Spitzer Skullduggery

I am pretty confident we're going to learn, over the next 2 years, more about how the Fall of Elliot Spitzer was engineered. Hubris? Of course. But this was a man with many enemies. One of them, Roger Stone, (click here for larger version of picture big enough to read) is a sleazebag GOP political operative and dirty trickster going back to the Nixon administration. He had a role in halting the Florida recount in 2000. He is a complete and total scumbag. He is also a swinger . . . on that count, to each their own - I don't really care what he and his wife do with their private parts. Consenting adults can do whatever the hell they want behind closed doors, in my view.

But he reported Spitzer to the FBI for using hookers four months before this scandal broke. . . . and it does add some irony that HE, of all people, should be reporting someone to the FBI for sexual misconduct.

Did I mention that Roger has a tattoo of Richard Nixon's face on his back? Must make for an interesting conversation piece at the orgies.

UPDATE:
Scott Horton has a much better distillation of the politicization of the Spitzer prosecution over at Harper's. It is a must read. Concludes Horton,

This marks a strong shift in position in Justice Department explanations of the case, increasingly bringing into focus the fact that Eliot Spitzer was a target because he was Eliot Spitzer. The comparison of this case with the handling of the “D.C. Madam” case produces a very curious bifurcation. Eliot Spitzer is worthy of being a target, and the dedication of massive resources to nab him. But G.O.P. Senator David Vitter and Bush Administration Director of USAID Randall Tobias are not. What, other than the fact that the latter are Republicans and the former Democrats, provides the basis for distinction? This investigation increasingly looks like a political hit.

Wither Atlantic Yards?

Yes, that's wither, not whither. It seems the project that Brooklyn loves to hate may be dying on the vine, so to speak. A tanking R/E market, sputtering credit markets, and Ratner's failure to secure an anchor tenant for Miss Brooklyn (she's no lady) have soured prospects for this mega-project.

This project from the start was a disaster in the making: a naked giveaway to a politically connected developer, a boondoggle of taxpayer financing for a sports arena, an egregious misuse of eminent domain, and a complete disregard for the community's input.

Make no mistake about it: The Vanderbilt Yards (there is no such thing as the "Atlantic Yards" outside of Bruce Ratner's drawing board) are an excellent site for development. So are the Hudson Yards. Deck them over and build. But this project was ill-conceived from the beginning.

The fig leaf of "affordable housing" (really, did you think that this project was ever about that? Or that we weren't just robbing Peter to pay Paul by raiding the state's funds for affordable housing to hand it all over to Ratner, at the expense of other sites around the city and state?) did very little to disguise the hideous, bloated carcass of Atlantic Yards.

Let's go back to the drawing board. We can do so much better than this. And don't dare build that goddamn arena as a stand-alone eyesore.

Graphic credit: New York Times.

More from The Brooklyn Paper. And an unusually thoughtful Brownstoner thread.

Back on My Feet

Was on my back sick for a few days. Been a long time since I had a 103 degree fever, and I hope it's a longer time before it happens again.

Sicker than me, it turns out, was Bear Stearns. Bear Stearns, which 1 year ago traded at $170 per share, was sold last night to JP Morgan for $2 per share. It gets more interesting- the FED basically GAVE JPM $30 Billion to buy Bear for $250 Million. (A $30 billion non-recourse loan to JPM secured by crap mortgages on BSC's books)

Why? Because Bear Stearns was bankrupt. Insolvent. Broke. And why? Because at bottom, they facilitated the housing bubble, where mortgage brokers lent money to people who couldn't pay it back to buy houses they couldn't afford. The mortgage brokers and investment banks didn't care, because they were shuttling the repayment risk off to the bond and CDO investors, and huge fees were made at every step of the process. Except when the music stopped, Bear was left with heaping armloads of crap, and no one was left that would take them away. They lost a giant game of Old Maid . . . only in this game, it seems, the Fed is willing to hold the Old Maid card . . . in a couple of years, we'll be able to figure out just how much this bailout cost. (It IS a bailout . . . because JPM would not have paid a nickel for BSC without that $30 billion from the Fed. And they're getting a $1.25 Billion office building in the deal. Peel that out, and they're valuing BSC's business not at $250 million, but at -$1 billion.)

Because of the mortgage mess that was enabled by BSC and it's peers, prices on houses and condos went through the roof the past few years, while incomes for the average guy stayed the same or even dipped slightly. This is George W. Bush's "ownership society", brought to you by "Easy Al" Greenspan.

Our economy, if you haven't guessed already, is in a lot of trouble. And the real estate market is in for a rough patch for the next couple of years. And that most certainly includes NYC.

Breaking News!

They tell me this Spitzer guy resigned.

In all seriousness, a sad display of hubris. I read some new reports last night, and it seems pretty clear he raised some red flags. Can't rule out some funny business (some more questions raised in that department) . . . but wow.

With his background you'd think he'd know better than to set off red flashing lights at the banks' compliance desks. Hubris is really the only word that describes it.

Spitzer: Kid Stays In The Picture?

The Sun reports a rumor that Spitzer might not resign after all.

I'll stipulate right off the bat that he hired a hooker(s), and we can all agree that is wrong on several levels.

However, what is troubling me is HOW he came to be ensnared in this investigation. First blush was, he was caught up in a vice takedown of a high-class callgirl operation. Now we come to find, the investigation centered on Spitzer from the beginning, which led to the prostitution ring. Scott Horton has a look at the shifting story in Harper's.

So far, the explanations (anti-money laundering audits) don't add up to me. I worked in banking for 5 years. I wasn't a compliance officer, but we did have regular KYC (Know Your Customer) training. And something about this whole thing just seems fishy.

Again, I'm not going to defend Spitzer's actions. But I am highly concerned about the possibility of a politically motivated prosecution. Particularly in light of the US Attorney scandals and most egregious of all, the railroading of Alabama Governor Don Siegelman. 60 Minutes had a piece on Siegelman that is worth a watch.

With the Bush Administration conducting warrantless wiretapping on American citizens, is there any privacy left? Mindblowing is this story from yesterday's Wall Street Journal, which was buried under the Spitzer circus:

According to current and former intelligence officials, the spy agency now monitors huge volumes of records of domestic emails and Internet searches as well as bank transfers, credit-card transactions, travel and telephone records. The NSA receives this so-called "transactional" data from other agencies or private companies, and its sophisticated software programs analyze the various transactions for suspicious patterns. Then they spit out leads to be explored by counterterrorism programs across the U.S. government, such as the NSA's own Terrorist Surveillance Program, formed to intercept phone calls and emails between the U.S. and overseas without a judge's approval when a link to al Qaeda is suspected.

The NSA's enterprise involves a cluster of powerful intelligence-gathering programs, all of which sparked civil-liberties complaints when they came to light. They include a Federal Bureau of Investigation program to track telecommunications data once known as Carnivore, now called the Digital Collection System, and a U.S. arrangement with the world's main international banking clearinghouse to track money movements.

The effort also ties into data from an ad-hoc collection of so-called "black programs" whose existence is undisclosed, the current and former officials say. Many of the programs in various agencies began years before the 9/11 attacks but have since been given greater reach. Among them, current and former intelligence officials say, is a longstanding Treasury Department program to collect individual financial data including wire transfers and credit-card transactions.

Do you trust the Bush administration with this program? I sure as hell do not. You can ignore that phrase "al Qaeda" in that second bolded phrase; the lack of ANY judicial oversight whatsoever ensures that no one will ever ask if there were suspicions of al Qaeda. Theoretically, you have to have suspicions of al Qaeda links, but no one will ever ask you. See how nicely that works?

This cannot continue. For that reason alone, I'm looking forward to a bare-knuckle brawl between Spitzer and the Justice Department, with full discovery as to just how this investigation came about. Spitzer has hired the firm Paul, Weiss to defend him in this matter, and they are no lightweights. Get your popcorn ready.

Holy Crap: Spitzer and Prostitutes?

I nearly fell out of my chair when I read this. Not what I was expecting today.

Gov. Eliot Spitzer has informed his most senior administration officials that he had been involved in a prostitution ring, an administration official said this morning.

Stunned.
UPDATE: TPM Muckraker has transcripts of the calls. Ouch.

Sex Withheld Over Clinton Support

How could I not blog an article with a lede like this? The fact that the couple lives in Carroll Gardens is just the icing on the cake:

Howard Graubard and his wife, Sabina Tyrk, were on opposite sides for months—he with Sen. Hillary Clinton and she with Sen. Barack Obama—when matters came to a head one night at their home in Carroll Gardens, Brooklyn. Ms. Tyrk made it clear that her husband's advances would be for naught unless he switched allegiances.