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Dec. 11 - It’s hard to know what was the last straw. Ever since President Bush announced on Dec. 3 that Bernard Kerik was his choice to replace Tom Ridge as Secretary of Homeland Security, official circles in Washington and New York have been buzzing with stories about Kerik’s potential liabilities. A hard-charging former New York City police commissioner, Kerik made many enemies and seemed to be dogged by minor scandals. He was a rags-to-riches story whose climb may have been a little too precipitous; in any case, his tangled personal life caught up with him.

On Friday night, Kerik abruptly informed the White House that we was withdrawing from the nominating process, citing potential problems with the immigration and tax status of a former nanny. “I am convinced that, for personal reasons, moving forward would not be in the best interests of your administration, the Department of Homeland Security or the American people,” Kerik said in a letter to President Bush.

But there may have been other issues at play. Kerik, who recently made millions in the private sector, once filed for personal bankruptcy as a New York cop. And just five years ago he was in financial trouble over a condominium he owned in New Jersey. More serious trouble than anyone realized: NEWSWEEK has discovered that a New Jersey judge in 1998 had issued an arrest warrant as part of a convoluted series of lawsuits relating to unpaid bills on his condo. The magazine faxed documents, including the arrest warrant, over to the White House around 6:00 p.m. Friday, asking for comment. Neither Kerik nor the White House had any immediate response. At 8:30 p.m., Kerik had submitted his letter to the president.

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Sources close to Kerik and the White House insist the arrest warrant was not the reason Kerik withdrew. The immediate cause was the nanny problem, the sources say, the same issue that took down Bill Clinton’s nomination of Zoe Baird to be Attorney General in 1993. Kerik explained to the White House that while he was preparing documents for his Senate confirmation hearings, he uncovered information “that now leads me,” he wrote, “to question the immigration status” of someone he had been employing as a housekeeper and nanny. For a period of time, Kerik reported, “required tax payments and related filings had not been made.” According to a Kerik associate, having this kind of nanny problem would have been untenable for the head of the Homeland Security department, which oversees the government's immigration agencies.

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Bush is counting on Kerik to keep the homeland safe
The lawsuit relating to Kerik’s apartment stems from his failure to pay maintenance fees. A court found that Kerik owed about $5,000 on the unit. When Kerik failed to comply with a subpoena related to the unpaid bill, a judge on Aug. 24, 1998 issued a warrant for Kerik’s arrest. It is unclear whether the warrant was ever served or withdrawn. Court computer records indicate that the lawsuit remains open, but there was some confusion on Friday over the location of the full record.

Kerik was also coming under close scrutiny for his windfall profit from stock options in Taser International, a company that makes high-voltage stun guns. He netted more than $6 million on the options, without ever having invested any of his own money. Kerik joined the Taser board after leaving his police commissioner’s job in 2002 . New York City was a purchaser of the stun guns, as was the Department of Homeland Security. Kerik sold the stock in early November, shortly before an Amnesty International report charged that there had been more than 70 Taser-related deaths since 2001.

Kerik's biggest booster for the job was former New York City Mayor Rudy Guiliani. Last night, an aide to Guiliani told NEWSWEEK that Kerik had made "the proper judgment" to withdraw.

With Kathryn Williams

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