Eliot Spitzer, The “Steamroller” Himself Is Steamrolled
A news report from last January foreshadows the sudden and swift end of Eliot Spitzer’s term as New York’s governor.
“I am a fucking steamroller and I’ll roll over you or anybody else,” the Democratic governor told Republican Assemblyman James Tedisco in a private conversation last week, the New York Post reported on Wednesday.
“I’ve done more in three weeks than any governor has done in the history of the state,” Spitzer also said, the Post reported.
Asked at a news conference if the comments were inappropriately boastful, Spitzer replied tersely, “No. Next question.”
Former New York governors include DeWitt Clinton, who built the Erie Canal in the 1820s, connecting New York to the interior of the United States and cementing New York City’s position as a powerhouse of international trade.
Four former governors went on to become president including Franklin D. Roosevelt, whose social welfare programs for the state provided a model for the New Deal when he later entered the White House.
“Most of those things take longer. At that rate we should be in heaven in four weeks, but he (Spitzer) might not get in for lack of modesty,” said former Gov. Mario Cuomo, who added that he did not consider the matter serious and did not expect it to hurt Spitzer politically.
Eliot Spitzer’s documented legacy of rooting out corruption on Wall Street had already garnered comparisons to Eliot Ness. The Lack of modesty, was not new and not surprising, but this revelation of Spitzer’s lack of judgment is quite startling.
Last summer, employees at a large New York bank detected something suspicious: Gov. Eliot Spitzer was moving around thousands of dollars in what they thought was an effort to conceal the fact that the money was his own, federal officials said on Tuesday.
They said the apparent sleight of hand kept the transactions small and removed his name from deposits. The governor’s actions prompted the bank to file alerts known as Suspicious Activity Reports with the Treasury Department, which were reviewed by I.R.S. agents on Long Island, the federal officials said.
A few months later, another New York bank sent its own reports of suspicious activity to the Treasury. They showed that Mr. Spitzer and others, including people overseas, collectively deposited hundreds of thousands of dollars into an account of a company called QAT International Inc., whose business involved foreign accounts and shell companies and appeared to be vaguely related to pornography Web sites.
It was the bank reports, required under federal law, that apparently tripped up Mr. Spitzer, setting in motion the federal investigation that identified him as a client of a high-end prostitution ring.
The federal officials said the rules that ensnared Mr. Spitzer apply to every bank customer, but they acknowledged that questionable activity involving a public official, particularly a prominent figure like the governor of New York, was likely to receive quicker and more thorough review.
Financial institutions have long been required to file reports on questionable transactions, but since the Sept. 11 terrorist attacks banks have been under heavier pressure from federal regulators to report any kind of questionable activity — even if, for example, a customer appears with cash that gives off a chemical-like odor.
As a result, the number of such reports has quadrupled, to more than one million in 2006 from not quite 205,000 in 2001, according to the federal government. When he was New York State’s attorney general, Mr. Spitzer himself used the reports to make his cases.
The federal officials sought to emphasize that Mr. Spitzer, a Democrat, had not been singled out by the Republican administration, although allegations of political interference dogged the Justice Department during the tenure of the former attorney general, Alberto R. Gonzales, who left office last year after lawmakers in both parties called for his removal. The Spitzer investigation began in July and Mr. Gonzales resigned in August last year; it is not clear whether he knew about it.
Michael B. Mukasey, Mr. Gonzales’s successor, was aware of the prostitution case involving Mr. Spitzer but did not specifically authorize the filing of charges, the federal officials said. Mr. Mukasey has pledged to manage the department’s criminal investigations in a manner free from partisan political interference.
The article continues.
Spitzer’s downfall was aided greatly by the U.S. Treasury’s Financial Crimes Enforcement Network, a
database of suspicious activity reports (SARs) that banks are required to file with the federal agency, according to ZDNet.Though the network has been around for some time, it got a closer look after 9/11. And in October 2007, the FBI and the IRS’ criminal investigative division opened an investigation into prostitution and money-laundering organizations. That investigation reportedly started with a SAR on Spitzer’s activity. Whoopsies.
The governor reportedly always kept his transactions below $10,000 - the threshold for federal reporting rules. But that type of activity actually helped catch Spitzer - 150 transactions between $7,000 and $9,000, for example, looks a tad more suspicious than one large transfer.
Spitzer “would have never been caught (he shunned wire transfers) if the operation wasn’t under investigation and his transactions weren’t being monitored,” ZDNet said.
The story has unfolded rapidly in stunning documentation, culminating with Eliot Spitzer’s resignation, which he announced at a press conference earlier today.
The emotional pain such revelation has brought to his wife, Silda Wall Spitzer, is obvious. But as Nina Bernstein points out, those who applauded his efforts to investigate and prosecute perpetrators of prostitution rings feel betrayed as well.
As New York’s attorney general, Eliot Spitzer had broken up prostitution rings before, but this 2004 case took on a special urgency for him. Prosecuting an international sex tourism business based in Queens, he listened to the entreaties of women’s advocates long frustrated by state laws that fell short of dealing with a sex trade expanding rapidly across borders.
And with his typical zeal, he embraced their push for new legislation, including a novel idea at its heart: Go after the men who seek out prostitutes.
It was a question of supply and demand, they all agreed. And one effective way to suppress the demand was to raise the penalties for patronizing a prostitute. In his first months as governor last year, Mr. Spitzer signed the bill into law.
Now the human rights groups, which credit him with what they call the toughest and most comprehensive anti-sex-trade law in the nation, are in shock. Mr. Spitzer stands accused of being one of the very men his law was designed to catch and punish.
“It leaves those of us who worked with his office absolutely feeling betrayed,” said Dorchen Leidholdt, director of Sanctuary for Families Legal Services, one of the leaders of the coalition that drafted the legislation.
The law, which went into effect Nov. 1, mainly deals with redefining and prosecuting forms of human trafficking, which Governor Spitzer called “modern-day slavery.” It offers help to the women who are victims of the practice, rather than treating them as participants in crime.
The article continues.
As Wired Threat Level points out, prostitution in the Web 2.0 world holds many dangers for those who hope to preserve privacy.
With New York Gov. Elliot Spitzer allegedly caught nibbling the fruits of a high-class, tech-savvy prostitution ring, it’s clearer than ever the world’s oldest profession is doing a fine job of harnessing the latest technology.
The red light site at the center of the Spitzer scandal is EmperorsClubVIP.com. Now offline, it’s described in FBI documents (.pdf) as a professional online storefront offering conveniences like e-mail confirmation of appointments, and linking clients and prostitutes across the United States and Europe.
[...]
Internet-based prostitution businesses are easy to find online. They range in size from sole-proprietorships posting on Craigslist to large organized rings allegedly like the Emperors Club. In 2006, federal prosecutors took down a Manhattan-based e-escort service operating as “New York Elites” and “Exotica 2000″ that had raked in $13.5 million in revenues in four years.
The industry is robust enough to have its own specialized support sector. The Emperors Club web site was crafted by an all-female web design firm with a Texas phone number called Working Girl Web Designs, which also offers hosting. Working Girl has an impressive resume, crafting the websites for businesses with names like companionescorts.com, YourLittleSecretNJ and VHotGirl.com. For operators in a hurry to get started, the firm offers six turn-key layouts, with templates like the spare “Noir Chic” design and the lush “Parisian.”
The Emperors Club VIP Web site, although offline, still exists in perpetuity on Archive.org.
Images like these, of pain and betrayal, will linger as well.
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I feel so sorry for his wife. The resignation speech that he read was so cold and heartless. He did not even look at his wife and say I am sorry nor thank his wife for standing there with him.