Ex-Giuliani aide Kerik faces corruption charges

By Christine Kearney

WHITE PLAINS, N.Y., Nov 9 Reuters) - Former New York police commissioner Bernard Kerik pleaded not guilty to federal corruption charges on Friday in a case that could further embarrass friend and one-time boss Rudy Giuliani as he campaigns for president.

Kerik, 52, faces charges including lying to White House officials, tax evasion and receiving benefits from a company suspected of links to organized crime. He was released on $500,000 bail and defense lawyer Kenneth Breen said he will move to dismiss major parts of the indictment.

"This is a battle I'm going to fight," Kerik said outside the federal courthouse in White Plains, just north of New York City. "My life has been marked by challenge."

The charges also include lying to investigators who were looking into his personal finances and business dealings and hiding more than $500,000 in income, much of it gifts from firms trying to do business with the city.

The 16-count indictment does not help Giuliani, the former New York City mayor who polls say leads the race for the Republican nomination in the 2008 U.S. presidential election.

Kerik stood by Giuliani's side on worldwide television following the Sept 11 attacks and the two became business partners after Giuliani's term ended.

Giuliani was campaigning on Friday in Nevada and his campaign did not immediately return calls seeking comment on Kerik.

Kerik, a former detective, was Giuliani's driver who later became head of the city jails and, in 2000 and 2001, the head of the largest police department in the United States. Prosecutors allege he conducted the illegal business while in charge of the jails and concealed it while he was the top cop.

"Time and again Kerik was asked specific questions about his financial dealings, and time and again he lied," said Michael Garcia, U.S. Attorney for the Southern District of New York.

In 2004, disclosures about unpaid taxes for a nanny undermined Kerik's nomination for U.S. Homeland Security Secretary, which President George W. Bush made on Giuliani's recommendation. Kerik withdrew from consideration.

Kerik lied to White House officials about his financial dealings when being vetted for the job, according to the indictment.

DAMAGING TO GIULIANI?

Experts said the indictment could be a problem for Giuliani if his political opponents used it to question his judgment and management decisions. Campaigning in New Hampshire, Republican rival John McCain did just that.

McCain noted Kerik's stint training local police in Iraq after he left the police department.

"Supposedly his mission was to train Iraqi police ... He stayed a couple of months and up and left," he said. "That should have been part of anyone's judgment before they would recommend that individual to be the head of the Department of Homeland Security."