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March 13, 2008

Enough is enough: Feds probe Spitzer's records back to 1999

The feds are launching a massive investigation into Eliot Spitzer's finances, going back to 1999. They say they're looking for more evidence of "structuring."

"Structuring" sounds sinister, but it just means breaking a large transaction into several smaller ones in order to skirt reporting guidelines. It's not money laundering. It's not public corruption. You can "structure" while buying legal goods and services with your own money. 

Structuring is a thought crime. If you calibrate the size of your transactions in order to avoid federal scrutiny, you're guilty. Yet the exact same transactions could be perfectly legal if you made them with "pure" intentions. Structuring charges are a way of meting out ad hoc punishment to people who are otherwise adhering to the letter of the law. How dare you prefer not to call attention to yourself?

Bush's Justice Department is using structuring as an excuse to literally make a federal case out of a pretty banal prostitution scandal. A powerful man bought sex with his own money, he got caught, he resigned. In two weeks, nobody but his family and New York political junkies will care.

Unlike pimps and prostitutes, johns are rarely prosecuted unless they get caught in the act. For example, none of the DC Madame's clients are going to jail because their names turned up in her little black book. Buying sex isn't a federal crime, and New York State doesn't give a rat's ass about Spitzer's dalliances, as far as the criminal law is concerned.

So, the so-called Public Integrity Section of Bush's Justice Department is trying to exploit an obscure bit of bank law to destroy Spitzer.

This isn't an isolated incident. The Republicans are using the criminal justice system to pick off rising Democratic stars, one by one.

This isn't just politics as usual. It's no longer about getting the Republicans' enemies out of office, or costing the Democrats the next election. It's about making sure the targets are so thoroughly discredited that they never return to public life. It's about ruining their lives, if at all possible.

Don Siegelman, was a rising Democratic star in Alabama. He was a rare commodity, a Democrat who could win elections in a deep red state. Some people saw a presidential bid in his future. Now, Siegelman is languishing in a federal prison camp, thanks to Karl Rove and the some cooperative US Attorneys. (For more details, see Scott Horton's Siegelman Chronicles.)

Now, the Bush Justice Department is trying finish off Eliot Spitzer, another high profile Democrat who once harbored presidential ambitions.

Our former governor was reckless enough to cause the sex scandal that ended his political career. In any sane world, Spitzer would just slink back into private life in disgrace. If Spitzer's political enemies had any sense of proportion, they'd be satisfied to see him lose his office and his reputation. But that's not good enough for the DOJ. They want to bring Spitzer up on federal criminal charges.

For what, really? For being a little sneaky when he wired his own money to pay for a call girl. Or, maybe for arranging to have a New York escort to service him in DC, in violation of a federal anti-"White Slave trading" statute. The feds can pour on the legal jargon and the righteous indignation, but that's really it.

The message to future reformers is clear: Don't you dare fuck with us.


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More to the point, intent affects the severity of the basic offense because that intent is reflected in the likelyhood that the accused will re-offend.

A pre-meditated murderer made a decision to kill someone and carried it out. He considered what he wanted to do and made that decision and would likely do it again if they thought they had figured out what they did wrong the first time and could avoid getting caught the next time (first the power, then the wadding, then the shot!) Someone accused of manslaughter, on the other hand, probably lost his temper or self-control in a difficult situation without thinking about the consequences. The sentence is more likely to be effective as a warning to more cautiously avoid situations in the future where the offenders could lose control and wind up killing someone else.

If someone commits a hate crime however, they are performing it because of a prejudice against a group of human beings, (be it based on social class, race, ethnicity, sexual orientation, etc) and are likely to re-offend against others of that class (or who they might mistakenly believe to be of that class), even those with whom they may have had no previous contact or genuine motive for offense. Those guilty of hate crimes are showing psychopathic(/sociopathic) tendencies and therefore pose a greater risk to that subset and the general public than those who perform the crime without a hatred motivation. And many people think that's a good reason to sequester those criminals from society for a longer duration.

BTW, that reasoning is also why I don't believe that drug use should be a crime. But, I do believe that committing a crime while having possession - or being under the influence - of an addictive or mind-altering substance should increase the severity of the other base offense (be it a property crime or a violent crime). The drug addict who offends to support his addiction is less likely to respond to rehabilitation than someone who isn't chemically addicted. Their willing involvement in and progress in drug treatment programs should then also play a significant factor in parole/probation eligibility.

The politicization of the justice department is the back story here that is not being told in the mainstream press. We've regressed quite a bit from the nixonian era of a watchdog press that was not afraid to criticize the President.

I don't understand how Karl Rove, Meiers, and Bolten can ignore congressional suppoenas. Why aren't warrants issued? Congress is a toothless tiger.

What is the difference in intent necessary to convict a person of assault as a hate crime vs assault? The difference is not in the intent; the difference is in the attitude the accused is alleged to hold toward the victim, and the role that is supposed to have played in motivating the attack.

Numad, hate crime legislation does not merely modify the sentencing. It's a completely separate crime. It gives prosecutors another weapon to use against defendants long before a case comes to trial. "Hey, we've heard you said some pretty nasty things about gay people before. We could charge you with a hate crime. You'd be better off pleading to simple assault."

Supporters of hate crime legislation might take a look at the way the statutes have actually been used. I believe they are applied disproportionately against people of color, like most criminal statutes. It's hard to imagine that a black defendant would be more likely to be charged with a hate crime than a white defendant, but that seems to be the case. Does this trouble any of the supporters of this type of legislation--that the proclaimed purpose of these laws doesn't seem to be the actual effect?

--It's hard to imagine that a black defendant would be more likely to be charged with a hate crime than a white defendant--


There have been a number of cases here in NY of black youths attacking gay males or Asians for identity reasons only, some of them high profile cases

Phantom, I don't see any reason to imagine that one particular group is more given to hate crimes than another, so my expectation would be that hate crimes charges would be roughly proportionate to a given groups representation in society as a whole.

What high profile cases involving black youths in NY attacking gay males for identity reasons only are you familiar with? Given the email lists I'm on, I suspect I'd be aware of them, but I'm not.

-- I don't see any reason to imagine that one particular group is more given to hate crimes than another--

That's nuts.

While I'm sure that there have been violent hate crimes committed by Chinese-Americans, I've certainly never heard of one.

And I'd think that women are far less likely to commit such crimes. Not saying that they're necessarily less racist or whatever, but the chance of them smacking someone on the head, leaving a nasty sign, or yanking the turban off the Sikh next door is not as likely as, say, it is as likely that such a crime will be committed by the 18 year old black kid who just saw Farrakhan on TV or the 18 year old Italian kid from a "changing" neighborhood.

I'd say that, similarly, straights are vastly more likely to bash gays, than the reverse.

I'll bet that there are loads of variations within groups on this score. Everyone reading this knows it, and every cop in the world knows it. So, let's quit playing games.


I can't find a direct story on the incident I first thought of --where a black gang beat the living hell out of a black drag queen/singer in Greenwich Village who was somewhat famous- I will find it later.

This is a story I just came across. Trust me, these things are not unusual. And it ain't the Chinese or Jews that are doing the attacking in such cases.

Phantom, I think the victim you mean was Kevin Aviance, and I should have remembered that without your prompting.

But it's interesting--I initially said I didn't imagine blacks were more likely than whites to commit hate crimes, and you respond with arguments about Chinese Americans, Jews and women. Do you think blacks are more likely that whites to commit hate crimes? If not, why do you suppose they are charged with them disproportionately?

Frankly, yes.

Forty years ago, it would have been the reverse, seventy years ago more obviously so, but now I do think that blacks are more likely to commit such crimes than whites.

And for what it's worth, I oppose the concept of "hate crimes" --and think that we'd all be better served by strict enforcement of existing laws against violent and other crimes.

If someone bashes another's head in, I'm less concerned about who he likes, I'm more concerned by putting him away for a long time.

"Numad, hate crime legislation does not merely modify the sentencing. It's a completely separate crime."


The content of that very sentence you can find in my comment, the one you're supposedly responding too. I'm done.

Lindsay: EXACTLY.


Sorry I had no time to read all the comments. I have been so busy.

BUT, I am very disappointed that he resigned. Bad decision on his part.
They were lying in wait for him.

Factual and statistical claims require facts and statistics. Phantom's argument is purely anecdotal.

I don't get the difference between "attitude" and "intent", seems like an distinction without a difference. Id addition motivations also play a role in choosing what to charge peopel with, and the different between attitude and motivation is even less clear.

I can see the argument that hate crime legislation is not necessary given existing laws, but arguing that motivation shouldn't play a role in the legal system opens up a huge can of worms.

Margalis, I don't think anyone has argued that motivation shouldn't play a role in the legal system. I challenged the notion that the role played by a defendant's thoughts and opinions in determining a hate crime was analagous to the role of intent in determining the treatment of a homicide. I'll repeat the question I asked, which no one who took that position regarding intent has responded to: What is the difference in intent necessary to convict a person of assault as a hate crime vs assault?

I also asked supporters of hate crimes to respond to the fact that people of color are disproportionately the targets of hate crimes prosecutions. None of the supporters has chosen to respond to that question, either.

Parse, I can't see that you've given any principled distinction between hate crimes and the numerous other cases where the law takes into account a person's motivations in determining charges and other punishment. I can't even see that you've tried to. Numad, Margalis, and myself are objecting that you've made no distinction. How is your response that hate crimes legislation is used disproportionately against people of color, or that prosecutors can threaten prosecution as a tool, even remotely relevant as a response? Whether hate crimes legislation is a good idea is separate from the question of whether they constitute a novel "thought crime," unheard of in the law until recently.

For the record, I have pretty mixed feelings about hate crimes legislation. I have, at times, made arguments against hate crimes legislation. That mean I'm going to agree with bad arguments against hate crimes legislation.

Lindsay's argument against "structuring" makes much more sense, although I'm uncertain about whether it's valid. Can you get charged with "structuring" if you structure purely legal transactions out of a desire for privacy, or only if such structuring is designed to hide illegal activities? If the latter, I'm not sure such legislation is novel (although it's perhaps being misused here). If the former, then such laws amount to saying that you have a legal obligation to make your actions transparent to the government, which is rather unusual and disturbing. The most analogous case I can think of is Bill Clinton's appalling 1990-era Clipper Chip plan to make strong private encryption illegal and require all encryption to have a back-door for the government. I recall that at the time, the Republican's killed the plan, and I applauded them, believing that they actually had some principled belief in certain privacy rights, rather than just opposition to violations of privacy by a Democratic President. Don't laugh! I was young and foolish then. I'm old and foolish now.

I don't agree with the excuses being made for Spitzer, and the false equivalencies with Seigelman.

As someone who donated heavily to (and volunteered energetically on) his campaign, I feel ripped off in more ways than one -- and it's not yet clear that he was using "his own money."

Let's review:

1. Spitzer put at least 18 people in jail for prostitution. Indeed, he signed a law demanding tougher prosecution of these "johns" just last November. If one doesn't think Spitzer should suffer the same fate he demanded of others, isn't the message that the rich and powerful don't have to follow the same rules as the rest of us? Isn't that precisely our complaint about the handling of the likes of Libby, et al.?

2. Regarding "obscure" banking laws -- as Attorney General, Spitzer himself specialized in scrutinizing the law and holding people to the letter of it. He had many successes which depended on provisions of the law that most laypeople would consider "obscure." If one believes in practicing what one preaches -- and preach Spitzer did -- this line of defense does not go over well for his particular case.

3. When Republicans have been caught up in their hypocrisies, there has been mostly glee from us Democrats. No excuses about it being a private matter, etc., that I can recall. (Consider, for example, the recent fracas over McCain's alleged affaire, let alone Larry Craig.)

4. As for a government conspiracy to entrap Spitzer -- let's get real. Spitzer spent tens of thousands of dollars over many years in flagrant violation of the law, and got away with it. If anything, his position and knowledge of the system appears to have him from the same fate as those he prosecuted for his same crime for far longer than most people can go undetected. I would not put anything past the Bush Justice Department, but seriously: Spitzer put himself in a position where eventually he was going to be caught and humiliated, no matter who was sitting in the White House. Thank goodness he never made it there himself, or we might have wound up with a Democratic presidential scandal to make Watergate look tame.

5. The investigation, if one follows the timeline in the NYT and elsewhere, follows an entirely logical path, and shows that in the end Spitzer practically begged to be caught. He asked his bank to wire an amount of money that *requires* reporting. He then waved two huge red flags by:

(a) asking the bank to take his name off the wire, which he knew was not allowed; and

(b) asking the bank to divide it up into three smaller chunks, which again he knew would call attention to himself -- the "structuring" alluded to above.

Moreover, Spitzer had spent an estimated $80,000 on this agency, and thus his bank(s) probably already were alert and curious. The wonder, in fact, is that he wasn't nabbed sooner. Moreover, I have seen no evidence to suggest that the official story put out -- that the government investigators at first assumed that he was being blackmailed or extorted in some way, and acted initially to protect him -- is not accurate. It makes perfect sense, especially since this was the last crime even a suspicious Fed would have expected of Spitzer.

6. The Times explained in an article yesterday how it got a lead on Spitzer being client #9. This is a case of good old-fashioned reporting (of the sort I wish there was more of in the Times). Its court reporters sniffed out (e.g., by noting which staff were filing the case) that this was not a garden variety prostitution case and started working their sources. My mother did some court reporting, and a I know that a good court reporter will cultivate sources to get the story. Someone on the Times staff was able to determine that this involved a major public figure and surmised that it was Spitzer. They then legally obtained the complaint and began filing FOIL requests for records pertaining to the dates in question to Spitzer's office. Spitzer, having been tipped off himself several days beforehand that he had been caught (a privilege not accorded to most people in his situation), then knew the Times was on the scent and decided finally to tell his staff and hold a news conference admitting his crime.

7. Of course the prostitute involved is a less-than-savory personality who, naturally for our culture, will grab at whatever publicity and money she can possibly reap from this debacle. That does not excuse Spitzer's abetting a culture which preys upon the problems of and dangers to such flawed people. (If one needs a more high-brow take on these unfortunates, read Dostoyevsky -- whose major works all include "fallen" women preyed upon by unscruplous characters, who I henceforth will have trouble envisioning with faces other than Spitzer's.) And the harm done to his three teenaged girls, one of whom is practically Ms. Dupree's age, is unpardonable in itself.

8. Lastly: Many of my friends are deploying the canard that paying attention to what is obviously a big news story for a few days means that people aren't, or haven't, been paying attention to a wide range of other social problems. But the very people among my peers who are incensed about Spitzer are also deeply involved in local affairs, in combating global warming, in opposing our abominable war in Iraq, and more. Clearly, we have the capacity to address more than one disgrace, so the "let's not forget the bigger picture" excuse seems just that to me -- a request to brush a highly inconvenient disgrace to one of our own aside.

If we really want to achieve the goals we expected of Spitzer, we can't create a new standard only for him, without becoming just what those on the other side believe us to be. Spitzer's utter recklessness and hypocrisy has made the job of Rush Limbaugh, Bill O'Reilly, Michael Savage, and yes, George Bush, much easier, and we should not excuse him for it, since we're the ones left to deal with the aftermath.

He'll still inherit a billion-dollar business from his father and will enjoy a very comfortable life once he's paid his small price. Which, in my view, still requires investigation and may properly involve jail time once all his various connivances emerge.

What if the investigation turns up a Spitzer money laundering operation under the guise of a whore addiction. Eliot knows whoring around is a forgivable offense especially with the erudite crowd that supports him.
Kick backs, bribes shake down money, and money laundering thats a whole different ball of wax.

Let them investigate. With all of Spitzers bluff and bluster he never did anything more than settle out of court the one case that he took to trial he lost.
So no law was ever changed or precedent law set.

Kind of the MO of a shakedown artist. It plays to our better selves knowing that wall street and the Federal Reserve is raping us and our children and their children into the foreseeable future.

"I challenged the notion that the role played by a defendant's thoughts and opinions in determining a hate crime was analagous to the role of intent in determining the treatment of a homicide."

It's difficult to talk about "intent" and "motivation" because they overlap a lot. Let's say intent is the desired end result, and motivation is *why.* Structuing laws are based at least partly on the why: why did the person structure their transactions that way?

Manslaughter is murder without malice or premeditation. Murder and manslaughter both end up with the same result (dead body) and the intent is the same. (To kill) The difference is in the motivation of the killer: murderers are motivated by malice while manslaughterers are motivated by immediate circumstances. Whereas involuntary manslaughter has a different intent.

I'll repeat: in both murder and manslaughter the intent is to kill, the difference is in the motivation.

"I also asked supporters of hate crimes to respond to the fact that people of color are disproportionately the targets of hate crimes prosecutions."

I'm not a hate crimes supporter and you didn't present any data (or if you did I missed it), so I'm not sure why I should respond to what you wrote or how I could even if I wanted to.

People of color are disproportionately the targets of all kinds of prosecutions; that says little about hate crimes and a lot about our justice system. Beyond that you haven't provided any evidence I can look at.

Wow, so SPitzer was a rising star for the Dems? Is this really the kind of guy you want leading a state or the country? Like I said in another thread, I know next to nothing about Spitzer and NY politics, but this guy is a hypocrite and a self admitted criminal. Whether prositution and solicitation is really "crime" doesn't matter. It is on the books and prosecuted. Prosecuted by this man as AG! Now I see people posting that it's not a big deal to solicit sex if you are spending your own money?? Come on!! It's a crime!

As for the current investigation, I think looking to see if he was dirty and laundering and taking kickbacks is OK. But If there is nothing there, they need to let it go. But we need to know if he was crooked. As for him "having his own money", well, let me ask, has that ever stopped people from being crooks? Ummm, no, I thought not!

Structuring is a thought crime. If you calibrate the size of your transactions in order to avoid federal scrutiny, you're guilty.

Much like fraud! If you tell people untruths in order to defraud them, it's a crime, but if you were just making a mistake, it's not. Thought crime.

And murder! If you engage in a behavior that kills someone in order to kill someone you're likely to be guilty of your jurisdiction's most severe or second-most-severe violent crime. But if you just end up killing someone for some other reason, you're not. Thought crime.

In fact, by this definition, every traditionally-defined crime, except statutory rape, is a thought crime, because they all have necessary state-of-mind elements. Man, why can't more criminal prohibitions be like the one against 19-year-olds having sex with 16-year-olds?

There are good criticisms of structuring, but "it has a mens rea element" isn't one of them.

I'm not against "mens rea" components in general. =

I'm saying that the law criminalizes a particular intention that, in my opinion, should not be a crime. People should be allowed to learn the reporting rules and structure their transactions in order to generate the smallest possible paper trail.

Certainly, everyone should do what they can to avoid triggering a Suspicious Activity Report. A Suspicious Activity Report goes in your permanent secret record. It's against the law for the bank to tell you that you've triggered one. The banks send these reports out in bulk to law enforcement authorities across the country, including every US Attorney's office. The authorities don't need probable cause to examine these reports.

If you're Eliot Spitzer,you can bet that these bank-generated reports are being watched very closely. Political appointees will have access to these reports. For an ordinary person, one SAR probably wouldn't be a big deal. But if you're a politician, one or two SARs could be a pretext for a much larger investigation. So, it's in your best interest to avoid SARs, even if your finances are completely above board. They give your enemies a peek into your finances. Someone in Spitzer's position should avoid anything that might give the appearance of impropriety. Structuring laws make a crime out of trying to act less suspicious.

I agree.

And, again, while I've not read all the comments (sorry) another blogger pointed out that the freaky religious right may have had something to do with the timing considering he was just getting ready to give a reproductive rights speech
credit to American Wisdom for that one.

it sure would be interesting to know how many interesting folks other than democrats these SARs have snared. he.

I tend to agree with you about the desirability of anti-structuring laws as a general matter.

Structuring is simply a means for the government to snoop where they don't belong.

It's a stupid law.

If you want to catch someone doing something illegal... catch them in the act, not at the teller's window.

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