http://www.dailykos.com/storyonly/2008/3/11/51123/3435/851/474082The New York Times this morning has a story about the origins of the Spitzer investigation that, at least to me, simply doesn't make sense. Apparently, the investigation didn't start with some big organized crime investigation that happened upon a prostitution ring, and that happened to lead to Spitzer. Supposedly, it began with an investigation of money movements by Spitzer that led, to the complete suprise of the investigators, to a prostitution ring. Except that the explanation in the story simply doesn't make sense.
Here's the version in the story:
In the Hauppauge offices of the Internal Revenue Service, investigators conducting a routine examination of suspicious financial transactions reported to them by banks found several unusual movements of cash involving the governor of New York, several officials said.
The investigators working out of the three-story office building, which faces Veterans Highway, typically review such reports, the officials said. 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.
What's wrong with this version of the story? At least one thing seems to be glaringly wrong: This wasn't money moving INTO Spitzer's accounts, as it would be if the crimes involved were bribery, political corruption, or "something inappropriate involving campaign finance." This was cash moving OUT of Spitzer's accounts -- based on everything we've heard, from his personal accounts.
When somebody is moving large amounts of cash OUT of their personal accounts, I suppose it's possible that they're bribing somebody else or something, although if they're already a Governor, that doesn't seem very likely. What it suggests is precisely what happened here: That they're spending money on something for which they don't want a paper trail, perhaps because they don't want their spouse to know about it. And while some of those things may be illegal (prostitution, gambling, drugs), by no means all of them are (supporting a mistress, indulging a taste for clothes or wine that is more expensive than one's spouse thinks is appropriate, etc.).
The other thing that seems odd is that these were apparently CASH TRANSACTIONS, which are extraordinarily difficult to trace. And yet somehow, investigators supposedly knew that this money:
ended up in the bank accounts of what appeared to be shell companies, corporations that essentially had no real business.
How, pray tell, did the investigators know that without FIRST getting wiretap or other evidence showing where it was going? Presumably, the front businesses for this prostitution ring were combining Spitzer's cash with cash from other customers, so the amounts wouldn't even be the same. But even if the amounts WERE the same, with the large number of cash businesses in the New York area, it strains credulity to think they could match the amounts up and tell with any degree of certainty at all where his money was going.
And there's one more thing:
Is it really possible that the Attorney General of the United States approved an investigation of a sitting state Governor, based on no more than the fact that the Governor was withdrawing unusually large amounts of cash from his personal accounts? If there's more than that, it's not apparent from anything in the article, or anything in the Complaint (to the pdf of which there is a link in this article:
http://edition.cnn.com/2008/POLITICS/03/10/spitzer/
I make no excuses whatseover for Spitzer, who engaged in monumentally risky and stupid (not to mention hypocritical) behavior, but what bothers me even more than his behavior is that major investigations are being undertaken based on no more than the fact that a public figure is using somewhat larger than normal amounts of cash -- and that seems to have been almost the only possible basis for the investigation of Spitzer in this case. Because frankly, that suggests a return to the bad old days where one of the major activities of the FBI was gathering dirt on every politician in Washington (not to mention civil rights leaders and others who had somehow run afoul of J. Edgar Hoover), which was then used to intimidate them politically. And that's much more disturbing to me than Elliot Spitzer's tawdry, and apparently very expensive, personal life.
UPDATE: Another thing that bothers me about this, and bothers me greatly as a former DOJ lawyer, is that it would appear that somebody associated with federal law enforcement revealed to the press that "Client 9" was Elliott Spitzer, and that would seem in itself to be a serious violation of ethics, if not a criminal violation if it was grand jury information. Somehow, I doubt that there will be the kind of concerted investigation into who leaked this information that there was into where Spitzer was spending the cash that he was withdrawing, and that also disturbs me. Anybody who leaks confidential information from a criminal investigation should at a minimum be fired, and if it's grand jury information, they should be prosecuted.
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