March 14, 2008
U.S. Is Examining Spitzer's Funds
By DANNY HAKIM and DON VAN NATTA Jr.
ALBANY - Federal prosecutors are investigating whether Gov. Eliot Spitzer
used campaign funds in connection with his meetings with prostitutes,
including payments for hotels or ground trans****tation, three people with
knowledge of the investigation said.
Prosecutors have asked the governor's lawyers about the travel
arrangements
for three trips, including his Feb. 13 rendezvous with a prostitute at the
Mayflower Hotel in Wa****ngton. The United States attorney's office in
Manhattan has also asked about the governor's use of car services during
trips to Wa****ngton.
The governor's lawyers have begun consulting with a campaign finance
expert
who has long worked for Mr. Spitzer's political organization to see
whether
campaign money was spent on the trips, including some as recently as last
month, a person briefed on the investigation said.
The governor, in the two brief statements he made this week as his
political
career ended, has not directly addressed the allegations concerning his
use
of prostitutes. But he has told his aides in recent days that he used
prostitutes only in the last eight months and never spent campaign or
public
money in that regard, according to several of the aides. He reaffirmed
that
position to his lawyer during a meeting at his Manhattan apartment on
Tuesday, others present said.
If campaign money was involved, it would expand the scope of a criminal
inquiry, because it is illegal to use campaign money for personal
expenses.
Mr. Spitzer, a Democrat, has championed a campaign finance reform proposal
for much of his tenure and often excoriated Republicans, saying their
fund-raising practices were responsible for the "haze and smog surrounding
the capital."
Several people involved in the campaign said on Thursday that they did not
believe campaign money had been misused. Jonathan Rosen, a spokesman for
Spitzer 2010, the governor's campaign committee, and the Excelsior
Committee, his political action committee, said neither organization had
received subpoenas from federal authorities.
One of Mr. Spitzer's lawyers, Michele Hirshman, did not respond to
requests
for comment.
A person briefed on the inquiry said on Thursday that investigators
pursuing
the case discovered something last fall that raised suspicions that Mr.
Spitzer may have used campaign money to pay for trans****tation or hotel
rooms for trysts with prostitutes.
It was not clear what two other trips investigators had requested records
for from the campaign. Earlier this week, a person with knowledge of the
escort service's operations said that Mr. Spitzer had had an encounter
with
a prostitute in Dallas, and a law enforcement official said another
prostitute had met with Mr. Spitzer in Florida during the past several
months.
Mr. Spitzer traveled to West Palm Beach last month for several events,
including a scheduled Feb. 29 fund-raiser for local Democrats at which he
and Representative Charles B. Rangel of New York were the featured guests.
Organizers canceled the event after Mr. Rangel could not attend. But Mr.
Spitzer said he would come to Florida anyway, local organizers said, and
attended a reception they organized for him, as well as a separate State
of
Israel Bonds luncheon and another reception.
Campaign finance records showed that Mr. Spitzer also attended a
fund-raiser
in October in Dallas, where he raised money during a reception at the
Hotel
Crescent Court.
A Congressional staff member said that Mr. Spitzer's appearance before a
House subcommittee on Feb. 14 came at his request, not theirs. Mr. Spitzer
traveled to Wa****ngton the night before and engaged, according to an
affidavit filed in federal court, in a tryst with a 22-year-old woman at
the
Mayflower Hotel.
Ms. Hirshman spent several hours at the United States attorney's office in
Manhattan on Tuesday listening to evidence that prosecutors had amassed
during their six-month inquiry. Ms. Hirshman, who was Mr. Spitzer's deputy
in the attorney general's office, has also worked in the United States
attorney's office for the Southern District of New York. While in that
office, her posts included service as the chief of the Public Corruption
Unit.
A person with knowledge of her meeting with Mr. Spitzer on Tuesday said
that
she had asked him whether he had ever used public money, or campaign
money,
in any visits with escorts, and that he said he had not.
Hours after Mr. Spitzer's resignation on Wednesday, Michael J. Garcia, the
U.S. attorney, said in a statement: "There is no agreement between this
office and Gov. Eliot Spitzer relating to his resignation or any other
matter."
Lawyers for Mr. Spitzer continued to have discussions with prosecutors on
Thursday, said a person who was briefed on the matter. A spokeswoman for
Mr.
Garcia's office declined to comment.
A person close to Mr. Spitzer said that prosecutors told Ms. Hirshman this
week that they would be more inclined to pursue a criminal case against
Mr.
Spitzer if he remained governor because of the violation of public trust.
"The message was, 'We'd be less inclined to press a case if he's just a
private citizen,' " a friend of Mr. Spitzer's said in a telephone
interview
Wednesday night.
In the last few months of 2007, the last period for which records are
publicly available, records for Spitzer 2010 showed payments of between
$5,000 and $40,000 a month to American Express. It is unclear how many
people working on the campaign had access to credit cards associated with
the account.
Two people briefed on the investigation said that one of the money
laundering laws that prosecutors are trying to determine whether Mr.
Spitzer
broke prohibits "the intent to promote the carrying on of the specified
unlawful activity."
Charles H. Grice, a banking expert, said that statute was hardly ever
used.
"This is extremely arcane stuff," he said.
A friend of Mr. Spitzer's, who spoke on condition of anonymity, reacted
with
fury at the news that prosecutors appeared to be widening their inquiry to
include money spent on campaign trips that may have involved trysts with
prostitutes.
"At some point, this becomes piling on," the friend said. The friend said
that he would be stunned if "a judge or jury would convict a man for
something like this. It's very low grade," adding, "Why would prosecutors
pursue this?"
--
Michelle Obama hasn't been proud of America in at least 26 years
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