Cashing In on Catastrophe | The Nation


Cashing In on Catastrophe

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The report found re-importation to be a bad and dangerous thing. "As the nation tightens its borders against possible future terrorist attacks, it risks undermining security and safety by opening them to non-FDA approved prescription drugs," the Giuliani study concluded. Giuliani himself testified before two Senate committees. When the public was invited to take its turn to testify before a federal task force studying drug importation, one of the first speakers was Kerik, who raised the possibility that terrorists could send weapons of biological warfare across the border disguised as prescription drugs.

This article is adapted from Grand Illusion: The Untold Story of Rudy Giuliani and 9/11, just published by HarperCollins. Copyright © 2006 by Wayne Barrett and Dan Collins.
Published by arrangement with HarperCollins Publishers. Anna Lenzer was the research assistant for the book. Research support was provided by the Investigative Fund of The Nation Institute.

About the Author

Dan Collins
Dan Collins is senior producer for CBSNews.com.
Wayne Barrett
Wayne Barrett is a Nation Institute Fellow who has been covering the presidential election for the Daily Beast and...

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Entergy Nuclear Northeast hired Giuliani Partners to evaluate emergency planning and security systems around its five nuclear plants in the Northeast, including Indian Point, north of New York City, which were always under the sharp and hostile glare of the communities in which they were located. Then, when Hurricane Katrina struck, Entergy was happy to announce that Giuliani Partners was going "to counsel the company in coping with the aftermath," which included trying to get its New Orleans electric utility back in operation. In making the announcement, J. Wayne Leonard, the chief executive officer, said, "Rudy Giuliani is a proven leader and his team of experts are probably the most acclaimed crisis managers in the world." Not only was New Orleans getting the attention of Rudy himself, the press release noted, but also that of a team of experts in this sort of catastrophe. All this consulting firepower was not enough, however, to keep Entergy New Orleans from declaring bankruptcy right after the hurricane, or to get power back to large swaths of the city, which were still without electricity months after the hurricane struck.

While such deals may have raised a few eyebrows, they don't compare with Nextel. Indeed, if there was any doubt that Giuliani Partners was all about 9/11, it was erased by the Nextel deal. Nextel was one of the firm's first and most lucrative customers, forming what the Partners called a "strategic alliance to significantly improve public safety communications across the United States."

The theme was consistent and clear: "On September 11th, we learned the true importance of interoperable communications. It was a chaotic scene at Ground Zero, but if it weren't for Nextel providing us with interoperable communications tools, it might have been worse." This pitch was so much the core of the Giuliani Partners message that partner Richie Sheirer was quoted as repeating it word for word at Nextel-sponsored public safety conferences in Washington, DC, and St. Louis in the spring of 2003. Tom Von Essen made the identical statement at yet another Nextel-sponsored event, at the Hilton hotel in New York City. Nextel echoed the point, describing how it had distributed thousands of cell phones at both Ground Zero and the Pentagon (along with mobile cellphone masts to get them working) and how "with local phones jamming and telephone and power main stations down, Nextel's Direct Connect service and two-way messaging remained working throughout the entire crisis, recovery and clean-up."

But Nextel's role in emergency service communications in New York was far from universally positive. It was, in fact, so problematic you'd have thought Giuliani would have left office with a bad taste in his mouth for the entire product line. The city was a big Nextel client when Rudy was mayor, leasing its phones for agencies from the Police Department to the Board of Education to the Office of Emergency Management. But as Nextel phones and equipment became omnipresent, the system developed a stunning, even life-threatening, glitch. The engineering tricks that allowed co-founder Morgan O'Brien to brag that Nextel had managed to stuff 8 million subscribers on a spectrum that was supposed to have a ceiling of 1 million also had a troubling side effect: The infrastructure created interference. In communities across the country, including New York City, Nextel signals were causing those in adjacent frequencies to drop or become garbled to the point of incomprehensibility.

While no one can establish that Nextel caused interference on 9/11, there is good reason to wonder. Five days after the attack, a lawyer representing the city e-mailed the FCC about the deployment of all the Nextel equipment at Ground Zero--particularly mobile cell masts--and observed that if Nextel and the city didn't coordinate closely, "it is highly probable that Nextel will disrupt these other critical communications." Another city attorney testified at a subsequent Senate hearing that the city and others in a communications coalition held teleconferences twice a day right after 9/11 to "monitor and, if necessary, remedy any interference," focusing especially on Nextel. Even the company acknowledges that interference with public safety communications increased with the kind of explosion of cellular use that occurred on 9/11. There are also indications that the World Trade Center might have been a particular source of Nextel interference. John Paleski, president of Subcarrier Communications, which managed sites atop the WTC, said Nextel had several pieces of interference-generating equipment there, including digital and analog antennas. While those antennas were probably knocked out from the moment the planes hit, Nextel apparently had a lot of similar equipment nearby.

In fact, the company had so much disruptive equipment in the area that a year after 9/11 it was still a public safety headache. Giuliani led the commemorative services at Ground Zero on September 11, 2002, even while his largest client, Nextel, made the city's interagency communications at the site so "inoperable" during the ceremony that the Bloomberg administration filed a complaint against the company that used precisely that word.

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