Rudy is All Business

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Meanwhile, Seisint's premier product — MATRIX — had proved controversial. The databases it searched contained personal histories of millions of Americans, their relatives, past addresses, property records and credit ratings. Civil-liberties groups said MATRIX would create detailed data profiles of innocent Americans. Georgia and Utah, which had signed up for MATRIX, launched investigations into the privacy concerns raised by the program's vast data files.

Seisint wasn't the only GP client to receive government scrutiny. In 2002, Giuliani's firm agreed to represent Purdue Pharma, the maker of the painkiller OxyContin, after the Drug Enforcement Administration began looking into thefts of the highly addictive drug from company plants. Purdue Pharma ended up agreeing to pay a $2 million fine for lax security at some of its plants. Sunny Mindel, spokeswoman for GP, says the firm helped Purdue balance the need to produce a "lifesaving medicine ... with the need to make sure that this vital medicine did not get diverted by criminals for criminal use."

Giuliani's international clients have also attracted controversy. Last summer the firm dropped Citgo, the oil company that is majority-owned by a company nominally controlled by Venezuelan strongman Hugo Chávez, after news reports uncovered the relationship. (Maria Comella, a Giuliani campaign spokeswoman, says the candidate "continues to provide general guidance to the management of the firm," and adds, "But he doesn't participate in any client matters or in the day-to-day operation.") The security firm within GP has provided advice and training in counterterrorism to the government of Qatar, an emirate on the Persian Gulf, though Qatar's Interior Minister, Sheik Abdullah bin Khalid al-Thani, is a controversial figure whom several former U.S. officials have suspected of protecting major al-Qaeda suspects. The head of GP's security arm, Pat D'Amuro, says the firm is helping protect American service members and private citizens in Qatar. Of al-Thani, he says, "We've never met him; we've never dealt with him. Our contract is not with him. He's not involved at all."

In most cases, it's impossible to say how much a specific contract has been worth to GP or Bracewell & Giuliani. That's one reason the Seisint case is interesting. By December 2003, Seisint was positioning itself to go public or be bought out. GP, according to Seisint's financial statements, agreed to waive $2.2 million of accrued commissions from its total bill of $6.5 million. In return, the firm received $5.5 million in cash and a much reduced exercise price on 1.7 million stock options that had been granted in the contract.

But however promising MATRIX's future appeared, it was unable to escape the concerns of privacy watchdogs. In early 2004, a commission appointed by Utah's Governor recommended dropping MATRIX over privacy concerns. One commission member, Elizabeth Dunning, said the program's accumulation of personal data on innocent Americans was "shocking" and "outrageous." Shortly thereafter, however, Seisint was sold to the British-Dutch firm Reed Elsevier. The sale netted GP $24 million, records show, with half of that made possible by the lower stock-option price. "A lot of people made a lot of money on the sale of Seisint," said Latham. "[Giuliani] was one of them." Did law enforcement benefit too? Hard to say. By mid-2004, fewer than half the states that had originally signed up for MATRIX remained in the program, and by the end of the year the rest had quit. Less than two years after Giuliani signed on to market MATRIX, the program was dead.