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 Rudy Giuliani
By Dan McCue
To most South Carolinians, former New York City Mayor Rudy Giuliani is either the hero of Sept. 11, 2001, or the most liberal candidate they ever expected to see leading the pack for the Republican party’s 2008 presidential nomination.
Both are descriptions the lifelong New Yorker comes by naturally.
Born to a working-class family in Brooklyn, N.Y., and the grandson of Italian immigrants, Giuliani learned early on the value of strength and determination, qualities he took with him into professional life when he joined the U.S. Attorney’s office in 1970. After being named chief of the office’s Narcotics Unit, he quickly rose to the position of executive U.S. Attorney before being called to Washington to serve as an associate deputy attorney general.
In 1981, Giuliani was named associate attorney general, the third highest position in the Department of Justice, a position in which he supervised all of the U.S. Attorney Offices’ Federal law enforcement agencies, the Bureau of Corrections, the Drug Enforcement Agency, and the U.S. Marshals.
His high-profile career, however, didn’t really begin in earnest until 1983, when was appointed U.S. attorney for the Southern District of New York. It was then that he spearheaded a massive push to jail drug dealers, prosecute white-collar criminals and fight organized crime by taking on New York City’s five major crime families. By the time he actively entered politics, making an unsuccessful bid for mayor in 1989, he had scored 4,152 convictions with only 25 reversals.
Running on the Republican and liberal party lines in 1993, Giuliani was successful in his bid to become New York City’s 107th mayor by campaigning on quality of life, business and educational issues.
In 1997, he was re-elected by a wide margin, carrying four out of New York City’s five boroughs.
Since leaving office shortly after the Sept. 11 attacks, Giuliani has served as chairman and CEO of Giuliani Partners LLC, a wide-ranging consultancy. Earlier this month, the firm announced that it was selling off one of its subsidiaries to an Australian entity, the Macquarie Group. Financial details of the transaction were not disclosed.
SCBIZ spoke to the candidate by telephone from his office at Giuliani Partners.
SCBIZ: As mayor of New York City you oversaw the redevelopment and revitalization of the city’s center, Time Square. What were one, or maybe two, lessons in economic development that you can point to from that experience that could readily be applied elsewhere?
GIULIANI: It’s interesting that you ask that question because I’m in an office that overlooks Times Square as we speak. Ten or 12 years ago it was totally different. It was empty. If it had anything, it had pornography and drug dealing. Those were the two big businesses on Times Square … and it had a tremendous amount of crime.
We started with the basic proposition that in order to have economic re-growth, you had to have safety. I kind of think about Iraq that way too. I’ve been spending a lot of time lately thinking about Iraq. The first thing you need in order to have a civil society is safety. People have to be able to go someplace and feel that they are not going to be mugged, that they are not going to be beaten and that they are not going to be accosted.
So the first thing we did (in New York) was put a lot more police officers on Times Square, train them differently to try to stop these specific types of crime, and to very, very quickly restore a sense of order to Times Square.
Our aim was to get rid of the drug dealers. Arrest them. Get rid of them. Make it clear that we didn’t want them there. Get rid of the prostitutes. And then we rezoned the city so that we drastically reduced the number of pornography shops that could proliferate in any one area. Over a period of about two years that wiped out a lot of the pornography that had been proliferating. However, before we achieved the results we wanted, we had to defend the rezoning in court. It was challenged as being unconstitutional, but we won that battle and we were able to get rid of, not all, but a very, very large number of the pornography operations.
The other thing we did was aggressively court business. We began negotiations with businesses in order to get them to establish a presence in this area. The first big one was the Walt Disney Co., and they agreed to take an old theater, the New Amsterdam, and remodel it. But their caveat was that we clean up the prostitution and the pornography. They said they couldn’t have a Disney live performing show in the middle of this decay and chaos and danger.
So once we won our battle, they went ahead with their investment. They were the first big investment. Then we pursued companies to put in hotels, restaurants and the wax museum. All of those were separate deals that we made, through my office of economic development and the governor’s, so that we dealt with whatever their particular issues were. You know, maybe they needed some tax abatement. Maybe they needed some help in financing. But we became sort of a clearinghouse to try to make it easier for these private enterprises to invest in Times Square.
SCBIZ: Here in South Carolina we’re in the midst of reinventing ourselves as an “innovation economy.” How can the federal government help encourage high tech companies to locate in rural areas to bolster economies that once were textile dependent?
GIULIANI: First of all, given the nature of your population—educated, highly motivated, very hard working—any kind of redirection like that would probably be good. Although I wouldn’t give up entirely on some of the basic businesses that are still necessary and still can be done cost-effectively if they get some assistance, some help and also are able to deal with the fact that they are closer to the market than when you have to bring in goods and materials from thousands of miles away.
In any event, I think the idea of moving toward high tech is a great idea because it’s the future, not just for South Carolina, but for the country. That’s where a lot of our jobs are going to be 10, 15, 20 years from now, so you might as well make the transition now.
As for the federal government’s role, it’d really have to be a partnership of local, state and federal government working together to figure out the companies that would have an inclination to consider South Carolina. And, you know what I’ve really found, is the best way to do this? You almost have to do it the way you do business; you have to do it on a business-by-business basis. You have to think about who the companies are that would be likely to think about moving into your market, those for whom your state or city is not off the charts.
Look at our experience in New York. There were companies I could never get to come to New York. They were family businesses, or they liked to be in warmer weather, or they liked being in Canada so there was just no chance, or New York was too expensive, which was sometimes the case. But then there was a whole host of businesses that would consider coming to New York, and those were the ones we focused on. We made a list of them. And maybe if we could get enough of them it would be worth it for the city to invest—and sometimes we could get federal money for it—and fix the infrastructure. In some cases they might have a problem with our high taxes.
Now I reduced taxes by 24%, 25%, 26%, particularly on businesses, but it took a while to do that; it took four or five years to do that. So I would give some businesses specific tax abatements in exchange for the number of jobs they were bringing us. So if they were going to bring 200 jobs, they could get a reduction in their taxes that we would negotiate with them for 10 years. If they were going to bring us 5,000 jobs, they’d get even a bigger one.
And we would get the state and the federal government where they could help us with that. So I think the best way I could describe it is you need a partnership of federal and state and local government that solves the individual problems that business have that might be inclined to relocate to your area, to your place.
SCBIZ: Now, what about venture capital? Here we feel there isn’t an awful lot of that kind of investment. What role can the federal government play in inspiring that investment?
GIULIANI: I think the more that the venture capital firms know about South Carolina the better. Sometimes it’s just a matter of their not having enough information and enough knowledge, and people tend to repeat all the stuff they’ve done in the past, so if they’ve invested in New York in the past, they invest in New York. If they’ve invested in Boston, they invest again in Boston. So in essence, you have to get information in front of them that shows them that there’s real potential for growth here. And I think the Department of Commerce could surely help South Carolina do that.
I’ve been to South Carolina a lot, even before we were competing in a primary there. And you’ve got a very healthy economy in the sense of real growth and a lot of people moving in and a lot of new investment, so there’s a really good chance that you can convince venture capitalists that this is a good place to put your money because it’s going to appreciate over five, 10, 15, 20 years. That’s what South Carolina has been doing for the last couple of years that I can think of. I think South Carolina has a pretty good story to tell.
SCBIZ: You’ve been a prosecutor, mayor of New York, but more recently, you’ve been a businessman as head of your consulting firm, Giuliani Partners …
GIULIANI: A great experience.
SCBIZ: Have you gained insight from your more recent experience that you didn’t have about being in business before?
GIULIANI: Oh, yes. I think it’s been an invaluable experience. I mean I’ve been in private law practice for parts of my life before now. Right after I left the Justice Department and after I left the U.S. Attorney’s Office, I practiced law and I did some business law then for corporate clients, but mostly litigation.
So this is my first opportunity to both build a business and then to work with a lot of businesses to try to restructure them and to deal with their problems. I think the discipline of learning how to break even and then to make a profit is a discipline that everybody, at some point in their life, should have to have. To have the responsibility of figuring out how you’re going to pay your bills, how are you going to make a profit, how are you going to pay the people that work for you, how you’re going to make a payroll; there’s a judgment that that ultimately gives you that can not be replaced.
And you also get a sense about how government can help that and hurt that. Most of the ways that government hurts is by interfering. Government can give you some help in the special situations we’ve been talking about, where you have to do redevelopment, but largely, both on the government side and the business side I would make a deal with government immediately which is…don’t interfere with us too much. Do that and you’re giving us the best break you can possibly give us.
Keep taxes moderate or at least keep them competitive. At least take a look at who are your competitors; what are the states and cities that people who might want to come to a South Carolina community, what are the one’s they would compare you to, what are the other alternatives and what are their tax rates and how much off from that are you? Are you higher? Lower? If you’re higher you’re going to lose a lot of business. If you’re lower you’re probably going to be in pretty good shape. But at least if you’re even you’ll be in a competitive position. Tax rates and fees—hidden taxes—are very, very important.
Education is really important. People when they think about moving business, particularly with a significant number of employees, all realize that a lot of these employees have children that have to go to school. So if one place has a pretty good school system and another has a really good one and a third one has a great one, you’re going to do a lot better when you have a good school system.
SCBIZ: Our Port of Charleston has consistently ranked in the top five ports in the nation. Are we as a nation doing enough in the area of port security? Would you, as president, want to invest a lot more money in that area?
GIULIANI: We’re not doing enough about port security. We’re doing more than we used to, and I believe the Department of Homeland Security and a lot of state and local governments are catching up.
Right after Sept. 11, and for two or three years thereafter, when the Department of Homeland Security was first established, the big emphasis was on airport security. That’s understandable. That’s the way the last attack took place. That’s the way I imagine (the Bush administration’s) intelligence suggested a future attack would take place. The one that become public was the one in London several months ago, where they were going to take 11 airplanes and blow them up over the Atlantic. So a tremendous emphasis was put on airport security. And I think a pretty good job was done on airport security.
But of necessity, unfortunately—or maybe not of necessity, but just out of focusing on one and not the other—port security didn’t get the same attention. It is now getting that kind of attention, and the core to it is, system-wide security.
The single most important thing you can for port security is to search the ship when it’s being loaded. Make sure that when the cargo goes on the ship that it’s safe. That it doesn’t contain a bomb or chemical or biological materials, that it doesn’t contain contraband. We need a very good system, technological and otherwise, of searching cargo as its loaded. From there we need to find a way to certify it and identify it, so that as it moves on to various ports, if it’s been tampered with we can tell that and search that container again. And if it hasn’t been, then we could feel pretty comfortable that it doesn’t contain anything. Even with that, however, you still would need to back that system up with checks at the port of entry. But at least you’ve winnowed the field down to something you can actually accomplish.
SCBIZ: How do you do that without slowing up international trade?
GIULIANI: Technology. You do it with technology. But you’re right. There’s a tradeoff here. Just like there is a tradeoff when people are inconvenienced and stopped at the airport. They don’t like it. They have to show up now an hour earlier. All those kinds of things, there is a kind of a trade off, and until our technology really gets ahead of us, there probably is going to be an inconvenience and maybe even a little loss of money in terms of commercial cargo because it’s going to take a little longer.
But I think it’s worth it, and I do think that within five to 10 years we will have the technology that will mean we can do this and not really, in any way, slow down international commerce.
SCBIZ: Down here we have a lot of international investment. Many of our big corporate entities are not homegrown. They’re the BMWs and the like. Should that be a concern, as far as the long-term health of our economy is concerned? Is that kind of investment something we can rely on?
GIULIANI: I think that investment in your economy is a good thing. I’ll tell you why. If a foreign country invests in our economy, they have a stake in our economic health. Just like when we invest and do business with them, we have a stake in their economic health. And no matter how many differences there are between us, it really reduces dramatically the chances of any kind of armed hostilities or even any long-term commercial hostilities.
For example, if there were a major downturn in the American economy, it would have a massive impact on China. And if there was a big downturn in the Chinese economy, it would have a pretty big impact on the United States. That gives us both an interest in being reasonable about each other’s economies. That’s a good thing. And we can’t fight, irrationally, the globalization of the economy. We can fight it all we want, but it’s going to happen.
So the best thing we can do is figure out how to position ourselves to take advantage of it. And the things we’ve been talking about are things that would position us to take advantage of it. Getting more people to have the skills to handle computers and technology, information work, knowledge work, analysis kind of work—communications. All of these things are fields that are going to grow dramatically. And now’s the time for people to invest time and money to be better educated in those areas. Those that do that will have really good opportunities.
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