When the New York Times first indicated that New York Gov. Eliot Spitzer (D) was “involved” in a prostitution ring, there were far more questions than answers. It soon became obvious that the governor had paid for sex with a prostitute, but the whole story lacked some pertinent details.
Since then, the picture has become considerably clearer.
Gov. Eliot Spitzer was a client of a high-end prostitution ring broken up last week by federal authorities, according to law enforcement officials, a development that threatened to end his career and turned the state’s political world upside down.
Mr. Spitzer’s involvement with the prostitution operation came to light in court papers filed last week, the officials said, as federal prosecutors charged four people with operating the service, Emperor’s Club V.I.P. Mr. Spitzer was caught on a federal wiretap discussing payments and arranging to meet a prostitute in a Washington hotel room last month. The affidavit, which did not identify Mr. Spitzer by name, indicated that he had used the prostitution service before, although it was not clear how often.
That last point certainly won’t help, legally or politically. Asked in February how he paid for his liaison, Spitzer told the Emperors Club VIP, “Yup, same as in the past, no question about it.” Spitzer ended up paying $4,300, which reportedly included a deposit for the next get-together.
Perhaps the most important detail to emerge was how Spitzer ended up as the target of an investigation in the first place. Oddly enough, law enforcement officials weren’t interested in the governor’s sexual habits, but rather, noticed “suspicious financial transactions” that moved unusual amounts of cash to Spitzer, with the governor apparently trying to conceal the source and destination.
The NYT has the details.
The money ended up in the bank accounts of what appeared to be shell companies, corporations that essentially had no real business.
The transactions, officials said, suggested possible financial crimes — maybe bribery, political corruption, or something inappropriate involving campaign finance. Prostitution, they said, was the furthest thing from the minds of the investigators.
Soon, the I.R.S. agents, from the agency’s Criminal Investigation Division, were working with F.B.I. agents and federal prosecutors from Manhattan who specialize in political corruption.
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.
At the outset, one official said, it seemed like a bread-and-butter inquiry into political corruption, the kind of case the F.B.I. squad, known internally by the designation C14, frequently pursues.
But before long, the investigators learned that the money was being moved to pay for sex and that the transactions were being manipulated to conceal Mr. Spitzer’s connection to payments for meetings with prostitutes, the official said.
Then, with the assistance of a confidential informant, a young woman who had worked previously as a prostitute for the Emperor’s Club V.I.P., the escort service that Mr. Spitzer was believed to be using, the investigators were able to get a judge to approve wiretaps on the cellphones of some of those suspected of involvement in the escort service.
The wiretaps, along with the records of bank accounts held in the names of the shell companies, revealed a world of prostitutes catering to wealthy men. At the center was the Emperor’s Club, which arranged “dates” with more than 50 beautiful young women in New York, Paris, London, Miami and Washington.
As David Kurtz put it, “[T]he whole case is sort of anti-climactic [for investigators]. The feds start out thinking they have the New York governor on the hook for bribery — and instead discover that he’s just skulking around with high-priced call girls.”
This is not to say that all the questions have been answered. We don’t yet know, for example, how IRS and FBI officials came to start reviewing the governor’s finances in the first place, or why Spitzer’s name was leaked to the media beyond “Client 9.” Jane Hamsher does a nice job of summarizing some of the odd circumstances.
A few other developments to keep in mind:
* Spitzer is not yet facing criminal charges of his own, but “one law enforcement official who has been briefed on the case said that Mr. Spitzer’s lawyers would probably meet soon with federal prosecutors to discuss any possible legal exposure. The official said the discussions were likely to focus not on prostitution, but on how it was paid for: Whether the payments from Mr. Spitzer to the service were made in a way to conceal their purpose and source. That could amount to a crime called structuring, which carries a penalty of up to five years in prison.”
* On a related note, Spitzer has lawyered up.
* For the more salacious among us, I suppose it’s worth noting that the booker for the prostitution ring said that Client 9 would sometimes ask the women “to do things that, like, you might not think were safe.”
* As of last night, Spitzer was “receiving counsel from his advisers and weighing a possible resignation.”