More about Spitzer

The more we learn about Eliot Spitzer's evident penchant for high-priced hookers, the thicker the irony.  And there's an important lesson in here about financial privacy — or the lack thereof.

What originally tipped off the feds had nothing to do with sex.   Rather, it was "suspicious" transactions that Spitzer's bank reported to the IRS.  At first, investigators thought it was bribe money and in fact it seems they were rather disappointed to find out it was a more prosaic case of call girls.

The upshot — the most likely charge to be filed against Spitzer is "structuring," which this ABC News article describes unhelpfully:  "Structuring involves creating a series of financial movements designed to obscure the true purpose of the payments"

That's clear as mud.  Here's the deal: "Structuring" means when you want to make any sort of big-dollar cash transaction, you arrange it in payments of under $10,000 each.  Any more than that, the bank is legally required to report it to the IRS.

But as anyone who follows these matters will tell you, the reality is that if you make a series of, say, $9000 transactions, the bank will report you anyway just to cover its rear end.  (I've heard it could be as little as $3000.)

Spitzer might never be charged with anything having to do with prostitution.  He'll be done in instead by statutes that all too often wind up nailing people who've done nothing wrong otherwise.  The sort of people Spitzer used prosecute as readily and as with little thought as you or I might pour a cup of coffee.  Or as Karen DeCoster put it in an especially pithy post:

…it'll be justice when he faces the same kind of politically-ambitious
totalitarian torment that he has administered to numerous individuals,
entrepreneurs, and successful businesses. He has destroyed umpteen
lives and business ventures in order to fulfill his ambition to ascend
to the ranks of the dictatorial, ruling elite. May he join Nifong in
the nether world of payback and ruination.

The question that remains to be answered today is: How could Spitzer have been so ignorant or careless as to have been caught like this?  Or did he simply think he was above the law he so ruthlessly enforced?

The Daily Reckoning