March 6, 2007

In Case It Was Still In Doubt

Rudy Giuliani appears to be all in for the 2008 Presidential campaign, and he's got the receipt to show it. Giuliani divested his lucrative investment-banking business for an undisclosed sum, widely seen as a necessary step to his candidacy:

An Australian-based firm bought Giuliani Capital Advisors LLC for an undisclosed amount. A source close to the Republican candidate who spoke on condition of anonymity said the sale is intended to free Giuliani from distractions as he pursues the White House.

"This enables him to sustain his intense focus on his candidacy," the source said.

Others viewed the sale as Giuliani's first step away from the lucrative private-sector career he built during the years he spent outside the public spotlight. Eric Abrahamson, a Columbia Business School professor, said he thinks Giuliani will have little choice but to start building a higher wall between his campaign and his business activities. ...

The 100-member banking outfit that Giuliani sold to the Macquarie Group yesterday specialized in helping companies restructure after bankruptcy. Giuliani Partners bought the boutique investment firm from accounting giant Ernst & Young in 2004 for $9.8 million.

Many have speculated that Giuliani might pull out of the race at some future point. They based that on his withdrawal from the 2000 Senate race against Hillary Clinton, which left Republicans with the earnest but overmatched Rick Fazio as her challenger. Giuliani had a bout of prostate cancer at the time, but Republicans had expressed mistrust about Giuliani's motives and questioned whether he had the fortitude to square off against Hillary.

It doesn't appear that Giuliani wants to run from this fight. He has now ended his fee-drawing speaking appearances and has begun divesting his considerable business interests. That shows a high level of commitment, especially this early in the campaign. He could have kept both until he got closer to the primaries.

So why divest now? The Washington Post speculates that his client list might have some embarrassing names, but they provide no evidence of such. The one name that they do mention, Bernard Kerik, already is widely known and associated with Giuliani for years. Giuliani may have to answer more questions about Kerik, but that would be true with or without the early divestiture. It's probably more related to the early announcement of his candidacy, which necessarily limits his business flexibility.

More acutely embarrassing but less impactful over the long term was the statement by Giuliani's son Andrew yesterday about the tension between himself and his father. This comes as no surprise; Giuliani left his mother during a very public affair several years ago. The younger Giuliani said that he would not campaign for his father but thought he would make a good President. The elder Giuliani asked that the media keep a respectful distance from his private life, but unfortunately Giuliani didn't have that level of discretion during his tenure as mayor. However, it's old news now, and will not likely mean much during the presidential campaign.


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