COLLATERAL DAMAGE IN THE WAR ON DRUGS

What goes around comes around. Eliot Spitzer, Governor of New York and former take-no-prisoner crime and corruption fighting zealot, got zapped doing business repeatedly with a high-priced call-girl operation. As New York's Attorney General, he attempted to besmirch the private lives of those he targeted for prosecution on white collar crimes. Now the seamy side of Spitzer's own private life has been publicly exposed, humiliating his wife and three daughters in the process, and forcing him to resign from office.

How did Spitzer's exposure come about. You may be surprised to learn that the Governor's fall from grace was the result of collateral damage in the war on drugs. In order to give law enforcement a powerful new weapon to fight that war, Congress in 1970 passed the Bank Security Act (BSA). This law was designed to detect and stop money laundering by big-time drug dealers and to uncover unknown traffickers.

BSA requires all banks to submit reports of certain money transactions to the Internal Revenue Service. The Currency Transaction Report (CTR) is required for any currency transactions in excess of $10,000. The Suspicious Activity Report (SAR) is required for transactions of at least $5,000 if a bank knows or suspects the money was derived from illegal activities.

SARs submitted by a bank led the IRS to track down a number of money transfers which revealed that Gov. Spitzer was one of several clients doing business with Emperor's Club VIP, a high-priced international prostitution service with day ("dawn to dawn") rates starting at $10,000 and with call-girls charging up to $5,500 an hour. Wiretaps on the service indicated that Spitzer, designated by the IRS as "Client 9," had been doing business with Emperor's Club for several years. (Client 6 is reported to be the Duke of Westminster, one of England's wealthiest men.) It is estimated that Spitzer may have spent as much as $80,000 on Emperor's Club call-girls.

A federal affidavit stated that Client 9 wanted a call-girl going by the name "Kristen" to take the 5:39 P.M. train from New York to Washington, D.C. on February 13. She was to check into a separate room at the Mayflower Hotel which he had paid for under another name. Client 9 would pay for the train ticket, cab fares, room service, and the minibar. When asked by Kristen's boss if he would make his payment to the same business as usual, he was heard to reply over the wiretap, "Yup, same as in the past. No question about it."

Apparently, Spitzer had sex with Kristen and numerous other Emperor's Club prostitutes over a period of years because he had to ask its agent to remind him of exactly what Kristen looked like. He agreed to pay Kristen $4,300 for a two-hour tryst at the Mayflower.

Not only did Spitzer knowingly and willingly do business with a criminal enterprise, but he really blew it when he paid for Kristen to travel from New York to Washington. He committed a federal felony by violating the White-Slave Traffic Act (Mann Act) of 1910, a law which forbids the transportation of women from one state to another for immoral purposes. It remains to be seen if the federal government will indict him for violating the Mann Act.

With this currency transaction investigation, the war on drugs snared a really big fish. But, it was not a big-time drug dealer who became a casualty - it was the holier-than-thou Governor of New York. Unfortunately for Spitzer, he was felled by heavy collateral damage in the war on durgs.