I think Giuliani played this all wrong. He should have just gone with "yeah I was grabbing my junk, and trying to whip it out"
Look at the context. From the write-ups I've seen the actress never implied she was underage, that was something Borat does later. The actress was actively trying to seduce him, touching him, saying she's going to help him relax and feel good, and then says lets get some drinks and go into the bedroom.
At that point I'm pretty sure most of us would think something sexual was going to happen. And of all the things Giuliani has done I disagree with, consensual sex with a 24 year old journalists isn't high on my list. There wouldn't even be scandal, save maybe his girlfriend being upset, but cheating isn't illegal, and for all we know they have an open relationship.
It reminds me of when that mayor Rob Ford guy said he eats all the pussy he wants at home with his wife and everyone was aghast and how terrible to say such things, what a monster. And I was like...that's actually kinda sweet in an adult way. He had a satisfying sex life with his wife. Yeah he was crass, but hardly scandal worthy. Everything else he did absolutely.
Same with Rudy. Thinking he was gonna get laid when an actress was paid to pretend she was going to sleep with him isn't the worst thing he's done. Fuck I wish it was the worst thing he's done!