University of Colorado Law Prof. Paul Campos is among those sporting the tinfoil deerstalker with regard to the investigation of NY Gov-until-Monday Eliot Spitzer’s finances:
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.
In reality:
After the governor transferred $10,000 by breaking it into smaller amounts, he then called the bank asking that his name be removed from the transactions, the sources said.
Nothing suspicious about that. Moreover, Spitzer’s financial activities were being closely monitored — because he is a politically exposed person. You know who knows this? People who listen to NPR. Even people who read FDL now know this. You know who doesn’t know this? Law Prof. Paul Campos.
Meanwhile, Phil Carter (not a member of the VRWC) corrects Harvard Law Prof. Alan Dershowitz on related issues.
Finally (I hope), having praised ABC News for diligently trolling internet escort services looking for the elusive “Kirsten,” it is only fair that I salute the New York Times for scoring the interview.
Update: In the comments, Jim in KC notes that the link above for PEPs refers to foreign officeholders and such. This is correct, but as noted by the New York Times, “several banking officials at major institutions said that as a matter of practice, they extend extra scrutiny to American political figures.”  Again, those who did their due dilligence on the issue – like NPR – knew this, but it somehow eluded Campos. Moreover, as the NYT piece makes clear, it turns out that — contrary to the Campos conspiracy theory — one of the banks actually failed to do due dilligence on the QAT companies in the first instance.
[…] know, as Karl points out below, it’s really great that the NYT gets the interview. You know why? Because all of us have […]
Ironically, I heard it was a computer program for banking transactions in order to catch suspicious money transfers that Spitzer himself encouraged to be enacted as Attorney General. Reported by North Country Radio in NY.
That reg seems to indicate he’d have to be a foreign political figure in order to be a PEP, Karl.
I’ll admit that those of us who live here in the relatively sane Midwest tend to think of New York as being a bit foreign, but I doubt that’s what the OCC means.
Jim in KC: and your point is?
Spitzer’s entire operating concept was based on dredging up obscure laws and regulations intended for something else, re-interpreting any ambiguities he could cite or manufacture so that they applied to his target, then employing the entire range of attack methods available to a prosecutor to apply them. He should have applied for a process patent. Now he and his sycophants are screaming bloody murder that those tactics mustn’t be used against them. My heart bleeds. Politics is commutative.
Regards,
Ric
You have to wonder why most of the MSM doesn’t dig as diligently to fact-check so much of the most obviously outrageous & false drivel that spews from progressive mouths. No, that’s left to bloggers, then it’s ignored.
Ric, the point is that he’s not a PEP. Trying to prevent an “Ellensburg moment,” i.e. the link doesn’t support the assertion.
That doesn’t mean that he’s not still going to be scrutinized more heavily than most, or that he didn’t commit the offense, just that the link doesn’t fit the situation.
You gotta wonder how many hookers they went through before they finally tracked down the Gov’s doxy, eh?
Jim, I understood what you were up to.
My point is that there’s no reason to use his own tactics right back at him — and those tactics are based on seeking a way to torture any article (including “a”, “an”, and “the”) of the Law into a weapon of attack. I mean, can we seriously believe that a person from that demographic has never been to Europe? Foreign influence! Increased scrutiny is mandatory!
It’s a pity we don’t have an investigative Press in this country. It’d really be interesting to find out how much Spitzer, his family, and his associates made off selling Merrill Lynch short while they were robbing Americans of eleven billion dollars of their retirement money.
Regards,
Ric
“…no reason not to use…”
Sheesh. I’m outa here for a while.
Regards,
Ric
Jim,
Good point. I have updated to provide the context.
dd,
The computer angle shows up at USN&WR and WNYT. And under the “know your customer” regs, the computer was probably set to note Spitzer’s political status; he knew this, which is why he wanted his name removed from the transactions.
Ric, there’s no doubt that banks are extremely fastidious in filing those SARs, no matter who’s conducting the transaction. And it’s not surprising that they would be particularly interested in the accounts of elected officials regardless of whether they were foreign or not, because obviously there’s a real public interest at stake. Banks don’t want to get caught enabling foreign officials in laundering money, and I’m sure they wouldn’t want the headline of having helped the governor of New York hide bribes, either.
Spitzer deserves whatever he gets, in my opinion. All politicians take bribes, all politicians peddle influence; it’s the nature of the beast. Hell, there’d be no reason to run for office, otherwise. When you catch one doing it stupidly and with patent illegality, it’s a bonus because then he can be brought to account.
Karl, I noticed that. It’s kind of a technicality, because as Ric notes, banks certainly do pay extra attention to American politicians as well for obvious reasons.
Of course Scott Horton is back out there today with his conspiracy theory AND revisionist history of what he said originally about Spitzmas, that he was strong in calling for Eliot’s resignation. As usual, Horton is strong on innuendo but light on details.
I saw the Campos piece in the local paper this morning and was going to e-mail someone here about it if nobody posted anything about it. Way to stay on the ball.
I noticed he also used the “Public Integrity section has been prosecuting six times more Dems!” angle, which I believe was based on a debunked study mentioned here the other day. Anybody got those links, just to pour salt on Campos’s wounds?
OK, I hadn’t read the Campos piece, but he’s wrong on a couple of counts. First, transfers of $10,000 or more don’t automatically result in a SAR; they automatically result in a CTR. What he was doing was specifically trying to avoid triggering a CTR by structuring the transfers.
Second, it’s hard to stress how seriously banks take this sort of thing regardless of who’s doing it. All it takes is for one person at a bank to get suspicious of a transfer, even a teller, and that transaction goes on a list for review. If the review reveals a pattern, the bank typically will file a SAR. If they know the account holder is a public official, you can be sure they’re even more likely to file a SAR when such a pattern is noticed.
At that point, the data goes to FinCEN and the IRS and FBI are going to review it, and presumably they’ll decide if any type of criminal investigation is warranted. I think it’s a pretty safe bet that when they noticed data indicating that the governor of New York appeared to be laundering money, they thought it warranted investigation.
Jim,
In practice, as you basically note, it is more than a technicality. Moreover, without turning this post into a law review article, the OCC reg on PEPs is based on an international standard. Major banks will flag their domestic PEPs because these banks do business globally and would pick up their activity elsewhere. Moreover, the entire regulatory scheme, including the “know your customer regs” sytematically bias the behavior of banks in favor of flagging such transactions. Flagging domestic PEPs for extra scrutiny is done “in practice” because banks fear that the government might launch an investigation if they did not do so.
Spitzer knew this, which is why he tried to have his name removed from the transactions.
Sean M,
I believe the debunking you seek is here.
A law review article or a review of banking practices…
Calling like that all but guarantees that a SAR will be filed, which is sort of like idiot icing on a cake of stupidity.
Or maybe it’s the chocolate syrup of stupidity on the erect nipples of a high-end call girl of stupidity…
Has this been linked:
Maybee
I had read it was more than one bank. Thanks for the link.
Or maybe it’s the chocolate syrup of stupidity on the erect nipples of a high-end call girl of hubris…
There. That has a better flow to it.
Wow, Ric Locke, congratulations on summing up modern Republican philosophy in one sentence. Merril Lynch commits financial crimes, and it’s the prosecutor who busts them that cost the shareholders all that money. Guess we should have let Enron continue to steal money from California energy consumers, because when they were caught “gaming the system,” it played hell with their share price. Crime is great, as long as you’re rich and white!
WR,
BULLSHIT. The “financial crimes” consisted of not kowtowing to Eliot Spitzer, who then dragged the statutes like a man obsessed until he found something to punish them for that lese majeste. The fact that you, and others, accept the eventual knuckling-under to the onslaught as evidence of some kind of guilt means you’re stupid, vicious, and cruel, not that Merrill Lynch did anything wrong — and makes you a tool in the hands of anyone who is sufficiently ambitious, unscrupulous, and able to make up a good story. They take up those tools with great alacrity and use them with skill, and gain a lot of power and make a lot of money off that use — and if you expect any kind of retirement that doesn’t come from the Government, Spitzer took every penny of it right out of your mouth and the people at Merrill Lynch did not miss a single meal.
Regards,
Ric
Spitzer started believing his own hype. I mean come on, this shit is ridiculous. I think he started going after companies spuriously because he really did think he was Elliott Ness. Though he is apparently an insufferable douchebag, I don’t think EVERY case he prosecuted was bogus. He did some good and cleaned up some dirt in his time.
When I told my friend how much Spitzer paid for his hooker, he asked: “What, does she have two p*ssies?”
Damn, my link didnt work. Here it is (they are so pretentious and full of themselves in this article that it cracks my shit up). http://www.02138mag.com/asset/1299.pdf
That was the other way around. First the stock tanked, then they got caught.
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