Andrew Zajac

One of the unusual aspects of Rudolph Giuliani's presidential candidacy is that it's based on his work in public service – primarily as mayor of New York after 9-11 – but he's spent the past five plus years in the private sector, where his work has been harder to evaluate.

Today, the Tribune takes a look at one of Giuliani's more unusual recent business deals, consulting on a casino resort proposal in Singapore.

Here's the story:

By Andrew Zajac and Evan Osnos
Tribune correspondents

WASHINGTON--Nine days after registering his presidential exploratory committee last November, Rudolph Giuliani appeared in Singapore to help a Las Vegas developer make a pitch for a $3.5 billion casino resort.

Though the bid ultimately failed, and there was nothing illegal about the involvement, it drew Giuliani into a complex partnership with the family of a controversial Hong Kong billionaire who has ties to the regime of North Korea's Kim Jong Il and has been linked to international organized crime by the U.S. government.

Giuliani's participation as a security consultant in the Singapore gambling venture illustrates the challenge he faces while attempting to win the Republican presidential nomination with a law-and-order message while maintaining a far-flung, international business portfolio, an unknown portion of which remains in the shadows.

As a candidate, Giuliani is banking on his reputation as a hard-nosed prosecutor and a crime-fighting mayor, along with his performance after the Sept. 11 attacks, to trump doubts about his turbulent personal life, his tolerant stands on gambling, abortion and other social issues and perhaps some of the decisions he's made as a businessman.

So far, the strategy seems to be working, as Giuliani leads most polls of GOP presidential contenders.

But as the primary campaign nears its first electoral tests in Iowa, New Hampshire and other states in the coming weeks, new details of Giuliani's extensive business dealings since leaving office continue to emerge piecemeal. Each revelation raises new questions for the first major presidential candidate in memory to build a multi-million-dollar business on the foundation of his time in elected office, and not the other way around.

Even today, more than a year after the former New York mayor signaled his intention to run for the presidency, it remains impossible to fully evaluate Giuliani's business dealings because he has declined to list all of the clients in Giuliani Partners, the consulting firm he founded and heads.

Questioned during an appearance Tuesday in Chicago, Giuliani said that, "all of Giuliani Partners' clients, maybe with one or two exceptions, I'm not even sure that's right, are public....At least the ones that I was familiar with."

Confidentiality agreements prohibit disclosure of an unspecified number of clients, Giuliani said, "but somehow I think you--you meaning the press in general--have been successful in discovering. I'd have to check if it's every client. But just about every single client of Giuliani Partners. You'll have to check with them."

A spokeswoman for Giuliani Partners said that "a number of client relationships...must remain confidential, as per the specific request of those clients."

She did not respond to questions about whether Giuliani was asking those clients to waive privacy in light of his presidential bid.

Giuliani's public involvement in the gaming bid began at a September 2006 press conference in Singapore hosted by Mark Advent, CEO of Eighth Wonder LLC, a Las Vegas development company heading one of three consortia competing to build the Sentosa Integrated Resort.

Giuliani Security & Safety LLC, a division of Giuliani Partners, was to provide security on a celebrity-studded, multi-billion project featuring participation by soccer legend Pele, chef Alain Ducasse, New Age guru Deepak Chopra and designer Vera Wang, according to Advent.

Advent estimated that he spent more than $30 million to assemble and present his plans to Singaporean authorities. He declined to disclose the fees paid to Giuliani, but described them as "fair and priceless."

Advent said he sought Giuliani's services because he was impressed by the way Giuliani ran New York, before and especially after the Sept. 11 attacks. "In my personal opinion, the mayor is the best crisis manager, post-traumatic event, of anyone I've ever seen," Advent said in a recent telephone interview.

Behind the scenes, Giuliani had been involved in the project for three months before his involvement was made public, and he had a 10-year agreement to provide "security management on all levels," including employee background checks, security features and disaster response, said Advent, who previously developed Las Vegas' New York, New York casino.

Giuliani participated in Eighth Wonder's presentation to Singaporean authorities last Nov. 29, according to Advent. That was nine days after the Rudy Giuliani Exploratory Committee Inc. registered with the Federal Election Commission.

Advent said he never discussed how the consulting arrangement would be affected if Giuliani ran for president. "At no time did Rudy ever talk politics with me," Advent said.

Advent described Giuliani as extraordinarily concerned about his firm's partners and associates. "They did a tremendous amount of due diligence...They wanted to make sure they vetted everybody," Advent said. But in a later interview, Advent said Giuliani's vetting only extended to Advent and his Eighth Wonder colleagues, and that Giuliani had no role in evaluating Eighth Wonder's outside partners.

Those partners would include Melco PBL, a joint venture based in Hong Kong which joined the project, with a 24.5 percent equity stake in October 2006, according to Advent.

Melco PBL is a collaboration between Publishing and Broadcasting Limited (PBL), an Australian firm run by James Packer, son of the late media magnate Kerry Packer, and Melco International Development, run by Lawrence Ho, son of Stanley Ho, a colorful casino tycoon.

At 85, Stanley Ho remains the dominant player in the gambling industry on Macau, an 11-square mile spit of land near Hong Kong on China's southeast coast.

A Portuguese possession for more than 400 years until it was returned to China in 1999, Macau has long been the gaming capital of Southeast Asia. For 40 years, until 2002, Stanley Ho held a monopoly on casinos there.

Even now, with the Macanese gaming market open to foreigners, including Americans, Stanley Ho and two of this 17 children, Lawrence Ho and Pansy Ho, have an interest in three of Macau's six casino licenses.

Although he has never been charged with a crime, the U.S. government's 2000 International Crime Threat Assessment described Stanley Ho as "a reputed organized crime figure."

A 2007 State Department narcotics and law enforcement report noted links between casinos controlled by Stanley Ho and Chinese organized crime.

In addition, Stanley Ho retains ties to the regime of North Korean dictator Kim Jong Il. In 1999, he opened a casino in Pyongyang.

In March 2003, the South China Morning Post, the main English-language newspaper in Hong Kong, reported that Stanley Ho conveyed an offer of asylum in North Korea by Kim to Iraqi ruler Saddam Hussein. The State Department has designated North Korea a state sponsor of terror since 1988.

A spokeswoman for Stanley Ho declined to comment.

Advent and Giuliani's spokeswoman said Stanley Ho had no involvement in the Singapore casino bid, pointing out that Stanley Ho has no direct interest in Melco PBL.

"We did business with Lawrence Ho," Advent said. "It has nothing to do with his dad...He (Lawrence Ho) has a separate company."

A spokeswoman for Melco PBL said that "Dr. Ho was not involved in the Singaporean bid and he is not involved in the affairs" of Melco International, PBL or their joint venture Melco PBL.

According to Hong Kong regulatory filings, Stanley Ho resigned as chairman and director of Melco International, sold the bulk of his shares in the company and turned over leadership of it to Lawrence Ho, in March 2006, about seven months before Melco PBL's participation in the Singapore casino bid was announced.

But at the time of the bid, Stanley Ho and a firm controlled by him still owned more than 21 million shares of Melco International--just under two percent of the shares outstanding.

In addition, regulatory filings in Hong Kong and the U.S. show a series of loans and contracts for computer services and gaming machines between Melco International and Stanley Ho-run firms. Melco International reported spending about $2.4 million as its share of costs to pursue the Sentosa license through Melco PBL.

The Giuliani Partners spokeswoman termed the link between Stanley Ho and the Eighth Wonder partnership "a stretch."

The government of Singapore announced Dec. 8 it was passing over Eighth Wonder and another bidder and selected a consortium headed by Genting International Bhd, a Malayasian casino company.

Analysts studying the three bids for the project before the decision generally marked down Eighth Wonder for its relative lack of experience in developing an entire resort complex.

Such a deficiency might be enough to eliminate Eight Wonder without considering other factors, but even a tenuous tie to Stanley Ho would give Singapore regulators pause, said William Eadington, an economics professor at the University of Nevada, Reno, who has extensively studied casino gaming in Macau.

"There were and probably still are Triad [Chinese organized crime] connections around Stanley Ho," said Eadington. "I think anything very close to Stanley Ho they [Singaporean regulators] are going to have trouble with."

Zajac reported from Washington and Osnos reported from Beijing. Tribune political reporter Rick Pearson also contributed to this story in Chicago.
azajac@tribune.com
eosnos@tribune.com