Rudy calls billing 'perfectly appropriate'

Former New York Mayor Rudy Giuliani and his senior aides Thursday blamed anonymous bookkeepers for his administration's practice of billing the travel expenses for his personal security detail to obscure city agencies.

But a top aide was unable to say why Giuliani’s administration and his successor's rebuffed questions from the city's top fiscal watchdog in 2001 and 2002. City Comptroller William Thompson said Thursday his auditors were “stonewalled” by the Giuliani administration when they inquired about the unusual billing procedures, which he called "disturbing."

Instead, Giuliani and his aides focused their attention on the issue of whether the unlikely divisions of the mayor's office had been reimbursed — not why the expenses were billed to out-of-the-way agencies such as the New York City Loft Board in the first place.

Politico reported that the bills included expenses incurred on 11 trips to Southampton, where the woman who would become Giuliani’s third wife had an apartment, as well as for campaign travel during his abortive 2000 Senate run.

Giuliani said that the "perfectly appropriate" practice of funneling his security detail's expenses through the mayor's office was begun in the mid-1990s to speed payments that had been delayed in police bureaucracy.

"The police department would sometimes ... be slow in payment," he told CBS' Katie Couric. "City Hall would pay it first, then the police department would reimburse every single penny of it."

A spokesman for Mayor Michael Bloomberg confirmed that the police department reimbursed the mayor's office for its expenses. The spokesman, Stu Loeser, declined to comment on Giuliani's claim that the billing practice was unremarkable, or that it predated the period examined by Politico, which coincided with Giuliani's affair with Judith Nathan.

Giuliani was not asked directly why payments went through offices like the Loft Board and the Assigned Counsel Administrative Office, rather than directly through the mayor's office.

A top campaign aide who was his City Hall chief of staff, Anthony Carbonetti, said he simply doesn't know the reason.

"It was a bookkeeping exercise," he said in an interview with Politico. "Why it was done this way, I don't know."

Carbonetti also said he was unaware that the city comptroller had sought explanations for some of the billing during Giuliani's last year and early in the term of his successor.

"I couldn't even tell you who that correspondence went to," he said.

”When [the auditors] tried to get answers to the questions, they were getting stonewalled by City Hall and this is in the previous administration, under the Giuliani administration. They were not giving answers," Thompson said Thursday. "This isn't the normal practice that we see now in other agencies. ... These are disturbing trends that we made the Bloomberg administration aware of, and it's clear that ... they haven't repeated the same mistakes, they haven't used the same processes of the former administration." Thompson is a Democrat, but has had good relations with Giuliani in the past.

In 2001, Giuliani was on hostile terms with the former city comptroller, Alan Hevesi, and a Giuliani aide suggested the election-year climate may have contributed to the lack of cooperation.

In the interview with CBS, Giuliani referred to the Politico account as a "totally false story."

However, neither he nor his aides have questioned any of the facts reported by Politico.

Politico editor-in-chief John F. Harris said in a statement: “This was a fair and carefully reported story. We gave the Giuliani campaign ample opportunity to dispute the story or comment on our reporting before publishing and they did not do so. Since the story ran, we have not heard from the campaign disputing any substantive aspect of the story.”