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Spitzer Scandal: The Devil Is in the Details

This level of minutiae in the descriptions of the investigation suggests an FBI or USAtty's office source.
 
 
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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.

Christy Hardin Smith is a former attorney, who earned her undergraduate degree at Smith College, in American Studies and Government, concentrating in American Foreign Policy. She then went on to graduate studies at the University of Pennsylvania in the field of political science and international relations/security studies, before attending law school at the College of Law at West Virginia University, where she was Associate Editor of the Law Review.

 
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