Master of Disaster

September 11 made Giuliani untouchable. Queen Elizabeth named him an honorary knight. French President Jacques Chirac called him "Rudy the Rock." He became a fixture at Republican rallies around the country in the elections of 2002, 2004—the year the GOP convention came to Madison Square Garden—and 2006. Once reviled by his party for his moderate views, he leapt to the top of opinion polls of potential 2008 Republican nominees.

There were other, more immediate rewards. After leaving the mayor's office in January 2002, Giuliani eventually commanded $100,000 per engagement on the lecture circuit. He found joy spending his new money with Nathan. "She became a socialite," says a friend who would comment on the couple only anonymously. "She helped his hair, she helped his suits." In May 2003, Michael Bloomberg, Giuliani's successor as mayor, married them in a star-studded ceremony on the lawn of the mayor's residence. Wearing an antique white Vera Wang gown and a pearl-and-diamond tiara, Nathan was finally mistress of Gracie, if only for one night.

Giuliani had found the good life, but that didn't stop him from playing a role in the arena, with very mixed results. In 2004, when the Bush administration was looking for a new Homeland Security secretary, Giuliani enthusiastically made the case for Bernard Kerik, who'd served as his police chief on 9/11. Gruff and hard-charging, Kerik was a Giuliani favorite; when the former mayor started Giuliani Partners, a security firm, he brought Kerik onboard, along with other associates such as Anthony Carbonetti and Denny Young. His recommendation helped Kerik win White House support. "Rudy got the door open for Bernie," says an administration official familiar with the Kerik nomination who would discuss personnel matters only anonymously.

Kerik's nomination was a disaster from the moment Bush announced it. Reporters inundated the White House with allegations of his seemingly shady behavior, including a sweetheart stock deal, improper use of police resources and connections to Mafia-linked construction moguls. (In 2006, Kerik pleaded guilty to two misdemeanors for accepting $165,000 in renovations to his Bronx apartment from a company attempting to win city contracts and for failing to report a $28,000 loan from a real-estate developer.) The White House was caught completely off guard. Bush withdrew Kerik's name after a week and a half, and the botched nomination threw Giuliani's political future into doubt. By the end of 2006, he had yet to assemble a serious political team for a 2008 run. The New York Daily News published an embarrassingly amateurish memo from his staff laying out potential fund-raising targets (many of whom had already been scooped up by McCain) and forecasting potential weaknesses. More than a few Republicans concluded he wasn't serious about running.

Then, once again, Giuliani surprised. "I'm running," he told Larry King in an interview last month before setting off on a series of carefully staged campaign events around the country to prove the point. Just showing that he meant it gave Giuliani a serious bump in the polls and worried his rivals. "I have thought for the longest time that [Giuliani] had zero chance," says an aide to another Republican candidate who asked for anonymity talking up the chances of his boss's rival. "But he's got real momentum. And if there's a terrorist attack between now and the election, he could be the next president of the United States."

Social conservatives remain skeptical and suspicious. "Giuliani is highly respected by lots of Americans because of his leadership after 9/11," says Gary Bauer, president of the conservative nonprofit organization American Values. "In fact, there is evidence that it might be the only thing people could tell you about him." A particular weakness for Giuliani may be gun control, a cause he advocated again and again as part of his crimefighting plan in New York. Grover Norquist, president of Americans for Tax Reform, asks: "The question is, do you need someone who is 100 percent on these issues, or someone who reaches a threshold? He wouldn't be polling so well if he wasn't coming close to a certain threshold."