President Bush taps terror veteran Michael Mukasey for AG

WASHINGTON - President Bush yesterday picked retired New York Federal Judge Michael Mukasey to be his new attorney general, moving to avoid a fight with Democrats and restore the Justice Department's depleted morale.

Mukasey, 66, retired last year as chief judge on the federal bench blocks from Ground Zero.

Bush said Mukasey is "clear-eyed about the threat our nation faces" from Islamic extremism.

The tough-on-terror judge presided over the trial of Omar Abdel-Rahman, the "Blind Sheik" who was convicted of plotting to destroy New York landmarks.

"He knows what it takes to fight this war effectively, and he knows how to do it in a manner that is consistent with our laws and our Constitution," Bush said, with Mukasey at his side.

Mukasey said the threat has changed since he was a prosecutor under Rudy Giuliani decades ago, when "foreign adversaries saw widespread devastation as a deterrent."

"Today, our fanatical enemies see it as a divine fulfillment," he said.

Confirmation could get rocky. Senate Judiciary Committee Chairman Patrick Leahy (D-Vt.) said Bush must cough up files on warrantless spying and the purging of prosecutors by ex-Attorney General Alberto Gonzales before he'll "schedule fair and thorough hearings."

Sen. Chuck Schumer (D-N.Y.) - who led the effort to oust Gonzales - urged negotiation.

He said "confrontation should not be in the front of anybody's mind right now." Asked about his softer tone, Schumer told the Daily News, "It's a kinder, gentler White House."

Since retiring, Mukasey has been a partner at the law firm Patterson Belknap Webb & Tyler and is a legal adviser to the presidential campaign of Giuliani, whom he swore in as mayor. His son Marc works in Giuliani's law firm.

White House officials said Bush had approached Mukasey the day Gonzales quit in August and met him Sept. 1.

But before Bush nominated him, the judge first had to calm six jittery "conservative constituents" who had concerns about his temperament, a senior administration official said. The official wouldn't name the leaders.

A knowledgeable source told The News that the conservatives were unsure if Bush's pick had enough management experience and political savvy - or shared their ideological and philosophical views.

They were particularly alarmed that a liberal like Schumer had once recommended Mukasey to Bush for the Supreme Court, the source said. Yet the same cabal that killed ex-Bush counsel Harriet Miers' high court bid was soothed enough to hold its fire yesterday.

Schumer also put on hold demands for a special prosecutor to probe wrongdoing by Gonzales and his departed aides, which another source close to the White House said proves Mukasey is bulletproof. "He's confirmable," the source said.