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Wednesday, March 19, 2008

SPITZER was on the case of the Bush Junta

Why the Bush Administration "Watergated" Eliot Spitzer

by F. William Engdahl -- Global Research, March 18, 2008

The spectacular and highly 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 "No.9," with a luxury call-girl, had less to do
with the 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 its most dangerous and vocal
critics of their handling the current financial market crisis.

A useful rule of thumb in evaluating spectacular scandals around prominent
public figures is to ask what and who might want to eliminate that person.
In the case of Governor Eliot Spitzer, a Democrat, it is clear that the
spectacular "leak" of government FBI wiretap records showing that Spitzer
paid a high-cost prostitute $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 bubble era. The powerful former head of the large AIG insurance
group, Hank Greenburg was among his detractors.

He made powerful enemies by all accounts. 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, and home to its financial industry, Spitzer
had begun making high profile attacks on the complicity of the Bush
Administration in covertly arranging bailout if its Wall Street financial
friends at the expense of ordinary homeowners and citizens, paid all with
taxpayer funds.

Curiously, Spitzer, who had been elected governor in 2006 defeating a
Republican by winning nearly 70 percent of the vote, has been not charged
in 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 resignation. 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 his 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 went to court and blocked New York State efforts to
investigate the mortgage activities of national banks. Spitzer argued 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 sub-prime 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 he 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 sub-prime lending crisis and recounts
its devastating effects on the lives of so many innocent homeowners the
Bush administration will not be judged favourably."

With that article, some Washington insiders believe, Spitzer signed his
own political death warrant.

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