Rudy Giuliani has argued that his buddy Hank Asher put his lawbreaking past behind him. But it looks like he may have fallen off the wagon.

We noted earlier today that Asher pops up in the indictment of Orange County Sheriff Mike Carona. And although Asher is not accused of a crime, the facts do not look good: Less than three weeks after Carona was selected to advise the President's Homeland Security task force, Asher gave Carona's wife a $15,000 watch. Asher was lobbying for the federal government to buy his data mining software at the time. That same month, he hired Giuliani under a contract worth more than $4 million to head that effort.

Carona was one of 14 officials named as advisors to the task force in December of 2002, the month before the newly formed DHS officially began operations. The panel was guiding development of the Department at the time. Carona remained as an advisor until he was forced to resign last month due to his indictment on corruption charges.

According to the indictment, Asher gave "yellow gold and diamond" Cartier watches to both Carona's wife and the wife of his deputy when they visited New York in December 2002. ABC reported that Asher was bombastic during the meeting at the restaurant, handing out $100 bills and comping other diners' meals and drinks to "pay for any inconvenience his boisterous party caused the other guests."

Carona was certainly aware of Asher's product, code-named MATRIX. A 2004 City Journal piece reported that Carona said that if he'd had MATRIX in 2002, "he could have prevented the murder of five-year-old Samantha Runnion, abducted from outside her home in July 2002, and found, raped, along a mountain road the next day." In 2002, when he was nominated to the DHS advisory spot, he told The Los Angeles Times that he intended to push for "strong coordination between the federal and local fight against terrorism," precisely the strength of MATRIX, which compiles law enforcement databases and public records.

Asher's support of Carona continued in 2006, when he and his family and associates made $6,000 in contributions to Carona's reelection campaign, according to county records.

Asher could not be reached for comment, and an assistant at his company Jari Research said that it was unlikely he'd respond, since this was a "hard time" for him. Asher's sister died last month of cancer.

As for Giuliani's camp, they responded to ABC's story yesterday about Asher's appearance in Carona's indictment with something of a non-answer:

"This would seem to be another case of trying to find a story where there isn't one. Over the course of his career, Mayor Giuliani has worked with numerous well-respected and highly regarded individuals as a member of the Reagan Department of Justice, US Attorney, Mayor of New York and private practice," said Maria Comella, a spokesperson for Giuliani.

Andrew Berger, Adrianne Jeffries, and Peter Sheehy contributed research to this post.