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Eliot Spitzer Cleared of Financial Wrongdoing

Former New York Governor Eliot Spitzer got good news today. Federal prosecutors announced they will not file charges against him.

"I appreciate the impartiality and thoroughness of the investigation by the U.S. Attorney's Office and I acknowledge and accept responsibility for the conduct it disclosed," Spitzer said in a statement today. "I resigned my position as Governor because I recognized that conduct was unworthy of an elected official."

That Spitzer won't be charged is only part of the story. The real news is that Spitzer has been cleared of financial wrongdoing.

Prosecutors had considered bringing charges connected to money laundering, or "structured withdrawals" to hide illegal movement of funds.

"After a thorough investigation, this office has uncovered no evidence of misuse of public or campaign funds," said U.S. attorney Michael J. Garcia.

As to no filing of prostitution-related charges, he was treated the same as everyone else:[More...]

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Grand Jury Secrecy Applies to Eliot Spitzer

Good for New York Attorney General Andrew Cuomo who has written an advisory opinion (available here (pdf))informing the District Attorney who wanted Gov. Paterson to release documents and communications provided by Eliot Spitzer that Paterson cannot do so -- they are covered by grand jury secrecy.

In response to a request for advice from the Governor's office, Cuomo writes:

You have asked for advice concerning District Attorney P. David Soares’ request, dated March 24, 2008, that Governor David A. Paterson grant a waiver of grand jury secrecy and all applicable privileges with respect to certain documents provided to the District Attorney’s office by former Governor Eliot Spitzer.

Shorter version: Governor Paterson does not have he power to waive Grand Jury secrecy or legal privileges reserved by Spitzer.

The New York Times has the backstory: [More...]

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Eliot Spitzer and Roger Stone, Part II

Bump from 3/19 and Update: Roger Stone did drop a dime on Spitzer after all.

Almost four months before Gov. Eliot Spitzer resigned in a sex scandal, a lawyer for Republican political operative Roger Stone sent a letter to the FBI alleging that Spitzer ''used the services of high-priced call girls'' while in Florida.

The letter, dated Nov. 19, said Miami Beach resident Stone learned the information from ''a social contact in an adult-themed club.'' It offered one potentially identifying detail: The man in question hadn't taken off his calf-length black socks ``during the sex act.''

Stone is the Republican operative credited with shutting down the Florida recount effort.

In related news, it turns out Spitzer used his own money to pay his call girls.

Original Post (3/19):

Spitzer Political Foe Predicted His Demise Months Three Months Ago

I don't like conspiracy theories, but this is bothersome. According to Raw Story, Robert Novak recently reported:

Republican political operative Roger Stone, Eliot Spitzer's longtime antagonist, predicted the New York governor's political demise more than three months in advance.

"Eliot Spitzer will not serve out his term as governor of the state of New York," Stone said Dec. 6 on Michael Smerconish's radio talk show on Philadelphia's 1210 WPHT. He gave no details.

[More...]

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Newsweek Examines Eliot Spitzer's Life

In a very long article, Evan Thomas examines the life and background of Eliot Spitzer, trying to understand why he engaged in such reckless conduct. Shorter version: He was trying to please Daddy.

He describes Spitzer's family:

Brought up in a cold-water flat in a New York slum, Eliot's father, Bernard, the son of Jewish immigrants, made a half-billion dollars in the cutthroat world of New York real estate. He and his wife, Anne, a former college literature teacher, are regarded as refined and cultivated, not domineering. But expectations in the Spitzer household in Fieldston, a wealthy enclave of the Bronx, were extremely high.

A series of Eliot's childhood and college friends have reported the intimidation they felt just sitting at the Spitzer dinner table. Each of the three Spitzer children was required to hold forth and debate on worthy topics (social chitchat was frowned upon). Jason Brown, who went to Horace Mann School, Princeton and Harvard Law with Eliot, compares the dinners to "a college class where the professor grills you." Afterward came games of Monopoly that qualified as play only in the loosest sense. "I play to kill," Bernard liked to joke.

More...

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U.S. Attorney Says No Deal With Spitzer...Yet

U.S. Attorney Michael Garcia has released a statement saying that no deal on criminal charges has been reached with Gov.Eliot Spitzer.

Did anyone else notice Libby lawyer Ted Wells entering the press room right ahead of Spitzer?

Shorter version: Negotiations are ongoing.

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New York's New Governor: David Paterson

New York Gov. David Paterson will take over on Monday.

He is New York's first African American Governor. He is legally blind. He's highly respected and well liked.

I hope he puts repeal of the draconian Rockefeller drug laws at the top of his agenda.

Paterson is a super-delegate for Hillary Clinton.

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Spitzer Resigns Effective Monday

Update: Text of Statement.

Embattled New York Governor Eliot Spitzer is expected to announce he is resigning at 11:30 a.m. ET.

More details of his trysts:

A person with knowledge of the serviceís operations said that Mr. Spitzer had begun meeting with the prostitutes of the Emperorís Club about eight months ago and had had encounters in Dallas as well as Washington. A law enforcement official said Mr. Spitzer also had an encounter with a prostitute in Florida. On some trips of several daysí duration, Mr. Spitzer scheduled more than one visit with a prostitute, this person said.

Update: He's now in the building. Updates below

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Spitzer Lawyers Want No Charges, Not Plea Bargain

Bump and Update: Now we get yet another version of events from the Wall St. Journal.

Shorter version: Forget $80,000. We're down to $19,000. His lawyers are insisting there was no crime, there should be no charges. In other words, no plea bargain. We also get the name of one of the banks that dropped the dime on him: Capital One Corp.'s North Fork unit.

On his gubernatorial financial disclosures, Mr. Spitzer lists North Fork as one of his primary personal banks.

As to the three wire transfers:

[Spitzer]made three payments of roughly $5,000 each through wire transfers in the spring and summer of 2007 from personal bank accounts, according to a person familiar with the matter. The New York governor allegedly paid an additional $4,300 in cash to the ring in connection with an encounter at the Mayflower Hotel in Washington on Feb. 13, making his total payments to the group more than $19,000.

As to why there may have been no illegality [More...]

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Spitzer Adviser Says He May Not Resign

Nobody really knows what New York Governor Eliot Spitzer's timetable is. The New York Times says no resignation is likely today.

And Jacob Gershman in the New York Sun says Spitzer senior adviser Lloyd Constantine says Spitzer may not resign at all.

"He has not made up his mind," a senior adviser to Mr. Spitzer, Lloyd Constantine, said. "It is more correct to say that he is not resigning."

Another source close to the governor said Mr. Spitzer was refusing to resign until he clinches an agreement with federal authorities about charges that he could face. "I don't think anything happens for a couple of weeks," the source said.

Reportedly, things aren't going so well at the Spitzer residence: [More...]

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The Mann Act and Should Spitzer Resign?

Update: The New York Times reports the Attorney General authorized the investigation of Spitzer:

The inquiry, like many such investigations, was a delicate one. Because the focus was a high-ranking government official, prosecutors were required to seek the approval of the United States attorney general to proceed. Once they secured that permission, the investigation moved forward.

****

The S.D. Florida blog has a post on whether it's right (as opposed to legally permissible) to charge Gov. Eliot Spitzer under the Mann Act (18 USC 2421, 2422 are the possible applicable sections.)

Now, should the feds pursue a simple prostitution case just because the prostitute traveled from state to state? There is nothing to suggest that the prostitute was coerced or was forced into this business (in fact, she was making more per hour than just about every lawyer in town). The original Mann Act of 1910 was really meant to outlaw forced prostitution (and was known as the "White Slave Traffic Act.") Although recent cases have greatly expanded the scope of the Act and the prosecution would be permissible, do you think such a prosecution is appropriate?

Trivia -- The most famous person prosecuted under the Mann Act is probably Charlie Chaplin.

Chaplin was acquitted. I'll add Chuck Berry to the list, although in his case the woman was a minor. [More...]

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Spitzer Lawyers Up, Resignation May Come Tuesday

WCBS TV (New York) reports that New York Governor Eliot Spitzer has lawyered up. He's retained the New York law firm, Paul, Weiss, Rifkind Wharton & Garrison. It also reports Spitzer is expected to resign Tuesday.

Question: Can we expect an appearance by Libby Lawyer Ted Wells, partner at Paul Weiss?

The New York Times in an editorial for tomorrow, explains why it's different for Spitzer than for others:

Mr. Spitzer’s own record of prosecuting such cases gives him scant breathing room. As state attorney general, he prosecuted prostitution rings with enthusiasm — pointing out that they are often involved in human trafficking, drug trafficking and money laundering. In 2004, on Staten Island, Mr. Spitzer was vehement in his outrage over 16 people arrested in a high-end prostitution ring.

If Spitzer resigns, New York's Lt. Governor David Patterson will take his place.

As for possible criminal charges, my latest post on the ABC report that he is being investigated for structuring financial transactions is here.

Update: Here's the press release (pdf) the U.S. Attorney's office sent out when filing the case against the Emporer's Club defendants.

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ABC News: Spitzer, Not the Prostitution Ring, Was the Subject of Investigation

Update: According to the New York Times, the Attorney General did authorize investigation of Spitzer:

The inquiry, like many such investigations, was a delicate one. Because the focus was a high-ranking government official, prosecutors were required to seek the approval of the United States attorney general to proceed. Once they secured that permission, the investigation moved forward.

*****

ABC News reports New York Governor Eliot Spitzer was the initial subject of the Justice Department investigation and it was his suspicious money transfers that led to their discovery of the prostitution ring. ABC says the feds are likely to charge him with the crime of structuring financial transactions:

The federal investigation of a New York prostitution ring was triggered by Gov. Eliot Spitzer's suspicious money transfers, initially leading agents to believe Spitzer was hiding bribes, according to federal officials.

It was only months later that the IRS and the FBI determined that Spitzer wasn't hiding bribes but payments to a company called QAT, what prosecutors say is a prostitution operation operating under the name of the Emperors Club.

And this:

The suspicious financial activity was initially reported by a bank to the IRS which, under direction from the Justice Department, brought kin the FBI's Public Corruption Squad.

"We had no interest at all in the prostitution ring until the thing with Spitzer led us to learn about it," said one Justice Department official.

More...

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Spitzer Political Implications

Will Eliot Spitzer resign? I think he will tomorrow.

Should he?

Survey USA just did a poll and finds 58% of New Yorkers say yes.

Here's a thread to discuss the political aspects of today's Spitzer revelations.

And, will he keep his superdelegate status at the Democratic convention?

Earlier threads are here and here.

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CNN: Spitzer Under Criminal Investigation

First Spitzer thread here.

CNN just reported Gov. Eliot Spitzer is under federal criminal investigation and that he is, indeed, customer "9" in the 55 page affidavit in support of search and arrest warrants in the case of U.S. v. Mark Brener, et. al.

Spitzer was at a hotel in Washington, D.C. and allegedly asked Tameka "Rachelle" Lewis to send someone from NY to D.C. to his room at the Mayflower.

Go to page 34. There's a lot of detail. Paragraph 85 may be key.

It's clear from the document that Customer #9 was a repeat customer and that he intended to use them again in the future. Read pages 34 to 39. They discuss his having a credit balance and whether he can leave more than he owes for future visits.

Also, when Tameka, aka Rochelle, told #9 it would be "Kristen", # 9 was very pleased. ("Great, ok, wonderful" he said." Par. 80.)

Update: I sincerely doubt Spitzer will be charged with a crime. He probably will have to cooperate with the feds in the prosecution of the members of the prostitution ring. Did Spitzer commit a violation of the Mann Act, 18 USC 2422?

Whoever knowingly persuades, induces, entices, or coerces any individual to travel in interstate or foreign commerce, or in any Territory or Possession of the United States, to engage in prostitution, or in any sexual activity for which any person can be charged with a criminal offense, or attempts to do so, shall be fined under this title or imprisoned not more than 20 years, or both.

Spitzer's statement today is here.

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NY Gov. Eliot Spitzer Linked to Prostitution Ring

New York Governor Eliot Spitzer is about to hold a press conference. He advised his aides earlier he's been linked to a prostitution ring.

Update: Jeffrey Toobin went to law school with Spitzer and is telling CNN now on the phone he was always such a straight arrow. As Attorney General, he was always a "moralist." I have to agree. I used to debate Spitzer on tv before he was Attorney General and met him several times. He's the least likely person I can imagine being involved in this. I never liked his position on crime, but I liked him and am sorry to see this.

We're all waiting for the press conference. It's still not happening. CNN says he was a customer of the ring. This was an IRS investigation, would he really have used a credit card and left a paper trail? Or did his name just show up in records? Stay tuned, I'll try to live-blog the press conference if it happens.

Update: Press Conference: His wife is by his side. He didn't resign, he apologized to his family and the public and said he would be taking some time to regain the trust of his family. Very short, no details. He said politics is not about individuals, it's about ideas. He said he'll be reporting back. He said he acted in a way that violates the obligation to his family and his sense of right and wrong. No questions.

More on the prostitution ring below:

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