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Rudy Put $400,000 In Advance Funds On Credit Card For Travel Expenses
We've been swimming in credit card receipts from Rudy Giuliani's administration today, and one thing in particular has struck us: in 2001, apparently with an eye to future globetrotting, Giuliani's administration sent a check for $400,000 to American Express. Though it was billed to the Assigned Counsel Administrative Office, an office that provides lawyers for indigent defendants, the money served as an advance against future travel and other expenses later incurred by the mayor's office and his security detail.
The unusually large prepayment, as yet unreported, adds weight to the theory that the Giuliani administration was using accounting gimmicks to obscure his office's travel expenditures.
With $400,000 prepaid on the Amex account, the mayor and his staff drew down on the credit card for a number of trips, including a handful out to the Hamptons, where Judith Nathan had her condo. Giuliani's administration ultimately spent approximately $100,000 of the $400,000 before leaving office in January, 2001.
Stu Loeser, a spokesman for Mayor Bloomberg, confirmed to us that his administration put a stop to the practice of putting funds for future travel in bulk on a credit card. Shortly after Bloomberg took office, American Express refunded $298,000, the remaining unused balance on the account. The move came shortly after the city comptroller sent the mayor a letter critical of the Giuliani adminsitration's practice of billing obscure city agencies for mayoral travel expenses.
But Loeser declined to comment when asked directly why the administration did this, and declined to comment when asked directly if the Bloomberg administration thought the Giuliani approach was problematic. "We process spending and travel differently," he said. "We use a different method. If we have government funded travel, we go through the city's travel agent."
Prepaying a city credit card with such a large amount is a procedure that "appears intentionally opaque," a high-level budget official under a previous administration told us. "You're not able to see clearly what [the money] is being used for," the official said, "because it's bundled in an AmEx card as opposed to as direct payments to vendors."
The unusual $400,000 prepayment is revealed in a letter from Giuliani's deputy director of fiscal operations that was contained in a package of documents City Hall released today, in response to reporters' questions about Wednesday's Politico story. You can see the letter here.
Giuliani's administration had done a similar thing in June of 2000, cutting checks for $54,000 worth of "prepayment" and billing them to the New York City Loft Board and other backwater agencies.
Comments (56)
Michael wrote on November 30, 2007 7:28 PM:He sounds just like the republicans in the whitehouse now. They spend taxpayer dollars on themselves and their cronies, while they deny basic help to the poor and needy in the name of being fiscally conservative. If anyone thinks that this is how you control spending, I am sure Mr. 9/11 has a bridge in brooklyn to sell them.
After all, he has made millions off of the crass exploitation of the deaths of thousands of americans on 9/11. Why would anyone think that he is a responsible, fiscal conservative? What a joke. I hope this buffoon rots in hell.
markg8 wrote on November 30, 2007 7:42 PM:I don't get the huge amount. He knew he'd be leaving the mayor's job whether he ran for senator or not but squirreled away 4 times as much in prepaid travel expenses as he eventually needed. Did he plan on acquiring three more mistresses?
Michael Lafferty wrote on November 30, 2007 8:01 PM:Maybe it seems like a small issue, but American Express rewards points—generally convertible to airline miles, other 'goods' or services—or, provides a cash discount for use of their payment cards. If the account in question, for example, earned AmEx reward points, it would have earned 102,000 of them on the actual expenses incurred against the amount prepaid. Points would not have been earned on the remaining $ 298,000 which was ultimately returned by American Express.
So what happened to the points, the products or services received in exchange, or the discounts earned through prepayment? Did Mayor Giuliani, his friends or associates, or his 'companions' receive any taxable benefit as a result?
What is the City of New York's policy regarding such earned benefits? Were converted points 'gifted' to others, and if so, did those recipients report the value of them, to the degree that they exceeded $ 25.00 per person, per year, to the Internal Revenue Service?
And to what degree was value received by the City of New York for handing over $ 400,000 to American Express, who—at market rates—certainly derived value, though legitimately, from the use of this prepaid, unearned sum? Could prepayment to another credit card provider have offered comparable value, at far lower rates of interest or in exchange for lower fees?
Were existing procurement rules followed in this apparent no-bid, non-competitive financial services contract?
Hmm… accounting issues indeed. Just wondering…
ape wrote on November 30, 2007 8:21 PM:markg8 - didn't giuliani attempt to extend his mayoral tenure past the legal limit post 9/11 - perhaps one can extrapolate from the extra unused funds to determine just how long he did plan to stay in unelected office.
CruzBustamove wrote on November 30, 2007 8:47 PM:oh please please let him him win the GOP nomination.
Rudeee? You've got some splainin' to do!
Nate wrote on November 30, 2007 8:50 PM:Seems Rudy learned a thing or two from his bestest bud Bernie. First and foremost, it appears, are the mafia style accounting tricks to throw any future dogs off the scent.
Keep up the good work!
Anonymous wrote on November 30, 2007 9:31 PM:With the backdrop of this financial malfeasence - can we really believe that Rudy's campaign is playing by the rules?
Just how many cash-stuffed envelopes has he accepted and not reported to the FEC?
Nixon ran his campaign on illegal money. Looks like Rudy could be following suit!
Bob wrote on November 30, 2007 9:42 PM:Soon, 28% of American voters will realized they were hoodwinked by a thug and Fox news.
TJ wrote on November 30, 2007 9:56 PM:Yup sounds like more of the same. But they are damn good as saying one thing & putting on such a perfect or 'moral' facade
TJ wrote on November 30, 2007 10:03 PM:Yup sounds like more of the same.
But the repub fascists are damn good at saying one thing & putting on such a perfect or 'moral' facade -- and yet the truth is a complete lie & as opposite as can be. Too bad so many people go for it.
It was so obvious that Bush & all the fascist bunch were full of it from day 1.
I remember that day well in congress years ago when Pelosi was laughing at Bush, & then everyone gave her such a hard time for that, "how can you laugh at our wonderful perfect President"...
Ja right. Hopefully this will all be one of those important lessons learned well, and not too late.
gcs wrote on November 30, 2007 10:22 PM:The Rudy that has been sold to America is a creation of the Shiny White Teeth and Hairspray crowd that passes for journalists in this country. All the nice folks out there who think Rudy somehow single-handedly "saved" New York on 9/11 need to ask themselves a simple question.
Why is it that the savior of New York City never campaigns in New York City?
Because we'd laugh his ass off the stage, that's why.
John Crandell wrote on November 30, 2007 11:05 PM:Perhaps he was simply going to throw one huge drag ball out there on Long Island.
Jenni wrote on November 30, 2007 11:32 PM:How dare Rudy and his staffers act as though they have already been transparent. There are soooo many unanswered questions.
Why can't he just come forward and answer the questions? The buck stops with him since he is running on leadership? Please keep digging!
Ethan wrote on November 30, 2007 11:33 PM:Don't people get, like, arrested for this kind of fraud? How on EARTH can he even attempt to run a credible campaign with all of the bullshit he has run over the years? How? I don't get it. This guy. or Romney. I can't figure out how either of them could be considered 'good' candidates by any sane person. They would obviously do great harm. It really is scary to me that they could be considered viable Presidential candidates for any political party.
markg8 wrote on November 30, 2007 11:56 PM:ape - That doesn't strike me as right. Until his sexual escapades and Donna Hanover's proposed role in the Vagina Monologues blew up in his face he'd planned on running against Hillary. So suddenly he was not only hated in NYC his conservative cred was shot upstate. Then he was diagnosed with prostate cancer which gave him a convenient out. That was in May 2000.
He was term limited out of the mayor's office in January 2002 wasn't it? He sent AMEX $400,000 in 2001 and it wasn't until after 9/11 that he tried to toss out the law and stay on as mayor.
George wrote on December 1, 2007 12:59 AM:This also is tax fraud. Without adequate documentation to the city, the $400,000 was taxable income, which you know wasn't reported.
james wrote on December 1, 2007 2:16 AM:I think that one of the most important points here, which everybody seems to be missing (I only read half the comments) is that:
If they could (and did) PREPAY AMEX in advance of purchases then the story about paying it from the coffers of the unrelated city agencies so that "the police officers could get reimbursed expediently" is complete bull.
A) The NYPD could have prepaid.
B) My previous experience with AMEX Corporate is similar to the previous Rudy story. I paid, AMEX billed me, I submitted my expenses to my company. If it took my company 2 months to reimburse me, I wouldn't care which budget the money came out of! HOWEVER, the idea that they're pre-paying on a single credit card implies that there was a specific credit card account that wasn't being billed to individual officers.
James
Mike Bakunin wrote on December 1, 2007 2:27 AM:Would someone ask Giuli if would keep or change his past government accounting methods.
GTK wrote on December 1, 2007 5:48 AM:The letter is signed by Maritza Gaton. Can she shed any light on this?
Henk wrote on December 1, 2007 9:53 AM:My experience is similar to what James describes, but I suppose there could have be multiple cards. Who held the card or cards for the account in question. Judy or Rudy?
bp wrote on December 1, 2007 10:22 AM:Now, now: Chris Matthews: in his other role as Tweety does not think this is interesting at all. Now if it were Bill? Move along folks. The Village (Washington Branch) is getting pretty fed up with the Village (New York Branch).
ineedalife wrote on December 1, 2007 11:07 AM:And was the public defender's office crippled by this 400K hit to their budget? Aren't they notoriously underfunded to begin with? They sure could have used the 20-40K interest AMEX must have accrued on that sum in the time they had it.
jon wrote on December 1, 2007 11:23 AM:Excellent points! Lotsa more dirt to be dug outa that hole.
My small contributions:
That money prepayed was not able to be banked or invested to earn any income while it sat in AMEX's accounts - at least to NYC. Giulliani caused that as a loss to the City. 5% simple interest on $400,000 over a one year period would have been $20,000 additional dollars of revenue lost. Maybe Amex threw in a free steak knife set...
The departments who were charged with repaying his charges (AMEX or not) lost the use of those funds during the elapsed time before they were reimbursed for those expenditures, if ever. That could easily have caused day to day budgeting and operational problems for the offices so burdened. Some purchasing might have had to have been delayed or cancelled altogether. Citizens were deprived of the full measure of services that the City Council intended and the public had a right to expect. Some of those departments are not the most lushly funded, and serve some of the most needy citizens. Legal aid might have been denied, or handicapped programs curtailed, so Rudy could catch some tail.
ERA wrote on December 1, 2007 12:07 PM:Re: ineedalife and jon's comments involving the monetary loss - fiscal "hit job", if you will - to the City agencies involved.
I've been thinking along similar lines. Does a NYC mayor have full discretion to dump any amount of expenses on any agency he pleases? Where's the operational/administrative oversight?
moondancer wrote on December 1, 2007 12:18 PM:Now that I understand GOP politics better, Rudy is simply proving his bona fides to the party. DO not mistake this for a scandal, no this should pave the way to the White House, if Reagan and Bush are any indication.
Ken wrote on December 1, 2007 12:20 PM:Where did the refund from AMEX end up?
Liam wrote on December 1, 2007 12:26 PM:Follow The Money.
If you have a city dept. pre-deposit $400,000.00, what did the department use as a billing proof for such a large accounts payable transaction.
Since it was a pre-payment transaction, there could not be any billing, at the time of the funds deposit, to offset it.
Who received the monthly itemized charges. Were there actually any, since it was really more like a debt card.
Who got to check and see if anyone was maki ng a lot of cash ATM withdraws from the $400,000 pool.
Who handled the oversight and auditing of the transactions to make sure that some one was not embezzling from the account.
Do you get my drift. There had to be a lot of people with their fingers in the whole scheme.
Follow The Money.
Slippery Slope wrote on December 1, 2007 12:37 PM:Many great points above.
But what about the down stream side of these transactions. That is, was there benefit, undo advantage, financial gain for select "friendly" vendors who were the recipients of the AMX expenditures?
My experience is that smart, fiscally responsible CEO/CFOs negotiate very lucrative (for the travel agency) contracts with travel agencies to drive down travel expenses. Rotten_Rudy's actions are the equivalent to the Medicare part D debacle. The City travel agency was essential cut out of the possible tax payer saving bulk bargaining on the purchased travel expenses.
Back to the who were the recipients of R_Rudy's travel business. Is there a pattern of use with any particular friendly vendor/s? Was there any equivalent "frequent flier" benefits accumulated with the travel vendors? Who may have been the recipients of any such benefits? Could R_Rudy or any of his friends, family or significant on-the-side other have received benefits?
And finally, if there is a pattern of use toward a "friendly" vendor, did that / those vendors every contribute to R_Rudy politically (FEC or NY State disclosures)?
johnnydoughey wrote on December 1, 2007 12:52 PM:If anyone believes his or her candidate will attempt to protect and spend our tax money wisely and with prudence, perhaps it is time to investigate just how frugal they are now spending the money given to them for actually running for office.
Are any of the candidates staying at adequate, rather than exorbitant hotels?
Do the meals cost dollars rather than hundreds of dollars?
Are they using other perks to the limit?
Have they hired half their relatives at above normal costs for campaign jobs?
I doubt seriously that anyone from either party has any intent of being responsible with our money once they are in office, and other than McCain, who has no other choice to be frugal due to his lack of funds, are most likely living high off the hog from other folks' money.
Do you think they will do better after they get more power?
just checking wrote on December 1, 2007 3:04 PM:Good report. But, did you mean "January 2002" (not 2001) in your 3rd paragraph?
bestpractices wrote on December 1, 2007 3:25 PM:Who pre-pays for anything? Really?
One general rule in business (and personal finance) is to hold on to your money for as long as possible. Keep your money in a interest bearing account or use it to purchase other goods that you can sell. And only pay early if you get some sort of discount or if you're being charged an interest rate higher than you're getting for holding on to your money.
And Rudy wants to run on his "record?" Fine. Sounds like he's a bad manager.
regular lurker wrote on December 1, 2007 4:32 PM:I want to know more about what happened to the AMEX awards (points, rebates, etc). I'd also like to know what were the card holder names on the account.
Julia wrote on December 1, 2007 5:09 PM:Can someone enlighten me. Is this correct?
Someone in the mayor's office ordered someone in the Assigned Counsel Administrative Office to cut a check for $400,000. to Amex as a prepayment for travel by the Mayor.
William Jensen wrote on December 1, 2007 5:27 PM:And the someone who cut the check did so... So how did the $400,000. taken out of the Assigned Counsel budget get replaced? Did someone in the Mayor's office transfer the money from another budget?
Who got the Membership Award points?
redterror wrote on December 1, 2007 7:30 PM:This is getting too strange. But I just paid my Amex bill, and if anyone in the Giuliani campaign wants to prepay my account a few hundred thousand dollars, I'll get over my antipathy to Goopers. Still won't vote for one, however.
JD21 wrote on December 1, 2007 9:34 PM:Bush is still hiding Abramoff docs. You see, argues Bush, all those docs showing Abramoff is his bud are like those documents about the Soviet submarine that went down in the 1970s. Yeah right, and Duke Cunningham is like a master CIA spy. And Bob "the horse" Ney is like Leonid Brezhnev.
What planet are the Fox Republican pols on? Why are they still covering for Bush? Why why why? Is it really worth hiding all the corruption to benefit their party? Are they really that desperate? And what planet do they think the American public is on? Do they really think Fox and their pundit A team can somehow spin this one so anyone asking for transparency is unpatriotic? Because I see conservatives asking for these docs (see article below).
This is pathetic. Truly pathetic. It's just as John Dean says. Worse than Watergate. And he ought to know.
http://www.rawstory.com/news/mochila/Secrecy_invoked_on_Abramoff_lawsuit_12012007.html
Look at the President give us his typical Plame-like blather about how serious the Abramoff the investigation. Look at this transcript. If it's so serious Mr. President, why won't you turn over the documents. This baloney about Abramoff's lobbying being a national interest secret like a sinking Soviet submarine in the height of the Cold War is really interesting. Give it up Mr. President. Give him up Fox Republicans. The longer you all hold out with these lies the worse it will be for you in the long run.
http://www.whitehouse.gov/news/releases/2006/01/20060126.html
Anonymous wrote on December 1, 2007 9:54 PM:Rudy while screwing Judith Nathan decided to screw the taxpayers as well, the security detail liked the overtime~
Bidness width Rudee is dun dis wey
morris1030 wrote on December 1, 2007 11:44 PM:Rudy's breathtaking scams and hubris really have not as yet fully been exposed. Beyond there is a real story in all of his deals in Saudi land. His partners are kept close to his vest. Who are they?
There's a lawsuit about offshore $$ Rudi and Co unaccounted for and absconded with , and client sued. Google.
There is really more. A good investigative mind needs to contact TPM and lets get the word out. He's a danger.
TJ wrote on December 2, 2007 12:27 AM:I wish the folks in NYC could for once elect a dem as mayor, doesnt anyone there vote?!
Frank - An American Patriot wrote on December 2, 2007 3:50 AM:"You're not able to see clearly what [the money] is being used for," the official said, "because it's bundled in an AmEx card as opposed to as direct payments to vendors."
As much as I'm coming to despise RG this statement is not accurate. I'm in the business travel industry and all major credit/charge card companies list the merchant name on the statement. Business travel accounts government entities and corporations use have even more detail available than run of the mill consumer accounts.
ignatiusreilly wrote on December 2, 2007 9:20 AM:When is someone going to do the legwork and look into whether they used the same practice during the period of his tryst with Christyne Lategano?
Dee Illuminati wrote on December 2, 2007 10:12 AM:Judith Regan: I was smeared to save Rudy Giuliani
Aneesh Raman: I was smeared to save Google
Wang Xiaoning I was tortured in China to save Yahoo
Dee Illuminati asks: whom do you believe and why?
If it is the stated goal of the United States to promote democracy why does the United States Media continue behaving this way?
A YouTube question to the moderator of the next political debate should have asked that question as, "When will the news industry discontinue undermining those whom seek human rights?"
Keep in mind when you see a Rudy Giuliani endorsement by the MSM what you are really looking at.
Judith Regan: "I was smeared to save Rudy Giuliani"
That is why Dee Illuminati exists, to demonstrate the lurid and insidious acts of the Neocons.
Anonymous wrote on December 2, 2007 12:49 PM:"I wish the folks in NYC could for once elect a dem as mayor, doesnt anyone there vote?!"
They have. His name is Michael Bloomberg. He changed his registration so he could run against Mark Green.
Tsumbra wrote on December 2, 2007 2:12 PM:"Rudy's Foiled Love Nest Tryst"
blogenfreude wrote on December 2, 2007 2:44 PM:www.ilovepoetry.com/viewpoem.asp?id=94014
Your tax dollars at work - and, at play?
Josh, it's our money, and we should make a formal demand he pay it back. It's unreasonable to object to his security detail - NYC mayors need them. But paying for his goumade to get shuttled around? Feh.
Adrian Lesher wrote on December 2, 2007 2:46 PM:Your post says that the account was a "city account." However, is that documented? Is it possible that a city check was paid into a personal account (e.g. Giuliani's or Nathan's).
Adrian Lesher wrote on December 2, 2007 2:54 PM:In that connection, I note that the Am Ex bill cited in the Politico article bears Giuliani's name.
If city money was prepaid into a personal account, isn't this an even more egregious breach of accounting practice?
Joe wrote on December 2, 2007 5:00 PM:TPM should file a freedom of information request with NYC for the Amex bills. All cardholders receive a bill and public agency bills are a public record.
ttc wrote on December 2, 2007 9:05 PM:this appears to me to be a prophylactic, panicky, preparatory step to potentially deal, quietly and apparently illegally (to put it delicately) with someone's financial emergency. Either the emergency failed to materialize or the parties got cold feet, since most of the money was eventually returned. No harm no foul, unless you then decide to run for president on the basis of your outstanding moral fiber.
If you look at Judith Nathan's back story, she is practically a permanent financial emergency. She can sporadically earn it, but she can also spend it. And Giuliani's 6.8 million dollar divorce can't have helped.
danger wrote on December 2, 2007 11:26 PM:JD21 wrote on December 1, 2007 9:34 PM:
Is it really worth hiding all the corruption to benefit their party? Are they really that desperate?
It's not so much that they're desperate, they're just oh so close to establishing a permanent dictatorship here in this country!
ForKucinich wrote on December 2, 2007 11:30 PM:http://www.bradblog.com/?p=5376#comments
California GOP Faces Debt, Layoffs, While Rudy Backers Pour Money into Initiative That Could Hand Him the Presidency
Effort to Get Initiative on the Ballot Was Momentarily Derailed Last Month When It Was Revealed That Its Sole Financial Backer Was a Rudy Campaign Chair, But It's Now Back on Target...
Guest blogged by Jon Ponder, Pensito Review.
Fundraising is down dramatically nationwide for the Republican Party, but things are especially bad here in California, where the state GOP is in such dire straits that its ability to compete in both state and federal races could be affected.
But while the state party is cutting programs and considering layoffs, hundreds of thousands of dollars are flowing in from out-of-state fatcat supporters of Rudy Giuliani --- funds the state GOP can't touch because they are earmarked specifically to promote a ballot initiative that would, if passed, give Rudy (i.e., the Republican presidential candidate) 20 or so of the state's 55 Electoral College Votes, even if he loses the state to the Democratic candidate.
Jim wrote on December 3, 2007 11:36 AM:If the prepayments happened near the end of the FISCAL year, then they may have been made to "use up" any unexpended funding in the respective budgets. THis way they go unnoticed and the agencies do not get pressure to reduce their budgets in the following year becayse they did not spend it all. A Win-win. THe agency gets the same money the following year and Mr.G gets more cops to walk his girlfriend's dog and drive her friends around - all illegal of course
mbbsdphil wrote on December 3, 2007 2:15 PM:Too obvious to need saying, but since Rudy claims to be a Republican, it's probably best to spell it out.
Nobody pays that much cash up front to a third party unless they are intentionally trying to disassociate where the funds came from with how they were spent. The lost interest alone is a "taking".
Most of all, it mocks the purposes of an accounting system - especially for a public entity spending taxpayer dollars - which is to tie together and verify the amount, timing and reasonableness of the expense; the legitimacy of the business purpose; and the correct budget. Controls and audit trail? Good luck. Not much better than cash in a paper bag.
Shagalicious is right, man.
highlander wrote on December 4, 2007 11:09 PM:Hes a fucking lowlife, scumbag rat like the rest of em. Look around and read the news, we only see 2 percent of what these people are into and ONLY when they get caught.
mostest wrote on December 7, 2007 9:27 AM:Theyre all corrupt.
So, in 2001 Rudy embargoed $400,000 from being used for other city government services, i.e, child's health, homelessness, food banks, winter heating costs, transportation, AIDS funding, and even the lawyers for indigent defendants budget, to have the money available for if and when he wanted to meet with his mistress. And to add insult to injured $298,000 was later refunded. So, at a minimum, if the $102,000 had been used properly, the lost opportunity to use the $298,000 for social city use. Someone should look into what budget falls/programs were cut when this money was being embargoed.
Another thing no one seems not to be focusing on...why is it justifiable for Rudy's mistress to get city funded security even if she was being threatened! I am sure many NYers in the time frame were being threaten for a many reasons. I guess the only differences is they were not all sleeping with the mayor...that we know of.
Kefa wrote on December 10, 2007 7:27 AM:This is unbelievable!
Rudi looks so bad on MTP this Sunday under the soft light and soft questioning of Timmy is was stunning. He stuttedd and stammeded and tryed to lie his was and only made matter worse. He's toast. As the light get bright he will melt just like the witch in the Wizard of OZ.