TPM News

There's sure to be some scrutiny of how federal prosecutors netted Gov. Eliot Spitzer, a rising star in the Democratic party, in a prostitution ring. Especially considering that prosecutors from Manhattan's U.S. attorney's public corruption section are working the case.

According to an affidavit by an FBI agent filed for a search warrant in the case the investigation, led by the FBI and IRS criminal investigators, began in October of last year and focused on the ring itself for prostitution and money laundering charges. The Emperors Club ring allegedly used more than 50 prostitutes and set up dates all over the country and international cities like London and Paris, and had more than $1 million in proceeds through its front company, called QAT.

The feds intercepted more than 5,000 telephone calls and text messages used by the company's alleged managers and 6,000 emails in the course of their investigation. The wiretaps lasted from January 8th through February 7th, when it expired, and then were renewed on Februrary 11th. As you can see from the excerpt from the affidavit posted below, investigators intercepted calls involving "Client 9," who is reportedly Spitzer, starting on February 12th and into February 13th.

It's not clear precisely how the investigation began. The FBI agent, Kenneth Hosey, does cite a conversation with a "law enforcement officer who had been involved in the investigation of a number of prostitution businesses in the New York City area." That officer (it's not clear if he works with New York City, the state or the feds) told Hosey that "in the end of 2006," he spoke with a confidential source who had worked as a prostitute in New York City. That source, who had gained immunity from prosecution, had told the law enforcement officer that she'd worked for the Emperors Club as a prostitute in 2006. Hosey said that further evidence had corroborated this. Again, it's not clear if this was a tip that led to the investigation, or just further information investigators discovered after the investigation began.

Update: Here's some clarity.

The New York Times cites "a person with knowledge of the governor’s role" that Eliot Spitzer is "Client-9" in last week's criminal complaint against four people who allegedly managed an international prostitution ring for wealthy clientele.

The New York Sun reported this morning that "prosecutors specializing in government corruption cases are leading the investigation."

Below are the relevant portions of a search warrant request filing filed by an FBI agent investigating the case (you can see the actual document here). The defendants mentioned below, Temeka Rachelle Lewis, Mark Brener, and Cecil Suwal, all are charged with managing and running the prostitution ring. QAT Consulting Company is alleged to be a front company used by the ring for transactions.

On February 12, 2008, at approximately 2:37 p.m., TEMEKA RACHELLE LEWIS, a/k/a 'Rachelle," the defendant, using the 6587 Number, called a prostitute who the Emperors Club marketed using the name "Kristen." During the call, LEWIS left a message for "Kristen" that the "deposit" had not arrived today, but that they should be able to do the trip if the deposit arrived tomorrow. (Call 9324R) . At approximately 4:03 p.m. , LEWIS received a call from "Kristen." During the call, "Kristen" said that she had heard the message, and that was fine. LEWIS and "Kristen" then discussed the time that "Kristen" would take the train from New York to Washington, D.C. LEWIS told "Kristen" that there was a 5:39 p.m. train that arrived at 9:00 p.m., and that "Kristen" would be taking the train out of Penn Station. LEWIS confirmed that Client-9 would be paying for everything - train tickets, cab fare from the hotel and back, mini bar or room service, travel time, and hotel. LEWIS said that they would probably not know until 3 p.m. if the deposit arrived because Client-9 would not do traditional wire transferring. (Call 9362) .

At approximately 8:12 p.m., TEMEKA RACHELLE LEWIS, a/k/a "Rachelle," the defendant, using the 6587 Number, received a call from Client-9. During the call, LEWIS told Client-9 that the "package" did not arrive today. LEWIS asked Client-9 if there was a return address on the envelope, and Client-9 said no. LEWIS asked: "You had QAT . . .," and Client-9 said: "Yup, same as in the past, no question about it." LEWIS asked Client-9 what time he was interested in having the appointment tomorrow. Client-9 told her 9:00 p.m. or 10:OO p.m. LEWIS told Client-9 to call her back in five minutes. (Call 9460R) .

At approximately 8:14 p.m., TEMEKA RACHELLE LEWIS, a/k/a "Rachelle," the defendant, using the 6587 Number, called MARK BRENER, a/k/a "Michael," the defendant, at the 0937 Number. During the call, LEWIS told BRENER that Client-9 had just called about an appointment for tomorrow, and that he had around $400 or $500 credit. SUWAL [defendant Cecil Suwal of New Jersey] said that she did not feel comfortable saying that Client-9 had a $400 credit when she did not know that for a fact. SUWAL and BRENER talked in the background about whether Client-9 could proceed with the appointment without his deposit having arrived. (Call 9462R). At approximately 8:23 p.m., LEWIS called Client-9, and told him that the 'office" said he could not proceed with the appointment with his available credit. After discussing ways to resolve the situation, LEWIS and Client-9 I agreed to speak the following day. (Call 9467R) .

Read More →

It was a pretty neat trick. Because Blackwater classified its guards in Iraq as independent contractors, the company saved possibly "tens of millions" of dollars in taxes.

A number of senators called for investigations last October. But House oversight committee Chairman Henry Waxman (D-CA) says that his staff have been digging and now it's clear: Blackwater is wrong when it says that its guards fit the description of contractors and not employees, and that dodge had much bigger benefits than a simple tax dodge.

Because Blackwater had many fewer "employees," for example, it made out with a number of contracts reserved for so-called small businesses: "at least 100 small business set-aside contracts. worth over $144 million, that have been awarded to Blackwater since 2000."

Waxman wants the IRS, the Small Business Administration, and the Department of Labor to investigate. Blackwater is already the focus of its share of criminal investigations, but it may be that these, if they were to get off the ground, would do the most damage to the company's bottom line.

And we're on to the next step of the Congress v. White House subpoena battle.

First, the House found Harriet Miers and White House chief of staff Josh Bolten in contempt for refusing to respond to House Judiciary Committee subpoenas from the U.S. attorney firings investigation. Then, the Justice Department, as Attorney General Mukasey had warned it would, refused to convene a grand jury and rebuffed the criminal referral. And now we're on to step three: a lawsuit against the administration to enforce the subpoenas.

As Chairman John Conyers (D-MI) says, "It is extremely rare that Congress must litigate in order to enforce subpoenas and no compromise can be reached. Unfortunately, this Administration simply will not negotiate towards a compromise resolution so we must proceed."

He looks forward to "a quick and favorable ruling by the Court, so that we can complete our investigation." The expectation on all sides, though, is that this will likely drag on for many months.

We'll keep you updated as the case moves forward.

You can read the 36-page complaint here (pdf).

A little more from that Wall Street Journal piece:

The White House wants to give companies that assist government surveillance immunity from lawsuits alleging an invasion of privacy, but Democrats in Congress have been blocking it. The Terrorist Surveillance Program has spurred 38 lawsuits against companies. Current and former intelligence officials say telecom companies' concern comes chiefly because they are giving the government unlimited access to a copy of the flow of communications, through a network of switches at U.S. telecommunications hubs that duplicate all the data running through it. It isn't clear whether the government or telecom companies control the switches, but companies process some of the data for the NSA, the current and former officials say.

The once-hotly anticipated Phase II report, now a punchline, is finally on its way. And, well. From The Los Angeles Times:

After an acrimonious investigation that spanned four years, the Senate Intelligence Committee is preparing to release a detailed critique of the Bush administration's claims in the buildup to war with Iraq, congressional officials said.

The long-delayed document catalogs dozens of prewar assertions by President Bush and other administration officials that proved to be wildly inaccurate about Iraq's alleged stockpiles of banned weapons and pursuit of nuclear arms.

But officials say the report reaches a mixed verdict on the key question of whether the White House misused intelligence to make the case for war.

I can't wait to read it. It's pretty clear that Sen. Pat Roberts' (R-KS) years of stonewalling, together with Senate Intelligence Committee Chairman Jay Rockefeller's (D-WV) slow-rolling, has produced a report that no one will want to read at a time when no one will care to read it.

Luckily the Center for Public Integrity and Fund for Independence in Journalism have already done the job.

If only they had listened to Doug Feith. In a soon to be released "massive score-settling work" on the run-up to the Iraq war, Feith skewers Colin Powell, the CIA, Gen. Tommy R. Franks (who called Feith "the f***king stupidest guy on the face of the earth") and L. Paul Bremer for their misguided pre-invasion planning and mismanaged occupation. Feith asserts that the State Department and intelligence experts undermined his genius work and President Bush's policies. While Feith praises Donald Rumsfeld, he elides "some of the basic facts of the war, such as the widespread skepticism inside the top of the U.S. military about invading Iraq, with some generals arguing that doing so would distract attention from the war against global terrorists." (Washington Post)

In The Nation, the author of Air Wars: The Fight to Reclaim Public Broadcasting explains how John McCain "broke the rules while doing the bidding of media mogul Lowell "Bud" Paxson, a major contributor to McCain's 2000 presidential campaign" and how "McCain's staff lied it [sic] about it then and they are inventing new lies even now." (The Nation)

After four years of investigations, the Senate Intelligence Committee is finally ready to release a report critiquing President Bush's claims about Iraq's WMD program in the buildup to the Iraq war. Though the report details the numerous wildly erroneous White House assertions that provided the pretext for invading Iraq, officials assert that the report stops short of alleging that the Bush manipulated intelligence. In short, one official has concluded that "the left is not going to be happy. The right is not going to be happy. Nobody is going to be happy." (LA Times)

Read More →

It is the closest thing I've seen to a complete explanation of the surveillance program the Bush Administration has assembled.

Siobhan Gorman of The Wall Street Journal reports this morning that the National Security Agency has assembled what some intelligence officials admit is a driftnet for domestic and foreign communications.

Here's the way the whole thing works, according to Gorman: into the NSA's massive database goes data collected by the Justice Department, Department of Homeland Security, and the Department of Treasury. This information includes data about email (recipient and sender address, subject, time sent), internet searches (sites visited and searches conducted), phone calls (incoming and outgoing numbers, length of call, location), financial information (wire transfers, credit-card use, information about bank accounts), and information from the DHS about airline passengers.

Then the NSA's software analyzes this data for indications of terrorist activity. When it hits upon a suspicious pattern, the NSA "feeds its findings into the effort the administration calls the Terrorist Surveillance Program and shares some of that information with other U.S. security agencies.”

Here's a more in-depth explanation:

Two former officials familiar with the data-sifting efforts said they work by starting with some sort of lead, like a phone number or Internet address. In partnership with the FBI, the systems then can track all domestic and foreign transactions of people associated with that item -- and then the people who associated with them, and so on, casting a gradually wider net. An intelligence official described more of a rapid-response effect: If a person suspected of terrorist connections is believed to be in a U.S. city -- for instance, Detroit, a community with a high concentration of Muslim Americans -- the government's spy systems may be directed to collect and analyze all electronic communications into and out of the city.

The haul can include records of phone calls, email headers and destinations, data on financial transactions and records of Internet browsing. The system also would collect information about other people, including those in the U.S., who communicated with people in Detroit.

The data sifting is supposedly legal because it's limited to so-called "transactional" details. In other words, the NSA cannot read the content of an email, but can use other data about the email (i.e. subject line, sender/recipient, data and time). If a suspicious pattern emerges, then the NSA, via the Terrorist Surveillance Program, may seek to wiretap.

Gorman describes the NSA's effort (elements of which have been reported before) as basically a resurrection of the Pentagon's Total Information Awareness program, which of course was de-funded by Congress once the details became public. This time around, of course, the details have remained secret. Although the budget for the NSA's driftnet is classified, Gorman cites one official as estimating it at $1 billion. One wonders what the reaction will be this time around:

Sen. Ron Wyden, an Oregon Democrat and member of the Senate Intelligence Committee who led the charge to kill TIA, says "the administration is trying to bring as much of the philosophy of operation Total Information Awareness as it can into the programs they're using today." The issue has been overshadowed by the fight over telecoms' immunity, he said. "There's not been as much discussion in the Congress as there ought to be."

We'll have more on this in a bit.

Charged with corruption, fraud and conspiracy, Sharpe James (D) allegedly greased the way for co-defendant Tamika Riley to buy nine city lots. James, 72, and Riley, 38, don't deny having had an extra-marital affair. Riley, a publicist who once owned a boutique, turned the properties she purchased from the city around quickly, making a nice return of $665,000 on her investment of $46,000. In the most extreme case, after she bought a lot for $2,000 in August, 2001, she sold it less than four months later for $130,000. Riley is charged with tax evasion, in addition to fraud and conspiracy.

In his testimony, former housing director Basil Franklin reminded the jury about the redevelopment program for the South Ward, a depressed area of the city. When the Newark City Council approved the plan in 1998, it made no stipulation for advertising the program or public bidding.

According to Franklin, qualified builders were able to buy land for as little as $1 a square foot. But it didn't take long for the program to fall apart, as who you knew, not what you knew, became the only qualification.

"There was no professional or legal vetting of anybody," Franklin said. Instead, builders had to be recommended by members of the City Council and the mayor's circle.

Riley's purchases of city property were approved by the City Council even though some of the applications lacked the necessary paperwork, such as project proposals, preliminary site plans, estimated total development costs or arrangements for financing.

Laying the ground for their charge that James did favors for his mistress at city expense, prosecutors called several of the former mayor's bodyguards to testify about the services they performed for Riley. One of them, Adelino Benavente, haltingly recalled being authorized by the mayor to pay $409.47 for an air conditioner, pick up and install it for Riley at her home.

James didn't limit his favors to his girlfriends.

Read More →

From President Bush's radio address today, where he announced that he'd vetoed the Senate authorization bill, which would have effectively outlawed waterboarding and other "enhanced interrogation" techniques for the CIA by limiting the CIA to the Army's guide for interrogations, the Army Field Manual:

The bill Congress sent me would take away one of the most valuable tools in the war on terror -- the CIA program to detain and question key terrorist leaders and operatives. This program has produced critical intelligence that has helped us prevent a number of attacks. The program helped us stop a plot to strike a U.S. Marine camp in Djibouti, a planned attack on the U.S. consulate in Karachi, a plot to hijack a passenger plane and fly it into Library Tower in Los Angeles, and a plot to crash passenger planes into Heathrow Airport or buildings in downtown London. And it has helped us understand al Qaida's structure and financing and communications and logistics. Were it not for this program, our intelligence community believes that al Qaida and its allies would have succeeded in launching another attack against the American homeland....

If we were to shut down this program and restrict the CIA to methods in the Field Manual, we could lose vital information from senior al Qaida terrorists, and that could cost American lives.

Nowhere in his speech did Bush mention waterboarding, only at one point alluding to it: "The bill Congress sent me would not simply ban one particular interrogation method, as some have implied."

There are a number of Dem responses to the veto. Reid emphasizes that "the President has substituted his own judgment for that of dozens of bipartisan military and foreign policy experts – including Gen. Petraeus – who agree that torture is counterproductive." Feingold, a member of the Senate intelligence committee, says that the CIA's program is "morally reprehensible and legally unjustified and it has not made our country any safer."

But Senate intelligence committee Chairman Jay Rockefeller's (D-WV) response is the closest to a direct refutation of Bush's claims about the success of the CIA's program:

“The CIA's program damages our national security by weakening our legal and moral authority, and by providing al Qaida and other terrorist groups a recruiting and motivational tool. By continuing this interrogation program, the President is sacrificing our strategic advantage for questionable tactical gain.

“As Chairman of the Senate Intelligence Committee, I have heard nothing to suggest that information obtained from enhanced interrogation techniques has prevented an imminent terrorist attack. And I have heard nothing that makes me think the information obtained from these techniques could not have been obtained through traditional interrogation methods used by military and law enforcement interrogators. On the other hand, I do know that coercive interrogations can lead detainees to provide false information in order to make the interrogation stop.

“Our government needs to have clear standards for interrogations, and that standard should be the tried and true methods in the Army Field Manual. These methods have been used by military and law enforcement interrogators for decades, often in life and death situations on the battlefield and in counter-terror investigations.

“The President is out of step with Congress, the American people, the world, and our own national security requirements. While disappointed, I remain committed to bringing all U.S. interrogation practices under the rule of law."

Another perspective from Senate Judiciary Committee Chair Patrick Leahy (D-VT):

As I have said all along, the provision adopted by both the Senate and House of Representatives was not needed to outlaw waterboarding or other forms of torture. Such techniques are already clearly illegal. However, this administration has chosen to ignore the law. The positions that they have taken publicly on waterboarding offend the core values of this nation, and have the potential to threaten the safety and wellbeing of Americans around the world. I supported this provision because a clear, public rejection of those positions was – and still is – needed.