Tuesday, March 11, 2008

Spitzer Gets Impaled by His Own Spikey Tactics

has an interesting insight into why Spitzer's demise has been greeted with such glee. Spitzer himself got sucked into the very "Everybody Does It" syndrome that he viciously prosecuted Wall Streeters for in a public fashion that was almost sadistic in its shaming rituals.
Many of the Wall Street figures Spitzer nailed were engaging in activities that looked skeevy when exposed to the public but that were generally well-known and accepted by the powers that be. Until Spitzer, investment banks giving buy ratings to their investment banking clients, and spinning shares of hot IPOs to the personal accounts of executives who funneled investment banking fees their way, were common practices at Wall Street's top firms. The executives nailed by Spitzer thought they were engaging in routine activity and never thought they could be indicted for it.

Now Spitzer is being nailed to the cross for a variation on the same theme:
The same holds, to a different degree, with high-end prostitution. In New York, high-end prostitution is widely acknowledged and generally tolerated, though heavily cloaked in euphemism. Ads for high-end escort services fill respectable publications like New York magazine. Fancy gentlemen's clubs and strip joints (where all sorts of services are available upon negotiation or request) operate with full sanction of the law. Comparatively few of those involved in it are arrested, and the johns are almost never prosecuted. Spitzer likely thought that he, too, was engaging in a practice common among men of his social and economic class and that the likelihood of prosecution was exceedingly low.

If Spitzer had confined his philandering to Babylon-on-the-Hudson, he might have skated. But his lack of limits and exuberant hubris drove him to set up assignations in DC, where the Feds can nail him on Mann Act and other charges. Already the feeble cries of Clintonian spinners are whining that the Mann Act is outdated because it was set up in 1910 to stop white slavery. At the same time, Slate points out:
Wall Street executives who ran afoul of Eliot Spitzer earlier this decade found they were in deep trouble because of a peculiar wrinkle in the law. They found their options were limited because they happened to conduct their business in New York. Spitzer had at his disposal the Martin Act, a 1921 piece of legislation that gives extraordinary powers and discretion to an attorney general fighting financial fraud. As Nicholas Thompson noted in Legal Affairs, "people called in for questioning during Martin Act investigations do not have a right to counsel or a right against self-incrimination. Combined, the act's powers exceed those given any regulator in any other state."

Spitzer's allies can hardly argue that the Mann Act is an artifact of an earlier legal culture when Eliot used the Martin Act from the same era to pull off his nastiest legal stunts---and gain a governorship from an absent-minded populace eager to see corruption end in the Empire State.

Now Spitzer is finding out what's sauce for the goose is sauce for the gander.

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