Kerik got rich on stun-gun stock

Ex-N.Y. police chief is Bush nominee for homeland security post

The Nation

December 10, 2004|By NEW YORK TIMES NEWS SERVICE

WASHINGTON - Just five years ago, Bernard B. Kerik was facing lawsuits from a condominium association and bank over delinquent payments owed on a modest New Jersey condo he owned. Today, he is a multimillionaire, the result of a lucrative partnership with former New York Mayor Rudolph W. Giuliani and an even more profitable relationship with a stun-gun manufacturer.

If he is confirmed to the post of homeland security secretary for which he was nominated by President Bush last week, he will oversee an enormous department that does business with some of the companies that helped make him wealthy. He now lives in a large house in the upscale New Jersey town of Franklin Lakes and drives a BMW sedan.

The list of income sources that transformed the former New York City police commissioner into a wealthy man is a diverse one. But it is the relationship Kerik has had since the spring of 2002 with Taser International, a Scottsdale, Ariz.-based manufacturer of stun guns, that has by far been the biggest source of his newfound wealth, earning him more than $6.2 million in pre-tax profits through stock options he was granted and then sold, mostly in the past month.

Kerik benefited largely because the company has enjoyed an extraordinary surge in its stock. Stock options that were worth very little at the time became extremely valuable, in part because of the sales pitch that Kerik made on the company's behalf to other police departments.

The sales driving Taser's growing profits come mostly from local and state governments. But while Kerik has served on the company's board, it has made an aggressive push to enter markets either regulated or controlled by the federal government, most notably the Department of Homeland Security. A White House spokesman said Kerik would resign from the board and sell his remaining stock if confirmed.

"Anyone in a federal law enforcement position is a potential customer," said Thomas Smith, president and co-founder of Taser International, who said he hired Kerik because of his prominence as New York's police commissioner. "And we are going to continue to go after that business."

Kerik declined, through a spokeswoman, to discuss his work for Taser.

He has defended the stun guns against criticism that their use has contributed to the deaths of suspects who have been fired upon by police.

Baltimore Sun Articles
|
|
|
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.