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Wednesday, March 12, 2008

Spitzer's very guilty, but exactly of how much is still unclear

If you read this morning's Wall Street Journal, you'd come away with the impression that Eliot Spitzer spent a mere $19k on high-dollar hookers to get himself into his current troubles. Turn instead to the New York Post, and you'll see allegations that he blew at least $80k on a habit that went back 10 years.

These claims are not necessarily inconsistent. No one news source seems to have anything remotely approaching a comprehensive list of dates, transaction types, and amounts yet. And although I think so far most of my early hunches as this story broke have held up pretty well, some of my early assumptions from the affidavit attached to the feds' federal complaint against the Emperors Club call-girl ringleaders as to the specifics of Spitzer's attempts to avoid triggering the Treasury Department financial reporting regulations may have been wrong: That affidavit apparently focuses only on later transactions that Spitzer conducted in cash, whereas newer press reports suggest that it was actually Spizter's splitting of more than $10k in wire transfer payments into three smaller pieces that got him onto the feds' radar screens, and that are the likely basis for the possibility that Spitzer may be charged with "structuring" in a deliberate (and boneheaded, and hugely unsuccessful) attempt to avoid triggering those regulations.

Without more specifics, I don't think I or any other legal pundit can give any confident opinion right now about how the potential financial crime charges would play out in court. I will note, however, that if they were obviously bogus, Spitzer's extremely capable criminal defense lawyers would have told him over the weekend that they ought to fight, and his Monday press conference would have included a vow not to resign. Instead, Spitzer's lawyers are negotiating, while trying to do some counter-spin for public relations purposes in the meantime (which is how I read the WSJ article).

The Wall Street Journal story, though, suggests a breath-taking degree of arrogance on the part of Spitzer and his lawyers in their on-going negotiations about a possible plea deal:

Mr. Spitzer won't resign until he reaches an agreement with the government not to pursue charges, say those familiar with his legal team's thinking.

Any legal case could be significant for Mr. Spitzer's future. Whether or not he remains in politics, the 48-year-old Mr. Spitzer likely would lose his license to practice law if convicted of a felony.

This is definitely Through-the-Looking-Glass logic. Spitzer's liberal defenders, always eager to assume that any federal prosecution of a Democrat is a purely political act by the evil BusHitler Justice Department, are saying that the point of all this is to drive a rising-star Democrat out of office. Yet going out of office voluntarily is the sole penalty that Spitzer's lawyers seem willing for their client to pay!

This paragraph from the WSJ report simply made my jaw drop:

[Lead Spitzer defense counsel Michele] Hirshman — a former assistant U.S. attorney in Manhattan — also argued that if federal prosecutors brought charges against Mr. Spitzer, they would be required to similarly charge the nine other unnamed clients in a federal complaint unsealed last Thursday, to avoid what's known in legal circles as "selective prosecution." None of the other nine unnamed clients have been charged in the case.

Let me be unequivocal: Michele Hirshman or anyone who argues with a straight face that the feds' failure to prosecute Clients-1 to -8 and -10 is "selective prosecution" is either an idiot or a partisan hack who is deliberately trying to deceive and mislead you. If this is the best argument she's got, then Spitzer is indeed in a world of trouble. There has been no suggestion whatsoever that Clients-1 to -8 or -10 committed any federal offense — neither a federal financial crime (like structuring), nor a federal vice crime (like crossing interstate borders to promote prostitution). As far as anyone has shown so far, they're neither public officials who've volunteered to be held to a higher standard of conduct (much less former state vice prosecutors), nor anything else but "common johns." Whatever else Eliot Spitzer is now and has been for the last several years, he's not a "common john," and it was not being a "common john" that got him into all this.

Similarly, beware anyone who tries to sell you on the notion that this is a partisan investigation or potential prosecution. Yes, it's entirely true that the reason the Suspicious Activity Reports about Spitzer's financial maneuvering came to the particular attention of the feds was because he is a public official. That is a good thing: We want our law enforcers to be particularly on the lookout for public corruption. Do not let someone bamboozle you into taking the next step, though, which is to assume that the feds only look for Democrats who are guilty of public corruption. Nothing about this case yet can possibly support that premise, but without a shred of evidence it's already being peddled by hyper-partisans in the blogosphere.

The Wall Street Journal article suggests, for the first time among any of the news reports I've read, that the feds have also now explicitly threatened Spitzer with prosecution for non-financial crimes — perhaps under the Mann Act, perhaps under the Travel Act, perhaps wire or mail fraud. It is entirely correct to observe that the feds, in recent decades, have not generally prosecuted mere customers of interstate or international prostitution rings for those crimes. Rather, they've generally used those crimes to go after criminals who are in the business of, and profiting from, those interstate or international prostitution rings — just as they've already used them as the legal basis to bring the complaint against the Emperors Club ringleaders.

But the feds obviously think they've got a strong case from which they can prove at least one instance of "structuring." That was evidence left in their laps after they'd exonerated Spitzer of their original suspicions, i.e., that all these suspicious payments might be connected to bribery or blackmail or the like. If Spitzer is defiant — if he insists not only on getting no real meaningful judicial punishment, but on not even being charged with anything, all despite clear evidence (at least as the federal prosecutors view it) that he committed a federal financial crime in his desire to conceal and cover up his tawdry violations of state vice laws — then it's altogether expected and proper that the feds would react by piling on additional charges that are within their charging discretion. When the defendant is being defiant and petulant, it's not "prosecutorial abuse" or "selective prosecution" for the government to seek to throw the biggest book at the guy which is reasonably close to hand. And if that means Eliot Spitzer doesn't "catch all the breaks" that the feds generally extend to other whore-mongers who transport themselves and their paid sex companions across state lines in the pursuit of their habits, then that's his fault, not theirs.

(I say "tawdry" state-law vice crimes, but among the extreme ironies here is that Spitzer was viewed as an active co-participant in efforts within New York State to crack down on customers of the sex industry, and last year he signed into law a bill that increased "the penalty for patronizing a prostitute, a misdemeanor, to up to a year in jail, from a maximum of three months.")

And if Spitzer and his lawyers think it's only felony convictions that threaten his law license, they need to think again. Other crimes of moral turpitude can certainly do that. Maintaining a multi-thousand dollar account balance with an international prostitution ring, whether that's resulted in a felony conviction pursuant to a plea bargain or not, is likely to draw the attention of the New York bar officials.

Spitzer made his career in large measure by being a bully. He routinely used his power as a state attorney general — including highly skilled manipulation of the press — in an attempt to shame and overwhelm corporate CEOs into rapid capitulations, counting on their unwillingness to actually force him to prove his charges in court. Count me as one observer who is hoping that Spitzer's propensity for bullying torpedoes his plea negotiations, and that as a result, he refuses to resign, and he goes "all in" and calls the feds' bet. The history of those who've called such bets, thinking that the feds were really just bluffing, is not a pretty one.

Moreover: If the press reports are correct and it's actually Spitzer's wife who's urging him not to resign, then my sympathy for her has dropped to zero. We're talking cosmic, genuinely Clintonesque degrees of co-dependency and enabling here. I do pity their poor daughters for having two parents who are dangerously out of touch with reality.


UPDATE (Wed Mar 12 @ 10:50am): Spitzer just announced his resignation on TV. I haven't heard any details on whether he's reached a plea agreement.


UPDATE (Wed Mar 12 @ 11:42am): The website for the U.S. Attorney for the Southern District of New York has posted this terse statement:

In response to press speculation, MICHAEL J. GARCIA, the United States Attorney for the Southern District of New York, said: "There is no agreement between this Office and Governor Eliot Spitzer, relating to his resignation or any other matter."

I don't know if it was Ted Wells or someone else, but someone inside the Spitzer legal team forced their client into a major reality check some time after the team was spinning the WSJ reporters last night.

Posted by Beldar at 05:34 AM in Law (2008), Politics (2008) | Permalink


Other weblog posts, if any, whose authors have linked to Spitzer's very guilty, but exactly of how much is still unclear and sent a trackback ping are listed here:

» Eliot Smurfer from Overlawyered

Tracked on Mar 12, 2008 6:37:52 AM

» Spitzer exit negotiations from PointOfLaw Forum

Tracked on Mar 12, 2008 7:46:39 AM

» More on Eliot Spitzers Looming Legal Problems from UrbanGrounds

Tracked on Mar 12, 2008 9:26:39 AM


(1) dchamil made the following comment | Mar 12, 2008 9:09:56 AM | Permalink

Not being a lawyer, I thought 'selective prosecution' was entirely within the discretion of the prosecutor, being also known as 'prosecutorial discretion.'

(2) Neo made the following comment | Mar 12, 2008 10:26:01 AM | Permalink

This is different that Vitter, Folley or Studds, who had 100 or so others to counteract their bad judgemnt and perhaps bias. Today we see this goes back to Spitzer’s time as NY AG, the guy who has final yea/nay on all prosecutions in New York State.

Anyone who thinks that this guy should remain should consider this ..

Close your eyes and imagine for a moment ..
Ashcroft being busted for the same.
Now, try to imagine your defense for both.

(3) EHeavenlyGads made the following comment | Mar 12, 2008 11:23:41 AM | Permalink

Ted Wells was an interesting member of Spitzer's resignation announcement party, wouldn't you agree?

(4) Ian Welsh made the following comment | Mar 12, 2008 11:50:44 AM | Permalink

I tend to think he should resign. But I do wonder why "conservatives" don't seem to understand that so should Vitter, and probably Craig.

And the Mann Act is a pretty dubious law to charge anyone under, as a brief review of its history will attest. It's far too often been used as a political bludgeon.

Also, under the Bush admin, the DOJ has launched investigations into Democrats at over 5 times the rate of Republicans. They finally caught someone who was actually guilty of something, but they've also railroaded more than one Dem who wasn't guilty of a thing.

This is a very politicized DOJ and anyone who doesn't wonder, every time a Dem is indicted, how much politics mattered, simply hasn't been paying attention.

No tears for Spitzer, he made his bed, so to speak. But try and keep the Schadenfrude under control, especially when it comes to Wall Street. I've read those analyst e-mails, there's no question they knew they were selling snake oil. From the left a lot of us were upset with Spitzer for the same thing as you -- we would have liked to see trials. And I'll be crying no tears for the CEOs who had to pay fines, they're all still multimillionaires, and their clients still have no yachts.

(5) Bench made the following comment | Mar 12, 2008 12:38:52 PM | Permalink

But I do wonder why "conservatives" don't seem to understand that so should Vitter, and probably Craig.

Are you crazy? Conservatives begged Craig to resign. As an Idahoan, my fondest wish is for him to resign. I don't know who you've been reading that leads you to believe that conservatives don't think Craig and Vitter should resign.

(6) seePea made the following comment | Mar 12, 2008 12:49:01 PM | Permalink

repeating a lie often does not make it true. there is no 5-to-1 ratio of prosecuting Democrats over Republicans. And before you site any study that says so, check to see if any relatives of the authors were prosecuted in the past 7 years.

Setting up strawmen does not help the defense of Sputzer.

And a Sputzer defender should think a dozen times before complaining about the use of the Mann Act in prosecuting him. Or don't you know of Sputzer's use of obscure laws that he perverted?

(7) seePea made the following comment | Mar 12, 2008 12:50:16 PM | Permalink

repeating a lie often does not make it true. there is no 5-to-1 ratio of prosecuting Democrats over Republicans. And before you site any study that says so, check to see if any relatives of the authors were prosecuted in the past 7 years.

Setting up strawmen does not help the defense of Sputzer.

And a Sputzer defender should think a dozen times before complaining about the use of the Mann Act in prosecuting him. Or don't you know of Sputzer's use of obscure laws that he perverted?

(8) seePea made the following comment | Mar 12, 2008 12:59:40 PM | Permalink

Why did typepad post my comment twice???

How long do we wait for the NY Bar to start de-barring proceedings before it is apparent they are dragging their feet on the issue?

(9) JMW made the following comment | Mar 12, 2008 1:01:48 PM | Permalink

The grandest irony of all this is that Eliot Spitzer's successor is already hailed as a potentially "iconic" politician. A blind, African-American governor -- the first of both for his state (the former for us all, apparently).

In this year of identity politics, Spitzer's successor is a blessing to the Democratic party. And, speaking of blindness, how much will the press critically examine the closeness of his connection to Spitzer versus his skin color?

(10) Lou. made the following comment | Mar 12, 2008 1:16:15 PM | Permalink

Beldar --

On the selective prosecution watch -

Any news on Tom DeLay? The last I heard, the case was on appeal and Ronnie Earle was about to retire.

Also, is it not likely that some Republican state prosecutor will get a wild hair to join a group of Democrat leaders into a campaign finance conspiracy charge? What goes around comes around, and the impact of politics-by-litigation could make us pine for the Praetorian Guard. At least they were public about their reasons for assassinating Roman emperors.

(11) charclax made the following comment | Mar 12, 2008 2:13:10 PM | Permalink

Spitzer should be shown as much mercy as he showed his targets. He should close his eyes and remember all of the times that he screamed, cursed and threatened people with far less evidence than the government has made public in an affidavit that was filed to support charges against other defendants. May God (and his wife) have mercy on him. As for the criminal justice system, throw the book at him.

(12) nk made the following comment | Mar 13, 2008 5:19:46 PM | Permalink

Honor among whoremongers? If the proprietors of the Emperor's Club had played their cards right, they could have retired as multimillionaires by selling out Spitzer to his Wall Street victims.

(13) nk made the following comment | Mar 13, 2008 5:24:05 PM | Permalink

I wonder what they were saving him for. Or what he was already doing for them and/or the Syndicate family that sells them "protection".

(14) DRJ made the following comment | Mar 15, 2008 11:57:52 PM | Permalink

I am not posting this comment as an apologist for Silda Spitzer or political wives in general but this article suggests that Silda urged her husband not to resign after he first told his family about his prostitute problems. Not long thereafter, she apparently quit urging him not to resign.

Human nature being what it is, I think it's possible Spitzer was less than candid about the extent of his involvement with prostitution, his financial dealings, and other issues that are still coming to light. In fact, I wouldn't be surprised if he initially told his wife and daughters that he was involved in a Bill Clinton-like liaison of brief duration.

If so, it's easier to see why Silda might "stand by her man." It's also easy to see why she might stand a little further away after the truth came out.

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