UPDATE: 03-21-08 REPUBLICAN OPERATIVE TOLD FBI OF SPITZER SEXUAL ACTIVITIES MONTHS BEFORE THE EX-GOVERNOR WAS CONFRONTED WITH THE SCANDAL
It is beginning to look like that the original "cover story" about IRS agents in a warehouse routinely discovering evidence of potential financial impropriety which then led to the discovery of Spitzer's involvment in a prostitution ring may be false. Considering that, at this late date, Spitzer has yet to be formally charged, leads one to speculate that there may have been other undisclosed factors in this case... and which may work to Spitzer's advantage.
According to MiamiHerald.com...
"Almost four months before Gov. Eliot Spitzer resigned in a sex scandal, a lawyer for Republican political operative Roger Stone sent a letter to the FBI alleging that Spitzer ''used the services of high-priced call girls' while in Florida." "The letter, dated Nov. 19, said Miami Beach resident Stone learned the information from 'a social contact in an adult-themed club.' It offered one potentially identifying detail: the man in question hadn't taken off his calf-length black socks 'during the sex act.''' "Stone, known for shutting down the 2000 presidential election recount effort in Miami-Dade County, is a longtime Spitzer nemesis whose political experience ranges from the Nixon White House to Al Sharpton's presidential campaign. His lawyer wrote the letter containing the call-girl allegations after FBI agents had asked to speak to Stone, though he says the FBI did not specify why he was contacted." ''Mr. Stone respectfully declines to meet with you at this time,'' the letter states, before going on to offer ''certain information'' about Spitzer. '''The governor has paid literally tens of thousands of dollars for these services. It is Mr. Stone's understanding that the governor paid not with credit cards or cash but through some pre-arranged transfer,' the letter said." '''It is also my client's understanding from the same source that Governor Spitzer did not remove his mid-calf length black socks during the sex act. Perhaps you can use this detail to corroborate Mr. Stone's information,'' the letter said, signed by attorney Paul Rolf Jensen of Costa Mesa, Calif." "The letter was written several months after allegations were leveled at Stone that he had left a threatening phone message at the office of Bernard Spitzer, the ex-governor's father, regarding ''phony'' campaign loans involving his son's unsuccessful 1994 bid for attorney general. Stone denied making the call but resigned as a consultant for state Senate Republicans in Albany." While Spitzer is allegedly guilty of the charges, this article hints not only of selective enforcement, but also the massive, and potentially inappropriate, resources of the government for "political purposes."
UPDATE(01): 03-17-08 NEW "NEW YORK STATE GOVERNOR ADMITS TO AFFAIR"
It gives new meaning to the words "full disclosure" and sets the tone for the New Governor's tenure. We applaud his honesty.
According to the New York Daily News...
"The thunderous applause was still ringing in his ears when the state's new governor, David Paterson, told the Daily News that he and his wife had extramarital affairs."
"In a stunning revelation, both Paterson, 53, and his wife, Michelle, 46, acknowledged in a joint interview they each had intimate relationships with others during a rocky period in their marriage several years ago."
"In the course of several interviews in the past few days, Paterson said he maintained a relationship for two or three years with 'a woman other than my wife,' beginning in 1999."
"As part of that relationship, Paterson said, he and the other woman sometimes stayed at an upper West Side hotel — the Days Inn at Broadway and W. 94th St."
"He said members of his Albany legislative staff often used the same hotel when they visit the city."
Original blog entry...
Eliot Spitzer is, by all accounts, a brilliant guy, a knowledgeable prosecutor, somewhat self-absorbed and fearless, plus is wealthy enough to hire the very best defense attorneys and spin doctors in the country.
Considering that neither Spitzer nor the government prosecutors have announced the specific charges or a negotiated settlement, I am wondering if there is something else in play.
A public relations campaign to set the stage for counter charges of prosecutorial misconduct which, if proven, might reduce or eliminate Spitzer's eventual charges or minimize his penalties.
An article in London's TimesOnLine has some of the elements of a carefully orchestrated public relations campaign which illustrate the possibility of background manuevering.
According to the TimesOnLine...
"Toppling of the Luv Guv is ‘Wall Street revenge’"
"Eliot Spitzer’s downfall as governor last week may have roots in pursuit of wealthy bankers while state attorney-general."
Powerful enemies will millions of dollars at stake...
"In early 2004 Eliot Spitzer was at the height of his powers as the sheriff of Wall Street, the highflying New York prosecutor who had set his sights on the cozy corporate kleptocracy that was pocketing millions from insider deals while ordinary investors went bankrupt."
"His latest victim was Richard Grasso, the chief executive of the New York Stock Exchange, who had made headlines around the world by negotiating himself a $140m (£69m) retirement package that Spitzer alleged was illegal."
"Grasso claimed he had done nothing wrong and when it became clear he was prepared for a fight, Spitzer’s investigators went to work. What happened next helps to explain why much of Wall Street cheered – and the rest of America gasped – when Spitzer, who was later elected governor of New York state, became enmeshed in a call-girl scandal that cost him his political career last week."
Anonymous reports set the stage...
"There are intriguing reports in New York that the man who was once dubbed Eliot Ness – after the “untouchable” FBI crime-buster – may have owed his fall at least in part to the bankers he once pursued with ruthless moral zeal. "
"Was the governor a victim of Wall Street’s revenge? 'Only one thing is certain – it’s an Eliot mess,' declared one former prosecutor."
Spitzer methodology: everything, even the leaks of sexual peccadilloes to the press were apparently fair game to weaken opponents and make them more likely to settle "out of court."
"As the Grasso investigation unfolded in the summer of 2004, it became clear to reporters following the case that Spitzer’s team was interested in more than financial matters. Aides in the attorney-general’s office hinted that Grasso was having an affair with his secretary, SooJee Lee; Grasso was also questioned about whether he had fathered an illegitimate child."
Had Grasso lied about these matters to investigators, there would be additional, and more easily provable charges added to the charge list.
"Charles Gasparino, a television reporter who wrote a book on the Grasso case, claims he was told by a Spitzer adviser: 'Everyone knows Grasso was boning SooJee.' Grasso vehemently denied both allegations, but the message was clear to all of Wall Street: Spitzer would stop at nothing once he had taken on a case. He even described himself as “a f****** bulldozer”.
"While many outside Wall Street applauded Spitzer for tackling murky insider trading, his readiness to delve into his targets’ private lives magnified the hostility towards him. Last week there was no doubting the financial world’s glee at his fall."
"Yet not even a hoard of saucy Dupré [Kristen] photographs unearthed by the New York Post on Friday could distract Wall Street lawyers and bankers from intriguing anomalies in the small print of the prosecution case against Spitzer, who announced his resignation as governor on Wednesday and will formally yield power to his deputy, David Paterson, tomorrow."
"While there was little sympathy, there were plenty of questions about how a handful of outwardly innocuous payments from his bank account came to trigger a federal investigation into his sexual activities."
Enter the name of a major attorney, famous for being a "fixer" of a variety of litigation problems...
“'The movement of the amounts of cash required to pay prostitutes, even high-priced prostitutes over a long period of time, does not commonly generate a full-scale investigation,' noted Alan Dershowitz, the Harvard law professor and former member of OJ Simpson’s legal team. Others on Wall Street were wondering whether Spitzer’s financial dealings had been singled out for scrutiny as revenge for his past prosecutions."
The implied question: Did someone tip the bank to watch Spitzer's account?
"The beginning of Spitzer’s end can be traced to three banking transfers that left his personal account at the North Fork Bank in New York last spring and summer. For reasons that have not been satisfactorily explained, these payments totaling $15,000 attracted the attention of bank employees who monitor accounts for signs of suspicious activity."
"After the terrorist attacks of 2001 on New York and Washington, laws relating to money-laundering were significantly tightened, requiring banks to file so-called 'suspicious activity reports' whenever there is evidence that clients might be trying to sidestep routine regulations."
Was it the "Q" that caught the investigators eye since a number of companies with ties to Islamic nations start with "Q?"
"Spitzer’s transfers to a company called QAT International Inc – later revealed to be a front for the Emperors Club – were reportedly considered by the bank to be an attempt to avoid another law that requires all transactions over $10,000 to be reported to the US Treasury. Breaking down payments with intent to avoid reporting is an offence known as 'structuring'."
Is Dershowitz on Spitzer's legal team?
"Yet Spitzer is the son of a multi-millionaire property tycoon and has substantial assets of his own. The notion that as few as three payments from his account of less than $10,000 might be considered suspicious “raises as many questions as answers”, said Dershowitz."
Raising freedom and privacy issues...
“'We are talking about a man who is a multi-millionaire with numerous investments and purchases,' he said. 'It’s simply none of the federal government’s business that a man may have been moving his own money around in order to keep his wife in the dark about his private sexual peccadilloes.'”
Happenstance, circumstance or enemy action?
Prosecution sources said last week they had no idea at first that the money was related to prostitution. Even after a second bank, HSBC, reported suspicious activity at QAT’s account – and a link was found to Spitzer – it was at first assumed that the money might be related to corruption or improper use of political campaign funds.
"The case was initially turned over to the section of the Manhattan prosecutor’s office that deals with political corruption. The ensuing investigation duly established QAT was banking payments to a prostitution network and that Spitzer was a client."
When the case against the one man and three women accused of running the international network reached court earlier this month, it was the presence of a federal prosecutor from the political corruption squad that first alerted New York Times reporters to the possibility that a politician might be involved.
Motive?
"It has since been established that both North Fork and HSBC were on the receiving end of Spitzer investigations in his days as attorney-general. In 2003 North Fork was obliged to refund $20,000 to dozens of home-owners after Spitzer claimed that the bank had been charging illegal fees."
Financial institutions often regard such fines and disclosures as a cost of doing business and are usually pleased that even greater sanctions were not imposed.
Raising doubt...
"No evidence has been produced that the bank reporting of Spitzer’s transactions was maliciously intended, yet Dershowitz and other commentators have noted that the system was designed to ferret out drug dealers, the mafia, terrorists and major financial fraud."
“'Once federal authorities concluded that the ‘suspicious financial transactions’ attributed to Mr Spitzer did not fit any of [these categories], they should have closed the investigation,' said Dershowitz."
There is a logic error here. One, the authorities did not know exact what they were dealing with at the time of the preliminary analysis of banking records and two, the authorities are not wont to turn a blind eye to illegal activities once they are discovered. Nowhere in Dershowitz's list is anything about bribery of public officials or the extortion of public officials to secure some advantage -- which are also legitimate concerns of law enforcement personnel and prosecutors.
"Instead, they went after Spitzer with the raw, relentless enthusiasm that the governor had so often displayed towards his own targets in the past."
Relentless or the diligence required by their official duties is a semantic question. I want relentless diligence as these agents protect us from our enemies, both foreign and domestic. I do not want them shutting down an instigation based on a narrow list of target types. As for enthusiasm, we should ask the people who sift through millions of pieces of data to find that proverbial "needle in a haystack" is they are having fun. Peering bleery-eyed at spreadsheets trying to discern patterns does not encourage enthusiasm.
"The soon-to-be ex-governor still faces possible financial charges, and investigators are checking whether public money may have been used to further his sexual activities. There are also security questions about the whereabouts of his bodyguards while he was secretly meeting prostitutes."
And the story continues to evolve. I am sure that there will be more revelations as time goes on... it is in Spitzer's best interest to settle this sooner rather than later. Whether or not he can negotiate the "slap on the wrist" that preserves his law license remains to be seen.
What can YOU do?
Watch the public machinations of the Spitzer defense team as they try to minimize the charges against Spitzer and arrange the lightest possible tap on the wrist for a career of unpleasantness and outright malfeasance.
Read each Spitzer story with a critical eye and wonder, as I do, if there was a public relations (i.e. damage control) expert behind the curtain.
Instead of rejoicing over Spitzer's very public downfall and personal tragedy, consider what a sad day it really is as we discover yet another elected official has inappropriately used the full weight of the government to coerce the innocent (they were never tried in court) into paying fines and agreeing to settlements in order to protect their families, friends and associates from being charged by an overzealous prosecutor. Or that a trusted member of the government felt compelled to leak anything (false, misleading or true) to the media to exert more pressure on the accused.
Elect honest individuals to office. Do not elect career politicians as they become acclimated to more and more power until they believe they are "royalty" with the perks and privileges not available to the common citizen.
Do not vote for any candidate or current politician who is willing to subvert the safety, security, sovereignty and economic strength of the United States or limit an individual's right of self-defense for their personal philosophy, power, prestige or profits.
-- steve
Quote of the day: "We've seen the hubris. And now we're seeing the scandals." -- David R. Gergen
A reminder from OneCitizenSpeaking.com: a large improvement can result from a small change…
The object in life is not to be on the side of the majority, but to escape finding oneself in the ranks of the insane. -- Marcus Aurelius
Reference Links:
Toppling of the Luv Guv is ‘Wall Street revenge’ - Times Online
Comments