As the media firestorm intensified over Eliot Spitzer’s links to a prostitution ring, federal investigators were quick to point out Tuesday that they weren’t interested in the New York governor’s pay-to-play sexual mores but how he financed his illegal dalliances.
If the payments involved money laundering, Spitzer could face a felony charge with a possible sentence of up to 20 years in federal prison. He could also face felony charges related to conspiracy to commit a federal offense, as well as various charges in connection with enticement and furtherance of interstate prostitution, with possible sentences collectively totaling 40 years in prison and fines of $1 million.
Routing payments through corporate shells such as QAT Consulting Group Inc., QAT International or Protech Consultants is almost invariably a sign of money laundering, a fact that must have been known to the former New York attorney general from his own prior investigations of New York prostitution rings.
Thus, the most amazing thing about the Spitzer case is that he apparently thought he could get away with it without fear of consequences.
But Spitzer has been getting away with a lot over the years without having to face the consequences, much of it having to do with his campaign finances.
As Matthew Vadum of Capital Research Center noted, Spitzer was responsible as attorney general for policing New York’s estimated 60,000 charities and nonprofits, including his family’s $26 million Spitzer Charitable Trust.
Most of those assets were invested in hedge and equity funds whose executives made numerous campaign contributions to Spitzer. There is no evidence Spitzer ever recused himself from investment decisions by the board of his family trust. Spitzer was a member of that board despite a State Ethics Commission ruling that high-ranking state officers should not serve as directors or board members of regulated agencies.
Then there is the matter of the $42,555 in contributions Spitzer received from lawyers with the now-disgraced Milberg Weiss law firm in his successful 2002 re-election campaign for state attorney general.
As first reported last year by The Examiner, those donations included $10,000 from Mel Weiss and $10,000 from former managing partner David Bershad, who has confessed to participating in kickbacks totaling $11.7 million to plaintiffs in more than 150 securities class-action lawsuits brought by the firm.
When he ran for governor in 2006, Spitzer said he was holding himself and his campaign to “a higher standard,” and claimed to have returned more than $124,000 donated by Milberg Weiss attorneys and associates.
But a year later his spokesman refused to say what happened to the donations he received in his re-election race for attorney general.