Was Spitzer Targeted?

Published on
by
the Rocky Mountain News (Colorado)

Was Spitzer Targeted?

by
Paul Campos

As Richard Nixon used to say, let me make something perfectly clear: Eliot Spitzer is a world-class hypocrite and fool, who more or less asked for the political and personal catastrophe that has befallen him.

That being said, the real Spitzer scandal has little to do with his apparent habit of paying young women for sex. Here's what really needs to be investigated:

Spitzer's fall was triggered not by his visits to prostitutes, but by banks reporting "suspicious" transactions of his to the IRS.

A deposit of $10,000 or more in cash automatically triggers a suspicious activity report. It's unlikely that someone as financially sophisticated as Spitzer would transfer $10,000 in cash at once to pay for illicit sex, given that he knew full well doing so would trigger an automatic report to the IRS.

It's a violation of the relevant statute to structure multiple cash transactions with the intent of avoiding the $10,000 automatic reporting requirement (by, for example, depositing $5,000 on the same day with two different banks), but it's quite unclear whether whatever Spitzer did would normally lead to the filing of a suspicious activity report, since such subterfuges are very difficult to detect unless one is already looking for them. This raises the possibility that Spitzer's financial activities were being closely monitored.

It's hardly a stretch to imagine that Spitzer, a man with countless enemies in the financial world, would be the target of such a vendetta.

This in turn raises a host of questions about how and why the subsequent IRS investigation turned into an FBI sting operation. The story being given out by the feds is that Spitzer's financial affairs were investigated initially because of the possibility the transactions involved bribes or kickbacks of some sort.

That's pretty unbelievable. Spitzer is an heir to an immense family fortune, and the amounts of cash in question would almost surely not be large enough to create a reasonable suspicion of bribery in this instance.

Be that as it may, it's far more probable that what happened was something like this: An IRS office is tipped off by officials at various banks that Spitzer is depositing a few thousand dollars in different accounts within a day or two. Realizing it has a potential political tiger by the tail, the IRS then contacts the Department of Justice and the FBI.

At the DOJ, the Public Integrity Section launches an investigation. This unit itself has come under intense criticism during the Bush administration for investigating nearly six times more Democratic politicians than Republicans. Furthermore, many of the section's investigations have seemed timed to coincide with elections and the like.

With a little digging, the feds soon establish that Spitzer is seeing high-priced call girls. This is a petty misdemeanor in most jurisdictions, but the DOJ goes ahead and constructs an elaborate and costly sting operation, for the express purpose of catching one of the country's most powerful Democratic politicians committing a petty crime.

In the course of the sting, Spitzer makes a really big mistake: He pays a call girl to travel from New York to Washington. This puts him in technical violation of an 85-year-old federal law, the Mann Act, which has a long history of being used for politically motivated prosecutions of the worst sort, such as those of the boxer Jack Johnson and movie legend Charlie Chaplin.

Only then is the existence of the investigation leaked to the media.

In sum, this whole sordid business smells bad. One need have no sympathy for Spitzer to recognize that there's a real chance what we're dealing with is a classic abuse of the criminal justice system, designed to take down a powerful political enemy.

That possibility deserves serious investigation - something we can hope the media will get around to undertaking, once they tire of feeding the public salacious details regarding the erotic adventures of Eliot Spitzer.

Paul Campos is a professor of law at the University of Colorado. He can be reached at paul.campos@colorado.edu.

© 2008 The E.W. Scripps Co.

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