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Giuliani's Exoneration Over Expense Scandal Falls On Deaf Ears

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Over the past several weeks, Rudy Giuliani's presidential aspirations have been weighed down by allegations that he hid trip expenses to see then-mistress Judith Nathan by billing them to obscure city agencies. Now, however, a new review of records has partially exonerated Giuliani for what was widely perceived to be a cover-up. And conservatives and even impartial observers are bemoaning that the scandal received far more attention compared to the revelations of innocence.

On November 30, 2007, the website Politico dropped a bombshell report that "As New York mayor, Rudy Giuliani billed obscure city agencies for tens of thousands of dollars in security expenses amassed during the time when he was beginning an extramarital relationship with future wife Judith Nathan in the Hamptons." The findings, taken from a review of city records, brought to the surface questions of Giuliani's transparency and personal conduct.

And indeed, at the CNN/YouTube debate later that night, the former New York City mayor was asked to explain the story. "I had nothing to do with the handling of their records," he said, "and they were handled, as far as I know, perfectly appropriately."

Days later, Giuliani elaborated further, telling CBS News, "The police department paid for all of these expenses. But since the police department would sometimes be slow in payment, city hall would pay it first, and then the police department reimbursed every single penny of it. And now we've been able to confirm that. All of it on the record, all of it discoverable, all of it going on for five or six years, and perfectly appropriate."

Both accounts, it turns out, have elements of truth. This past Friday, the New York Times published its own study of the records. The conclusions did not directly contradict what Politico had found. But the implication was decidedly different. As the Times wrote, "All eight of Mr. Giuliani's trips to the Hamptons in 1999 and 2000, including the period when his relationship was a secret, were charged to his own mayoral expense account, according to the records. After his affair became public, the mayor's office in 2001 did charge several trips to the Hamptons to the Assigned Counsel Plan, which was designed to coordinate legal efforts for the poor. But the total cost of those trips, $2,474, represents less than 1 percent of the $281,338 in travel expenses that was charged to the obscure agencies. And those expenses were not incurred until two years after Mr. Giuliani's office first began to shift mayoral travel expenses to lesser-known units."

In short: Giuliani, for some reason, started hiding travel expenses by shifting them to obscure city agencies late in his mayoralty. His aides have yet to explain why. But, as the Times notes, there is little evidence to suggest that he did so to cover up the start of his affair with Nathan. Although the costs of some of his later trips to see his then-girlfriend were sent to obscure departments.

Ben Smith, who wrote the Politico piece, responded to the new findings on his blog the next morning.

"I wanted quickly to touch on the difference between the pieces," he wrote. "The [New York Times'] reporter, Russ Buettner, focuses on Giuliani's first Hamptons trips (the Times appears to include some official travel here, to go into the weeds) which, were -- unlike later ones -- billed directly to the mayor's office.... Neither Russ nor I seem have talked to anyone who could recall the actual decision to use money from obscure agencies to prepay city credit cards. Intent aside, the maneuver covered a period in which travel expenses ballooned and Giuliani had begun spending unusual (for him) amounts of time out of the city for two reasons: his romance and his Senate campaign."

As Smith noted in his post, his initial reporting remains intact. Giuliani was still secretly billing travel costs to obscure city agencies (hardly the model of transparency he has claimed to be), and the debate remains as to whether Nathan deserved and/or abused her security privileges.

But the former mayor did not, it appears, try to hide evidence of his affair. "This proves what we've been saying from the beginning - that all security expenses were appropriate, paid for properly and completely transparent," Randy Mastro, a former deputy mayor under Giuliani, said in a statement issued by Giuliani's presidential campaign.

For Giuliani, however, exoneration on that account may have come too late.

At the time of the Politico story, Hizzoner was riding high in the Republican primary race. An NBC News/Wall Street Journal poll in late November put him at 33 percent nationally. But Shag-gate - as it became known - initiated a week of bad press. And it was only compounded by revelations that a subsidiary of Giuliani's security firm had done work for a Qatar company that had ties to a terrorist figure, as well as the indictment of Giuliani's long-time confidant and close adviser Bernard Kerik on charges of conspiracy, mail fraud, wire fraud, and lying to the IRS. A NBC News/Wall Street Journal poll taken a month later, had Giuliani dropping 13 points nationally and in a tie for first place with former Arkansas Gov. Mike Huckabee at 20 percent.

Making matters worse for the former mayor, no one has seemingly paid attention to his absolution. The New York Times ran its story on page 35 of its city-distributed section. And save for a long segment on Hardball and a small write up in the Boston Globe (which is owned by the Times), few outlets beyond the conservative websites have picked up on the findings. "Why Isn't Anyone Paying Attention To This," screamed a headline from Byron York at the National Review. "If a look around the blogs is correct," he went on, "it appears that no one has paid any attention to this story, which seems odd, given the frenzy over the issue a while back."

As conservative commentators wait for the press to give Giuliani his due, some political observers caution them not to hold their breath. The affair over billing practices, they note, underscores a far greater problem facing the former New York City mayor. With the presidential campaign hitting its nasty stretch, there is simply more ammunition with which to attack Giuliani than anyone else.

"Giuliani is unfortunately prone to attracting these kinds of stories because of his complicated personal and political life," Steve Hayward, of the conservative American Enterprise Institute, told the Huffington Post. "And even when everything is done properly, the combination of Byzantine government accounting systems and his edgy record in some other areas (Bernie Kerik) gives these stories legs. I suspect there may be more of these kind of stories ahead, all perhaps perfectly legit, but everyone recalls the old adage--when you are having to explain things, you're losing."