THE NOTE: Rudy’s Demons Rise

This just may be the moment the political world has been waiting for.

The moment when former mayor Rudolph Giuliani -- he of the famous temper, the "nasty" streak, the colorful personal life, and a heretofore preternatural ability to overcome a shady past to remain the national GOP frontrunner -- either does or does not effectively confront the central critiques of his candidacy.

The story about security billing records from his time as mayor comes out at a terrible time for Giuliani, R-N.Y. Emerging five weeks before Iowa, Giuliani called the story a "hit job" on Thursday, and dispatched one his top operatives, Joe Lhota, to attack the reporter who broke the story.

"This was really done to try to focus on my personal life," Giuliani said, per ABC's Jake Tapper and Wonbo Woo. "They were handled openly, honestly, it was the practice that was going on since my first term and the idea was to get the bills paid quickly."

But Rudy is unlikely to get the benefit of the doubt on anything that veers close to involving his personal life -- or his management of New York that constitutes his main rationale for running for president. New York City Comptroller Bill Thompson still doesn't buy it: "If anyone hoped that no one would notice, they were being foolish," he told ABC News.

Maybe it's innocuous -- but the burden is on Giuliani's campaign to prove it.

Aides are going to have to do better than this: "Why it was done this way, I don't know," Anthony Carbonetti, Giuliani's then-chief of staff, told Politico's Ben Smith, who broke the story on Wednesday. Writes Smith: "Neither [Giuliani] nor his aides have questioned any of the facts reported by Politico."

"DOESN'T ADD UP!" blares the New York Daily News. Joe Lhota at first said the billing practice predates Giuliani, but had to backtrack when told that Dinkins and Koch aides disputed that.

"I'm going to reverse myself on that," he said, per David Saltonstall and Michael Saul. "I'm just going to talk about the Giuliani era. . . . I should only talk about what I know about." (And, sometimes, what he's learning about on the fly.)

More 'splainin' to do: "Neither Mr. Giuliani nor Mr. Lhota explained why the travel expenses for the security detail were spread across the budgets of an array of obscure mayoral offices rather than paid out of a single account in the mayor's office," William K. Rashbaum and Russ Buettner write in The New York Times.

And timing is everything: the report broke "hours before Wednesday night's Republican debate and as his campaign geared up for January's Iowa caucuses. The reports also arrived as one of his rivals, Mitt Romney, was raising questions about fiscal stewardship of New York City during his two terms as mayor."

Tapper's unanswered questions: "Why spread out the expenses among lots of city agencies instead of just one?

Why not tell this to Ben Smith and the Politico when he first called to ask about these records and the city comptroller's concern about them? Why not share any information with the city comptroller when questions were first asked about this six years ago? Did Bernie Kerik have anything to do with any of this?"

One more question: Would a Giuliani administration pay for the war in Iraq by handing the Department of Education a fistful of IOUs?

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