Sex and the Single Political Culture

I want you to watch a politician who understands the financial services industry, now the most important factor in returning us to economic growth, and who is at the top of his game discussing how we sold out the manufacturing base of the country while in thrall to that financial services industry, particularly Goldman Sachs, which created artificial paper profits and used their vast political connections to cut the line and receive trillions in handouts when those paper profits went up in smoke. As a result, the banks have rebounded thanks to the intense effort of the federal government, but that money has not flowed through them and into the creation of new productive sectors of the economy that would create jobs.

The only additional piece of information you need is that this particular politician cannot practice politics anymore because he solicited prostitutes, and as a Democrat not named Larry Craig, David Vitter, John Ensign or Mark Sanford, he must resign for a sex-related mistake. Funny how that worked out right at the time that the financial sector was on the verge of melting.



I don't glorify Eliot Spitzer's conduct. But clearly he is virtually the most important politician in America for the times who cannot use his skill and talent because of a personal indiscretion. And this has become a real paradox in America, where personal failings get confused with real and thoroughgoing criminal activity, and the over-moralists in Washington pick and choose which to emphasize. Thus we have a situation where Marcy Wheeler says blowjob on television and everyone in the media runs for the fainting couch, but hours earlier on the same network good ol' boy Pat Buchanan can advocate for murdering a 19 year-old and nobody had any similar reaction, just a shrug of the shoulders and words like "Oh, Pat!"

Our sexual hangups date back to our Puritan ancestry. They will always spark attention and furious twitterings (the offline kind) back and forth. When they get in the way of legitimate investigations into the rule of law and the work of public servants uniquely qualified to fight back against the corporate control of government by the financial industry, they become real barriers to progress. And no matter how many moralizers fall under the spell of passion and fall from their own personal standards, this zing of attention to sex will never cease.

Supercop

President Obama reportedly wants to put the Federal Reserve in charge of managing systemic risk among "too big to fail" financial giants. And why not? They've certainly done a bang-up job so far.

Thrill to them throwing down the hammer on the biggest banks during the stress tests:

The Federal Reserve significantly scaled back the size of the capital hole facing some of the nation's biggest banks shortly before concluding its stress tests, following two weeks of intense bargaining.

In addition, according to bank and government officials, the Fed used a different measurement of bank-capital levels than analysts and investors had been expecting, resulting in much smaller capital deficits.

When the Fed last month informed banks of its preliminary stress-test findings, executives at corporations including Bank of America Corp., Citigroup Inc. and Wells Fargo & Co. were furious with what they viewed as the Fed's exaggerated capital holes. A senior executive at one bank fumed that the Fed's initial estimate was "mind-numbingly" large. Bank of America was "shocked" when it saw its initial figure, which was more than $50 billion, according to a person familiar with the negotiations.

Bank of America's final gap was $33.9 billion, down from an earlier estimate of more than $50 billion, according to a person familiar with the negotiations [...]

At Fifth Third Bancorp, the Fed was preparing to tell the Cincinnati-based bank to find $2.6 billion in capital, but the final tally dropped to $1.1 billion. Fifth Third said the decline stemmed in part from regulators giving it credit for selling a part of a business line.

Citigroup's capital shortfall was initially pegged at roughly $35 billion, according to people familiar with the matter. The ultimate number was $5.5 billion. Executives persuaded the Fed to include the future capital-boosting impacts of pending transactions.

Chill to the makeup of one of the Fed's branch boards:

The kerfuffle about current New York Federal Reserve Bank Chairman Stephen Friedman's purchase of some Goldman stock while the Fed was involved in reviewing major decisions about Goldman's future—well-covered by the Wall Street Journal here and here—raises a fundamental question about Wall Street's corruption [...]

So who selected Geithner back in 2003? Well, the Fed board created a select committee to pick the CEO. This committee included none other than Hank Greenberg, then the chairman of AIG; John Whitehead, a former chairman of Goldman Sachs; Walter Shipley, a former chairman of Chase Manhattan Bank, now JPMorgan Chase; and Pete Peterson, a former chairman of Lehman Bros. It was not a group of typical depositors worried about the security of their savings accounts but rather one whose interest was in preserving a capital structure and way of doing business that cried out for—but did not receive—harsh examination from the N.Y. Fed.

The composition of the New York Fed's board, which supervises the organization and current Chairman Friedman, is equally troubling. The board consists of nine individuals, three chosen by the N.Y. Fed member banks as their own representatives, three chosen by the member banks to represent the public, and three chosen by the national Fed Board of Governors to represent the public. In theory this sounds great: Six board members are "public" representatives.

So whom have the banks chosen to be the public representatives on the board during the past decade, as the crisis developed and unfolded? Dick Fuld, the former chairman of Lehman; Jeff Immelt, the chairman of GE; Gene McGrath, the chairman of Con Edison; Ronay Menschel, the chairwoman of Phipps Houses and also, not insignificantly, the wife of Richard Menschel, a former senior partner at Goldman. Whom did the Board of Governors choose as its public representatives? Steve Friedman, the former chairman of Goldman; Pete Peterson; Jerry Speyer, CEO of real estate giant Tishman Speyer; and Jerry Levin, the former chairman of Time Warner. These were the people who were supposedly representing our interests!

As Spitzer notes (and by the way, can we start blaming Eliot Spitzer's libido as among the causes of the financial crisis?), it's not necessarily corruption at the NY Fed, but a very cozy groupthink, where what's good for America and what's good for Wall Street are seen as equal. Whether you think the stress test portrayed a false picture of overall banking industry health or not, everybody basically agrees that stronger regulation and enforcement could avert the kind of crisis we've already seen. But the Federal Reserve acting as any kind of regulator for large banks and investment firms should invite peals of laughter. It reminds me of Bush hiring top industry lobbyists to regulate the industries for which they used to lobby.

Spitzer Returns

Newsweek writes an article about the attempted comeback of Eliot Spitzer. They ask "can he become a public figure again" in an article making him a public figure again. Also, Spitzer has a column for Slate, which is owned by the same parent company as Newsweek. Michael Wolff is absolutely right to point it out.

But putting that all aside, I agree with Ezra Klein that Spitzer has a unique voice that is simply right for the times. He has been talking about the need for regulating the banks, and not just talking but acting on it, for a long time. This is from 2004:

On the surface, predatory lenders are doing nothing more than seizing a "market opportunity" for refinancing or home-improvement loans in lower-income communities. To be sure, such communities desperately need credit. And it stands to reason that the prices and terms will be less favorable to borrowers whose financial circumstances are troubled or limited. In this sense, predatory loans are the natural outcome of a competitive market.[...]

[But] it is difficult to imagine a less rational, less efficient economic practice than lending of this sort. At the micro-level, it results in a gross misallocation of costs-- imposing higher costs than the market requires on those least able to bear them. At the macro-level, it denies lower-cost capital to whole classes of persons who would otherwise qualify for it and to neighborhoods whose economic vitality depends on it.

In these circumstances, government must step in to curb predatory lending and encourage the flow of fairly priced capital to sectors where it is needed and will be well-used. Filling a gap left by federal inaction, state enforcement efforts in this arena have centered on identifying the valid economic criteria considered in mortgage underwriting and compelling lenders to focus on those factors--not on preconceptions, prejudices, or predatory instincts--in determining how to price home mortgage loans. The point is not to protect people from their own bad decisions or, conversely, to guarantee that mortgages be granted to specific persons or groups on specific terms--that would violate the principle of market freedom. The point is to support equal opportunity and to ensure that borrowers are charged rates and fees based upon their status and qualifications as economic actors in the mortgage market, not upon their diminished access or market savvy or their race.

This was written years before anyone "discovered" the subprime disaster. Simply put, we should not sacrifice valuable insight and opinion on the altar of sexual peccadilloes. Spitzer was an idiot for soliciting prostitutes but his experience is valuable, perhaps too valuable to ignore.

Good Picks

With all the focus and attention on Hillary Clinton, some of the other strongly rumored choices for the Obama Administration are getting less scrutiny. One is pretty big: Eric Holder as the next Attorney General.

President-elect Obama has decided to tap Eric Holder as his attorney general, putting the veteran Washington lawyer in place to become the first African-American to head the Justice Department, according to two legal sources close to the presidential transition.

Holder, who served as deputy attorney general during the Clinton administration, still has to undergo a formal “vetting” review by the Obama transition team before the selection is final and is publicly announced, said one of the sources, who asked not to be identified talking about the transition process. But in the discussions over the past few days, Obama offered Holder the job and he accepted, the source said. The announcement is not likely until after Obama announces his choices to lead the Treasury and State departments.

Holder was #2 at Justice under Janet Reno and the DC US Attorney from 1993-1997. He was an early and enthusiastic Obama supporter. He apparently was involved with signing off on the Marc Rich pardon, but that won't hold up the confirmation process. And he's really good on what we care about:

Holder charged the detention facility at Guantanamo Bay was a "moral hazard," which he compared to the original constitutional flaw that permitted slavery to continue, to President Lincoln's decision to suspend habeas corpus during the Civil War and to the decision by President Franklin Roosevelt to create the Japanese internment camps during World War II.

"We have squandered one of our greatest strengths as a nation," Holder said, taking a partisan swipe at the Bush administration.

He insisted it was disgraceful that the Supreme Court "had to order the president to treat detainees in accord with the Geneva Convention."

In the months and years since 9/11, the Bush administration took many steps that were excessive and unlawful," Holder continued. "We authorized torture and we let fear take precedence over the rule of law, as we overreacted to perceived danger."

In addition to closing Gitmo, Holder insisted the next president should:

* Declare without qualification a policy that the United States will not torture political detainees, engage in forced interrogations or submit people to degrading treatment in prison;

* End all programs, covert or otherwise, to transfer detainees to nations that practice torture;

* Stop domestic search and seizures without warrant and end wiretapping of citizens.

"We have lost our way before," Holder told the 350 attendees at the Friday evening session. "Now we must step back into the shining path envisioned by our founding fathers in such icons of liberty as the Declaration of Independence, the Constitution and the Bill of Rights."

I'm OK with that.

And I'm even more OK with the appointment of Peter Orszag as White House Budget Director.

President-elect Barack Obama is preparing to tap Congressional Budget Office Director Peter Orszag, once a veteran economic adviser in the Clinton White House, to become his budget director, according to several National Journal sources. The Office of Management and Budget job -- seen as a key post to help Obama deliver on his domestic policy agenda amidst the gloom of a $700 billion federal financial rescue, a recession and the prospects of a $1 trillion deficit next year -- carries Cabinet rank. An announcement is expected soon, but could come with other personnel decisions Obama is making to lead the Treasury Department and National Economic Council in his White House.

Orszag is young, smart, and has been fantastic on health care policy (he says reform is desperately needed to stave off a budget nightmare) and climate change. He also happens to be the only Budget Director ever to have been a blogger.

These are Clinton Administration officials, but I would hardly call them "Clintonites." The fact is that finding anyone with relevant experience to lead in the new Administration will ultimately have ties to the only Democratic President of the last 28 years. And besides, a lot of people LIKED the Clinton Administration. It had a lot of diligent employees working in it, and not everyone there was somehow tainted by the missed opportunities at the top.

Now, if Obama would give Eliot Spitzer a second chance and a shot running a regulatory agency, I'd be pretty happy about all this....

Everybody Must Get Stoned

See, there's a very simple explanation for how federal investigators discovered Eliot Spitzer's secret trysts in hotel rooms with prostitutes. They were merely alerted by a series of suspicious financial transactions and thought it was a bribery case and then just stumbled upon the prostitution ring. It's all so very s-

What's this now?

Almost four months before Gov. Eliot Spitzer resigned in a sex scandal, a lawyer for Republican political operative Roger Stone sent a letter to the FBI alleging that Spitzer ''used the services of high-priced call girls'' while in Florida.
The letter, dated Nov. 19, said Miami Beach resident Stone learned the information from ''a social contact in an adult-themed club.'' It offered one potentially identifying detail: The man in question hadn't taken off his calf-length black socks ``during the sex act.''

Stone, known for shutting down the 2000 presidential election recount effort in Miami-Dade County, is a longtime Spitzer nemesis whose political experience ranges from the Nixon White House to Al Sharpton's presidential campaign. His lawyer wrote the letter containing the call-girl allegations after FBI agents had asked to speak to Stone, though he says the FBI did not specify why he was contacted.

''Mr. Stone respectfully declines to meet with you at this time,'' the letter states, before going on to offer ''certain information'' about Spitzer.

''The governor has paid literally tens of thousands of dollars for these services. It is Mr. Stone's understanding that the governor paid not with credit cards or cash but through some pre-arranged transfer,'' the letter said.

So a well-known Republican ratfucker with a history of making threatening phone calls to Spitzer's father in the middle of the night, is contacted by the FBI, in reference to God knows what, and he refuses to talk to them, but through his lawyer he leaks a bit of oppo research he picked up in a sex club, which he's been known to frequent. The Miami FBI apparently TAKES NO FOR AN ANSWER, and may have forwarded the information to the FBI in New York (they would not say whether or not they received the letter). A month later Stone goes on Michael Smerconish's radio show and says unequivocally that "Eliot Spitzer will not serve out his term as governor of the state of New York." A couple months later Spitzer is picked up on a wire and you know the rest. Immediately Stone is interviewed by Newsday, and you can almost smell the smugness.

"I didn't make him go to a prostitution ring," said the most famous and ruthless Republican dirty trickster who still walks the earth. "He did that all on his own."

Stone said that even before I asked if his hand was somehow in Spitzer's latest trouble. I figured, somehow or another, it had to be.

"No comment on that," Stone said. "I will say I knew it was coming. That's why I wasn't too upset about the results of the special election," where a Democrat grabbed a supposedly safe Republican State Senate seat, leaving Democrats just one vote shy of control.

Conversations with Stone often go like that. Always cocky. A little cryptic. Leaving you wondering about more.

Yeah, I'm wondering why some slimy political operative is all but managing federal investigations in the Bush Justice Department.

Scott Horton at Harper's has some more, including this new article from the New York Times.

The Justice Department used some of its most intrusive tactics against Eliot Spitzer, examining his financial records, eavesdropping on his phone calls and tailing him during its criminal investigation of the Emperor’s Club prostitution ring. The scale and intensity of the investigation of Mr. Spitzer, then the governor of New York, seemed on its face to be a departure for the Justice Department, which aggressively investigates allegations of wrongdoing by public officials, but almost never investigates people who pay prostitutes for sex.

A review of recent federal cases shows that federal prosecutors go sparingly after owners and operators of prostitution enterprises, and usually only when millions of dollars are involved or there are aggravating circumstances, like human trafficking or child exploitation. Government lawyers and investigators defend the expenditure of resources on Mr. Spitzer in the Emperor’s Club V.I.P. case as justifiable and necessary since it involved the possibility of criminal wrongdoing by New York’s highest elected official, who had been the state’s top prosecutor.

So the Justice Department, under the direction of Roger Frickin' Stone, at least from the outside, deployed massive resources to capture the bad actions of a sitting Democratic governor, while in the analogous case of the DC Madam they expended no energy entrapping David Vitter or Randall Tobias. And we know the Bush Administration has a history with going after Democratic governors and even putting them in the slammer.

Eliot Spitzer did what he did; there's no getting around that. The selective prosecution and politicization of justice, however, continues to magnify in this case.

Actual Audacity of Hope

Now that the Spitzer nonsense is over (although, in a very important sense, it isn't, more on that below), I have to feel heartened by the swearing in of a blind man in one of the most populous states in the nation to become the governor. From everything I've heard from people in New York, he's a good man and very progressive, who will use a different governing style to achieve similar goals as Spitzer, and who will command respect and admiration for succeeding through his own struggles. Here's a show of support from the New York net/grassroots:

The Progressive community of New York State - activists, bloggers, fundraisers, organizers, ordinary men and women from all walks of life - welcomes our new Governor, David Paterson, as he assumes our state's highest office. We recognize that Governor Paterson is the first person of color to hold the office of Governor of New York and the first legally blind person to ever hold the office of Governor in the history of the United States. We are inspired by his life achievements to date, by his impressive and daring record of reform, and we are supremely confident that he is ready to lead our state.

We understand that Governor Paterson will face challenges and opportunities as he takes office. Our new Governor's long history of working with all stake holders will prove a valuable asset in delivering for New Yorkers. We believe that both houses of our legislature require drastic changes in their operations. Transparency and open government still elude our state, and too often, our citizens are shut out of decisions that affect our lives. The voices of too many New Yorkers still do not get heard in our state Capitol. These things must change. Governor Paterson's distinguished record of reform gives us great confidence that he will be an agent of this change.

The Progressive community of New York State is ready to support our new Governor in bringing about the change New York needs; the change that New Yorkers voted for in the 2006 election. After the trials of the recent past, we believe that New Yorkers want Governor Paterson to step forward with a bold plan for change that returns our government to our people and creates a better future for all New Yorkers. We look forward to working with our new Governor as we build a lasting Progressive majority, in Albany and around the state, conversation by conversation, vote by vote, district by district, until New York is again a beacon of Progressive governance bright enough to illuminate our entire nation.

As for the former Governor, his downfall was his alone and he must own it, but the way in which it was revealed does raise concerns about the extension of the national surveillance state into all walks of life.

These events offer a window into a much larger phenomenon, the National Surveillance State, in which the state increasingly identifies and solves problems of governance through the collection, collation and analysis of information. Governments have always used information, but today's techniques are made more powerful and more prevalent by lower costs of computing and data storage. This story also shows the important role played by private businesses in constructing and implementing the National Surveillance State. The Times report suggests that the banks in question volunteered more than the letter of the law might have required, because the transactions in questions were wire payments rather than coin or currency. The banks erred on the side of caution, seeking to assist the state in its efforts. Moreover, they already had their own pattern recognition systems designed to identify suspicious behavior. (Many people are probably familiar with the programs devised by credit card companies which analyze consumer transactions to calculate the probabilities that a card is being used fraudulently.)

If computing power increases enough, there is no reason why governments might not lower the threshold for reporting of suspicious transactions, or, indeed, require that every transaction over 100 dollars be reported. All this information could later be sifted through by data mining programs, in order to spot patterns of suspicious activity. The only limit is the technology and the manpower that law enforcement is willing to devote to analysis of financial transactions.

Read the whole thing, you'll be nervous by the end. The real problem I have with it is prosecutorial discretion. The NRCC, the campaign arm of House Republicans, had a treasurer who was a thief - he stole over a million dollars over the course of several years and deposited it into personal accounts. Eve Fairbanks gets this right.

...how is it possible that a ten-thousand-dollar Spitzer transfer to a prostitution ring tripped up authorities while the NRCC's treasurer stole one million dollars and nobody noticed anything?

It depends on who's doing the watching, I guess.

P.S. I don't understand why anyone running for Congress would react to this desperation move from the NRCC and give back contributions from Spitzer. If anything, I'd throw it right back in their face and ask every Republican candidate to give back money raised by the NRCC, who has a felon running their books.

QOTD

Gov.-in-waiting David Paterson just wrapped up a news conference in the governor’s Red Room (more on that shortly), but before he finished, the question that seems to hang over him this week finally got asked: Has he ever patronized a prostitute?

The uncomfortable question grew more uncomfortable in the silence that followed as Paterson paused, paused some more, and finally said, “Only the lobbyists.”

Is he from Harlem or the Catskills?

David Paterson will be playing all week.

Grey Lady Goes Into The Depths

It's been a little disturbing how the New York Times has driven this Spitzer story purely to get extra eyeballs at their website, but this useless, unnewsworthy "interview" with "Kristen," the call girl from room 871, is about the lowest of the low. Will they print tomorrow's edition in tabloid format with Page 3 girls, too?

I know you're supposed to give the reader what they want, but show a little self-respect, would you? I mean, if the NYT covered Spitzer and Albany politics with this kind of zeal BEFORE this story broke, maybe people would actually know something about how their government functions...

This was the only quote of interest to me in the story:

"I just don’t want to be thought of as a monster," the woman said as she told the tiniest tidbits of her story.

The Clinton campaign immediately called on "Kristen" to resign.

UPDATE: More on this from Glenn Greenwald (and actually his whole post is worth reading):

All decent people agree that what Eliot Spitzer did is repulsive, morally disgusting and totally nauseating -- which is why it's so important to learn about and report on every last titillating detail about what he did, the kind of sex he had, with whom he had it, how many times he had it, and what his partners looked like -- because it's all so completely appalling that it's critical that we stay fully informed.

Spitzer Resigns

Two things. I love when he said "the remorse I feel will always be with me." That must be why he only consorted with prostitutes for six years, because he knew it'd be so hard to live it down.

Second, I still can't get over the fact that a blind, black man from Harlem will now be the Governor of New York now. I hear extremely good things about David Paterson, but honestly, that's a Martin Lawrence movie.

OK, now that my jokes are out of the way, this is sad, as I thought Spitzer had a bright future.

UPDATE: Looking at this story, it appears clear that the feds were sitting on the wire, waiting for Spitzer to incriminate himself with audio evidence. They had enough information to bust the prostitution ring without Spitzer, but they had to bag the Democrat, or at least the high-profile john.

The Conservative Movement In Four Words

Shut up, that's why.

Though I'll admit, those words come in handy when trying to explain away total contradictions in logic.

The Sad Spitzer Chronicles

It's really upsetting to see such a bright prospect in the Democratic Party, a guy who didn't make friends because he didn't put up with the bullshit, be brought so low. But he was of course a victim of his own hubris. Anyone who prosecuted scum as long as he did to not understand fundamentally how those rackets work and how easy it is to get caught is either stupid or amazingly arrogant.

Spitzer ended up as the subject of an investigation into the prostitution because his bank branch in Manhattan turned him in to the Internal Revenue Service as someone who might be engaged in suspicious currency transactions, according to sources familiar with the investigation.

Agents of the IRS Criminal Investigation Division initially started a probe, fearing that the governor was the victim of some sort of blackmail scheme or that he was being victimized by an impostor, the sources said.

Spitzer last year had wanted to wire transfer more than $10,000 from his branch to what turned out to be the front for the prostitution ring, QAT Consulting Group, which also uses a number of other names, in New Jersey, the sources said.

But Spitzer had the money broken down into several smaller amounts of less than $10,000 each, apparently to avoid federal regulations requiring the reporting of the transfer of $10,000 or more, the sources said. The regulations are aim to help spot possible illegal business activities, such as fraud or drug deals.

Apparently, having second thoughts about even sending the total amount in this manner, Spitzer then asked that the bank take his name off the wires, the sources said.

Bank officials declined, however, saying that it was improper to do so and in any event, it was too late to do so, because the money already had been sent, the sources said.

There's something unseemly about the IRS snooping around in every transaction checking for possible violations, but if anyone knows that's occurring it's the former Attorney General of the State of New York.

I still think there are some unanswered questions about how fast this got to the press and why the government is wiretapping prostitution rings and how Spitzer was so quickly burned for this, but clearly he needs to resign as is likely, though the New York Times is more noncommital, even suggesting that his wife wants him to stay in office.

Finally, it was nice to see Tucker Carlson end his ignominious run as a TV host with such class, simultaneously decrying the peering by Big Government into private consensual activity and also having Moonlight Bunny Ranch owner Dennis Hof on his show to speculate about all the deviant behaviors Spitzer might have engaged in, like whips and ball gags. He's really a superb human being. And how exactly does he know Dennis, anyway? It's irresponsible not to speculate.

Spitzer and Bush League Justice

Without attempting to defend Eliot Spitzer in any way, it's unquestionable that the questions over the monitoring of his conduct and the speed with which the story went public remain unquestioned.

ABCis reporting that Eliot Spitzer came under the attention of the Feds because his bank reported "suspicious money transfers" to the IRS. The Justice Department brought it to the FBI's Public Corruption Squad, who looked into it and found that payments were made to a company called QET, which did business as The Emperor's Club.

All kinds of questions arise here:

1. Why would the bank tell the IRS and not Spitzer himself if there was a suspicious transfer? Spitzer is a longtime client, a rich guy and the governor. We're talking thousands of dollars here, not millions. It doesn't make a whole lot of sense that they spotted a "suspicious transfer" made by the governor, and that this is how things began. It's possible it was just ordinary paperwork the bank had to file with the government whenever some particular flag was raised, but if that's the case, why did the DoJ go to DefCon 3?

2. What is a USA doing prosecuting a prostitution case? This isn't normally what the feds spend their time with.

3. Mike Garcia (the USA for Southern New York) is a Chertoff crony. Sources familiar with the investigation say that he sent a prosecution memo to DC two months ago asking for authority to indict a public figure (Spitzer). Which means they had their case made long before the wire tap of February 13. Why did they then include this line from that conversation in the complaint?

LEWIS continued that from what she had been told "he" (believed to be a reference to Client-9) "would ask you to do things that, like, you might not think were safe -- you know -- I mean that...very basic things...."Kristen" responded: "I have a way of dealing with that...I'd be like listen dude, you really want the sex?...You know what I mean."

This salacious detail does not seem like it's necessary to make their case, and appears to be added for no other purpose than to destroy Spitzer's career.

4. How did Spitzer's name get leaked to the media, and who did it? Didn't happen to Dave Vitter.

The only way #1 can be credibly answered if there were multiple bank transfers that fell slightly under the $10,000 limit required to trigger federal reporting. If this was a one-off deal then there's no way that gets noticed unless someone at DoJ or the US Attorney's office is combing through the records. I don't think we have that information yet. Numerous transactions would raise a red flag, to be sure.

The political partisanship which has infected the Justice Department has really poisoned the system of justice in general. While there's no question that Spitzer committed a crime here (regardless of what you think of that crime and whether or not it should be prosecuted; for the records, johns rarely are convicted), the way in which they drew him into the case is suspicious. And if the transfers tipped the feds off to the whole prostitution ring, then this notion that Democratic governors are held to a different standard in this Justice Department, and are subject to intense scrutiny and wiretapping and all the rest, stands.

Scott Horton, who's been following the Siegelman prosecution (a different case, as he was railroaded and committed no crime), writes:

Note that this prosecution was managed with staffers from the Public Integrity Section at the Department of Justice. This section is now at the center of a major scandal concerning politically directed prosecutions. During the Bush Administration, his Justice Department has opened 5.6 cases against Democrats for every one involving a Republican. Beyond this, a number of the cases seem to have been tied closely to election cycles. Indeed, a study of the cases out of Alabama shows clearly that even cases opened against Republicans are in fact only part of a broader pattern of going after Democrats. So here are the rather amazing facts that surface in the Spitzer case:

(1) The prosecutors handling the case came from the Public Integrity Section.

(2) The prosecution is opened under the White-Slave Traffic Act of 1910. You read that correctly. The statute itself is highly disreputable, and most of the high-profile cases brought under it were politically motivated and grossly abusive [...]

(3) The resources dedicated to the case in terms of prosecutors and investigators are extraordinary.

(4) How the investigation got started. The Justice Department has yet to give a full account of why they were looking into Spitzer’s payments, and indeed the suggestion in the ABC account is that it didn’t have anything to do with a prostitution ring. The suggestion that this was driven by an IRS inquiry and involved a bank might heighten, rather than allay, concerns of a politically motivated prosecution.

There is simply no reason to trust the Bush Justice Department. Remaining Democratic governors need to conduct themselves far more cleanly than Spitzer, to be sure. But there is unquestionably a different standard. Remember that Karl Rove and other Republicans have relentlessly named "corruption" as the reason they lost Congress in 2006. They didn't do that by accident. If they can find a few spare Democrats to point to for 2008 they can say that the pendulum has swung back, that those in power now are abusing it, and that Democrats are hopelessly corrupt and cannot be trusted. Not sure if it'll work, but they can claim "balance" for Mark Foley and Dave Vitter and Larry Craig. If I were a Democrat I wouldn't even leave the house at night from now until the election.

UPDATE: On the other hand, it could have been a routine investigation into financial improprieties triggered in a perfectly reasonable way. But the well of justice is poisoned by consistent partisanship.

The Foster Earthquake

Chris Cillizza makes some really good points.

Republicans' defeat in last Saturday's special election to replace former House Speaker Dennis Hastert (R-Ill.) was stunning on its face but the implications of the contest are potentially far-reaching and critical in understanding the coming November elections.

As much as Republican strategists sought to downplay the national importance of the race -- mostly accomplished through bad-mouthing of their candidate -- it's clear that the race was fought on national, not local, issues.

The winner, Democrat Bill Foster, focused heavily on the troubled state of the economy and hit his Republican opponent -- dairy magnate Jim Oberweis -- as a willing advocate for the President Bush and the administration's policies on Iraq. Oberweis and national Republicans, on the other had, cast Foster as a tax-and-spend Democrat willing to throw money at any problem to make it better.

The fact that voters in an exurban district that went for Bush by double digits in 2000 and 2004 opted for the Democratic national message is telling. It suggests that the national political landscape is decidedly tilted in Democrats' favor -- that the uneven playing field of the 2006 election is still alive and well.

Cillizza goes on to list 50-odd seats that are more Democratic than IL-14 that could be in play in November. I think he needs to pare that down a bit; of the four California seats he lists, two (CA-26 and CA-50) are legitimate chances, one (CA-45) is maybe yes, maybe no, and the other (CA-24) really isn't much of an option at this time. But the major point here is golden. The race was fought on national issues, and considering that there's a Presidential election, all of the races will be. This is a major opportunity. Foster ran on Iraq and FISA and obliterated Oberweis. It is true that Oberweis was a terrible candidate but a national election will trump those particulars.

I truly believe that this will be a good November, though of course today's Spitzer scandal leaves me sad about progressive options at the top in the near term.

Wiretaps

I guess that Eliot Spitzer was caught on a federal wiretap asking for a prostitute to be sent from New York to Washington, DC. The law is pretty clear on this and that's a violation of the Mann Act.

However, the Mann Act is occasionally used for political purposes. And the bigger story here is how normal it is for federal wiretaps to be used in prostitution cases. We have this situation where the Terrorists are lurking and ready to kill us in our beds at night, according to Republicans, and let US Attorneys are spending their time on this. And after reading this report in the Wall Street Journal, I think it's not much of a leap to consider how these wiretaps could be used for partisan political purposes.

Here's the way the whole thing works, according to Gorman: into the NSA's massive database goes data collected by the Justice Department, Department of Homeland Security, and the Department of Treasury. This information includes data about email (recipient and sender address, subject, time sent), internet searches (sites visited and searches conducted), phone calls (incoming and outgoing numbers, length of call, location), financial information (wire transfers, credit-card use, information about bank accounts), and information from the DHS about airline passengers.

Then the NSA's software analyzes this data for indications of terrorist activity. When it hits upon a suspicious pattern, the NSA "feeds its findings into the effort the administration calls the Terrorist Surveillance Program and shares some of that information with other U.S. security agencies.”

Here's a more in-depth explanation:

"Two former officials familiar with the data-sifting efforts said they work by starting with some sort of lead, like a phone number or Internet address. In partnership with the FBI, the systems then can track all domestic and foreign transactions of people associated with that item -- and then the people who associated with them, and so on, casting a gradually wider net. An intelligence official described more of a rapid-response effect: If a person suspected of terrorist connections is believed to be in a U.S. city -- for instance, Detroit, a community with a high concentration of Muslim Americans -- the government's spy systems may be directed to collect and analyze all electronic communications into and out of the city.

The haul can include records of phone calls, email headers and destinations, data on financial transactions and records of Internet browsing. The system also would collect information about other people, including those in the U.S., who communicated with people in Detroit."

You can't tell me that such a massive drift net can't be employed in a situation like this, and to furthermore take down every single Democratic politician in the country if they ever got so much as near trouble. It's really not a conspiracy; this stuff is publicly available and out there.

At the very least, we should continue to question the enormity of the national surveillance state that we have created over the last several years. I don't personally think prostitution should be illegal; it's a victimless crime and it should be properly regulated rather than the shadow environment in which it exists today where exploitation is rampant. If it remains a crime, certainly it should be prosecuted. But let's prioritize the criminal justice system. And let's keep heavy oversight over this surveillance state which is spinning out of control.

...In this context, I'd say that fixing FISA is of paramount importance.

...I completely agree with this and I wish we'd shuffle off those Puritan bonds of history, but these are the laws we have:

If I were in charge of writing laws, I do not believe that anyone belongs in jail for procuring or (certainly) selling sex for money, or that any criminal offense more severe than a ticket for the purchaser should be involved.

If poor sex workers are thrown in jail under existing laws, then affluent white johns sure as hell should be too. This goes double for people who have positions that might allow them to work to repeal laws they don't feel are just.

... Glenn Greenwald also has some worthy thoughts. Our discomfort as a nation with sex and morality really becomes pronounced at moments like this.

Politicians Are People

This is an object lesson into why you should not invest yourself so heavily into politicians.

Gov. Eliot Spitzer has informed his most senior administration officials that he had been involved in a prostitution ring, an administration official said this morning.

Mr. Spitzer, who was huddled with his top aides early this afternoon, had hours earlier abruptly canceled his scheduled public events for the day. He is set to make an announcement about 2:15 this afternoon at his Manhattan office.

Mr. Spitzer, a first-term Democrat who pledged to bring ethics reform and end the often seamy ways of Albany, is married with three children.

Just last week, federal prosecutors arrested four people in connection with an expensive prostitution operation. Administration officials would not say that this was the ring with which the governor had become involved.

I really, really liked Eliot Spitzer when he was a reformist Attorney General, and his campaign for Governor was first-rate. I could probably dig up my "Spitzer 2008" blog post from a couple years back. His first term in Albany was tumultuous but he's proven himself a partisan fighter. But he's a person, and people have their own issues and peccadilloes, and nobody should be particularly shocked. Democrats have pretty much voided their ability to say this kind of thing doesn't matter, after relentlessly focusing on Republican sexual deviancy over the years. And that's sad, because it really doesn't matter all that much in the big picture. In the case of many Republicans, there is an issue of hypocrisy at work, as the ones most vocal about family values typically become the ones most likely to be involved in these scandals. And that's fair game. There is a kind of hypocrisy issue at work here considering that Spitzer ran as a crime fighter and a reformer, and he's broken the law if he's involved in a prostitution ring.

The larger point is that politicians are not demigods. They should not be seen as if they walk on water. They're people and they've been given tremendous power and that can have a negative influence. In the current primary fight, we should consider this and try to keep an even keel.

...What didn't become clear in the Sen. David Vitter case, for some insane reason, is that this behavior is against the law in the states where these officials are alleged to have engaged in it. Somehow Vitter avoided that and kept his job. There may be a double standard, but that wouldn't make it right for Spitzer, just more wrong for Vitter. The standard should not be set by David Vitter. If anything, this should increase pressure on him to resign, too. I can't see Spitzer keeping his job, so why should Vitter?

... Spitzer's comment was vague and noncommital. Maybe he's doing the Vitter/Larry Craig strategy and just waiting around for everyone to forget about this.

Mommy And Daddy Are Fighting!

When, oh when will the partisan bickering end?

Testifying in Albany, Mayor Michael R. Bloomberg said today that Gov. Eliot Spitzer’s state budget unfairly shortchanges New York City out of millions in promised financial support for health care and education, among other things. If not reversed, he said, the broken promises could force the city to further squeeze taxpayers and deepen cuts in programs.

“This year, as we do every year, we’ve made budget decisions in the city based on the expectation, and even the expressed assurances, that Albany will honor its commitments to us,” Mr. Bloomberg said during his testimony at a joint legislative budget hearing in Albany.

I don't know who's right and who's wrong, and I don't care. I just want everyone to stop fighting so we can listen to the obscenely rich guy and move forward to wherever he wants us to go!

Doesn't Eliot Spitzer know his place?

Tweety Follies

Just saw Chris Matthews give his best Lou Dobbs impression, attacking Eliot Spitzer and Hillary Clinton for their "flip-flop" on driver's licenses for illegal immigrants, saying with full precision why people don't want to allow it, and brazenly speculating if Hillary "coordinated" with Spitzer to shut down the proposal, accusing her of all sorts of backroom dealings. He was joined in the pile-on by Republican Rep. Peter King and, for balance, a writer from the New York Post.

And then he just scratched his head and couldn't figure out what this whole Judith Regan thing is all about and why it has anything to do with Rudy Giuliani. He just can't figure it out and it's all so complicated and what is Judith Regan really saying (um, it's all in the lawsuit, bud) and this is "a media echo chamber" and clearly there's no impropriety here and maybe Rupert Murdoch should "write a big check" to Regan to straighten all this out.

Interesting how he can speculate to his heart's content when it comes to Hillary, but when it's about Rudy, it's all so confusing and there's no there there.

(Also, the whole point of the Regan case is that News Corporation threatened her to shut up about her affair with Kerik to protect Rudy Giuliani's campaign, and he just had a guy from the New York Post on, who might know a thing or two about Rudy's relationship to the Post and the parent company News Corp, but he let the guy go.)

Then, John McCain "hit the middle ground" when he fielded a question about Hillary of "How can we beat the bitch?" by saying "That's a great question." And then he played Rudy Giuliani's new TV commercial, for free, twice.

This is on the "liberal" MSNBC.

Toward A Demonization-Free Politics

It's sad that we can't have a conversation about public safety in this country without it degenerating into an expression of xenophobia.

Gov. Eliot Spitzer formally announced today that he would abandon his plan to give driver’s licenses to illegal immigrants, conceding that his best efforts to sell New Yorkers on the merits of his proposal had clearly failed.

The decision ends a bitter seven-week battle over the proposed policy that battered Mr. Spitzer and his fellow Democrats and drew national attention from critics of illegal immigration.

“It does not take a stethoscope to hear the pulse of New Yorkers on this topic,” Mr. Spitzer said, standing with a half-dozen members of New York’s Congressional delegation who had supported his original move to give licenses to illegal immigrants.

In acknowledging one of his first major reversals as governor, Mr. Spitzer hit a few familiarly pugilistic notes, lashing into critics who, Mr. Spitzer said, “equated minimum-wage, undocumented dishwashers with Osama bin Laden.” He also said he still believed his proposal would have benefited New Yorkers, citizens and immigrants alike, and lit into federal officials for failing to fix the nation’s immigration system at the national level.

Spitzer's doing the right thing by listening to the concerns of New Yorkers. Unfortunately, immigrant-bashers and "anti-amnesty" activists drowned out the needs to reasonably keep the roads safe. Unlicensed drivers are not a good thing. There's no way to track them and measure their ability to follow traffic laws. I've heard many law enforcement officials, responding to criticism that this would give terrorists legal ID, say that "if a terrorist wants to give us fingerprints and a photo and a current address, go ahead." It's shocking that we allow xenophobes to get away with equating immigrants to terrorists in such a cavalier fashion.

The governor was trying to make a solution in the midst of chaos, and he was absolutely justified in doing so. The federal government's immigration policy has failed. Just focusing on the border, when fully half of all the undocumented in this country overstay tourist visas, will fail. A comprehensive solution is all that will succeed.

Revising And Extending My Remarks On Hillary Clinton

I was a bit surprised to see so many people focusing on the substantive question that tripped up Hillary Clinton in Tuesday's debate, and not what the episode revealed about her political character. To reiterate, I think Eliot Spitzer is a great leader, and what he is doing on the driver's license issue, particularly by beating back the hate speech of the likes of Lou Dobbs, is admirable. There are illegal drivers on the roads because we don't have a functioning public transit system in America. The driver's license should not be the main form of ID in America, it should simply allow you to operate a motor vehicle. If you have unlicensed drivers all over the roads, there are going to be serious public safety issues. That's all this issue is about, and it's not a federal one, furthermore.

I initially thought Clinton nailed the issue and was far better than Chris Dodd, who frankly sounded clueless about it. But her eventual response, marked by a backtrack to "I understand but I do not endorse," trying to be on all sides of it, was revelatory. It was status quo, all-things-to-all-people, value-challenged Democratic politics. I reject that. Apparently Clinton tried to clean up her response yesterday, but even that wasn't crystal clear.

So here's the statement that Camp Hillary gave to The Times today in response to questions about where she stands on the issue:

"Senator Clinton supports governors like Governor Spitzer who believe they need such a measure to deal with the crisis caused by this administration’s failure to pass comprehensive immigration reform," her campaign said.

It's almost too obvious to point out, but this just isn't an expression of support for Spitzer's proposed policies in any way. It even falls short of overt support for Spitzer in general -- it says she supports governors "like" Spitzer who are faced with policy conundrums of this sort. This is basically a clearer way of saying what she said yesterday -- Spitzer is trying to solve a problem that needs to be solved, and she supports the idea of trying to do something about it with policies similar to these.

The AFSCME endorsement kind of blunted the impact of this waffling, although John Edwards nabbing the New Hampshire SEIU may prove more important. The point is less about the contentious issue of driver's licenses for illegal immigrants - one that State Senator Gil Cedillo has been nobly pushing out here in California for years - it's about Hillary Clinton's judgment. She is far too constrained by political expediency, and would rather dance around a tough issue than lead on it and bring people to her position. That's not the kind of leadership I really want to see in the White House.

SCHIP: Health, Shmealth

A brief Cook's Tour of Bush and the Children's Health Insurance Program, the federal program that provides health insurance for lower-income children:

That was Bush in 2004 - during an election year.

Now, it's a different story.

In July, Bush announced he would veto any effort to expand CHIP - not because it doesn't work, but because it works too well:

President Bush yesterday rejected entreaties by his Republican allies that he compromise with Democrats on legislation to renew a popular program that provides health coverage to poor children, saying that expanding the program would enlarge the role of the federal government at the expense of private insurance.


The president said he objects on philosophical grounds to a bipartisan Senate proposal to boost the State Children's Health Insurance Program by $35 billion over five years. Bush has proposed $5 billion in increased funding and has threatened to veto the Senate compromise and a more costly expansion being contemplated in the House.


"I support the initial intent of the program," Bush said in an interview with The Washington Post after a factory tour and a discussion on health care with small-business owners in Landover. "My concern is that when you expand eligibility . . . you're really beginning to open up an avenue for people to switch from private insurance to the government."

Ah yes: our president wishes to ratchet up Americans' suffering on philosophical grounds. Who's looking out for those poor beleaguered HMOs? Bush, that's who! Someday we'll see the wisdom of this and thank him for it.

After Bush's statement, outrage from predictable corners. For one, Bob Herbert, who quotes New Jersey Governor John Corzine and New York Governor Eliot Spitzer in a righteous froth over Bush's interference in their efforts to govern. The federal government seeks to impose a cap on what states set as an income ceiling for those eligible.

“The reality,” said Governor Spitzer, “is that there is an enormous proportion of American society above the poverty level but in the lower middle class that simply can’t afford health coverage.”

Wherever there are large numbers of families without coverage, you will find children who are suffering needlessly and, in extreme cases, dying. They don’t get the preventive care or the attention to chronic illness that they should.

“That has not only an immediate effect on their development,” said Mr. Spitzer, “but a long-term cost to society that is incalculable.”

Now Spitzer plans to sue the federal government to reverse its attempts at preventing New York from setting its own income ceiling.

All well and good - particularly fighting the Bush Administration on such a wildly unpopular, autocratic rule. But I stopped at this section at the bottom of the press release and sighed:

With the expansion, virtually all children in New York State would have access to affordable health insurance through a combination of Medicaid, Child Health Plus, and private commercial insurance. The initiative is a key piece of the Governor’s health reform agenda and is the first step in the Governor’s “Partnership for Coverage” initiative to expand access to health insurance for all New Yorkers through an incremental, building block approach.

One day we'll look back on this "incremental, building block approach" and wonder just how we allowed ourselves to be snookered into such a nonsensical arrangement.

Never have so many paid so few so much for so little.