updated 11/28/2007 10:20:51 PM ET 2007-11-29T03:20:51

Rudy Giuliani dismissed a report Wednesday that he expensed the cost of his security detail to obscure city offices for trips to a Long Island resort as the then-mayor began an extramarital affair with current wife Judith Nathan.

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"First of all, it's not true," he said during a GOP debate hours after the story broke. "I had 24-hour security for the eight years that I was mayor. They followed me everyplace I went. It was because there were, you know, threats, threats that I don't generally talk about. Some have become public recently; most of them haven't.

"And they took care of me, and they put in their records, and they handled them in the way they handled them," Giuliani said. "I had nothing to do with the handling of their records, and they were handled, as far as I know, perfectly appropriately."

Neither he nor his aides, however, offered an explanation for why the tens of thousands of dollars in costs, which they say were routine expenses for protection for the mayor, were billed to city offices like the Office for People With Disabilities.

Tony Carbonetti, Giuliani's mayoral chief of staff and his top campaign political adviser, said he's asked Joe Lhota, a former city budget director, ex-deputy mayor and a Giuliani campaign adviser, to explain how such accounting practices could have occurred and why security expenses were not billed to the police department.

"These were all legitimate expenses incurred in protecting the mayor, and his police detail covered him wherever he went, 24/7," Carbonetti said in an interview before the debate. "You just do what you do, and the police go with you. That's just a fact of life when you're the mayor of New York."

Affair has become common knowledge
Giuliani's affair with Nathan, while he was married to second wife Donna Hanover, has become common knowledge.

But the suggestion, true or not, that he was hiding expenses for liaisons with Nathan in little-known city accounts, could open him up to criticism, remind voters of his three marriages and infidelity and tarnish his good-guy image from the aftermath of the Sept. 11 terrorist attacks. The report surfaced just five weeks before voting begins, and a couple hours before the GOP candidates shared a debate stage.

None of Giuliani's rivals raised the issue. Debate moderator, CNN's Anderson Cooper, asked Giuliani about it briefly.

The online publication, The Politico, obtained documents under New York's Freedom of Information Law that it says shows the expenses incurred while Giuliani visited the Hamptons had nothing to with the functions of little-known city offices that were responsible for regulating loft apartments, helping the disabled and providing lawyers for indigent defendants.

Weeks after Giuliani left office, The Politico reported, the city comptroller criticized the practice of transferring the travel expenses of Giuliani's security detail to the accounts of obscure offices. In a January 2002 letter to current Mayor Michael Bloomberg, City Comptroller William Thompson described $34,000 in mayoral expenses from fiscal year 2000, which covers parts of 1999 and 2000, to the Loft Board, as part of a preliminary investigation by auditors.

"They were unable to verify that these expenses were for legitimate or necessary purposes," Thompson wrote in the letter that The Politico obtained. He said the mayor's office refused to explain the accounting to city auditors, citing only "security."

The Politico said American Express bills and travel documents it obtained detail hotel, gas and other travel expenses for Giuliani's New York Police Department security detail during 11 trips over three summers of visits to Southampton, the Long Island town where Nathan had a condominium.

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