Tuesday, March 11, 2008


So NY Governor and former crusading AG and Wall Street crime buster Elliot Spitzer is going down for going a-whoring. First fact: it seems pretty clear that he broke a few laws along the way and he should resign. Second fact: he cheated on and humiliated his wife and humiliated and embarrassed his family, and he deserves every bit of moral calumny laid on him. (We will leave aside for a moment why so many right-wing bloggers are howling for his blood when the equally guilty Sen. Vitter (R-LA) earns their endless defence.)

All of that aside, the most interesting thing question is going wholly unanswered: Why was the FBI investigating Spitzer in the first place?

The FBI says that they were investigating suspected corruption and just happened (shocked! shocked they were!) upon the prostitution evidence. Why were they investigating Spitzer? He and his family are rich as hell, he has a reputation for being a business and commercial law straight-arrow; he therefore seems a rather odd target for somebody looking for financial malfeasance.

Thing to remember number 1: since the tenure of Louis Freeh the Feebs have been within an inch or two of being a wholly owned subsidiary of the Republican Party.
This started during the Clinton administration when it ran a bit wild from DOJ and AG oversight, overtly aligning itself with House Republicans and their agenda in order to protect its budget.

Thing to remember number 2: Spitzer has been one of the most aggressive enemies of the kind of top-floor white collar corruption that has been the staple of the Bush administration.
Don't forget that the Bushies simply don't believe that any theft done by a corporation or corporate executive is even a crime. That's not exaggeration, that's simply a fact. Spitzer's tenure as AG is neatly summarized by the Toronto Star's David Olive:
What gained Spitzer international renown was the painstaking work by his New York attorney general's office in piecing together the memos and emails by which America's largest brokerage firms were selling stock at the height of the late-1990s dot-com boom that their own analysts regarded as "crap" and "junk."

Spitzer extracted a stupendous $1.4 billion (U.S.) settlement from 10 of America's largest securities firms, including Citigroup Inc. and Merrill Lynch Inc., for their dissemination of this supposed "research" to clients. He then went after dubious sales practices in the mutual fund industry.

Spitzer exposed unsavoury bookkeeping practices in the insurance trade, forcing the ouster of the CEOs of insurance giants American International Group Inc. and Marsh & McLellan Cos. He waded into the field of excessive executive compensation, forcing Dick Grasso to relinquish a portion of his huge severance package on retiring as CEO of the New York Stock Exchange.

In identifying many of the leading culprits in the loss by Main Street investors of some $8 trillion (U.S.) when the dot-com, tech and telecom markets imploded, Spitzer acted while the U.S. Securities and Exchange Commission dozed. And in doing so, Spitzer helped bring about higher standards of transparency and CEO accountability for the authenticity of corporate financial reporting.
The Bush administration is a CEO administration, pure and simple. It has corporate and class interests and loyalties which were right in the crosshairs of any genuine effort to enforce the law. Militarizing police forces in order to pursue the ludicrous "war on (certain classes and colours of people who use) drugs", raiding medical marijuana facilities and so forth... those, in the eyes of the Bush Administration, are valid uses of federal authority. Going after CEOs is something best avoided.

Thing to remember number 3: The Bush administration has thoroughly politicized the Department of Justice.
Partisan zealots occupy not only the political slots in the DOJ but have dumped vast numbers of professional career staff and replaced them with even more GOP tools.

My guess? The thoroughly-Roved federal Department of Justice said, "dig and dig and dig until you find something on Spitzer". The prostitution stuff was an easy and unexpected win, negating the need for Plan A: Siegelman him.

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