Subject: [NEXTEL-1] Rudy to the rescue

From: Marcel <[email-masked]>
Date: Mon, 25 Nov 2002 14:01:59 -0500

http://cnniw.yellowbrix.com/pages/cnniw/Story.nsp?story_id=34636264&ID=cnniw&scategory=Business+and+Finance&

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Rudy to the rescue

Source: The Sunday Telegraph - London

Publication date: 2002-11-24

Rudolph Giuliani, the former New York City mayor whose heroism
during the September 11 terrorist attacks elevated him into an icon
for courage and dignity under fire, is now ascendant in corporate
America. He is the ubiquitous fixer-for-hire in a world where it
seems there is nowhere else to turn. In the words of former New York
Governor Mario Cuomo, Giuliani is "a kind of new model inspector
general".

Last week, the vast - and lucrative - manifestations of
Giuliani's star power became apparent when he was retained by a
group of Wall Street money men in a bid to assume control of
beleaguered WorldCom, and possibly place himself atop it as
chairman.

At first glance, the 58-year-old Giuliani is a curious choice to
command a long-distance telephone giant mired in bankruptcy and
scandal. For one thing, only two weeks ago WorldCom hired former
Compaq chief executive Michael Capellas as its chairman and CEO. But
Giuliani's group, led by distressed debt investor David Matlin, aims
to propose a restructuring of WorldCom where bondholders would
assume control of the company. Given the low regard for corporate
governance these days, Matlin cleverly enlisted Giuliani to reassure
investors there would be no financial funny business of the sort
that has so far resulted in accounting discrepancies at WorldCom of
at least $9bn and the indictments of several top execs.

It has been suggested that Giuliani sees in WorldCom a "diamond
in the rough" situation, analogous to the crime-addled, inefficient
mess New York City was in when he became mayor in 1994. Among the
things his firm is working on are post-restructuring governance
ideas which include an independent board and a "check and balance"
separating the CEO and chairman's job.

"We'll try to help them create a situation in which a corporation
upon emergence from bankruptcy can be a model of corporate
governance, maybe in a way to reverse some of the damage done in the
past - both in that corporation and in several others that you all
know about," Giuliani mused last week. "Wouldn't that be terrific?"

Well, sure. It is very hard to argue with the PR value of such a
move; it bears similarities with investment deity Warren Buffett's
joining the board of Wall Street firm Salomon Brothers after it was
laid low by scandal a decade ago. And questioning Giuliani's
business acumen or telecom know-how is merely the inverse of what
was wondered about the political skills of his successor as mayor,
the billionaire Michael Bloomberg. These days, what apparently
counts most in any arena is Leadership - and it just so happens that
is the title of the book by Giuliani which has just spent several
weeks perched on top of the best-seller lists.

Will the man dubbed "Mayor of America" now morph into the "Mayor
of Corporate America"? There are certainly no scarcer commodities in
business these days then credibility and integrity, and as a result
Giuliani's diary is jammed. Since setting up Giuliani Partners as a
joint venture with Ernst & Young in January - joined by a cadre of
his civic administration's top officials including former police and
fire commissioners - Giuliani has nabbed a wide swath of consulting
gigs.

They include a $4.3m deal with the police department of Mexico
City to help solve its kidnapping crisis, working with
pharmaceuticals company Purdue Pharma to stop the spread of its
prescription pain killer OxyContin as a street drug, and helping
wireless company Nextel ensure the reliability of mobile phones
during emergencies.

Until WorldCom, one of Giuliani's highest-profile retainers was
to advise Merrill Lynch on its handling of the investigations into
its stock-picking conflicts led by the New York State Attorney
General, Eliot Spitzer. There was no small irony there, given that
Giuliani first made his name in Spitzer's job by fearlessly tackling
the mob as well as prosecuting Wall Street crooks like Ivan Boesky
and Michael Milken in the 1980s.

Last Wednesday, Giuliani lent his ample mojo to a press
conference held at a Times Square hotel by the National Thoroughbred
Racing Association. They were there to announce that Giuliani
Partners had been hired along with Ernst & Young to investigate and
fortify the horse-racing industry's electronic betting systems after
a group of thieves were caught hacking in to claim millions of
dollars in false winnings. It is fair to say that the hiring of
Ernst & Young alone might not have been as confidence-building to
punters as the news the G-man is now on the job.

In that now familiar stoop, head thrust forward, Giuliani led the
entourage of NTRA bigwigs to the podium in a dizzying whoosh. He
assumed his classic stance with head slightly bowed, lips pursed and
fingers folded tensely in front of him. Vaguely reminiscent of
Robert Duvall's Colonel Kilgore in Apocalypse Now, Giuliani spoke
mysteriously about Ernst & Young and its "IT security" expertise. He
held forth with allusions to his time battling the mob and his
concept called "exceeding the pig factor" (the point at which crimes
become detected because culprits get too greedy). He also,
unconvincingly, asserted that any involvement in WorldCom is "not
for me personally" but for "my firm".

Several blocks away, in Central Park, actor James Woods is being
filmed starring as Giuliani for the upcoming made-for-TV film Rudy.
His compassion and steely demeanour in the wake of the terrorist
attacks were so epic that Time magazine named him its Person of the
Year for 2001. Not only did he lead the city in its darkest hour,
but he rose to the task at a time when he had just been treated for
prostate cancer and endured a tabloid-fodder divorce.

His critics like to quietly remind us that it was not always
thus. "He's now Saint Rudy everywhere except New York City," says
former New York mayor Ed Koch, who once published the book Giuliani:
Nasty Man. "In New York they remember with great respect three-and-
a-half months of great leadership after 9-11. But they also remember
seven-and-a-half years of him being miserable. The epiphany which he
clearly sustained on 9-11 has continued - he has not gone off the
reservation and he appears to be pretty nice. I expect him to
relapse."

There are few who doubt that Giuliani's plan is to get his
finances in order and sock away millions through Giuliani Partners
before staging a return to public service, possibly as a
presidential candidate. And given the high-profile challenges he's
taking on, Giuliani clearly intends to prove his worth in the public
eye. Those who recently bandied his name as a possible replacement
for departed Securities and Exchange Commission head Harvey Pitt
could surely not have been taking into account that the $150,000
annual salary that job pays is roughly what Giuliani now commands
for a single speech.

"It's a once in a lifetime opportunity he had" after the attacks,
observes Cuomo. "He stood up on that platform for a few days and did
magnificently well. He was given a new persona: iconic, soaring,
unassailable - and that's worth a lot of money."

Publication date: 2002-11-24

© 2002, YellowBrix, Inc.

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