The Invasion of Spitzer’s (Financial) Privacy

US Politics
on 13 Comments

I just heard Adam Davidson on NPR’s "All Things Considered" try to explain the reason that Eliot Spitzer was targeted. He said that after 9/11 banks/law-enforcement came up with software that scrutinized cash withdrawals to look for suspicious patterns. The old Mafia threshhold of $10,000 went out the window. Now a series of 1000 withdrawals of $5, to make $5,000, was a red flag.

Davidson said that another layer of scrutiny was of  PEP–"politically exposed persons"–which includes even the relatives of elected officials. Their bank accounts got an even finer-toothed comb. So maybe, Davidson speculated, Spitzer moved around a few sums of $2,000… Davidson presented all this as cutting edge, routine and gee-whiz.

It’s insane. That a man’s withdrawal of hunks of cash to pay a prostitute should attract the attention of law enforcement is brave-new-world. That political people should be scrutinized by banks/law enforcement even more closely is maybe inevitable, but that the financial institutions turn this kind of stuff over to the FBI? Horrifying. Look at Craig’slist–look at all the traffic in prostitution that goes on in New York on a daily basis without the scrutiny of government agencies.

I don’t know how I feel about Spitzer as governor. He’s arrogant, my political friends tell me. Spoiled and rich. But he did a great job taking on Wall Street, and god knows he’s been humbled. Secretly I hope he hangs tough and fights this invasion. Public people have rights too.

13 Responses

  1. Jim Haygood
    March 11, 2008, 7:03 pm

    As I said earlier, your banker is now a spy for the government. If you're not familiar with CTRs (Cash Transaction Reports) and SARs (Suspicious Activity Reports), you're probably the subject of some of them. I'm sure I've been ratted out by my bank several times, when I took out larger than normal amounts of cash to pay home improvement contractors. Welcome to freaking East Germany, comrade. The walls have ears.

    "Secretly I hope he hangs tough and fights this invasion. Public people have rights too." – Phil Weiss

    Dear, dear Phil. You're innocent about how the federal courts work, aren't you? The conviction rate in some federal districts is north of 95%. Why? If you plea bargain, you get only a few years in the joint. But if you insist on going to trial and get convicted, you'll get the maximum penalty. "Fighting this" means the fedgov will crush you like a bug.

    As a journalist, you need to read one of the best pieces of investigative journalism of the 20th century: the 10-part series "Win At All Costs" in the Pittsburgh Post-Gazette. It will disabuse you forever of the insane notion of fighting the fedgov on their own turf:

    link to post-gazette.com

  2. Seth Roberts
    March 11, 2008, 7:43 pm

    "Secretly", huh?

    I like this post a lot. It is heartfelt, well-written, persuasive, and a little courageous.

  3. scorpio
    March 11, 2008, 9:33 pm

    adam davidson and NPR (Neocon Public Radio) are part of the cover story. this is bullshit. the man was targeted because he's the Democratic governor of a large state, a man who had pursued successfully some v high-profile Wall St cases and was preparing to pursue more in light of the total breakdown and bend-over of financial regulation of capitalism under Greenspan-Bernanke-Cheney. this is sad, on many levels. it would be nice to know who Clients 1-8 and 10-100 were, since we get to know about Spitzer.

  4. Glenn Condell
    March 11, 2008, 10:24 pm

    I wonder if the Governator has had this sort of scrutiny, and whether anything turned up. I'm thinking Spitzer may be the tip of an iceberg, and whether you are an exposed tip or remain submerged depends on how you play the game.

    The client list of the bordello that serviced Vitter was rumoured to be full of Republicans – where did it go? Who was on it? This sort of thing goes back a very long way of course; the Larry Franklin pedophile ring and the related White House call-boy scandal involving Craig Spence (who had the good grace to die just before he could do any real damage) was Republican too. Not to say that Dems don't get their hands as dirty, just that they are less likely to be studiously ignored or whitewashed.

    I have never had a sensible answer to the question of why the death of a pretty young intern in Joe Scarborough's office drew such a miniscule percentage of the coverage afforded to Gary Condit, though it's true timing mattered with Condit, who helpfully cropped up to distract us all from crucial developments in the propaganda effort to lie us into the Iraq War.

    If Spitzer was targeted, you wonder if he was offered 'asylum' if he kept his investigative tendencies within certain boundaries. More likely he was considered one of those incorruptibles who would never stoop so low; therefore, forget the offers, just get him.

    It can be fun inside this tinfoil hat.

  5. Glenn Condell
    March 11, 2008, 10:26 pm

    I wonder if the Governator has had this sort of scrutiny, and whether anything turned up. I'm thinking Spitzer may be the tip of an iceberg, and whether you are an exposed tip or remain submerged depends on how you play the game.

    The client list of the bordello that serviced Vitter was rumoured to be full of Republicans – where did it go? Who was on it? This sort of thing goes back a very long way of course; the Larry Franklin pedophile ring and the related White House call-boy scandal involving Craig Spence (who had the good grace to die just before he could do any real damage) was Republican too. Not to say that Dems don't get their hands as dirty, just that they are less likely to be studiously ignored or whitewashed.

    I have never had a sensible answer to the question of why the death of a pretty young intern in Joe Scarborough's office drew such a miniscule percentage of the coverage afforded to Gary Condit, though it's true timing mattered with Condit, who helpfully cropped up to distract us all from crucial developments in the propaganda effort to lie us into the Iraq War.

    If Spitzer was targeted, you wonder if he was offered 'asylum' if he kept his investigative tendencies within certain boundaries. More likely he was considered one of those incorruptibles who would never stoop so low; therefore, forget the offers, just get him.

    It can be fun inside this tinfoil hat.

  6. americangoy
    March 12, 2008, 12:14 am

    "If Spitzer was targeted, you wonder if he was offered 'asylum' if he kept his investigative tendencies within certain boundaries."

    Great. The sad part was a few years ago I was such a happy go lucky business consultant, and now… now, America lost some of its luster….

    This is spot on; nothing would ever be admitted, and even if filmed and wiretapped the exact words won't be used – but it will be understood by both parties what is really going on.

  7. Richard Silverstein
    March 12, 2008, 3:38 am

    Phil: Spitzer created shell companies in order to hide the payments to prostitutes. The shell companies had no other activity or purpose than funneling these payments. I've read in the NYT or perhaps heard on NPR that this is what first alerted the IRS to the suspicious behavior. At first, they belived that Spitzer might be hiding bribes or other illicit gains. That's the reason they pursued this. While I support Spitzer & generally suspect Republican prosecutors' motives (& I'd like to hear more about this investigation before I give the feds a clean bill of health) I think the original reason for opening the investigation was prob. valid.

  8. neocognitism
    March 12, 2008, 5:08 am

    I read a something humorous, that Spitzer was targeted because he was going to re-open an investigation into 9/11-related things, due to the depreciation of the Carlyle Group, which is where a large amount of NYPension money is stored. Silverstein was apparently involved by having $12 Billion in the fund that he pulled out suspiciously, putting the fund in a terrible state and possibly meaning the total loss of the NYPension. The NYPension is overseen by Hevesi, another convicted bad guy.

    I know it sounds wacky, but it's the only truly inventive and interesting thing I've read about the assault on Spitzer.

  9. ej
    March 12, 2008, 6:07 am

    Shell companies are being targeted?
    Then why is the mega tax haven racket off the agenda?
    nothing to do with shell companies.

  10. Richard Witty
    March 12, 2008, 7:53 am

    It was reported that Spitzer spent $80,000 on prostitutes over the last two years.

    Its not incidental, and DOES point to a compromised office.

    The difference between the impeachment movement for Bush and that for Clinton, is that the Bush impeachment assertions are of violations of the law of his office, while the impeachment assertions of Clinton were of an independant private citizen with a genuinely consenting adult.

    Who knows how long this had been occurring. Did it occur while he was attorney general?

    He is now incompetent to govern. Its not sex. Its the prospect of corruption.

  11. Charles Keating
    March 12, 2008, 9:54 am

    Gotta agree with Richard Witty on this one.

  12. Jim Haygood
    March 12, 2008, 10:20 am

    From the WaPo: "In this case, the [North Fork] Bank's report was triggered by Spitzer's attempt to structure a $10,000 cash transaction into three parts, according to a senior law enforcement official familiar with the evidence. When investigators looked more closely at the transactions, they learned that the recipients were apparent shell companies associated with the Emperors Club."

    Spitzer's bank ratted him out for "structuring" a $10,000 payment. For example, sending wires of $3,500, $3,500 and $3,000 on three successive days. Wires over $10,000 are AUTOMATICALLY reported. Attempting to evade scrutiny by breaking them into smaller pieces also triggers the Stasi's suspicion.

    The shell accounts belonged to the prostitution ring. When the investigators looked at structured payments on Spitzer's side, and shell accounts on the recipient's side, they initially concluded it was a money laundering operation for bribes. Probably when they found that the shell accounts were being paid out to "Kristen," "Heather," "Cheri," etc., they realized what was up. Poor Kristen is now going to be facing a big IRS assessment on her cash earnings.

  13. Bill Bailey
    April 22, 2008, 7:04 pm

    Please check out my comments on this subject at:

    link to 60733066.blogspot.com

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