Thread: Sources: Spitzer Resignation Expected Wednesday

Sources: Spitzer Resignation Expected Wednesday

Governor Negotiating To Cut Deal With Federal Prosecutors

Reporting
Marcia Kramer

NEW YORK (CBS) ― Gov. Eliot Spitzer is set to resign Wednesday, sources tell CBS 2 HD political reporter Marcia Kramer, but insiders say he's going to use the resignation as a bargaining chip to cut a deal with federal prosecutors and he won't step down until that happens. The talks have been going on since Tuesday morning.

The governor's fate rests in the hands of two people: U.S. Attorney Michael Garcia and Michele Hirshman, the head of his legal defense team. The deal they cut will determine Spitzer's future.

Criminal law experts say Spitzer will definitely have to resign the governorship and that what's involved in the deal is key.

So what's the best that could happen to him?

"No charges, absolute resignation, and contrition. I think the worst that could happen is a felony plea on one of a number of charges that they could lodge against him," said noted criminal attorney Ronald Fischetti, who has often had to negotiate with feds on behalf of clients.

Still, Fischetti said Spitzer stands no hope of ever regaining political respect again.

"I think his career politically is at an end," he said.

The very real problem for Spitzer, as he well knows having been a prosector and the former Attorney General is that he could be charged with a number of things that carry jail time: tax evasion, money laundering, bringing a prostitute across state lines from New York to Washington.

He also has another problem in the negotiations with Garcia, who could be feeling pressure to throw the book at him.

"It's very important that [Garcia] expresses to the public that everyone is treated alike and if he doesn't charge someone who was the Attorney General and prosecuted crimes, he will be subject to a lot of public criticism that he let [Spitzer] go because he was the governor," said Fischetti.

And as the negotiations have dragged on, numerous groups have demanded that Spitzer step down, saying that his reform mission has been compromised.

"This problem really affects Gov. Spitzer at the core rationale for his governorship," said Baruch College Professor David Birdsell. "He came in promising integrity, a faultless governorship, one that's built on the firmest morale principles."

Sources say the resignation is expected sometime Wednesday morning, but it is unclear whether he will do it in writing or in a farewell speech. All of this, of course, is pending on the outcome of any deal he cuts.

What could hold up the deal is Spitzer's desire to avoid having to plead guilty to a felony.

"The main thing I would do is not plead for a felony because if he does that his law license is toast. He can't practice law anymore," said Fischetti.

So the goal for Hirshman is to see if she can get prosecutors to allow Spitzer to plead to a misdemeanor, something along the lines of solicitation, so he'd be able to practice law after he leaves Albany in exchange for his promise to resign.

The case is very difficult not only for Spitzer's family, but for the state of New York, which could soon find itself in the midst of an emergency transition.

http://wcbstv.com/politics/eliot.spitze ... 74943.html

Spitzer Got Tripped Up Laws He Enforced
Mar 11 04:59 PM US/Eastern
By SAMANTHA GROSS and DEVLIN BARRETT
Associated Press Writers

NEW YORK (AP) - Eliot Spitzer knew how to catch bad guys by following the money.

As attorney general, he once broke up a call-girl ring and locked up 18 people on corruption, money-laundering and prostitution charges. He ruthlessly investigated the pay packages of Wall Street executives and was so familiar with shady financial maneuvers that he rose to become the top racketeering prosecutor in Manhattan.

But in the end, it appears that Spitzer may have been done in by the same behavior he built a career out of prosecuting.

In fact, it seems he was tripped up by some of the very financial accounting methods he used so successfully against multibillion-dollar Wall Street firms.

For one thing, the governor initially drew the attention of federal investigators because of cash payments to an account operated by a call-girl ring, according to a law enforcement official who spoke on condition of because of the sensitivity of the case.

Banks are required to file Suspicious Activity Reports to the government whenever they observe something they fear may be a crime.

In court papers, Client 9—identified by another law enforcement official as Spitzer—hurried to get more than $4,000 in cash to pay a call girl at a Washington hotel.

That kind of activity, repeated over time, is just the kind of thing that would set off alarm bells with a bank's compliance officer, who is trained to be on the lookout for what is called structuring or "smurfing"—a pattern of transactions aimed at hiding the nature or purpose of certain money.

Spitzer of all people should have known that, said Miami-based lawyer Gregory Baldwin, credited with coining the term "smurfing" in the as a federal prosecutor.

"I think he's done enough cases where he's charged money laundering that he would know exactly what kind of information you get from the banks. It's such a perfect example of what goes around, comes around," he said.

By the time the scandal broke this week, Spitzer's financial transactions had been monitored, his phone calls had been caught on tape, and his actions had been scrutinized by federal prosecutors. It could have been straight out of the Spitzer prosecution playbook.

Whether Spitzer thought he was smarter than the feds because of his own professional experience is, for now at least, a matter for psychologists to speculate on.

As New York attorney general, Spitzer was also familiar with how to bust up a prostitution ring.

Spitzer proudly announced on April 8, 2004, that authorities had arrested 18 people on promoting prostitution and related charges—including money laundering and falsifying business records—in an investigation of escort services in New York.

"This was a sophisticated and lucrative operation with a multitiered management structure," Spitzer said at the time. "It was, however, nothing more than a prostitution ring, and now its owners and operators will be held accountable."

In the 2004 probe, investigators used wiretaps and other surveillance to build their case, said Vincent Romano, who defended the man accused of running the ring. Prosecutors also charged some of the defendants with enterprise corruption—a charge carrying heavier penalties than simple prostitution. No charges were brought against the ring's customers, just those accused of working for or running the service.

"It was a big splash. They had the perp walk. He caused a lot of embarrassment to a lot of people in the case to his benefit. What he put their families through at the time, he's probably experiencing now: the level of embarrassment and ridicule," Romano said.

"He's got this overzealous, mean-spirited prosecution, but behind closed doors in another state, he's doing the identical thing that he's accusing others of doing," he added. "And the other irony of it is that you've made a career off of a wiretap, and your demise is by the same prosecutorial tool."

The investigation that could spell Spitzer's ruin found that Client 9 was apparently a repeat customer with the Emperors Club VIP, a lucrative prostitution service where some call girls pulled in $5,500 an hour. The governor has not been charged, and prosecutors would not comment on the case.

A person familiar with the investigation told The Associated Press that the probe began with a referral from banks to an Internal Revenue Service office on Long Island about suspicious transactions involving accounts ultimately traced to Spitzer. The IRS studied the records and then referred the case to federal prosecutors in October. It was then assigned to the public corruption unit of the federal prosecutor's office in Manhattan.

The precise details of what set off alarm bells for federal authorities are still unclear.

A half-million or so times every year, banks alert the federal government that a suspicious transaction has occurred. Although the public sometimes thinks it requires a transfer of $10,000 or more to attract attention, banks can label transactions suspicious even if they involve far less money, said Walter Pagano, a former IRS agent who has testified in court on white-collar crime.

Spitzer might have tried to keep his transfers below the $10,000 threshold, underestimating the scrutiny that banks give to lesser amounts.

Spitzer prosecuted cases in New York for two decades before becoming governor. From 1986 to 1992, he was an assistant district attorney in Manhattan. While there, he rose to become chief of the labor racketeering unit.

While attorney general, he also went up against two men he accused of using their tour company to promote "sex tourism" in the Philippines and Thailand—first suing them in civil court and then bringing criminal charges.

One defense attorney on the case said it was politically motivated.

"He prosecuted a couple of little guys who were easy targets when he was running for governor," Daniel Hochheiser said. "The whole situation is marked by irony, hypocrisy and self-righteousness."

http://www.breitbart.com/article.php?id ... _article=1