NY governor linked to prostitution ring By AMY WESTFELDT, Associated Press Writer
Gov. Eliot Spitzer, the crusading politician who built his career on rooting out corruption, apologized Monday after he was accused of involvement in a prostitution ring. He did not elaborate on the scandal, which drew calls for his resignation.
His stoic wife at his side, Spitzer told reporters at a hastily called news conference: "I have acted in a way that violates my obligations to my family."
"I have disappointed and failed to live up to the standard I expected of myself," he said. "I must now dedicate some time to regain the trust of my family."
Spitzer's involvement in the ring was caught on a federal wiretap as part of an investigation opened in recent months, according to a law enforcement official who spoke to The Associated Press on condition of anonymity because of the ongoing inquiry.
The New York Democrat, identified in legal papers as "Client 9," met last month with at least one woman in a Washington hotel, the law enforcement official said.
The prostitution ring, identified in court papers as the Emperors Club VIP, arranged connections between wealthy men and more than 50 prostitutes in New York, Washington, D.C., Los Angeles, Miami, London and Paris, prosecutors said. Four people allegedly connected to the high-end ring were arrested last week.
The club's Web site displays photographs of scantily clad women with their faces hidden. It also shows hourly rates depending on whether the prostitutes were rated with one diamond, the lowest ranking, or seven diamonds, the highest. The most highly ranked prostitutes cost $5,500 an hour, prosecutors said.
The scandal was first reported on The New York Times' Web site.
Spitzer spoke hours later. Stunned lawmakers gathered around televisions at the state Capitol in Albany to watch, and a media mob gathered outside the office of Lt. Gov. David Paterson, who would become governor if Spitzer was to resign. It took opponents only minutes to call for his resignation.
"Today's news that Eliot Spitzer was likely involved with a prostitution ring and his refusal to deny it leads to one inescapable conclusion: He has disgraced his office and the entire state of New York," said Assembly Republican leader James Tedisco. "He should resign his office immediately."
Spitzer, 48, built his political reputation on rooting out corruption, including several headline-making battles with Wall Street while serving as attorney general. He stormed into the governor's office in 2006 with a historic share of the vote, vowing to continue his no-nonsense approach to fixing one of the nation's worst governments.
Time magazine had named him "Crusader of the Year" when he was attorney general and the tabloids proclaimed him "Eliot Ness."
But his term as governor has been marred by problems, including an unpopular plan to grant driver's licenses to illegal immigrants and a plot by his aides to smear Spitzer's main Republican nemesis.
Spitzer had been expected to testify to the state Public Integrity Commission he had created to answer for his role in the scandal, in which his aides were accused of misusing state police to compile travel records to embarrass Senate Republican leader Joseph Bruno.
Spitzer had served two terms as attorney general where he pursued criminal and civil cases and cracked down on misconduct and conflicts of interests on Wall Street and in corporate America. He had previously been a prosecutor in the Manhattan District Attorney's Office, handling organized crime and white-collar crime cases.
His cases as state attorney general included a few criminal prosecutions of prostitution rings and into tourism involving prostitutes.
In 2004, he was part of an investigation of an escort service in New York City that resulted in the arrest of 18 people on charges of promoting prostitution and related charges.
Good piece!
ReplyDeleteWill Spitzer be Prosecuted?
ReplyDeleteNow that Eliot Spitzer has resigned as Governor of New York, the big question is whether he will be charged for a criminal act. During the past two days since the story broke, speculation has run rampant that Spitzer might be using resignation as a bargaining chip against being prosecuted. From my own law enforcement experience, albeit drug law enforcement, I see a strong possibilty that Spitzer is in serious trouble.
According to published reports, the investigation arose when Spitzer's own bank alerted IRS to suspicious bank transfers (apparently to off-shore accounts). That led to a federal wiretap that identified the prostitution operation that involved the governor.
Those types of bank transfers have also been prominent in the drug trade, where traffickers used bank wire transfers to send drug proceeds or payments for drugs. The IRS, to their credit, educated banks decades ago as to what was happening and enlisted their cooperation in uncovering drug money movements.
Under federal law, financial institutions are required by law to report money transactions in excess of $10,000 to the IRS. Drug traffickers, aware of that requirement, resorted to sending smaller amounts under $10,000, often going to multiple banks and sending multiple shipments of funds. That is also a crime-called Structuring, in essence, attempting to circumvent the reporting requirements.
So now, the question is-what exactly did Spitzer do in sending money to a criminal enterprise in the amount of tens of thousands of dollars? Of course, many will argue that it makes no sense to prosecute a man for patronizing prostitutes, although others will argue-why prosecute prostitutes and not their customers? The Mann Act is also in play, but I think the money transfer to a criminal enterprise is Spitzer's most serious problem. At this point, it appears (though not yet proven) that the Governor of New York (and former Attorney General who prosecuted prostitution rings) has engaged in a conspiracy with a large scale criminal organization and violated currency transaction laws in order to cover up his illegal activity. Of importance is what quantities did Spitzer transfer to the Emperor's Club? Apparently, it was suspicious enough to cause the bank(s)in question to alert the IRS. If,in fact, the money transfers were illegal, and given the fact that they were sent to a criminal enterprise, then Mr Spitzer is in deep legal trouble.
gary fouse
fousesquawk