Ride the Lightning

BANK SECRECY ACT GUNS DOWN SHERIFF OF WALL STREET

March 13, 2008

In a truly timely keynote presentation at ABA TECHSHOW 2008, the Executive Director of the Electronic Privacy and Information Center analyzed the investigation that finally resulted in the abrupt termination of Elliot Spitzer’s tenure as New York’s governor. Marc Rotenberg is a terrier with a scent for the truth, not always an easy pursuit where government officials are concerned.

This time, a mighty man was undone by an obscure (to most of us) law known as the Bank Secrecy Act of 1970. As originally constituted, the poorly named Act required banks to report on cash transactions of $10,000 or more. Those who wished to evade the Act simply took out or put in lesser amounts in a short period of time. These days, the banks have a formula for determining cash in/cash out in a given period of time. The law requires banks to track politicians more closely as they are “politically exposed persons.” Now, you would think Spitzer would have known this, as he has used bank reports under this law previously to dethrone (I just can’t help myself) the “emperors” of Wall Street.

Now, as a member of the Emperor’s Club (what a tribute to hubris in a name!), Spitzer himself tried to dodge the law by making smaller but frequent cash transactions. He apparently made enough of them to trigger a report to the IRS by his own bank, which subsequently resulted in a wiretap, and oh well, you know the rest.

I’m sure he was delighted to find that his paramour Kristen had a MySpace page, adding further ignominy to a situation that could hardly be worse. Everyone feels for his family of course, but it is hard to have a lot of sympathy for “The Sheriff of Wall Street,” who has now been gunned down by, what else, the electronic evidence that pervades our lives.

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