GIULIANI ROLE WITH OXYCONTIN MAKER DRAWS SCRUTINY

On Oct. 23, 2003, Rudy Giuliani appeared with Rep. Curt Weldon in
suburban Upper Darby, Pa., to announce a new program - called "Dime
Out a Dealer" - that was designed to combat the growing scourge of
prescription drug abuse by offering $1,500 rewards to anyone who
turned in a pusher.

"Congressman Weldon's new program helps us go after the real villains
here, the illegal dealer," Giuliani said, praising both Weldon (R-Pa.)
and Purdue Pharma, the Stamford, Conn., drugmaker that was
underwriting the program, according to a news release. "By doing so,
we ensure that the patients who require these same life-saving and
enhancing medicines are not denied access based upon the illegal
conduct of others."

The appearance was one in a series of efforts Giuliani undertook over
a five-year period after leaving City Hall in 2002 - from
image-building and security-consulting to behind-the-scenes lawyering
- - that helped Purdue grapple with the fallout from widespread abuse of
its blockbuster painkiller, OxyContin, by focusing attention on street
criminals rather than corporate misconduct and lax regulation.

In May, however, the company and three top executives agreed to pay a
$640-million fine and plead guilty to fraudulently marketing the drug
between 1995 and 2001 by minimizing its addictive potential. Federal
prosecutors said scores had died and many more became addicted, and
with Giuliani now running for president, the plea deal he helped
negotiate has drawn new attention from some OxyContin critics who say
he provided a "smoke screen" that deflected attention from the
over-marketing and under-regulation they blame for the crisis.

"The country was being devastated, continues to be devastated, and his
function was to convince the public that there wasn't a problem with
the drug," said Marianne Skolek, a New Jersey nurse whose daughter
Jill died in 2002 of heart failure after she was prescribed OxyContin
for a herniated disc. " ... He is not a hero to the thousands of
parents who have lost kids or whose kids are in rehab facilities as a
result of Purdue peddling this drug."

"If he became president, I would like to move to Canada," said Ed
Bisch, whose teenage son died in Philadelphia in 2001 after mixing
illicit OxyContin with alcohol. "I'll do everything in my meager power
to stop his election."

Purdue declined to respond to these criticisms, except to say that it
was "pleased" with Giuliani's services. Giuliani declined to be
interviewed, but in the past has portrayed himself as devoted to
ensuring that suffering patients didn't lose access to valuable pain
medication because of problems of abuse and illegal trafficking. "You
can't throw out the baby with the bathwater," he said in a speech in
Kansas City, Mo., last year.

Those views, an aide said Friday, are not the result of being retained
by Purdue. "Mr. Giuliani's opinions about pain medicines are informed
and his very own," said spokeswoman Sunny Mindel. Purdue, Giuliani's
consulting firm and his law firm all declined to specify his fees.

It is not clear whether the OxyContin critics will become as vocal and
visible as other Giuliani adversaries, such as New York City
firefighters who regularly spar with him over his Sept. 11 record. But
with OxyContin still a widely abused drug, and a hearing set for
Friday on Purdue's plea deal in federal court in Virginia expected to
attract another round of attention, Giuliani's work for the drug
company seems to hold more political peril than most of his
private-sector activity.

While some political experts said he had nothing to worry about
because he wasn't involved in Purdue's lawbreaking, others said his
role could be a fat target for opponents.

"This is one of Giuliani's Achilles' heels," said Baruch College
public affairs professor Doug Muzzio. "He was directly and intimately
involved with a company that was in violation of law and morals and
ethics. There are ways to frame the issue that resonate, that Rudy
Giuliani is sacrificing the public weal for his own personal benefit."

Packed a Powerful Punch

OxyContin first hit the market in 1995 to meet a perceived need for
more effective pain relievers. An opium-based analgesic in a
time-release formulation, it packed an unusually powerful punch and
was heavily marketed by Purdue both to those who suffered from chronic
and intense cancer pain and to patients with less severe ailments.

It had become a huge moneymaker - $1.3 billion in sales, $392 million
in profit in 2001 - but also faced a Drug Enforcement Administration
investigation, calls for tighter FDA regulation, and media and
congressional scrutiny of abuse and overprescribing when Purdue hired
Giuliani Partners, the ex-mayor's newly minted consulting firm, in
January 2002.

Part of the assignment was to help design a security plan for Purdue's
plants, to prevent thefts of OxyContin that were under a DEA
microscope, and to advise on other steps that might help stop illicit
diversion. But one Purdue official later admitted, according to
published reports, that Giuliani also was hired in part as a
"political consultant" - a characterization Purdue now disputes. Early
on, he used his clout to arrange meetings with DEA chief Asa
Hutchinson to discuss the plant security probe, which eventually led
to a $2-million civil fine for recordkeeping violations.

"I felt they were not doing everything they could do. In my opinion
they hired Rudy to give them a good image, and to get around me," said
Laura Nagel, the chief DEA diversion investigator at the time. "Rudy
got them access to higher levels of government." But she says
Hutchinson never interfered.

The criminal conduct the firm admitted to in May involved sales
efforts in 2001 and earlier - prior to Giuliani's hiring - to falsely
convince doctors that OxyContin was less addictive than other
painkillers. The government alleges in civil filings, however, that
fraudulent marketing practices actually continued until 2005, three
years after Giuliani's hiring. Purdue did not admit to that as part of
the plea bargain. Prosecutors have declined to provide details.

A federal investigation began in 2003. Giuliani's role as a defense
lawyer did not become publicly known until May of this year and it is
not clear when it began, but government and defense sources have
confirmed that he played a key role last fall in negotiating the
"agreement in principle" that led to May's plea.

While the plea deal has sparked opposition among some OxyContin
critics who view it as too lenient, few blame Giuliani for his legal
work. Instead, it is public relations efforts - like the
Philadelphia-area news conference - that rankle some, especially
focusing blame on street criminals as the "real villains" instead of
on a company that has now admitted that it behaved criminally.

Dr. Art van Zee, who has testified at FDA hearings on OxyContin and
still sees dozens of painkiller addicts at his clinic in rural St.
Charles, Va., compares Purdue's support for programs like "Dime Out a
Dealer" to "using a squirt gun" to try to put out a forest fire while
simultaneously "dropping napalm" through its marketing efforts.
"Everyone is entitled to legal representation, but that is a little
different than being a public advocate for a group," van Zee said.
"You don't know what Giuliani knew or understood about Purdue's role,
but he should have found out before he not only represented but
advocated for them."