Way back in the mists of time, er 2001, Judge Jed S. Rakoff of the the federal district court SDNY issued a decision unsealing some court documents so that a news outlet, TheStreet.com, could have access to them for news gathering and disseminating purposes.
Back in 1998, 10 stock brokers and brokerage officials had been arrested for crimes committed on the floor of the New York Stock Exchange ("NYSE"). The SEC started a civil suit against one of these criminal defendants in what is known in the law biz as a "parallel proceeding".
The defendant turned around and sued, on a 3rd party complaint, the NYSE in which he contended that the NYSE and four of its officers, Richard Grasso, Edward Kwalwasser, Robert McSweeney, and Brian McNamara where aware of and even encouraged the crimes he committed on the floor of the Exchange. Depositions were taken of these men, and some were placed under seal by Judge Rakoff at the request of the NYSE.
Later, TheStreet.com sought to intervene in the case to make a motion to have those depositions unsealed (there’s a nice timeline at this link, btw). The Judge granted the motion, and he was sustained on appeal.
Why am I telling you all this? Because in order to seal, leave sealed, and unseal the various documents, Judge Rakoff had to read them. And among those documents were transcripts of depositions taken from Grasso, Johnson, and Kwalwasser. In unsealing them, Judge Rakoff noted that disclosure would probably result in "reputational harm."
So, knowing all kinds of inside baseball about allegations of wrongdoing against Grasso, Judge Rakoff probably read his morning newspaper with interest a few years later when Eliot Spitzer took off after Grasso and Ken Langone over Grasso’s inflated pay from NYSE.
After the Emperor’s Club scandal broke, Ken Langone gave the most amazing interview:
CNBC: Do you think that he should resign?
KEN LANGONE: Absolutely.
CNBC: Tell me why?
LANGONE: Because he’s a hypocrite. He destroyed reputations of people who had good reputations and deserved reputations. He talked today about his standards – but what he didn’t talk about was the standards that he held everybody else to that he couldn’t keep. So how do I feel? I certainly feel sorry for his daughters, very much so. I don’t know his wife, but I have to assume she has some idea of this happening. For him? It couldn’t be enough to please me. What he’s done to people, not me, I’m standing, thank God, but the number of people that he besmirched, the number of people whose reputations were earned that he soiled is horrible.
CNBC: Would you say that you were surprised by this news?
LANGONE: Not at all. I had no doubt about his lack of character and integrity. It would only be a matter of time, I didn’t think he would do it this soon or the way he did it. But I know for sure he went himself to a post office and bought $2,800 worth of mail orders to send to the hooker.
CNBC: How do you know that?
LANGONE: I know it. I know somebody who was standing in back of him in line….We all have our own private hells. I hope his private hell is hotter than anybody else’s.
[emphasis added]
How would a person allegedly standing behind Eliot Spitzer on line at the post office ever bother to notice the amounts of the postal money orders that he bought, or the name of the payee? Doesn’t the purchaser fill the name of the payee themselves ?
Why would some random person know to memorize the name of the payee (this is before the scandal broke), which would have been the name of a corporate shell, unless, of course, the "somebody who was standing behind [Spitzer] in line" was perhaps a private eye tailing Spitzer, hoping to get some dirt on him that some enemy might use?
The judge who issued the recent decision to unseal some of the documents related to the wiretapping in the Emperor’s Club investigation is none other than Judge Rakoff, a man who clearly knows a lot about First Amendment law, and a lot about powerful men on Wall Street who really wanted to see Eliot Spitzer brought down.
This is part one of a three-part series.
Related posts:
- Appeals Court Won’t Unseal Spitzer Wiretap Applications
- Oversight Done Right: Judge Rakoff Rejects SEC-BofA Settlement
- Breaking! Judge Walker Gets Ready to Penalize the Government in al-Haramain
- al-Haramain Reply Filed; Constitution, Rule of Law in Judge Walker’s Hands
- Judge White Thumps The DOJ On EFF FOIA Case
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Of course… and we ended up with a Geither instead of a Spitzer.
So is Roger Stone really part of it, or is he being used to hide Langone’s role? (Or perhaps the roles of others?)
Roger Stone would make a very convenient Bright Shiny Object of Distraction, wouldn’t he?
Is there anyone in the big-time financial world who is *not* a dirty bastard?
Way OT: NPR interviewed Jane Harmon, hotly indignant. She just doesn’t know if there was ever such a conversation.
First off, the link where it says ‘Judge granted the motion’ isn’t working. Also, what does sustained on appeal mean? The link provided reads like Chinese to me.
Great Catch LHP sounds like someone was opening Spitzer’s mail I think thats a felony Ken should get himself a lawyer will there be an investigation or will this get sweep under the rug?
Gasso and Ken should both get lawyers the GOP dirty tricks machine where they investigate everything about your life sometimes illegally just might now get investigated themselves.
I wonder who else they looked at? I want the list of people Bush spied on I bet Spitzer is on the list.
Very interesting series of events. It was just a little too convenient that Spitzer went down the way he went down. Not to say that he did himself any favors.
As you note, this judge would be in better position than most to know the deep background.
I wonder how many of these powerful men play around on the side and expose themselves to blackmail and have so much hubris that they don’t even think about it? People who do that sort of stuff are usually pretty secretive and if they’re smart do not leave too many clues. SIlda seemed to be surprised, but who knows. One would think she would known something was off.
Spitzer was set up by someone, or if he wasn’t set up it looks like he was the target of some sort of PI thing to look for some dirt to nail him. And since it seems that most men with power seem to stray, as it were, this sees like a pretty sure bet to nail someone.
I would like to see Spitz come back and go after Wall Street in some fashion, not as vengeance, but because Wall Street is full of lying cheating scum and that scams and they need to be gone.
Holy crap. Money orders.
And they still nailed him?
I can’t wait for parts 2 and 3!!!
Now, I’m totally confused. I thought the reason Spitzer got flagged in the first place is because of bank transfers. Now, certainly it’s really believable that Spitzer also used Postal Money Orders (how homely), but I just find it strange. I also am a big believer in the thought that Grasso and Hank Greenberg were in ‘cahoots’ on this with goodness only knows how many other people – if there had been a wiretap on those guys, I’m sure THAT information would have just leapt off the page.
Grasso lost quite a knot when his comp package was reduced.
It continues to blow me away that our economy is based on the financial industry, which employs and encourages people like Grasso, and that Dow Jones, S & P and Nasdaq are barometers of the country’s financial health. Stupid. Just stupid.
Spitzer went down because of what he knew, whom he knew it about, and — oh, yeah — the hookers at the Emperors Club.
Because no one else in NYC ever patronized the Emperors Club, right?
And scary, apparently.
Peterr is upstairs!
Never Again? That’ll be Quite a Speech, Mr. President
Names of payees are left blank and the maximum amount per M.O. is $1000. M.O.’s are traceable to the post office where purchased, and of course, are traceable once in the hands of the payee, any subsequent holder in due course who signed the instrument, and the bank where deposited or processed.
It seems unlikely that either of these men would have stood in line to buy money orders at the Post Office. Mr. Spitzer is a multi-millionaire many times over and a well-known public official. In New York City, there are precious few places where he would not be recognized. It also seems unlikely that Mr. Spitzer, an experienced criminal prosecutor, would have filled in the name of a payee on a M.O. in his own identifiable handwriting.
Well, that shoots my theory right in the butt that the bank he used monitored his transfers using obscure Bush-era banking law…
Unless they already knew about the Emperor’s Club and worked the other direction and met up with the money orders.
How interesting none of this was in the complaint, either…
>>Also, what does sustained on appeal mean? The link provided reads like Chinese to me.
It means his decision was appealed and then upheld.
Spitzer’s idiocy with the pros was monumental. Didn’t he know his ever word and action was likely to be seen, every word heard? If anyone should know that the all seeing eyes are now everywhere it should be the powerful insiders like him or now Harman.
When the non scandal about the Democratic House computer hack trickled in and then out I kept thinking to myself what a bunch of naive fools. Some little rat fuck GOP aide is the least of your worries. Why don’t these people get it?
One of the many excellent aspects of the 2007 movie “Michael Clayton” is the way that it shows privately hired detectives working on behalf of a large (polluting) corporation in what might be called ‘corporate espionage’. They answer to no one except the people who pay them. I’ve long assumed that Spitzer made enough enemies that he was surveilled by private interests, who probably had a ‘joint interest’ with one or more members of Bu$hCo.
Spitzer’s conduct is hardly stellar; but the weirdness of the revelations and also the strangeness of its timing are very suspicious. One wonders if the ‘night janitor’ (or an IT person) was logging onto his computer at 2 am. The whole thing is weird. Given what’s occurred since he was politically smeared, it’s hard to believe he wasn’t onto someone’s trail. Big Time.
Langdone is no doubt a pleasant person; very likely charming. But his claims that Spitzer is the only dark player in the tale is pathetic and whiny.
call me crazy – but yesterday when the poll came out w/ the numbers for our current gov, (who replaced spitzer – patterson), i thought if spitzer were to run again, i would vote for him again.
apparently i’m not alone.
“In a hypothetical 2010 Democratic primary for Governor, Attorney General Andrew Cuomo has 64 percent support, compared to 11 percent for Paterson and eight percent for Nassau County Executive Tom Suozzi. In potential general election matchups, former New York City Mayor Rudy Giuliani beats Paterson 56-29 percent (56-33 percent last month) and Giuliani beats Suozzi 50-31 percent. Andrew Cuomo increased his lead over Giuliani to 53-39 percent, up from 51-41 percent last month.
“Voters are pining for the days of Mario Cuomo (39 percent) and George Pataki (33 percent) as Governor,” Greenberg said. “A plurality of Democrats and independent voters would choose Mario and a majority of
Republicans chose George. While 14 percent of all voters want to see Spitzer back in the Capitol, only eight percent would opt to have Paterson as Governor if choosing among the last four to hold that office.”
http://staging.siena.edu/level…..8;id=15579
if rudy runs theres going to be some major organizing…..ny style
Spitzer was definitely on the right track about the fraud on Wall St. That is why he was taken down. Not to condone his conduct especially when the banksters who are being bailed out where charging hookers to their corporate charge cards, but someone knew where he was vunerable and pulled the plug before he got too close. You don’t think all these boys at the top are watching each other? They get tripped up when they think they are smarter than the competition. They think they cover their tracks. Arrogance will do you in everytime.
What better way to ruin someone going after you? Make them look sleazier. But a hooker isn’t sleazy any more, it is common place. Why the hell did Spitzer resign? Was it extortion perhaps?
Can you imagine what we could find out with a corporate FOIA? I mean, all those banks and investment firms, using bailouts (even “temporarily”) should have to fork over their insider memos.
Can you hear the wailing?
Sustained on appeal means that the appeals court agreed with the judge’s decision. Will try to get link fixed
Spitzer resigned , really, as fallout from his feud with Joe Bruno (the former NYS Senate Majority Leader) Bruno had the votes in the Senate to impeach Spitzer and the Emporor’s Club thing gave him the excuse to use them.
Spitzer knew how to count votes and realized he was DOA, so he resigned to deprive Bruno the pleasure of the impeachment.