Wednesday, March 30, 2005


I'm not quite sure how to interpret today's Giuliani news. The story in today's New York Times suggests that he's kissing the rings of Texas Republicans because that's how you get to the White House in the twenty-first century:

Rudolph W. Giuliani's empire is expanding with a high-profile new venture: Mr. Giuliani, the former mayor of New York, is becoming a partner in a politically connected Texas law firm and will open its Manhattan office in May.

The Houston law firm, Bracewell & Patterson, employs several prominent Republicans and former members of the Bush administration and has a roster of oil, gas and banking clients that once included Enron.

... Mr. Giuliani, the former federal prosecutor, noted on Tuesday that he was not restarting his legal career at the expense of a future return to politics.

"At some point I'll probably want to run again but I don't know," Mr. Giuliani said in a telephone interview from Los Angeles, where he was taping an appearance on the "Tonight Show" for NBC.

...In recent years the firm has expanded its Washington presence, increasing its lobbying portfolio and also moving into homeland security issues....

The firm has added several other prominent Republicans and former Bush administration officials, including Marc Racicot, who was chairman of President Bush's re-election campaign in 2004 and a Republican National Committee chairman, and Lisa Jaeger, a former top adviser and acting general counsel of the federal Environmental Protection Agency.

Mr. [Pat] Oxford [Bracewell's managing partner] said he began talks with Mr. Giuliani last fall after being introduced by Roy W. Bailey, a founding partner of Mr. Giuliani's consulting firm and a Texan who once served as finance chairman of the Texas Republican Party....

But this Houston Chronicle story makes it seem like a corporate merger -- or a partnership enabling a crime family to muscle in on new territory:

"He will give us just the profile we need," said Pat Oxford, Bracewell's managing partner. He said Giuliani will show the firm's lawyers "how it is to play in the bigs."

A bit more from the Chronicle:

Giuliani conceded ... that he felt a bond with Oxford because of the managing partner's close ties with Bush. Oxford raised more than $100,000 for Bush's 2000 presidential campaign and was chairman of his Houston-area campaign for governor in 1998.

When he was governor, Bush appointed Oxford a regent of the University of Texas System, where he also served as a member of its investment management company, known as UTIMCO....

The decision to hire Giuliani was greeted enthusiastically by one of the firm's clients, Rich Kinder, the chairman of Kinder Morgan Inc.

"I think he would be an excellent rainmaker," said Kinder, whose wife Nancy was a major Bush fund-raiser.

The first chairman of UTIMCO was Tom Hicks. Hicks is the guy who made George W. Bush a rich man by buying out his stake in the Texas Rangers baseball team. Paul Krugman wrote about all this in 2002:

The University of Texas, though a state institution, has a large endowment. As governor, Mr. Bush changed the rules governing that endowment ... government officials no longer had to tell the public what they were doing with public money, or allow an independent performance assessment. Then Mr. Bush "privatized" (his term) $9 billion in university assets, transferring them to a nonprofit corporation known as Utimco that could make investment decisions behind closed doors.

In effect, the money was put under the control of Utimco's chairman: Tom Hicks. Under his direction, at least $450 million was invested in private funds managed by Mr. Hicks's business associates and major Republican Party donors. The managers of such funds earn big fees. Due to Mr. Bush's change in the rules, these investments were hidden from public view; an employee of Utimco who alerted university auditors was summarily fired. Even now, it's hard to find out how these investments turned out, though they seem to have done quite badly.

Eventually Mr. Hicks's investment style created a public furor, and he did not seek to retain his position at Utimco when his term expired in 1999.

A site called UT Watch thinks the management of UTIMCO is still a bit questionable. It notes, for instance, that Pat Oxford owns 5,000-10,000 shares of Kinder Morgan Inc. stock while UTIMCO, of which he is a regent, has approximately 1,000,000 shares of Kinder Morgan Energy. And, as the Chronicle story notes, Oxford's law firm has Kinder Morgan as a client.

One hand washes the other. And now this crowd's man in New York is Saint Rudy.


UPDATE: In comments, Skimble points me to this 2004 post from his blog, which describes a birthday party thrown for Bush the Elder by Rich Kinder (of Kinder Morgan) and his wife, Nancy; Rich Kinder gave more money to Shrub than anyone else in 2000. Oh, and he used to be an Enron exec (though he seems to have left before things got really ugly).

And note, in Skimble's post, who else was a guest at the party.

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