Politics makes strange bedfellows. Throw stocks into the mix and things can get downright weird.

Based on that underlying thesis, TheStreet.com will weigh in on the looming 2008 presidential campaign by evaluating the holdings and affiliations of the major presidential candidates, according to Stockpickr.com.

We begin with today's report on the portfolio of companies served by Giuliani Partners, the firm headed by former New York Mayor Rudolph Giuliani. (Via its communications director Sunny Mindel, Guiliani Partners declined to comment for this story.)

The Stockpickr list is designed to give an "overall picture of what types of clients Giuliani Partners has been interactive with over the years," not a list of its current client base, according to James Altucher, a contributor to TheStreet.com and the founder of Stockpickr. The Giuliani Partners portfolio on Stockpickr includes companies the firm has "some relationship" with, but does not necessarily say what the status of that relationship is, says Altucher.

For example, the site reports a relationship between Giuliani Partners and Applied DNA Sciences ( APDN), a Stony Brook, N.Y.-based firm whose technologies are designed to prevent and identify counterfeits. But Giuliani Partners reportedly severed its ties to Applied DNA in 2005 after USA Today reported on the company's links with Richard Langley Jr., who was involved in an alleged scam involving penny stocks and was barred from participating in penny-stock offerings by the Securities and Exchange Commission.

The Giuliani Partners list does feature some common names you'd expect a prominent player like Giuliani to work with, including US Airways ( LCC), Sprint Nextel ( S) and Aon ( AOC).

But Giuliani Partners' client base is chock-full of small- and micro-cap stocks like Applied DNA, one of many Giuliani Partners' clients that trade on the OTC Bulletin Board. Companies that trade on the so-called Pink Sheets are typically speculative in nature and often unable to meet listing requirements for the major exchanges.

Ecosphere Technologies ( ESPH) of Stuart, Fla., embodies the type of speculative names represented by Giuliani Partners.

On Feb. 1, Ecosphere filed a prospectus pertaining to the sale of up to 30.87 million shares of its stock by shareholders who are converting notes and debentures previously acquired via private placements. If all shares in the so-called PIPE transaction -- short for private investment in public equity -- are sold, the offering would increase the company's outstanding float by 55%, a massively dilutive proposition.

That's especially so for a money-losing penny stock firm like Ecosphere, which was known as UltraStrip Systems (and trading with the symbol USTP) until August. That name reflected its primary business as a developer of robotic technologies used to remove paint and other adhesives from boats, autos and airplanes, for which the company has 10 U.S. patents.

Ecosphere has applied for three patents related to its "water filtration system that has been designed, tested and verified to meet the critical water requirements for the military, homeland security, and natural disaster relief domestically and worldwide," according to a company press release. This technology was "tested and verified by the U.S. EPA to decontaminate a water system compromised by a terrorist attack."

Thus with the magic terms 'homeland security' and 'terrorist attack' does Ecosphere (nee UltraStrip) fit perfectly into the intersection where Giuliani Partners and its founder and CEO seek to position themselves.

Other bulletin board stocks Giuliani Partners has advised include Lagrangeville, N.Y.-based Command Security ( CMMD), which provides security, aviation and support security services to U.S.-based private and governmental clients.

Command Security paid Giuliani Security & Safety LLC, a unit of Giuliani Partners, $175,000 a month plus expenses in 2005, according to SeekingAlpha.com. Command Security paid a third company, Jericho State Capital, a monthly fee of $90,000 for making the introduction to Giuliani Security.

In addition, Jericho received warrants to purchase 350,000 shares of Command Security stock at $2, which vested immediately, as well as an additional 150,000 shares if the agreement with Giuliani Security was extended another 12 months, according to a February 2006 SEC Filing.

For the six months ended Sept. 30, Command Security paid Giuliani Security more than $1 million related to its "consulting agreement," according to a 10-Q filing in mid-November, the company's most recent regulatory filing.

Another bulletin board name, Dallas-based Lighting Sciences ( LGSP), entered into a similar warrants-laden transaction in February 2005 with Giuliani Capital Advisors, a boutique investment bank and the largest unit of Giuliani Partners.

In exchange for financial advisory services, the company paid Giuliani Capital a $150,000 one-time fee, gave it 20% ownership of a planned joint venture to own light poles and related infrastructure, and issued warrants to purchase up to 1.65 million shares at 60 cents per share, exercisable at any time during the ensuring five years. The shares represented 3.2% of Lightning Sciences' outstanding float at the time, according to the firm's 8-K filing.

Argyle Security Acquisition ( ARGL) of San Antonio is a so-called blank check company that went public with the express purposes of buying other companies, in this case those in building security. Argyle has the distinction of being a homeland security play that, by having retired Gen. Wesley Clark as a director, hits the security industry's version of the daily double. The running joke among homeland security investors is that smaller companies "either put General (and former presidential candidate) Wesley Clark on their board or get a consulting agreement with Giuliani Partners," says Altucher.

Argyle Security has done both: Clark sits on the board and owns more than 70,000 shares, while Giuliani Partners served as financial adviser on Argyle's December acquisition of San Antonio-based ISI Detention Contracting Group, one of the nation's largest providers of detention equipment products and service solutions.

Giuliani Partners' fee for its advisory role will not be disclosed until the company submits its S4 filling with the SEC. That could come as early as next week, says Bob Marbut, Argyle Security's chairman and co-CEO, who generally praised Giuliani Partners and expects to use the firm's services for future transactions.

Giuliani Partners offered the "full range of advisory services plus their knowledge of the industry and its players," Marbut says, citing the particular expertise of Paul Talley and Walter Bailey, who joined Giuliani Partners in April 2006 as co-heads of security and defense investment banking. "Their knowledge and Rudy's capabilities we thought was a winning combination."

Representatives of Ecosphere, Command Security and Lightning Sciences did not return calls seeking comment.

Positioning for the Race

Giuliani Partners is dedicated to "crisis management" and thus "by definition is involved with stuff outside the usual circles," says Barry Ritholtz, chief investment officer of Ritholtz Capital Partners and a RealMoney.com contributor.

Furthermore, the firm's focus fits with candidate Giuliani's posture as being strong on national security and homeland defense, a reputation earned, of course, during his leadership amid the Sept. 11, 2001, terror attacks and aftermath. "Proactive anti-terror technology is consistent with his image vs. traditional venture capital investment made for financial reasons," Ritholtz says.

Indeed, Giuliani Partners' Web site features sections on such lofty goals as integrity, optimism, courage, preparation, communication and accountability. "It's a site geared toward a presidential campaign. There's nothing important to investors," Ritholtz observes.

It's almost as if making money is somehow beneath the firm -- almost.

Earlier this week, Giuliani filed paperwork with the Federal Election Commission that makes a presidential bid a near certainty. But by not formally declaring his candidacy, Giuliani put off having to submit a personal financial disclosure form. If Giuliani formally declares his candidacy between now and May 15, he will have to file a personal financial disclosure statement by May 15, according to The New York Times. If he declares between May 15 and Dec. 30, he must file the statement within 30 days of the declaration date.

At least some aspect of Giuliani's business ventures have been reported. Giuliani Capital Advisors is reportedly for sale and could fetch $80 million to $100 million after generating about $4 million of revenue a month in 2005, according to The New York Times

Giuliani's investment bank unit has been paid more than $10 million in fees for consulting on the bankruptcies of US Airways, Aloha Air and Delta Airlines, according to the Chicago Tribune, which further reports Giuliani's law firm, Bracewell & Giuliani had lobbying income of $6.8 million in 2005.

Rather than looking at what companies can do for him and his capital, Giuliani seems to be able to profit from what he can do for firms, especially those on the fringe who are willing to pay to be associated with "America's mayor."

Giuliani "has so much credibility as 'Rudy' he can represent people that others will find off-putting -- clients who pay him a lot of money to do things that aren't attractive." says one Manhattan-based lawyer. "I consider my personal credibility important. He doesn't have to do that" because his reputation is so high among the general public.

The attorney, who requested anonymity because he has opposed Giuliani in prior court cases and may do so again in the future, took pains to compliment Giuliani. He's a "very fine lawyer and a bright guy" who has some "very sharp people" working for him, the lawyer says. "Whether or not he picks clients that will help his political career, I have no doubt."

But what may be good politics looks like a poor road map for would-be investors.

Aaron L. Task is editor at large of TheStreet.com. In keeping with TSC's editorial policy, he doesn't own or short individual stocks, although he owns stock in TheStreet.com. He also doesn't invest in hedge funds or other private investment partnerships. He appreciates your feedback; click here to send him an email.

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