"I'm very wary of Fred Thompson myself" At least we agree on one thing. Time will tell. You are right in that Rudi should have known about his buddy, but it wouldn't be the first time that he has been let down or betrayed by a confidant... that goes for most of us as well.
But that's not what happened.
Rudy was briefed about Kerik's mob ties, but appointed him as Police Commissioner just months later. He later recommended Kerik for the post of Secretary of Homeland Security.
This isn't about being "let down" by Kerik. Not when Rudy knew ahead of time.