Story of Rudy's 'Mistress' Fund Has Legs

By: E&P Staff Ben Smith, who broke the story about former New York Mayor Rudy Giuliani's alleged use or misuse of city funds related to his extramarital affair with Judith Nathan, returned late Thursday with a followup.

He noted that 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."

In an interview with CBS, Giuliani referred to the Politico account as a "totally false story." But Smith points out: neither he nor his aides have questioned any of the facts reported by Politico.

The New York Times, meanwhile, got its own copies of the documents and reports on Friday, "Rudolph W. Giuliani last night called a Web site?s account of his spending a 'political hit job' as his campaign struggled to explain why hundreds of thousands of dollars in travel expenses for his mayoral security detail were billed to obscure city offices instead of the Police Department."

It also published a photo on its Web site of a Long Island Inn where Giuliani's detail holed up, near where Nathan was staying.

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.?