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I hate to argue with my colleague Scott Horton, but I’m not sold on the notion that Eliot Spitzer was targeted by the feds. Scott wrote earlier today:
Today’s Times tells us that the North Fork Bank launched the inquiry by submitting a Suspicious Activity Report (SAR) against their client, Governor Spitzer, on the basis that he had made a number of smaller payments in order to avoid a $10,000 threshold for reporting…. Indeed, the suspicion that the bank apparently articulated, that Spitzer was laundering bribes, is and was absurd. But that baseless ‘suspicion’ was enough to launch a massive fishing expedition into the governor’s finances and is now very aggressively invoked by prosecutors as cover for what increasingly looks like a political hit job.
But the Times also said that “for several months, the electronic report [from North Fork] languished unnoticed in a vast Treasury Department database in Detroit. In early fall, however, a separate report was filed by the HSBC bank about suspicious transactions connected to two shell companies, which drew the attention of investigators. That touched off an inquiry that led investigators to discover the July report on Mr. Spitzer, which showed he had made several wire transfers to those companies, according to three people briefed on the inquiry.
I asked Jack Blum, a Democrat and former congressional investigator into the Iran/contra affair, for his opinion about the Spitzer investigation. “This did not look political to me,” said Blum, now with the firm of Baker Hostetler. “It looked like a proper response to a SAR filed by a bank in what could have been an extortion case. The feds were doing their job. This should put the lie to the argument that financial monitoring is useless because there are so few prosecutions. In fact many cases start with SARs but few people realize it.”
I put the same question of political motivation to a former federal prosecutor and money-laundering expert. “More a combination of bad luck and worse judgment,” he replied. “North Fork was being very conservative in filing theirs and wasn’t technically necessary, though in today’s environment, not that unusual. HSBC’s was more typical and once the two married up at FINcen, the rest was predictable. Government wouldn’t normally do Mann Act, especially wiretap, but once it was referred, however much glee the FBI/IRS might have taken is irrelevant. They had to follow the string or risk criticism from the other direction: that they passed up because of who he was. If reported facts are accurate, it followed a logical, predictable, and sad path.”
Of course, it’s possible that more facts will emerge that could suggest that the Spitzer investigation was politically motivated, and it’s certainly true that the investigators were extremely chatty with reporters. But at this point, it seems Spitzer’s own actions were grounds for investigation.
More from Ken Silverstein:
Perspective — October 23, 2013, 8:00 am
How pro-oil Louisiana politicians have shaped American environmental policy
Postcard — October 16, 2013, 8:00 am
A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits
Amount by which the total wealth of all American households declined last year:
A study concluded that commercial fish stocks may be gone by 2050 as a result of overfishing, pollution, and global climate change.
“All I saw,” said a 12-year-old neighbor of visits to the man’s house, “was just cats in little diapers.”
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“I hope that after reading the following pages the leaders of the Y. M. C. A. will start a campaign to induce good young men to do nothing. If so, I shall not have lived in vain.”