having a taxpayer car and driver at the disposal of his sick wife. Giuliani, meanwhile, ordered a taxpayer-financed security detail for his wife and mistress at the same time, and his mistress ended up treating the NYPD as a publicly-financed cab service. If Giuliani were held to Hevesi’s standard, he would have been forced to resign.
* Both Giuliani and his campaign are emphasizing that the various city agencies were eventually reimbursed for the expenses. That’s probably true, but utterly irrelevant. Josh Marshall explained that the whole argument is “basically a distraction. The issue was why they were paying these bills out of these obscure accounts in the first place. Reimbursement or not, it still has the effect of hiding what Rudy was doing.”
* Giuliani said yesterday that the expenses were handled “openly” and “honestly.” NYC Comptroller Bill Thompson has no idea what Giuliani is talking about: “That’s not the way that we operate these days, and it would not be the preferred way of doing business. In the end, it’s a very convoluted way of getting things done. If anyone hoped that no one would notice, they were being foolish.”
* When the city’s top fiscal watchdog in 2001 and 2002 tried to get an accounting for these expenses, his auditors were “stonewalled” by Giuliani and his aides. “Openly” and “honestly”? I don’t think so.
* Another Giuliani defense from Giuliani media flack Joe Lohta: “[T]he practice started when officers on his security detail complained that the police department was slow to reimburse them for rental cars and lodging.” Josh Marshall explains why this is still a red herring: “Not to state the obvious again, but this doesn’t tell us anything about why the expenses were squirreled away in the budgets of obscure city offices. It’s non-responsive. But is it even true?”
* If you’re going to dismiss an article as false, you should be able to explain why: “In an interview with CBS, Giuliani referred to the Politico account as a ‘totally false story.’ But Smith points out: neither he nor his aides have questioned any of the facts reported by Politico.”
Remember the Watergate-era adage, “It’s not the crime, it’s the cover-up”? It was custom-made made for a scandal like this one.