The Devil Is In The Investigative Details In Spitzer Case
The level of detail in reporting on the Spitzer case catches my eye today. This level of minutiae in the descriptions of the investigation suggests an FBI or USAtty’s office source. Defense counsel for any of the potential defendants won’t have gone through this much discovery, unless their clients have been cooperating as informants for quite some time — which is possible given that they were charged via an information and not by a grand jury indictment.
If this is a government source for these reports, that says to me that someone wants this story out there in spades.
There are any number of people who have an axe to grind with Gov. Spitzer, and NY politics is certainly a hardball environment — but this is a serious amount of detail to be throwing out publicly in a case which has not yet been indicted. Which makes me wonder if the public pressure isn’t designed to force a resignation rather than having to prosecute him.
First, from the NYTimes:
…But this was not typical: transactions by a governor who appeared to be trying to conceal the source, destination or purpose of the movement of thousands of dollars in cash, said the officials, who spoke on condition of anonymity.
The money ended up in the bank accounts of what appeared to be shell companies, corporations that essentially had no real business.
The transactions, officials said, suggested possible financial crimes — maybe bribery, political corruption, or something inappropriate involving campaign finance. Prostitution, they said, was the furthest thing from the minds of the investigators….
But before long, the investigators learned that the money was being moved to pay for sex and that the transactions were being manipulated to conceal Mr. Spitzer’s connection to payments for meetings with prostitutes, the official said.
Then, with the assistance of a confidential informant, a young woman who had worked previously as a prostitute for the Emperor’s Club V.I.P., the escort service that Mr. Spitzer was believed to be using, the investigators were able to get a judge to approve wiretaps on the cellphones of some of those suspected of involvement in the escort service.
The wiretaps, along with the records of bank accounts held in the names of the shell companies, revealed a world of prostitutes catering to wealthy men. At the center was the Emperor’s Club, which arranged “dates” with more than 50 beautiful young women in New York, Paris, London, Miami and Washington.
But its finances moved through the shell companies — the QAT Consulting Group, QAT International and Protech Consulting — which held bank accounts into which clients wired their payments, according to court papers in the case. (emphasis mine)
Incredibly stupid conduct from a man who worked both in the Manhattan DA’s office and as NY’s AG, prosecuting among other things, Wall Street firms whose financial transgressions were tracked in similar fashion by investigators and forensic accountants for his office and the feds. Beyond stupid. Especially after 9/11, when financial transactions are tracked constantly and closely by an FBI looking for any anomaly. Using an informant who has flipped as a witness against the target is a fairly common means of nailing someone in this kind of case — and Spitzer would have known that, too.
Was this "confidential informant" also the defendant who was quoted in the information regarding the difficulty of Mr. Spitzer as a client — the "not safe" quote? And, if so, why did the USAtty include that part of the conversation in the information using an informant who knowingly put that information on the wiretap record? (If she wasn’t the informant or cooperating with the government on Feb. 13/14, then that point is obviously moot.) That’s a question worth getting answers to, in my book, because that inclusion seemed solely designed for public humiliation of Spitzer and not for prosecution purposes.
The financial concerns regarding weird, hidden transactions passed through a dummy corp from a public official are legitimate questions that a public corruption investigator would ask — but I’m still left wondering how this was brought to the FBI’s attention, what triggered the reporting, whether the transactions were clustered or otherwise suspicious, or how the pattern emerged that caught the bank’s eye? Was it just one questionable transaction, brought to the FBI’s attention — they saw Spitzer’s name, and gave his accounts increased scrutiny? Or was it multiple transactions caught and brought in at once as a suspicious pattern of behavior? As a public official, there would be particular questions on public corruption that you wouldn’t have with a non-official defendant, and that triggers a whole host of questions on how determinations were made to proceed on this that investigators would have had to ask and answer as they moved the case forward.
Then, this from the NYSun, which speculates on potential prosecutions lines for misuse of public funds and employees, the Mann Act, and financial transactional charges:
…Law enforcement officials are also expected to try to contact any prostitutes whom Mr. Spitzer patronized, as well as interview Mr. Spitzer’s inner circle about their knowledge of his conduct, former prosecutors say.
The situation raised the question of whether the governor may come under pressure to resign to placate prosecutors….
Other prosecutors from other districts could also consider charges.
The U.S. attorney in the District of Columbia, Jeffrey Taylor, is charged with enforcing not only federal laws but the district’s municipal anti-prostitution laws as well.
Conceivably any U.S. attorney whose district includes a section of the train tracks that carried the prostitute, identified in court papers as Kristen, from Penn Station in Manhattan to Union Station in Washington, has jurisdiction to try to bring a Mann Act case against Mr. Spitzer, a former federal prosecutor who did not want to be identified because he did not want to appear to be advocating prosecution of Mr. Spitzer, said.
Now, all of that "throw the kitchen sink at him" information is coming from somewhere for this reporter to put into his story — and several lawyers are named (Andrew Hruska, Todd Harrison, Barry Kamins), along with a host of off-the-record anonymous "several former prosecutors." The hints at questioning associates to see if they were involved certainly add to that pressure around him for "what’s my future" discussions.
Then there is this from another NYTimes story:
Mr. Spitzer has not been charged with a crime. But one law enforcement official who has been briefed on the case said that Mr. Spitzer’s lawyers would probably meet soon with federal prosecutors to discuss any possible legal exposure. The official said the discussions were likely to focus not on prostitution, but on how it was paid for: Whether the payments from Mr. Spitzer to the service were made in a way to conceal their purpose and source. That could amount to a crime called structuring, which carries a penalty of up to five years in prison.
Say hello to at least one FBI or IRS agent, most likely, as a source. Plus there are any number of other stories in other NY papers giving more contextual details and pulling quotes from public and anonymous political and law enforcement sources. That’s a lot of public pressure and talk of resignation and criminal exposure. And I can’t help wondering whether this is coming from the GOP side of the aisle, or the Dem side…or both. Or if the SDNY is signaling that Spitzer should resign and they won’t drop a prosecutorial dime on him. Or whether they have more, and this is a signal to his counsel to work on a deal. Any or all of that is possible.
(YouTube of The Eagles singing Dirty Laundry.)