An anthrax decontamination project in Florida that Mayor Giuliani showcased as one of his highest-profile ventures after joining the private sector has fizzled out at cost of millions of dollars to his firm.
The project was an effort of Bio-One Solutions LLC, a joint venture between the former mayor's consulting firm, Giuliani Partners LLC, and Sabre Technical Services LLC, an Albany-based environmental company. Bio-One Solutions had planned to place its offices in a Boca Raton, Fla., building and to have Mr. Giuliani be one of the first to cross the threshold after the firm eliminated the deadly spores from the complex, which once housed the offices of a company that published supermarket tabloids.
Boca Raton's mayor, Steven Abrams, boasted to local residents that, in terms of the building's tenants, the city was trading up. "It used to be home of the National Enquirer and now it's the home of a national hero," Mr. Abrams said last fall as he and Mr. Giuliani campaigned for President Bush.
Now, more than 16 months after Bio-One declared that the offices were anthrax free, there are no plans for the firm, or Mr. Giuliani, to return to the site. In fact, the building remains closed and under quarantine.
Mr. Giuliani's firm stopped work after its contract with the building's owner expired in May. The owner hired a rival decontamination company, Marcor Remediation Incorporated, which began work at the three-story office complex yesterday, a spokesman for the Palm Beach County health department, Timothy O'Connor, said.
No one has challenged the quality of the work Bio-One performed at the site, which involved pumping chlorine dioxide gas through the building's workspaces. "There's a pretty good satisfaction that they got 100% kill in that building," Mr. O'Connor said.
However, the ensuing contract dispute, and the fact that Bio-One has never been paid for its efforts, could contribute to questions about Mr. Giuliani's management of his business endeavors since leaving office at the end of 2001. If Mr. Giuliani goes ahead with a possible bid for the Republican presidential nomination in 2008, his business ventures, which are far flung and include legal and consulting work, are likely to come under increased scrutiny. Already, he has drawn critical press attention for his consulting work on anti-crime initiatives in Mexico City and his ties to a for-profit vocational college in Kentucky that recently shut down due to financial difficulties.
In the Bio-One episode, it was photos of celebrities like Jacqueline Kennedy Onassis and Princess Diana that became the point of contention that ultimately soured the firm's involvement in the widely touted anthrax cleanup project. The photos were among archives of the Enquirer, the Star, and other publications stored in the parking garage at American Media Inc. The wax-lined cardboard containers were doused in a chemical rinse while being moved, but most were never fully decontaminated. Bio-One's chief operating officer and general counsel, Karen Cavanagh, said in an interview yesterday that company officials were not pleased when they felt forced to walk away from the project earlier this year. "It was a very frustrating time for us," she said. "There was the issue of the contents and the photographs and who owned those and who was responsible for them."
Ms. Cavanagh said both her firm and the real estate investor who bought the contaminated building from American Media for $40,000, David Rustine, assumed at the outset that all the boxed up materials would be destroyed. "You can see where the crux of the contract dispute goes back to," she said.
Freelance photographers have objected to the plan to incinerate the photos, saying they still own the pictures. In September, a Virginia-based photographer, Greg Mathieson, filed a $2 million federal lawsuit against American Media, alleging that it failed to safeguard more than 1400 of his photographs, or to compensate him for their loss. Last month, attorneys for the company asked a judge to throw the case out. They argued that the anthrax contamination was an "unforeseeable criminal event" for which the company could not be held liable.
The photo files could be among the most hazardous items ever on the site. It was a photo editor for American Media, Robert Stevens, who died after being exposed to anthrax at the tabloid publisher's offices in October 2001. Two postal workers and a Bronx woman also died of anthrax later that month, and employees at the New York offices of CBS, NBC, and the New York Post also fell ill. Investigators said the anthrax was sent through the mail. No one has been publicly charged in the case.
Once the issue of preserving the photographs arose, Bio-One and Mr. Rustine could not reach agreement on who would pay for the decontamination work, and how much. "It was a 'you go your way, we go our way,'" Ms. Cavanagh said.
Ms. Cavanagh said Bio-One was never paid for the anthrax-killing project, which Mr. Giuliani told reporters would cost more than $5 million. "It cost us quite a bit," she said. "We were never compensated for the work we did there."
A secretary at Mr. Rustine's real estate firm, Crown Companies, said Mr. Rustine would not agree to be interviewed for this story. Through a spokeswoman, Mr. Giuliani also declined to be interviewed.
Asked if Bio-One might take legal action to recoup its losses, Ms. Cavanagh said the firm may still have some leverage to resolve the dispute because the company's data may be needed to convince public health authorities that the site is truly clean. "At the end of the day, we'd like to work something out that's fair and will get the quarantine lifted," she said.
Bio-One now says it has no plans to move into the tabloid publisher's former offices. "We really were committed to making the building itself into a symbol that we can handle these types of issues," Ms. Cavanagh said. "Because of what occurred with the owner, obviously that didn't work out."
Mr. Abrams, the Boca Raton mayor, said in an interview yesterday that the drawn-out saga has been disconcerting to local residents, but he stressed that the delays were not the fault of Mr. Giuliani's firm. "It's been an ongoing frustration for the city literally from the day of the first anthrax attack," Mr. Abrams said. "Our view is Bio-One was really a savior for us because we were at a dead end with the federal government."
In May, the Palm Beach Post reported that two medical waste treatment companies declined to work with Bio-One because of concerns about the autoclaving process the company planned to use to decontaminate the disputed boxes. Ms. Cavanagh said those worries were unfounded.
The health department spokesman, Mr. O'Connor, said the authorities agreed. "Everybody, including the Environmental Protection Agency, felt it was adequate," he said. Bio-One returned to the site briefly after concerns were raised that hurricane-related flooding could again propagate the deadly anthrax spores.
The new contractor, Marcor, said in a statement yesterday that it hopes to complete the remaining work within three months.
"This has taken a lot longer than we expected," Mr. O'Connor said.
Ms. Cavanagh said Bio-One has "moved on" and now has the vast majority of its personnel cleaning up mold damage from the recent hurricanes. "We've been extremely busy in the Gulf region and we expect to be for the foreseeable future," she said.
Correction from November 30, 2005:
Mayor Giuliani has no ties to a for-profit vocational college in Kentucky, Decker College. He is the chairman of the advisory board of a private investment fund at Leeds Equity Partners, but not the Leeds fund that holds the minority stake in the Kentucky school. An article on page one of yesterday's Sun was incorrect in that regard.