THE "PORK" IN NEW YORK, Thoughts of an older American on Constitutional Government in the USA Options

[Livyjr]

"Paterson proposes cutting NY budget increases amid Wall Street woes"

By VALERIE BAUMAN, Associated Press

Last updated: 5:32 p.m., Tuesday, March 18, 2008

ALBANY -- Citing troubles on Wall Street, Gov. David Paterson is taking the extraordinary step of calling for an $800 million cut in the proposed state budget increases.

Paterson wants to cut the almost 5 percent spending increase in former Gov. Eliot Spitzer's $124 billion plan to 3.7 percent.

His proposal includes an across-the-board 2 percent reduction in operating spending for all state agencies, and another 2 percent reduction in the funds that the state contributes to local governments and programs.

Under the state consitution, lawmakers must reach a final budget by April 1.

"We've got to do, maybe, something we've never really done before so that next year we're not in the same situation," Paterson said.

"We're going to be in the same situation either way, based on where the national economy is going, but we don't want to be where California is."

California lawmakers approved emergency cuts and new borrowing last month as part of their plan to cut an estimated $16 billion shortfall in half by this summer.

Since then Gov. Arnold Schwarzenegger has called for 10 percent, across-the-board budget cuts to cope with a projected deficit in the 2008-09 fiscal year.

That includes a $4.3 billion reduction in education spending.

Nearly 20 percent of New York state's revenues come from Wall Street.

The state is directly affected by layoffs in the financial world and JP Morgan's acquisition of the investment firm Bear Stearns Companies Inc. Monday at a fraction of its worth from a week ago.

Senate Majority Leader Joseph Bruno, a Republican, says he would be open to a hiring freeze for state workers -- an idea suggested by Assembly Minority Leader Jim Tedisco.

The state has about 1,400 job vacancies right now.

Paterson said he probably wouldn't consider a hiring freeze, but perhaps would look at cutting some of those positions.

Assembly Speaker Sheldon Silver is seeking a tax increase for New Yorkers who make $1 million or more.

Bruno rejects any tax increases.

"We realized there was a gap," Silver said.

"We proposed for this time of economic downturn that we would provide a revenue source for that downturn."

The biggest conflict is that lawmakers can't agree on how much revenue they have to work with while planning a budget.

"We all just count differently," Bruno said.

"It's kind of hard for the public to understand how we arrive at such different conclusions from what should be the same information."

Paterson and lawmakers were tackling the budget in meetings Tuesday.

[Livyjr]

"Woman charged in prostitution ring that snared Spitzer free"

By LARRY NEUMEISTER, Associated Press

Last updated: 4:52 p.m., Tuesday, March 18, 2008

NEW YORK -- A 23-year-old woman accused of controlling the money for the high-priced escort service that led to Eliot Spitzer's downfall has been released on bail, nearly two weeks after her arrest.

A smiling Cecil "Katie" Suwal left U.S. District Court in Manhattan Tuesday, and has three weeks to pay $50,000 in cash.

She declined to comment as she stepped in to a dark sedan.

Suwal lived in Cliffside Park, N.J., with 62-year-old Mark Brener before they were arrested along with two others on charges they ran the Emperors Club VIP.

They were accused of conspiracy to violate federal prostitution laws and conspiracy to launder more than $1 million in illicit proceeds.

Brener remains incarcerated.

Charges were unveiled four days before it was revealed that Spitzer was accused of being a client, and may have paid to meet a prostitute from the Emperors Club in a Washington hotel room.

He stepped down as governor on Monday.

Prosecutors say Suwal, who graduated from the prestigious Blair Academy in New Jersey, handled the day-to-day operations for the escort service.

[Livyjr]

"Upstate NY fruit growers unsettled by virus and market worries"

By CAROLYN THOMPSON, Associated Press

Last updated: 4:13 p.m., Tuesday, March 18, 2008

APPLETON, N.Y. -- Three weeks before the peach growing season gets under way with the labor-intensive hand pruning of thousands of trees, growers don't know whether they will have a buyer for their crop at harvest time.

And that's not the only problem in what are increasingly unsettled times for western New York fruit growers.

The anticipated closing of a Canadian processing plant that has been buying tons of New York peaches is just the latest in a series of challenges that include a potentially devastating virus, persistent labor shortages and competition from abroad.

"What saves us is we're diversified," said James Bittner, an ownership partner at Singer Farms LLC and one of the largest growers in the Lake Ontario fruit belt.

"None of us put our eggs in one basket."

CanGro Foods announced in early January that it will sell or close its St. Davids, Ontario, fruit processing plant by March 31, severely diminishing the market for canning peaches that construction of the plant helped create.

CanGro markets the peaches under the Del Monte label.

About 26 growers in Niagara, Orleans, Monroe and Wayne counties were contracted with CanGro to sell their peaches for $500 per ton.

Now they are scrambling to find other markets.

"Nothing's going to be as good as the deal we had, that's for sure," said Bittner, who has spent the last three months contacting potential buyers.

Another looming challenge for growers is the spring start of testing for plum pox virus and the serious measures in place to stop the invasive species from spreading.

The virus, spread by tiny aphids to peach, nectarine, apricot and plum trees, was detected for the first time in the United States -- in Pennsylvania -- in 1999 and has been found in Canada since 2000.

It was found in two locations in Niagara County in 2006 and five more places, in Niagara County and neighboring Orleans County, in 2007.

No one knows what 2008 will bring.

Once plum pox virus is found in a tree, growers have to rip out all susceptible trees within a roughly 150-foot radius and are barred from planting new trees in a 1 1/2-mile radius.

The restrictions must stay in place for at least three years.

Six growers, including Bittner, have had to destroy some 26 acres of trees, said Robert Mungari of the state Department of Agriculture and Markets.

A compensation program reimburses growers for lost trees but provides no relief for neighboring farms who fall into the no-plant zone.

So far, between $750,000 and $800,000 has been paid out, with about $259,000 coming from the state and the rest from the federal government, Mungari said.

While posing no threat to humans, plum pox virus shortens the life expectancy and productivity of trees, Mungari said, "and more importantly, it was a disease we didn't have here in North America, so it's an actionable pest by federal and state standards."

In the coming weeks, state inspectors will collect leaves from thousands of commercial trees across the state to be analyzed.

The United States Department of Agriculture, meanwhile, will conduct its own survey of backyard fruit trees on homeowners' property.

In Pennsylvania, after a concerted eradication effort, there were no positive findings in 2007, authorities said.

Canada, however, reported about 261 detections in Ontario, leading to increased sampling and the removal of higher numbers of trees across the border.

The closing of the CanGro processing plant may inadvertently help with eradication efforts by forcing Canadian farmers out of peach-growing or to reduce their tree stock.

The CanGro plant received more that half its inventory from Canadian growers.

New York farmers were happy to supply some of the rest, especially after the company offered farmers $1.50 per tree in the late 1990s to plant processing peaches, Bittner said.

The state harvested about 7,000 tons of peaches from 1,700 acres in 2006.

Bittner's farm was set to grow 800 tons of processing peaches, worth $400,000, mainly for CanGro in the coming season.

That represents about a third of the farm's income.

"For them to close up has really put a crimp on us, and it's sad," Bittner said, "because it's been a bright spot for the farm, profit-wise."

"It's been a bright spot for the last five or six years."

Bittner has canceled plans to plant an additional 15,000 peach trees this year and is planning to pull the developing fruit off his youngest trees to reduce the crop size and expenses.

"I can't invest the money in spraying and hand thinning and harvesting if we don't know where they're going," he said.

There are not many options for growers.

A Michigan processing plant may take some peaches, but shipping costs would eat into the profits.

There has been talk of a plant opening in the state, but nothing has been finalized.

[Indianhead]

Good thing about it...if growers shift to crops to support their families and their communities
they will be well served no matter what "the market" does. The most important folks in this
country are growers. All those city folk that talk...postulate...argue and debate...
don't feed anyone...any maybe it's time that America learns the lesson...that we are blessed
with good land...good weather...and smart growers...the value of the dollar...the markets...
the government...don't hold a candle to those who can feed themselves and their neighbors.

[Livyjr]

THE WASHINGTON POST

"Predatory Lenders' Partner in Crime - How the Bush Administration Stopped the States From Stepping In to Help Consumers"

By Eliot Spitzer

Thursday, February 14, 2008; Page A25

Several years ago, state attorneys general and others involved in consumer protection began to notice a marked increase in a range of predatory lending practices by mortgage lenders.

Some were misrepresenting the terms of loans, making loans without regard to consumers' ability to repay, making loans with deceptive "teaser" rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks.

These and other practices, we noticed, were having a devastating effect on home buyers.

In addition, the widespread nature of these practices, if left unchecked, threatened our financial markets.

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners.

In fact, the government chose instead to align itself with the banks that were victimizing consumers.

Predatory lending was widely understood to present a looming national crisis.

This threat was so clear that as New York attorney general, I joined with colleagues in the other 49 states in attempting to fill the void left by the federal government.

Individually, and together, state attorneys general of both parties brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices.

Several state legislatures, including New York's, enacted laws aimed at curbing such practices.

What did the Bush administration do in response?

Did it reverse course and decide to take action to halt this burgeoning scourge?

As Americans are now painfully aware, with hundreds of thousands of homeowners facing foreclosure and our markets reeling, the answer is a resounding no.

Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye.

Let me explain: The administration accomplished this feat through an obscure federal agency called the Office of the Comptroller of the Currency (OCC).

The OCC has been in existence since the Civil War.

Its mission is to ensure the fiscal soundness of national banks.

For 140 years, the OCC examined the books of national banks to make sure they were balanced, an important but uncontroversial function.

But a few years ago, for the first time in its history, the OCC was used as a tool against consumers.

In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act to issue formal opinions preempting all state predatory lending laws, thereby rendering them inoperative.

The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks.

The federal government's actions were so egregious and so unprecedented that all 50 state attorneys general, and all 50 state banking superintendents, actively fought the new rules.

But the unanimous opposition of the 50 states did not deter, or even slow, the Bush administration in its goal of protecting the banks.

In fact, when my office opened an investigation of possible discrimination in mortgage lending by a number of banks, the OCC filed a federal lawsuit to stop the investigation.

Throughout our battles with the OCC and the banks, the mantra of the banks and their defenders was that efforts to curb predatory lending would deny access to credit to the very consumers the states were trying to protect.

But the curbs we sought on predatory and unfair lending would have in no way jeopardized access to the legitimate credit market for appropriately priced loans.

Instead, they would have stopped the scourge of predatory lending practices that have resulted in countless thousands of consumers losing their homes and put our economy in a precarious position.

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably.

The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits.

So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

The writer is governor of New York.

http://www.washingtonpost.com/wp-dyn/conte...8021302783.html

[Livyjr]

the value of the dollar...the markets...the government...don't hold a candle to those who can feed themselves and their neighbors.

Well said, Indianhead ...

[Indianhead]

I'm a simpleton...but if you get hungry brother...985-429-1810.
Rave on against the machine...Rebels ain't regional...that's a
neo-con, liberal, racial, regional myth. We're just outside.

[Livyjr]

I'm a simpleton...

Me, too, Indianhead ...

Must be why we can get along without rancor in here ...

And so ....

[Livyjr]

THE NEW YORK POST

"HIS PUSHY PLAN TO BE IN DC FOR TRYST"

By DAPHNE RETTER Post Correspondent

March 12, 2008 -- WASHINGTON - Gov. Eliot Spitzer himself sought to testify before a congressional subcommittee that hadn't invited him to appear - possibly to give him an excuse to be away from home and see a hooker, officials revealed yesterday.

When Spitzer did show up before the panel on Feb. 14, the day after he'd been with a prostitute, Rep. Spencer Bachus (R-Alabama) said that the typically unflappable Spitzer "came unglued" under questioning during the hearing.

Bachus, a former prosecutor himself, added that Spitzer also seemed unprepared, making at least one statement that Bachus has since informed the committee was inaccurate.

Now, though, it all makes sense, Bachus said.

"I realize that he may have been a little sleep-deprived," Bachus said with a grin in an interview yesterday.

"When we haven't had a good night's sleep, we can all get a little cranky."

http://www.nypost.com/seven/03122008/news/...ryst_101577.htm

FORBES

"Credit Crunch - What To Do About Wall Street"

Liz Moyer, 02.14.08, 3:05 PM ET

So who's to blame for the subprime mess?

Banks?

Investors?

Regulators?

Ratings agencies?

The epicenter of all this finger-pointing: Capitol Hill Thursday, as lawmakers, regulators, and executives gathered to debate how to deal with the crisis gripping the credit markets, particularly the perilous state of the mortgage bond industry.

New York Governor Eliot Spitzer, in testimony to the House of Representatives finance committee, laid the blame at the feet of federal regulators and ratings agencies, who failed to stop the growth of the subprime mortgage bubble before it got out of control.

And he said a swift resolution to the severe capital pressures the bond insurers are facing is necessary to stop a "tsunami" of problems in the financial markets.

Gov. Spitzer said he hoped a private effort by Wall Street banks to inject capital into some of the hardest-hit bond insurers could get done in the next three to five business days.

If not, regulators would have to resort to the "good bank, bad bank" split of the bond insurers, as proposed Tuesday by Berkshire Hathaway's Warren Buffett.

"The clock is ticking," Gov. Spitzer said.

"We will be forced to act."

http://www.forbes.com/2008/02/14/washingto...artner=yahootix

THE WASHINGTON POST

"Predatory Lenders' Partner in Crime - How the Bush Administration Stopped the States From Stepping In to Help Consumers"

By Eliot Spitzer

Thursday, February 14, 2008; Page A25

When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners, the Bush administration will not be judged favorably.

The tale is still unfolding, but when the dust settles, it will be judged as a willing accomplice to the lenders who went to any lengths in their quest for profits.

So willing, in fact, that it used the power of the federal government in an unprecedented assault on state legislatures, as well as on state attorneys general and anyone else on the side of consumers.

The writer is governor of New York.

http://www.washingtonpost.com/wp-dyn/conte...8021302783.html

An interesting article, Snuf ...

Especially from the perspective that it appeared the same weekend that Spitzer was "trysting" in Washington with his high-priced "lady of the evening" ...

But based on a review of the facts in New York State, this can easily be seen as nothing more than BLUSTER and OBFUSCATION and HYPE and POLITICAL BLAME-LAYING and yet more HYPOCRISY from Spitzer ...

Because in New York State, Spitzer as Attorney General was also defending and PROTECTING the FRAUD that underlies a lot of these worthless mortgages ....

And in doing so, Spitzer chose to align himself with the system that was victimizing consumers ....

And so ...

Sauce for the goose, sauce for the gander is my thought ...

And so ....

THE WASHINGTON POST

"Predatory Lenders' Partner in Crime - How the Bush Administration Stopped the States From Stepping In to Help Consumers"

By Eliot Spitzer

Thursday, February 14, 2008; Page A25

Even though predatory lending was becoming a national problem, the Bush administration looked the other way and did nothing to protect American homeowners.

In fact, the government chose instead to align itself with the banks that were victimizing consumers.

end quotes

With respect to this above, these following are relevant facts, Snuf, from a March 31, 2005 decision of Bush-judge Gary L. Sharpe in federal District Court for the Northern District of New York in Albany that Spitzer defended before the federal 2d Circuit Court of Appeals in NYC in November 0f 2005 in Matter of Paul R. Plante, NYSPE v. Kathleen Jimino, Rensselaer County Executive et al, 05-2133-CV ...

III. FACTS:

On May 22, 2001, Jeffey Pelletier was issued a sewage system construction permit by the County of Rensselaer.

On July 7 (2001), PLAINTIFF (Paul R. Plante, NYSPE) conducted an investigation of defendants Aiken (engineer) and McGrath’s “deliberate falsification of inspection data and fraudulent submissions” resulting in the issuance of the Pelletier permit.

During PLAINTIFF'S investigation, Pelletier assaulted him.

On August 9 (2001), defendant Reiter (Rensselaer County Director of Veterans’ Services Robert "BOB" Reiter) warned PLAINTIFF to “back off” the Pelletier investigation because he (Pelletier) was a “protected person” in the county.

On August 17 (2001), defendant Jimino (Rensselaer County Executive Kathleen Jimino) allegedly phoned PLAINTIFF threatening to harm him if he did not stop his investigation.

end quotes

"DELIBERATE FALSIFICATION OF INSPECTION DATA AND FRAUDULENT SUBMISSIONS" RESULTING IN THE ISSUANCE OF A RENSSELAER COUNTY HEALTH DEPARTMENT SEWAGE SYSTEM CONSTRUCTION PERMIT ......

There is the GAME as Spitzer was defending it in NYS, Snuf ...

THERE IS THE SCAM ....

BOGUS APPRAISALS OF LAND ....

And as I have said before ....

It never was a secret .....

Just a story not widely told before this ....

And so ....

And I am surprised at the FREE RIDE Spitzer got on this case from the press ....

"MR. CLEAN" DEFENDING THOSE WHO WERE DIRTY WITH THE FULL POWER OF THE STATE OF NEW YORK ....

In November of 2005 ....

And then in September of 2006, while he was still NYSAG ....

Spitzer appeared before the NYS Business Council at Bolton Landing on Lake George in NYS, and this is what he promised the NYS Business Council on that evening:

"Improving the Business Climate"

by New York State Attorney General Eliot Spitzer

New York State Business Council, Bolton's Landing, NY

[As Prepared for Delivery]

September 21, 2006

Thank you, Peter, for that kind introduction, and thank you all for inviting me here today.

I want to recognize Dan Walsh and thank him for his leadership over the past 18 years as President and CEO of the Business Council.

Dan, you have been an outstanding advocate for New York's private-sector business community, and you will be missed.

I also want to welcome Ken Adams as the Business Council's new President.

Ken, I look forward to working with you to make New York the best place to do business in the world.

As Governor, I will ensure that the Governor's Office of Regulatory Reform places renewed focus on breaking the regulatory logjam in the State's permitting process for new development.

end quotes

Put that statement by Spitzer to the NYS Business Council in September of 2006 together with the findings of federal District Court in 2005, and couple that with the fact the Jeffrey Pelletier was a member of the NYS Business Council through the Rensselaer County Chamber of Commerce, and you begin to get a more complete picture of where Spitzer himself really was in connection with this whole financial mess ...

Spitzer was a PLAYER, Snuf ...

Spitzer wasn't trying to clean things up ...

Spitzer was trying to take things over ....

To be the boss of bosses ....

Instead of just being a bit player ....

And so ...

[Livyjr]

Rave on against the machine...

The "MACHINE" eats it young, Indianhead ...

[Livyjr]

FRAME-UP:

Conspiracy or plot, especially for evil purpose, as to incriminate a person on false evidence ....

FRAMED:

Incrimination of person on false or fabricated evidence ....

When used to describe evidence, word is generally accepted as implying that willful perjurers, suborned by and conspiring with parties in interest to litigation, are swearing or have sworn to matters without any basis in fact ....

Black's Law Dictionary

A year ago ...

When I started this thread ....

It was, as I have said before, with an intent ....

To make public, here in OUR America ....

Something that was very shocking ...

To my sense of fair play ....

And that was this Bush-appointee Federal District Court Judge's decision to deny protection of law to the PLAINTIFF herein ....

A disabled Viet Nam veteran who rehabilitated himself after Viet Nam ....

And became a licensed professional engineer in the State of New York ...

As a means of not only supporting himself financially ...

So as to not be a burden on the public ....

But so that PLAINTIFF could also devote the remainder of his life to PUBLIC SERVICE .....

And specifically, the protection and safeguarding of life, health and property in the State of New York .....

For which PUBLIC SERVICE ...

PLAINTIFF was commended by Dr. David Axelrod, the then-Commissioner of Health ..

Of the State of New York ....

And while this Bush-appointee was denying the PLAINTIFF access to a jury ....

He was at the same time ....

Wrapping the protection of the federal district court in Albany, New York ....

Firmly around Jeffrey Pelletier of Poestenkill, New York ....

A politically-connected PLAYER in Rensselaer County ......

Who bragged of having this federal judge in his pocket .....

And who was also featured in a videotape assaulting the PLAINTIFF herein on a public thoroughfare on the Town of Poestenkill, New York in August of 2001 ....

In order to not only harm the PLAINTIFF physically ....

But also, to deter the PLAINTIFF from coming forward with further evidence of corrupt conduct in the County of Rensselaer in the State of New York ....

Which happens to be a federal crime .....

That Jeffrey Pelletier NEVER DENIED COMMITTING ....

When specifically so charged .....

And so .....

WHY WAS THE ARM OF THE FEDERAL DISTRICT COURT FOR THE NORTHERN DISTRICT OF NEW YORK PUT AROUND A MAN WHO OPENLY ADMITTED, YEA, EVEN BRAGGED ABOUT VIOLATING A FEDERAL STATUTE BY ASSAULTING THE PLAINTIFF IN AUGUST OF 2001?

What's the deal here, is what was on my mind back then ....

And so ...

"Woman charged in prostitution ring that snared Spitzer free"

By LARRY NEUMEISTER, Associated Press

Last updated: 4:52 p.m., Tuesday, March 18, 2008

NEW YORK -- A 23-year-old woman accused of controlling the money for the high-priced escort service that led to Eliot Spitzer's downfall has been released on bail, nearly two weeks after her arrest.

Suwal lived in Cliffside Park, N.J., with 62-year-old Mark Brener before they were arrested along with two others on charges they ran the Emperors Club VIP.

They were accused of conspiracy to violate federal prostitution laws and conspiracy to launder more than $1 million in illicit proceeds.

THE CONSERVATARD

"The Entrapment of Eliot"

By ALAN M. DERSHOWITZ

March 13, 2008; Page A19

The federal criminal investigation that has led to Eliot Spitzer’s resignation as governor of New York illustrates the great dangers all Americans face from vague and open-ended sex and money-transaction statutes.

Federal law, if read broadly, criminalizes virtually all sexual encounters for which something of value has been given.

Federal money-laundering statutes criminalize many entirely legitimate and conventional banking transactions.

Congress enacted these laws to give federal prosecutors wide discretion in deciding which “bad guys” to go after.

Generally, wise and intelligent prosecutors use their discretion properly — to target organized crime, terrorism, financial predation, exploitation of children and the like.

But the very existence of these selectively enforced statutes poses grave dangers of abuse.

They lie around like loaded guns waiting to be used against the enemies of politically motivated investigators, prosecutors and politicians.

There is no hard evidence that Eliot Spitzer was targeted for investigation, but the story of how he was caught does not ring entirely true to many experienced former prosecutors and current criminal lawyers.

The New York Times reported that the revelations began with a routine tax inquiry by revenue agents “conducting a routine examination of suspicious financial transactions reported to them by banks.”

This investigation allegedly found “several unusual movements of cash involving the Governor of New York.”

But the movement of the amounts of cash required to pay prostitutes, even high-priced prostitutes over a long period of time, does not commonly generate a full-scale investigation.

We are talking about thousands, not millions, of dollars.

We are also talking about a man who is a multimillionaire with numerous investments and purchases.

The idea that federal investigators would focus on a few transactions to corporations — that were not themselves under investigation — raises as many questions as answers.

Even if Mr. Spitzer’s derelictions were serendipitously discovered as a result of routine, computerized examination of bank transactions, the dangers inherent in selective use of overbroad criminal statutes remain.

Money laundering, structuring and related financial crimes are designed to ferret out organized crime, drug dealing, terrorism and large-scale financial manipulation.

They were not enacted to give the federal government the power to inquire into the sexual or financial activities of men who move money in order to hide payments to prostitutes.

Once federal authorities concluded that the “suspicious financial transactions” attributed to Mr. Spitzer did not fit into any of the paradigms for which the statutes were enacted, they should have closed the investigation.

It’s simply none of the federal government’s business that a man may have been moving his own money around in order to keep his wife in the dark about his private sexual peccadilloes.

But the authorities didn’t close the investigation.

They expanded it, because they had caught a big fish in the wide net they had cast.

In this case, they wiretapped 5,000 phone conversations, intercepted 6,000 emails, used surveillance and undercover tactics that are more appropriate for trapping terrorists than entrapping johns.

Unlike terrorism and other predatory crimes, prostitution is legal in many parts of the world and in some parts of the U.S.

Even in places like New York, where it is technically illegal, johns are rarely prosecuted.

Prostitution rings operate openly, advertising “massage” and “escort” services in the back pages of glossy magazines, local newspapers and television sex channels.

If the federal government really wanted to shut down these operations, they could easily do it without a single wiretap or email intercept.

All they would have to do is get an undercover agent to answer the ads, arrange for the “escort” to go from New York to New Jersey and be arrested.

But many in law enforcement would much rather reserve these statutes for selective use against predetermined targets.

In this case, if the serendipitous bank audit really led federal agents to Mr. Spitzer, and Mr. Spitzer led them to the Emperor’s Club, and federal prosecutors really wanted to get the Club, they could easily have sent an undercover cop to pose as a john, instead of tapping phones and reading emails — tactics designed to catch and embarrass Mr. Spitzer with his own recorded words, which could be, and were, leaked to the media.

As this newspaper has reported: “It isn’t clear why the FBI sought the wiretap warrant."

"Federal prostitution probes are exceedingly rare, lawyers say, except in cases involving organized-crime leaders or child abuse."

"Federal wiretaps are seldom used to make these cases . . .”

Lavrenti Beria, the head of Joseph Stalin’s KGB, once quipped to his boss, “show me the man and I will find the crime.”

The Soviet Union was notorious for having accordion-like criminal laws that could be adjusted to fit almost any dissident target.

The U.S. is a far cry from the Soviet Union, but our laws are dangerously overbroad.

Both Democrats and Republicans have targeted political adversaries over the years.

The weapons of choice are almost always elastic criminal laws.

And few laws are more elastic, and susceptible to abuse, than federal laws on money laundering and sex crimes.

For the sake of all Americans, these laws should be narrowed and limited to predatory crimes with real victims.

Mr. Dershowitz teaches law at Harvard University and is the author of “Finding Jefferson” (Wiley, 2007).

http://conservatard.wordpress.com/2008/03/...y-rat/#more-347

[Livyjr]

Mar 20, 2008

ASIA TIMES

"Why Spitzer was Bushwhacked"

By F William Engdahl

The spectacular and bizarre release of secret FBI wiretap data to the New York Times exposing the tryst of New York State governor Eliot Spitzer, the now-infamous client "No 9", with an upmarket call-girl had relatively little to do with the George W Bush administration’s pursuit of high moral standards for public servants.

Spitzer was likely the target of a White House and Wall Street dirty tricks operation to silence one of the most dangerous and vocal critics of their handling of the current financial market crisis.

A useful rule of thumb in evaluating spectacular scandals around prominent public figures is to ask who might want to eliminate that person.

In the case of former governor Eliot Spitzer, a Democrat, it is clear that the spectacular "leak" of the government's FBI wiretap records showing that Spitzer paid a high-cost prostitute US$4,300 for what amounted to about an hour’s personal entertainment, was politically motivated.

The press has almost solely focused on the salacious aspects of the affair, not least the hefty fee Spitzer apparently paid.

Why the scandal breaks now is the more interesting question.

Spitzer became governor of New York following a high-profile record as a relentless state attorney general going after financial crimes such as the Enron fraud, and corruption by Wall Street investment banks during the 2002 dotcom bubble era.

Spitzer made powerful enemies by all accounts.

The former head of the large AIG insurance group, Hank Greenburg, was among his detractors.

He was bitterly hated on Wall Street.

He had made his political career on being ruthless against financial corruption.

Most recently, from his position as governor of the nation’s second largest state, home to its financial industry, Spitzer had begun making high-profile attacks on the complicity of the Bush administration in covertly arranging bailouts of its Wall Street friends at the expense of ordinary homeowners and citizens, all paid for by taxpayer funds.

Curiously, Spitzer, who had been elected governor in 2006, defeating a Republican by winning nearly 70% of the vote, has not been charged with any crime.

However, the day the scandal broke, New York Assembly Republicans immediately announced plans to impeach Spitzer or put him on public trial were he to refuse to resign.

Spitzer could be asked to testify in any trial involving the Emperors Club prostitution ring.

But so far he hasn’t been charged with a crime.

Prostitution is illegal in most US states, but clients of prostitutes are almost never charged, nor are their names usually leaked in a case in process.

The Spitzer case is in the hands of Washington and not state authorities, underscoring the clear political nature of the Spitzer "Watergate".

The New York Times said Spitzer was an individual identified as Client 9 in court papers filed last week.

Client 9 arranged to meet with "Kristen", a prostitute who officially charged $1,000 an hour, on February 13 in a Washington hotel.

Whatever transpired, Spitzer paid her $4,300, according to the official documents.

The case is clearly political when compared with more egregious recent cases involving Republicans.

Republican Mark Foley was exposed propositioning male interns in Congress and Rudolph Giuliani was discovered cheating on his wife, but no or few Republican calls for resignations were heard.

Why the attack now?

Spitzer had become increasingly public in blaming the Bush administration for the nation’s current financial and economic disaster.

He testified in Washington in mid-February before the US House of Representatives Financial Services subcommittee on the problems in New York-based specialized insurance companies, known as "monoline" insurers.

In a national CNBC TV interview the same day, he laid blame for the crisis and its broader economic fallout on the Bush administration.

Spitzer recalled that several years ago the US Office of the Comptroller of the Currency (OCC) went to court and blocked New York State efforts to investigate the mortgage activities of national banks.

Spitzer argued that the OCC did not put a stop to questionable loan marketing practices or uphold higher underwriting standards.

"This could have been avoided if the OCC had done its job," Spitzer said in the interview.

"The OCC did nothing."

"The Bush administration let the housing bubble inflate and now that it's deflating we're dealing with the consequences."

"The real failure, the genesis, the germ that has spread, was the subprime scandal," Spitzer said.

Fraudulent marketing and very low "teaser" mortgage rates that later ballooned higher, were practices that should have been stopped, he argued.

"When mortgages are being marketed, there is a marketplace obligation to ensure the borrower can afford to pay back the debt," he said.

That TV interview was only one instance of Spitzer laying blame on the Bush Republicans.

On February 14, Spitzer published a signed article in the influential Washington Post titled, "Predatory Lenders' Partner in Crime: How the Bush Administration Stopped the States From Stepping In to Help Consumers."

That article, laying clear blame on the administration for the development of the subprime crisis, appeared the day after his ill-fated tryst with the prostitute at the Mayflower Hotel.

Just a coincidence?

Spitzer wrote, "In 2003, during the height of the predatory lending crisis, the OCC invoked a clause from the 1863 National Bank Act pre-empting all state predatory lending laws, thereby rendering them inoperative."

"The OCC also promulgated new rules that prevented states from enforcing any of their own consumer protection laws against national banks."

In his article, Spitzer charged, "Not only did the Bush administration do nothing to protect consumers, it embarked on an aggressive and unprecedented campaign to prevent states from protecting their residents from the very problems to which the federal government was turning a blind eye."

Bush, said Spitzer right in the headline, was the "predator lenders' partner in crime".

The president, said Spitzer, was a fugitive from justice.

And Spitzer was in Washington to launch a campaign to take on the Bush regime and the biggest financial powers on the planet.

Spitzer wrote, "When history tells the story of the subprime lending crisis and recounts its devastating effects on the lives of so many innocent homeowners the Bush administration will not be judged favorably."

With that article, Spitzer may well have signed his own political death warrant.

F William Engdahl is author of the book Seeds of Destruction: The Hidden Agenda of Genetic Manipulation, about to be released by Global Research Publishing, and of A Century of War: Anglo-American Oil Politics and the New World Order, Pluto Press. He may be reached via his website, www.engdahl.oilgeopolitics.net.

http://www.atimes.com/atimes/Global_Economy/JC20Dj04.html

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"Ohio Gov. Strickland gives $10,000 campaign contribution from Spitzer to food bank"

Associated Press

Last updated: 4:33 p.m., Wednesday, March 19, 2008

COLUMBUS, Ohio -- Ohio Gov. Ted Strickland is giving a food bank $10,000 in campaign cash he got from former New York Gov. Eliot Spitzer.

Spitzer resigned last week in a prostitution scandal.

He gave Strickland the contribution for the Ohio governor's 2006 campaign.

It was the biggest of the out-of-state political contributions Spitzer had handed out to Democratic candidates and causes across the country since 2004.

Strickland donated the money to the Tri-County Food Pantry in southeast Ohio.

Strickland has been floated as a possible vice presidential running mate for Sen. Hillary Rodham Clinton should she win the Democratic nomination.

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"Top state staffers asked to resign - Paterson aide says request does not mean there will be 'mass departures;' top state cop quitting"

By JAMES M. ODATO, Capitol bureau, Albany, New York Times Union

First published: Thursday, March 20, 2008

ALBANY -- Less than a week after telling state agency heads he's keeping the Spitzer team intact, Gov. David Paterson on Wednesday asked all commissioners, directors and top staff to submit their resignations.

The requests from the new governor arrived as Acting State Police Superintendent Preston Felton, 49, advised Paterson he is retiring effective April 4 from his $157,000-per-year post.

An administration official said he believes Paterson's staff will contact executives soon and let them know that most of their resignations won't be accepted because the move is only a formality.

"This is a typical step in the transition of one administration to another," said Paterson spokesman Errol Cockfield Jr.

"This is not a signal there will be mass departures throughout the administration."

Some people have already been informed they will be allowed to move on, including Felton.

"The resignation was offered and accepted," Cockfield said.

Others resigning include senior adviser Lloyd Constantine, chief of staff Richard Baum and scheduling officer Marlene Turner.

Felton's retirement announcement is his second.

He planned to begin collecting his pension 13 months ago when he retired as the first deputy superintendent of the State Police.

He rescinded his retirement at Gov. Eliot Spitzer's request.

"He was not asked to resign," said Lt. Glenn Miner, a spokesman for the 5,000-member force.

"I'm sure it's personal reasons."

Under Felton, the State Police were accused by Senate Republicans of being used for political ends by Spitzer to help attack Senate Majority Leader Joseph L. Bruno.

More recently, critics attacked the force for not knowing about or disclosing information about Spitzer's meetings with prostitutes.

Felton had hoped to be considered for the superintendent's job.

A possible successor is Col. Pedro Perez, the next-highest ranking officer and the field commander, stationed at division headquarters in Albany.

Others mentioned as potential replacements include Harry Corbitt, a retired State Police colonel, and some active chiefs with the New York City Police Department and the Metropolitan Transit Authority.

Dan De Federicis, president of the trooper's union, said Felton is appreciated for improving safety equipment and weaponry.

James M. Odato can be reached at 454-5083 or by e-mail at jodato@timesunion.com.

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"Judge: dam suit can proceed - Residents who lost waterfront after failure may now file action"

By JIMMY VIELKIND, Staff writer, Albany, New York Times Union

First published: Thursday, March 20, 2008

FORT ANN -- Residents who lived upstream of a dam that collapsed in 2005 have a legitimate claim for damages, a judge has ruled.

Supreme Court Justice David B. Krogmann denied a motion to dismiss a lawsuit by more than 100 residents who live around Hadlock Pond.

The residents saw views of a quiet pond turn into vistas of a mud pit when the Hadlock Pond dam collapsed in July 2005, destroying four homes and washing out a road.

The dam had been reconstructed in May of that year by order of the state Department of Environmental Conservation but it failed after a heavy rain.

A subsequent state report found the structure failed due to construction flaws.

Until the structure burst, Hadlock pond was about a mile-long body of water ranging from 12 to 15 feet in depth.

A new dam was built last summer, and the lake has slowly begun to fill.

While there was little dispute that those downstream had grounds to sue, those living around the lake also suffered damages, attorney Paul H. Wein said.

"If you've ever been on a lakefront property, this is their sanctuary, and it was taken away from them," he said.

"They've lost the ability to enjoy their properties."

Krogmann agreed, saying "it cannot be said as a matter of law that plaintiffs, as riparian owners, suffered absolutely no damage to their property when their docks and lakefront beaches and retaining walls became adjacent, for an extended period of time, to a mud pit."

The collapse spurred multiple legal actions.

The suit names the Town of Fort Ann, Kubricki Construction, the builder, design firm HTE Northeast and Atlantic Testing Laboratories as defendants.

Fort Ann Town Attorney John Aspland Jr. said the defendants haven't yet seen the decision, and reserved comment.

He also said other suits -- including one in which the town of Fort Ann is a plaintiff -- are pending.

The 13-page decision also grants a motion for bifurcation, meaning the upstream residents' claims will be heard in two separate proceedings: one to determine who, if anyone, is liable for the collapse, the second to determine the amount of any damages.

Wein said there was also a possibility that a settlement could be reached.

Jimmy Vielkind can be reached at 454-5043 or by e-mail at jvielkind@timesunion.com.

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FROM THE DEPARTMENT OF HAVEN'T WE BEEN HERE BEFORE?

Testimony of Chairman Alan Greenspan - Private-sector refinancing of the large hedge fund, Long-Term Capital Management Before the Committee on Banking and Financial Services, U.S. House of Representatives"

October 1, 1998

Mr. Chairman and other members of the Committee, I thank you for this opportunity to report on the Federal Reserve's role in facilitating the private-sector refinancing of the large hedge fund, Long-Term Capital Management (LTCM).

In my remarks this morning, I will attempt to put into some perspective the events of the past few weeks and discuss some questions of importance to public policy makers that they raise.

LTCM is a hedge fund, or a mutual fund that is structured to avoid regulation by limiting its clientele to a small number of highly sophisticated, very wealthy individuals and that seeks high rates of return by investing and trading in a variety of financial instruments.

Since its founding in 1994, LTCM has had a prominent position in the community of hedge funds, in part because of its assemblage of talent in pricing and trading financial instruments, as well as its large initial capital stake.

In its first few years of business, it earned an enviable reputation by racking up a string of above-normal returns for its investors.

LTCM appears principally to have garnered those returns by making judgments on interest rate spreads and the volatilities of market prices.

In its search for high return, LTCM levered its capital through securities repurchase contracts and derivatives transactions, relying on sophisticated mathematical models of behavior to guide those transactions.

As long as the configuration of returns generally mimicked their historical patterns, LTCM's mathematical models of asset pricing could be used to ferret out temporary market price anomalies.

Their trading both closed such price gaps and earned an extra bit of return on capital for them.

But it is the nature of the competitive process driving financial innovation that such techniques would be emulated, making it ever more difficult to find market anomalies that provided shareholders with a high return.

Indeed, the very efficiencies that LTCM and its competitors brought to the overall financial system gradually reduced the opportunities for above-normal profits.

To counter these diminishing opportunities, LTCM apparently reached further for return over time by employing more leverage and increasing its exposure to risk, a strategy that was destined to fail.

Unfortunately for its shareholders, LTCM chose this exposure just as financial market uncertainty and investor risk aversion began to rise rapidly around the world.

In that environment--so at variance with the experience built into its models--LTCM's embrace of risk on a large scale produced stunning losses.

As we now know, by the end of August the firm had lost half its capital base.

And as September unfolded, the bleeding continued.

Of course, any time that there is public involvement that softens the blow of private-sector losses--even as obliquely as in this episode--the issue of moral hazard arises.

Any action by the government that prevents some of the negative consequences to the private sector of the mistakes it makes raises the threshold of risks market participants will presumably subsequently choose to take.

Over time, economic efficiency will be impaired as some uneconomic investments are undertaken under the implicit assumption that possible losses may be borne by the government.

Some Questions for Policy Makers

Without doubt, extensive study will be required to put the events of the past few weeks into proper perspective.

As a member of the President's Working Group on Financial Markets, I support Secretary Rubin's call for a special study on the public policy implications of hedge funds.

While the affairs of LTCM are by no means settled, I would like to pose some tentative questions that may have to be addressed.

First, how much dependence should be placed on financial modeling, which, for all its sophistication, can get too far ahead of human judgment?

Third, in this regard what lessons are there for bank regulators?

Supervisors of banks and security firms must assess whether current procedures regarding stress testing and counterparty assessment could have been improved to enable counterparties to take steps to insulate themselves better from LTCM's debacle.

More important will be the assessment of whether those procedures are adequate for the future.

But this is an area in which much work has been ongoing.

During the fourth quarter of 1997 and the first quarter of 1998, supervision staff of the Federal Reserve Bank of New York and the Board met with managers at several major New York banking institutions to discuss their current relationships with hedge funds, updating a similar study conducted 3-1/2 years earlier.

Fourth, does the fact that investors have lost most of their capital and creditors may take some losses on their exposure to LTCM call for direct regulation of hedge funds?

It is questionable whether hedge funds can be effectively directly regulated in the United States alone.

While their financial clout may be large, hedge funds' physical presence is small.

Given the amazing communication capabilities available virtually around the globe, trades can be initiated from almost any location.

Indeed, most hedge funds are only a short step from cyberspace.

Any direct U.S. regulations restricting their flexibility will doubtless induce the more aggressive funds to emigrate from under our jurisdiction.

The best we can do in my judgment is what we do today: Regulate them indirectly through the regulation of the sources of their funds.

We are thus able to monitor far better hedge funds' activity, especially as they influence U.S financial markets.

If the funds move abroad, our oversight will diminish.

In the first line of risk defense, if I may put it that way, are hedge funds' lenders and counterparties.

Commercial and investment banks especially have the analytic skills to judge the degree of risk to which the funds are exposed.

Their self interest has, with few exceptions but including the one we are discussing today, controlled the risk posed by hedge funds.

Banking supervisors are the second line of risk defense in their examination of lending procedures for safety and soundness.

We neither try, nor should we endeavor, to micro-manage bank lending activity.

http://www.federalreserve.gov/boarddocs/te...ny/19981001.htm

"Frank calls for more gov't bank powers"

By ALAN ZIBEL, Associated Press

Last updated: 3:24 p.m., Thursday, March 20, 2008

WASHINGTON -- A key House Democrat is calling for tougher and broader regulations of the financial system after the fall of investment bank Bear Stearns.

Rep. Barney Frank, D-Mass., the chairman of the House Financial Services Committee, wants to give either the Federal Reserve or a new regulator the power to oversee the activities of major financial players, regardless of whether they are a bank, securities firm or hedge fund.

Frank, who made the proposal Thursday in a speech to a business group in Boston, also suggested that investment banks be required to hold cushions against losses, a mandate that currently only applies to commercial banks.

The concept, if enacted, could reshuffle the existing landscape of financial regulators, whose duties are split among several federal agencies, including divisions of the Treasury Department, the Fed and the Securities and Exchange Commission.

Lawmakers are due to return from a two-week recess later this month, and the events leading to Bear Stearns buyout will top many an agenda.

Like Frank, other congressional members aren't waiting return to the nation's capital to weigh on Washington's role in steadying the financial sector.

Some fear that the bargain-basement sale of Bear Stearns Cos. to JPMorgan Chase & Co., engineered by the Federal Reserve and Treasury Department, opens the door to more government efforts to aid troubled financial players, ultimately putting taxpayers at risk.

The Fed, which is providing $30 billion in backing for that deal, could wind up turning a profit, but could also see its payments to the Treasury diminished if the investments it is backing do not pay off.

In addition, the Fed's historic decision Sunday night to allow investment banks to borrow directly from the central bank through its discount window is heightening concerns that taxpayers will wind up on the hook for Wall Street losses.

Frank said in a prepared statement that, in exchange for giving investment banks access to lending from the Federal Reserve, the new regulator should be able to limit risky practices and "protect the integrity of the financial system."

The call for a clearer window into the investment bank world resonated with commercial banks, which are more tightly regulated and whose depositors are insured by the Federal Deposit Insurance Corp.

"We do understand the concern about providing access to the discount window to institutions that do not have the same regulatory examination," as federally insured banks, said Floyd E. Stoner, executive director for congressional relations and public policy at the American Bankers Association.

However, he added: "We also are always concerned about new, potentially intrusive regulation."

Wall Street's biggest lobbying group, the Securities Industry and Financial Markets Association, welcomed Frank's comments, especially his focus on the overlap of existing regulations.

Scott DeFife, the trade group's senior managing director for government affairs, said in a statement that doing so could "help reduce the current turmoil and build a better regulatory future,"

Republicans are rolling out their own proposals, with Rep. Vito Fossella, R-N.Y., saying Thursday he will introduce legislation to reduce duplication among banking regulators, which he said makes it difficult to monitor risks to the system.

The Treasury Department has been working on its own plan for banking industry reforms over the past year.

A department spokeswoman, Jennifer Zuccarelli, said in an e-mail that "we are considering all issues as we propose broad changes to our regulatory structure in the near and short term."

Daniel Forte, president of the Massachusetts Bankers Association, said government backing for troubled investment banks industry should be coupled with stricter regulations.

"If we're going to put our money at risk, we should have some protections and greater oversight," Forte said.

----

AP Business Writer Mark Jewell in Boston contributed to this report.

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"NY budget behind schedule, leaders not agreeing on much"

By VALERIE BAUMAN, Associated Press

Last updated: 6:52 p.m., Thursday, March 20, 2008

ALBANY -- The New York budget process is behind schedule in a Capitol distracted by sex scandals, with lawmakers unable to agree even on how much they have to spend.

Budget conference committees were supposed to begin a week ago, but they still haven't met.

Under the state constitution, lawmakers must reach agreement on a 2008-09 budget by April 1.

"We're hearing they aren't making any great progress," Assemblyman William Parment, a Jamestown Democrat, said of the legislative leaders and governor.

"I'm disappointed they are not because I thought, with the disruption going around us, there would be an effort to close things down and pass it."

Former Gov. Eliot Spitzer proposed a $124 billion budget that would have increased spending by 4.8 percent while the state faced a growing deficit estimated in February at more than $4.6 billion.

State revenue is declining amid trouble on Wall Street -- which generates 20 percent of state revenue -- and Gov. David Paterson says New York is likely suffering because of a national recession.

Soon after Paterson replaced the disgraced Spitzer earlier this week, he met with legislators to work on spending cuts.

He said he wanted the spending increase limited to 3.7 percent by cutting $800 million from the proposal.

Paterson said Thursday he doesn't support an Assembly bill that would raise taxes for New Yorkers who make $1 million or more.

"I am in a budget negotiation right now, and if one of the leaders puts it on the table then it's something we will discuss," Paterson said.

"But it is not my intention to come in here and to start raising taxes because, in my opinion, that's what got us into this trouble in the first place."

Assembly Speaker Sheldon Silver, a Democrat, has said the new and temporary tax would be a way to fill in gaps in the budget.

Republican Senate Majority Leader Joseph Bruno said he would reject any tax increases.

Until lawmakers can agree on how much money is available, not much can happen, but they hadn't accomplished that by this time last year either.

Just because leaders are behind on scheduled budget talks doesn't mean the budget won't come through in time.

Parment said lawmakers hope to avoid the election-year wrath of constituents who pay attention to whether a budget is passed on time, if little else in Albany.

"I do not want to be walking down a Memorial Day parade without a budget," he said.

"People will shout: 'Why aren't you back in Albany doing a budget?'"

The state budget had been late for 20 straight years until 2005.

After a frenzy of last minute negotiations last year, the budget didn't get passed until late morning on April 1, missing the midnight deadline.

There is increasing talk of passing a partial budget to meet the deadline and then passing the balance of the budget in coming months.

Nationally, states are projected to increase spending an average 4.7 percent, according to the National Association of State Budget Officers.

New York has rarely been below the national average.

During the past two decades state spending growth across the U.S. has risen an average of 6.4 percent per year, according to the association.

------

Associated Press Writers Ben Dobbin and Michael Gormley contributed to this report.

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"Inspector arrested in NYC crane collapse"

By KAREN MATTHEWS, Associated Press Writer

20 March 2008

NEW YORK - A city inspector has been charged with lying about checking on a construction crane that later collapsed, killing seven people in a dense Manhattan neighborhood.

Edward Marquette, 46, was arraigned and released without bail Thursday on charges of falsifying business records and offering a false instrument for filing.

"We will not tolerate this kind of behavior at the Department of Buildings," buildings Commissioner Patricia Lancaster said at a news conference.

"I do not and will not tolerate any misconduct in my department."

Marquette, who earns $52,283 a year as an inspector in the department's division of cranes and derricks, was arrested while being questioned Wednesday night, said Barbara Thompson, spokeswoman for the Manhattan district attorney.

If convicted, Marquette faces up to four years in prison.

His lawyer, Kate Moguletscu, had no comment Thursday.

The 20-story crane broke away Saturday from an apartment tower under construction and toppled over, killing six construction workers and a visitor in town for St. Patrick's Day.

A complaint about the crane was logged March 4 to a city hot line, officials said, and Marquette said he inspected it.

It was later determined he had not.

Lancaster said it is very unlikely an inspection would have prevented the accident because the equipment that failed was not on site March 4.

In addition to suspending Marquette, Lancaster said, she has ordered a full audit of his inspection reports over the past six months, and also of the cranes and derricks unit.

The crane collapse caused a swath of destruction along a full city block not far the United Nations, pulverizing a four-story brownstone and damaging at least seven other buildings.

The gigantic piece of machinery toppled over when a six-ton steel collar used to secure the crane to the building came loose, plunging into another collar that acted as a major anchor.

Without that support, the spindly structure came tumbling down with terrifying force.

The collapse followed weeks of complaints by neighbors that the crane didn't appear safe.

Bruce Silberblatt — a retired contractor who called in the complaint that the crane might not be sufficiently braced against the building — said the arrest stunned him.

"My first reaction was astonishment."

"My second reaction is anger that a person would have the gall to do this," said Silberblatt, vice president of the Turtle Bay Neighborhood Association.

City officials would not discuss Marquette's possible motive.

Investigators first interviewed him Sunday and got a copy of his route sheet.

He told them that he had conducted the March 4 inspection and that it revealed no problems with the crane.

Marquette was also listed in city records as having responded to a Jan. 22 complaint by another caller who complained about the safety of workers assembling the crane.

Marquette said in his report, filed two days later, that he examined the crane and found no violation.

Other safety complaints were called in by neighbors on Jan. 10 and Feb. 11, according to city records.

Residents said they weren't surprised by the arrest.

"It makes me very suspicious of the whole situation."

"I'd like to feel that it's safe to live in this neighborhood with all the construction going on," Sandra Graham said.

"If he's been arrested, I think he should be made an example of."

Earlier, city officials said they had started inspecting every construction crane in use around New York City, though authorities have said there's no indication that Saturday's accident points to a larger problem.

The inspections began Wednesday, Buildings Department spokeswoman Kate Lindquist said.
___

Associated Press writers David B. Caruso and Samuel Maull contributed to this report.

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"Spitzer probe all but ordinary - Justice Department tactics went far beyond recent prostitution cases"

By DAVID JOHNSON and PHILIP SHENON, New York Times

First published: Friday, March 21, 2008

WASHINGTON -- The Justice Department used some of its most intrusive tactics against Eliot Spitzer, examining his financial records, eavesdropping on his phone calls and tailing him during its investigation of the Emperor's Club VIP prostitution ring.

The scale and intensity of the investigation of Spitzer, then the governor of New York, seemed on its face to be a departure for the Justice Department, which aggressively investigates allegations of wrongdoing by public officials, but almost never investigates people who pay prostitutes for sex.

A review of recent federal cases shows that federal prosecutors go sparingly after owners and operators of prostitution enterprises, and usually only when millions of dollars are involved or there are aggravating circumstances, like human trafficking or child exploitation.

Government lawyers and investigators defend the expenditure of resources on Spitzer in the Emperor's Club VIP case as justifiable and necessary since it involved the possibility of criminal wrongdoing by New York's highest elected official.

Bradley D. Simon, a veteran Justice Department trial lawyer who was a federal prosecutor in Brooklyn throughout the 1990s, said that although it was rare for the department to use so many resources on the workings of a prostitution ring, the involvement of such a high-level politician must change the equation.

"If they've got some evidence of a high-ranking public official involved in violations of federal criminal code, it may not be unreasonable for them to pursue it,'' he said.

Still, he said, "I don't think prostitution has been a high priority at the Justice Department.''

Senior political appointees at the Justice Department have said they had little involvement in the case.

Attorney General Michael B. Mukasey was not told about the case until shortly before March 5, when the complaint was filed against four of the prostitution ring's employees.

The government has not accused Spitzer, a Democrat, of any wrongdoing.

The top federal prosecutor in Manhattan, Michael J. Garcia, issued a statement saying there had been no deal with Spitzer's lawyers, suggesting that a prosecution of some kind might still be a possibility.

[Livyjr]

FINDLAW

"Client 9 and President 42: Drawing Parallels Between Spitzer and Clinton"

By SHERRY F. COLB

Thursday, Mar. 13, 2008

On March 11, New York Governor Eliot Spitzer's fall from grace topped the news.

Federal investigators had caught Spitzer -known to them as "Client 9" -- arranging for a prostitute named "Kristen" to meet him for an assignation at the Mayflower Hotel in Washington.

Ten years ago, in 1998, as readers will doubtless recall, a different sex scandal made headlines across the globe.

Then, it was President Bill Clinton who stood in the glare of the cameras.

As he finally admitted, months after the allegations first surfaced, he had engaged in an inappropriate (i.e., sexual) relationship with Monica Lewinsky, a White House intern in her early 20's.

In this column, I will consider some similarities and differences between the two scandals.

Spitzer's Fall

As Attorney General, Spitzer had pursued the prosecution of sex rings.

As governor, he played a pivotal role in passing a human trafficking law that would punish prostitutes' clients.

In so doing, he had evidenced an understanding for the claims of human rights organizations that sex traffic begins with demand, and that criminal penalties must therefore target consumers rather than sex workers.

As it has emerged, however, following the shocking announcement on March 11, Spitzer had himself contributed to the demand that fuels the sex trade -an industry that Spitzer had called "modern-day slavery" - and had spent tens of thousands of dollars purchasing the services of the Emperor's Club V.I.P., an online prostitution ring.

Moreover, it seems he may have even put sex workers in some danger.

In a conversation that followed Kristen's meeting with Spitzer, the booking agent - Temeka Lewis - told Kristen that Client 9 sometimes had requests for women "to do things that, like, you might not think were safe."

After the story broke, Spitzer confessed to having "acted in a way that violates my obligations to my family and that violates my, or any, sense of right and wrong."

As of Wednesday, March 12, the 48-year-old governor had announced his resignation from office, effective March 17, at which point his current Lieutenant Governor will take his place.

Clinton's Fall

Like Spitzer's, Clinton's admission of sexual misconduct included an acknowledgment of the pain that his behavior had caused his family.

Clinton also indicated that his actions were wrong.

He did not, however, resign from office and allow his vice president - Al Gore - to continue the important work of running the country.

A Republican-controlled House of Representatives subsequently impeached Clinton for perjury and obstruction of justice (in connection with his misleading statements about his relationship with Lewinsky in response to questions posed in the course of Paula Jones's separate sexual harassment lawsuit against Clinton).

The Senate, however, acquitted Clinton of the charges, and he continued in office until the end of his term, though he had his license to practice law in Arkansas suspended and his membership in the U.S. Supreme Court bar revoked in the aftermath of the trial.

Similarities and Differences Between the Spitzer and Clinton Scenarios

Although both Clinton and Spitzer were brought low by sex scandals, one could draw some distinctions between the two men.

First, though both Clinton and Spitzer appeared to have been repeat players in the marital infidelity game, Clinton's conduct generally did not violate the criminal law, while Spitzer's did.

I say "generally," because one woman did accuse Clinton of raping her in a hotel room in 1978, an allegation corroborated by a friend who had met with the woman immediately after the alleged attack.

Clinton denied the accusations, which never faced the test of a trial.

Other alleged Clinton relationships, however, appeared to qualify as consensual, at least for purposes of the criminal law (sexual harassment does, of course, raise some issues of coercion).

This distinction, however, may in some ways support a comparison between the situations in which Clinton and Spitzer have, respectively, found themselves embroiled.

For the most powerful man in the world to have sexual relations with an intern (who was apparently in love with the President) might be consensual, but it does exploit a power imbalance that could hardly be more stark.

Similarly, we have no evidence that Spitzer compelled Kristen or other sex workers to engage in conduct against their will.

Nonetheless, the role of a prostitute - being offered to a client for his sexual gratification in exchange for money (in this case, at least $1000 an hour) - does not exactly place the man and the woman in the relationship on reciprocal footing.

And, as Spitzer seemed to understand when he supported and signed the human trafficking law, coercion and brutality - toward minors and adult women - are endemic to the sex industry.

Another obvious distinction between the two scandals is that Spitzer very quickly announced his resignation, but Clinton chose to stay on and fight.

Because of the extremely humiliating nature of the disclosures, and because of the sense that political foes had exploited a sex scandal for partisan gain, many of Clinton's allies sympathized with him and resisted calls for his resignation.

Clinton had never claimed to be a model of sexual fidelity or propriety, after all, having previously as much as admitted cheating on his wife.

In a way, then, it appeared that the humiliation of Bill Clinton was really only an attempt to destroy the Democratic Party itself.

Clinton - as the Republicans' target - was therefore able to garner the loyalty of most vocal Democrats.

Spitzer, by contrast, had betrayed principles that he had strongly pressed, both as Attorney General and as Governor of New York State.

Though Spitzer, too, had his political enemies, there was not the same Republican/Democratic warfare to rally the troops to his cause.

Indeed, the only ally of Spitzer's in the end appeared to be his wife, Silda, who stood by his side as he confessed his misdeeds and as he announced his resignation.

Doing the Honorable Thing in the End

In retrospect, however, many of the people who once stood by Bill Clinton may have come to see things in a new light.

While hardly criminal, Clinton's relationship with Lewinsky was troubling and was symptomatic of a willingness to use power to exact sexual favors, often in contexts in which his partners were apparently less enthusiastic about participating than Monica was.

Perhaps more importantly, the entirely foreseeable circus surrounding Clinton's affair with Monica had the effect of distracting his and everyone else's attention from the important work of the nation.

As Clinton said on the night that he apologized to the nation, "Now it is time - in fact, it is past time to move on."

"We have important work to do - real opportunities to seize, real problems to solve, real security matters to face."

As he did not say, it would have been far easier to accomplish that work had Clinton stepped down and allowed Al Gore to become president.

In the years that followed, of course, many other things would likely have been different if Clinton had taken that route.

It is difficult to praise Eliot Spitzer for resigning, because we cannot know what he would have done if he had had more friends willing to stand by him, as Bill Clinton did.

He certainly behaved recklessly, just as Clinton had, and in a manner that would - once exposed - predictably undermine the force of the work that he and others had tried to do.

But in stepping down, regardless of his motives, Spitzer has acted honorably and has paved the way for a new governor, David A. Paterson, to move Albany beyond the events of the last few days.

http://writ.news.findlaw.com/colb/20080313.html