Eliot Spitzer

Spitzer Probe May Not Be Prime Focus Of House Inquiry, After All

Zachary Roth | November 26, 2008, 11:48AM

The news that a House committee plans to look into the events that led to that fateful investigation of Eliot Spitzer may have some observers licking their chops in anticipation of finding out whether the probe was politically motivated payback for the governor's targeting of Wall Street.

That notion has persisted, despite little concrete evidence, almost since the news of Spitzer's tryst with Ashley Dupre first surfaced in March.

But don't get too excited just yet. Steve Adamske, a spokesman for Rep. Barney Frank -- who, as chair of the House Financial Services committee, will run the inquiry -- told TPMmuckraker in an interview that in fact the effort won't be designed primarily to look at that question. Rather, said Adamske, it will focus on the somewhat drier subject of whether increased scrutiny by the Treasury Department of banking transactions, as required by the Patriot Act, is an effective counter-terrorism tool. Banks have in the past complained about the increased paperwork required by the law, arguing that in addition to being burdensome, it does little to help fight terrorism.

The Spitzer saga is the hook for an inquiry into that subject because the investigation of the governor began after his bank filed a routine report to Treasury about a series of wire transfers he made to QAT International, a shell company connected to the Emperor's Club prostitution ring. After another bank filed reports about suspicious activities by QAT International, investigators noticed the previous report about Spitzer, and began looking closer.

That focus may disappoint some committee members. Michael Capuano, a Massachusetts Democrat on the committee, seems to see the issue differently. "The question was: Why were they looking for this? Is this political retribution?" he told the New York Times.

But it's by no means clear that Frank's inquiry will answer that question.