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Giuliani: Legal quagmires have left him broke

Giuliani: Legal quagmires have left him broke

By Katelyn Polantz and Tierney Sneed and Jeremy Herb | CNN

Rudy Giuliani is staring down hundreds of thousands of dollars in legal bills and sanctions amid numerous lawsuits in addition to the new criminal charges – related to his work for Donald Trump after the 2020 election.

In court on Monday, the former New York City mayor said the legal quagmires have left him effectively out of cash. He even appears to have responded to some of the money crunch by listing for sale a 3-bedroom Manhattan apartment he owns for $6.5 million.

Not including standard legal fees, Giuliani faces nearly $90,000 in sanctions from a judge in a defamation case, a $20,000 monthly fee to a company to host his electronic records, $15,000 or more for a search of his records, and even a $57,000 judgment against his company for unpaid phone bills.

While he has declined in court to provide details of his financial state, his lawyers wrote this week that “producing a detailed financial report is only meant to embarrass Mr. Giuliani and draw attention to his misfortunes.”

Giuliani’s financial situation is likely to become even more difficult to navigate in the coming days. He faces potentially perilous court decisions against him in two 2020 election defamation lawsuits as early as this week.

While Giuliani’s attorneys’ fees have not been paid directly by Trump’s political action committee, Trump’s PAC paid more than $300,000 in May to a company handling Giuliani’s archived records for evidence preservation in court cases, according to federal campaign finance records and court filings.

“He is having financial difficulties,” Giuliani’s lawyers said in a filing this month in a civil defamation case brought by two Georgia election workers against him. “Giuliani needs more time to pay the attorneys’ fees and would like the opportunity to seek an extension from the Court.”

Giuliani is facing disbarment proceedings in DC and New York. His law license is already suspended – a situation his attorneys say leaves him further hampered from making money. And he is facing a personal lawsuit from an ex-employee filed in May, which he is contesting.

The criminal charges that Fulton County District Attorney Fani Willis brought against Trump, Giuliani and 17 others will undoubtedly add to the former mayor’s legal bills.

That prosecution is separate from the federal election subversion investigation that looms over Giuliani. He is “Co-conspirator 1” in special counsel Jack Smith’s indictment of Trump related to efforts to overturn the 2020 election. While he has not been indicted, prosecutors continue to investigate, including speaking with Giuliani’s ally, Bernie Kerik, about what Giuliani did to prove that Trump actually won the election, among other things, Kerik’s attorney told CNN.

Robert Costello, a lawyer for Giuliani, declined to comment for this story.

Following his indictment in Georgia, Giuliani’s political aide Ted Goodman released a statement calling the case “an affront to American Democracy.”

Owed $320,000 for records searches after phone was seized

While all of the legal peril Giuliani now faces revolves around his work for Trump questioning the election’s result, a primary consequence he’d faced prior to Monday’s criminal indictment in Georgia had come from his inability to respond fully to 2020 election-related lawsuits.

When the FBI seized several of his cell phones in April 2021 in a now-closed investigation, much of Giuliani’s electronic records were held on a database operated by a company called Trustpoint.One. But they were archived, and running searches on files the company held for more recent litigation isn’t cheap. Even  hosting his records with the company costs $20,000 a month, according to a recent court filing.

Giuliani wanted to search the records so he could respond in each of the election-related lawsuits, according to court filings.

By May, Giuliani was more than $320,000 behind in payments to the document hosting company, according to a sworn statement he made in court. “I do not have the funds to pay this amount at this time,” he wrote. 

He negotiated for a year with what his lawyers say were “third-party funding sources” for help in paying his legal bills, and awaited funding for six months for help with the Trustpoint bill, according to Giuliani’s filing this week in the Smartmatic case.

Trump’s former attorney appears to have had some reprieve from the debts in May, plus an additional $20,000 cover for additional data searches, according to court filings, thanks to the former president’s political action committee. The PAC is not paying Giluiani’s legal fees – unlike many other Trump allies – but it has paid more than $400,000 to Trustpoint this year, with an unusually large sum  going to the company in late May for $340,000, according to federal campaign filings.

Days after that distribution, Giuliani said in one of the lawsuits he faces that he “obtained funding to pay the arrearage” and “cured” his outstanding bill with Trustpoint. He also discussed receiving that “donation” in his latest court filing, saying he thought it would help cover for the response he needed to make in the Smartmatic case.

But the $340,000 payment isn’t enough to cover more searches, Trustpoint “will not extend any further credit” to him, and his bill to keep his data held by the company will keep growing by the month, his court filings say.

“This is not merely an excuse that Giuliani trudges out when required to produce documents,” his latest filing said.

Trustpoint executives didn’t respond to requests for comment.

Defamation lawsuits piling up

Giuliani is the defendant in several defamation lawsuits for his statements after the 2020 election.

A federal judge in Washington ordered him to pay a portion of the legal bills of Georgia election workers Shaye Moss and Ruby Freeman to cover what they had spent on attorneys litigating evidence-gathering disputes in the case, by July 25.  He still hasn’t paid that $89,000, according to court records.   

Two weeks later, Giuliani backed down from contesting Moss and Freeman’s claims that he made false statements about them in 2020, saying he wanted to “avoid unnecessary expenses in litigating.”

Moss and Freeman are still trying to win the lawsuit, and a judge is considering ruling ultimately in their favor. But in the meantime, they have asked the judge to order Giuliani to pay another $44,000 of their legal fees stemming from their efforts to force him to hand over certain evidence in the case.

That’s only one lawsuit. Smartmatic, in its defamation case against Giuliani that prompted his growing data-hosting bill, asked a judge to sanction Giuliani – including by ordering him to reimburse the company’s legal fees – for failing to provide the company his records.

Dominion Voting Systems, which is also suing Giuliani for defamation, is seeking documents for their case but has not pressed the issue of sanctions before a judge at this time. Giuliani also faces a fourth defamation lawsuit related to the election from an executive at Dominion.

Smartmatic pointed to the Trump PAC’s payments to Trustpoint as reason that Giuliani should be able to comply with its demands that he search his records and provide the company evidence as it builds its case, because it’s now apparent others might pay for Giuliani’s growing expenses.

But the former mayor said that’s not the case in his court filings on Monday.

Giuliani “cannot afford to pay at this point” another $15,000 to $23,000 for more searches for documents in the case, his attorneys wrote.

The New York state judge overseeing Smartmatic’s defamation case has a hearing set for Wednesday.