Client 9 - The Call Girl and the Governor Storyville

This programme contains some strong language

What I'm most proud of as Attorney General

is that we were willing to walk into the buzzsaw

of some very powerful interests,

and never back down.

Look, I had a simple rule.

I never asked if a case was popular or unpopular.

Never asked if it was big or small.

Hard or easy.

I simply asked if it was right or wrong.

I will never forget THAT moment.

I was dumbfounded.

I can't say I was sorry.

# Start spreading the news

# I'm leaving today... #

It was like, "You gotta be kidding!"

# ..I want to be a part of it

# New York, New York... #

He was going to be our first Jewish President.

# ..These vagabond shoes... #

There was corporate corruption. Greed had seemed to hit its peak.

And he was fighting all of that.

# ..Right through the very heart of it

# New York, New York

# I want to wake up in a city that doesn't sleep

# To find the cream of the crop at the top of the heap

# These little town blues

# I'm walking away

# I'll make a brand-new start... #

On the face of it, the fall of Governor Spitzer

was just another sex scandal.

Was it a private matter or a public reckoning?

And what of the timing?

A few months after his resignation, the reckless banks

Spitzer had policed brought the economic system close to failure.

# ..I'll make it anywhere

# New York, New York... #

Everyone agreed on one thing.

No-one expected him to go down like he did.

It is, to a certain extent, a very classic tale, perhaps,

of an individual who, from the exterior,

appears to have been captured by hubris.

A sense of standing for virtues and, I think,

working very hard to articulate

and work towards establishing rules and boundaries

but then, himself, slipping and failing.

And this goes back to the days of Greek mythology.

It's not a new story.

In New York, everyone's some sort of an animal, you know?

They're some sort of an animal.

They're hungry...to make more money.

Hungry to get more sex.

To date a prettier girl, or a richer guy.

Just hungry. Just greedy. Just animals.

This Chinese philosopher said that human beings

are a hybrid between

animals and angels.

That we're capable of animalistic behaviour.

Consider sex and war.

But we're capable of doing beautiful things too,

like art, music, or making love.

When I was contemplating that, I was like, "Wow, I kind of dig that."

We're half-angel, half-animal.

Good afternoon.

Over the past nine years,

eight years as Attorney General, and one as Governor,

I've tried to uphold a vision of progressive politics

that would rebuild New York and create opportunity for all.

We sought to bring real change to New York, and that will continue.

Today, I want to briefly address a private matter.

I have acted in a way that violates my obligations to my family,

and that violates my, or any, sense of right and wrong.

Spitzer's wrong turn surprised everyone,

because he had a reputation as Mr Right.

As Attorney General of New York,

he was known as the Sheriff of Wall Street,

someone determined to take on powerful interests on behalf of those who couldn't afford to.

This was a guy who understood that he had been

a member of the lucky sperm club.

He was really smart. He was wealthy.

So he had gotten a lot of breaks in life.

And he wanted to use that, you know,

to better the world.

Spitzer's father, Bernard, was a self-made real estate tycoon

who sent his son to an elite prep school, Princeton, and Harvard Law School,

where he met his wife to be,

Silda Wall.

His father had pushed him to succeed.

We debated issues around the dining room table.

So I guess it was more of a symposium

than a touchy-feely environment.

We were taught not to embrace a notion or principle of fact

merely because somebody had asserted it.

Challenge them. Push back.

That was part of the conversation.

For a real estate family, Monopoly takes on a special edge.

Sure, it's a game.

But it's also a way for a father to teach his son

some lessons about money and power.

Look, I don't want the impression to be that he was devoid of compassion,

but it is true he foreclosed on me in a Monopoly game.

Bernard Spitzer tricked his son into selling Boardwalk and Park Place

for cheap and wiped him out when he landed on a built-up Boardwalk.

The lesson - don't trust anyone.

But I think, really, what he was trying to do was

teach me how the market worked.

Monopoly's a fun game, but I had overbuilt and overextended.

And he said, "I'm sorry, that's it. There are consequences, and you've learned a lesson."

-What was your response at the time?

-Oh, I cried.

I think I was about ten. I mean, I was a kid.

It was no fun. I wanted to be bailed out.

Bernie is a guy who judges people. That's a tough thing for a kid.

I do remember him watching Eliot and me play tennis.

And, after one particular serve and volley of mine which I won,

he gave me the victory sign.

He said, "Yeah, that's exactly what to do to him."

Eliot's strategy is to stick with his core game.

Hard shots, serve and volley.

My reflexes are good.

Love to get into net.

As I say, the game I used to have keeps getting better.

Eliot Spitzer's notion of public service was like his tennis game.

Attack, attack, attack.

Good morning and thank you for coming.

As Attorney General, Spitzer saw an opportunity

to do more than enforce the law.

He wanted to use the law to change the way society worked.

He sued coal-fired plants in Ohio for causing pollution in New York.

He sued General Electric for dumping poisonous waste into the Hudson River.

He uncovered fraud in the pharmaceutical industry,

where pill-makers hid the damage done by their drugs.

He fought for the minimum wage for delivery men, and forced upscale restaurants to hire more women.

He would take them all on because no-one else would.

There's a reason why Eliot Spitzer became famous as New York's Attorney General.

The job had been a second-tier position.

It had been focused on regulating crooked car dealers.

And Eliot Spitzer focused on Wall Street, on the biggest guys around.

And Spitzer's premise, which was right,

was that Wall Street can't be left to regulate itself,

or terrible things will happen.

When I assumed office, which was January of 1999,

we were in a period where Wall Street and investment bankers were,

to use Tom Wolfe's great phrase, "masters of the universe".

To protect the average citizen,

Spitzer was willing to prosecute bankers and CEOs,

like any other lawbreakers.

In the course of this investigation,

my office developed evidence

indicating that analysts gave misleading advice that helped

the brokerage's investment banking clients,

but harmed individual investors.

When we first got into this, everybody said,

"Well, what's the State Attorney General's office in New York doing,

"going after this problem? Shouldn't this be the SEC?"

And my response was, "Yes, but they haven't."

And if they haven't,

and there are investors being ripped off, we WILL do it.

Wall Street analysts advise buyers on what stocks look good or bad.

With the rise of the internet, analysts became superstars because

only they seemed to understand how to value internet companies.

As stocks soared, so did the value of analysts who knew how to pick them.

The more money they made, the more potential there was for abuse.

Henry Blodget was a failed writer who stumbled into being

a top research analyst when, as a young stock picker,

he predicted the rise of Amazon.com.

By 2001, he was working for Merrill Lynch, making 12 million a year.

When one of Merrill's customers sued Blodget for phoney research,

Spitzer's team investigated him,

using an arcane law called the Martin Act

to subpoena thousands of documents and emails in search of fraud.

As Spitzer's team pored through Blodget's emails,

they kept coming across the term POS.

They thought POS was short for positive,

for stocks Blodget wanted customers to buy.

But then they stumbled upon Blodget's keyword chart.

Blodget's emails were honest and brutally downbeat.

Meanwhile, his official stock ratings were mostly upbeat,

urging customers to buy, buy, buy.

Mr and Mrs Smith, whose IRA - or 401k - is being invested,

they are the sacrificial lambs, and being used to prop up the stock

so that the Merrill Lynches of the world can go to companies and say,

"See what we're doing for you? Bring us your investment banking business."

It was fundamentally corrupt.

It was insiders' Monopoly, guided by a basic fundamental principle.

You don't go south of 14th Street

except for one reason, to make money.

The guys on the floor, all they cared about was making money.

That's the American way.

Jack Grubman was a highly respected telecommunications analyst for Salomon Smith Barney.

He became famous for pumping up AT&T stock to please his boss, Sandy Weill.

Then Weill helped Grubman get his twins into an exclusive preschool.

Grubman's payday for research?

20 million a year.

Enough to buy a palace on the Upper East Side.

Grubman's career ended when he relentlessly pumped up the stock

of a company called WorldCom just before it went bankrupt.

Do you regret, in hindsight, staying so bullish on the company for so long?

Nothing... Look, why are you harassing me like this?

I'm not harassing you.

I'm just asking you questions about the company that you cover.

This caught you completely by surprise, you say?

Yes.

Yes.

-Thank you.

-Yeah.

There was always this, internally, we call it the come-to-Jesus moment,

where we went to whoever it was we were prepared to sue

and/or go after for doing something wrong,

and we'd say to 'em, in no uncertain terms,

"Tell us why, given this fact pattern,

"we would be wrong to sue your ass."

Early on in the investigation, the Merrill Lynch lawyers came into my office.

They looked at me and they said, "You're right.

"But we're not as bad as our competitors."

I was a prosecutor for a lot of years.

I never heard a defendant stand up in court and say,

"Yeah, I robbed three people, but somebody over their robbed five so, therefore, I'm not bad."

Merrill Lynch wanted to settle the case and pay some money and said,

"We will pay a big sum of money if you promise to keep the information secret."

And I said, "No.

"Because my job as Attorney General is to change the system

"so that it's fair and will be honest.

"And if we seal the evidence and you pay a cheque,

"and we don't change the system, I'm basically being bought off."

My office has reached an agreement that will help ensure

the integrity of investment advice on which investors often depend.

Blodget and Grubman paid million-dollar fines

and were banned from the securities industry for life.

But their firms bought their permanent silence

with handsome severance packages.

In exchange for Grubman's silence on the details of his firm's behaviour,

Solomon Smith Barney paid Grubman 30 million.

The nation's best and brightest were lured to Wall Street

in search of fast fortunes.

The money they made flowed everywhere.

Penthouses, yachts, golf clubs.

And to the oldest sector of the global economy,

ready for a new cash infusion.

I have rich lovers.

# Love for sale... #

I don't go out with poor men.

I've got no reason to do so.

# ..Appetising young love for sale... #

I don't call prostitution and escorting selling your body.

# ..Love for sale... #

You don't sell, you rent.

I love my bank account full.

It's better than empty.

There's a street in Soho where a lot of artists set up.

I was selling my paintings one day

and this charismatic fellow comes along,

and he's got a beautiful girl with him.

This girlfriend, Natalia, said,

"This is the number-one escort, New York city.

"I run New York's number-one escort agency."

I've never seen you naked. You think your body's good enough?

"I want to buy the biggest, most expensive painting you've done."

He gives me his business card.

I still have an old souvenir.

"New York Confidential. Rocket fuel for winners."

That's all it says.

In 2004, New York Confidential was at its height,

making millions by offering clients the Girlfriend Experience.

A few hours with naughty playmates who look like college cheerleaders.

-I've had 1,500 in 100 bills in my purse.

-Oh, God.

-I pulled it out.

-Only 15? THEY LAUGH

We started hanging out, even after I did the painting.

One day, we're in the back of a town car and he says,

"Hey, grab the phone.

"Just talk to the guy and try to help him out.

"He's probably looking for a girl to spend the night with."

I'm on the cell phone and, you know, my adrenaline is going

and I'm, like, "OK, we have a brunette, a blonde.

"Do you like ethnic girls?"

I do a deal for, I don't know, three or four thousand.

He says, "Great. You just made 400 bucks from a five-minute phone call. I'll give you 10%.

"Why don't you just come to work for me for a little while, you know?"

That Craigslist ad pulled well, huh?

That's where it all began. When I started working for Jason.

How do you know she's a no?

We don't get that many calls for Asians. One hot Asian is plenty.

We need more blondes, hot blondes.

They might look good in person, but they've got a shitty photographer.

Hot blondes. She's a definite yes.

When a businessman spends, say, 2,000 an hour,

he wants to read the reviews just like if he were to buy a car.

You want to read the reviews. How much mileage does it get?

Does it have air conditioning? Four-wheel drive?

What's the difference between paying 1,000 an hour for this young lady

when I can open up the Village Voice or go on Craigslist

and I can pay 200 for another young lady?

And I'd say, "Well, sir, sure.

"You can have a cheeseburger, or you can have lobster.

"You're going to have such a good time

"with one of New York Confidential's girls that

"you're going to go to work Monday morning with a smile on your face,

"you're going to make more money for you and your family,

"and then you're going to call me up next week and you're going to say,

"'Who can you send me out today?'"

You can make the assumption that they're not being sexually satisfied in their marriage,

or there's baggage, or whatever.

And then what's their option? Do they get divorced?

Do they split up their family?

Or do they seek, you know, do they go see an escort?

One young lady was a schoolteacher.

Another girl was an athlete, trying to make it to the Olympics.

Actresses, singers, models.

Jason would give his business card to every girl that he met.

Half of them would call and then a quarter of them would start working.

Some girls would offer me cash, tips.

Some girls offered me sex.

I don't think I ever got a tip or sex with Ashley.

Ashley was Ashley Youmans, later Ashley Dupre,

who would become famous for having sex with Eliot Spitzer.

As an escort, she got her start at New York Confidential,

where her working name was Victoria.

It was through one of those straight pitches that Jason found Ashley.

Jason recruited her from the Gansevoort Hotel.

At the Gansevoort, Ashley was a bottle girl,

trying to break in to the music business.

She was just light. She was just happiness.

She was a great, bubbly 19-year-old girl.

She was a good American, New Jersey, Italian girl.

Guys loved her.

She had great pheromones or something, you know.

Within three or four weeks,

her rate was going up to 2,000 an hour, with a two-hour minimum.

Her reviews were awesome as well.

I think she got something like 12 consecutive 10/10 reviews.

After we did our first appointment together, I told Jason,

"You got to book this girl."

First of all, she's great. But she also has a perfect coochie.

Ashley's reign ended when New York Confidential

was raided by local police.

No customers were arrested, but Hulbert was convicted of

promoting prostitution and was sent to jail for eight months.

Ashley would move on to work

for another escort service.

For every New Yorker who's been ignored, left out,

who's been told, "You can't fight City Hall,"

so many times, they've come to believe it.

For every New Yorker without a voice, listen.

There's one strong enough for all of us.

For most of our history, we have turned a blind eye to

the violations of duty on the part of white-collar criminals.

We can understand it.

There's something viscerally terrifying about street crime.

And, until you're safe in your home,

you worry a bit less about what is often a bit more amorphous,

which is the nature of white-collar crime, which is more subtle theft.

Spitzer broke the mould of how you prosecute a white-collar case.

He went after it fast and hard and he got things done

in a period of weeks or months that would take federal regulators years.

He wanted to change the system, so he'd get the goods on a company,

or on people, and use it as leverage to institute reform.

To force the industry to change the way it did business.

A lot of people thought that was outrageous.

While Spitzer stirred popular rage at Wall Street, there were a few people

who were delighted to see the bankers take home big paydays.

As revealed in the actual cell phone of one of the bookers

of the escort service called the Emperors Club.

The lawyer/banker thing is true. There are quite a lot of them.

But there are lots of stereotypes, you know?

That it's this crazy, drug-fuelled sort of party scene.

But, generally, people are respectful.

They just want to have a nice time with someone.

Many of my clients are nicer to me than many of the dates I've been on.

In fact, I've stopped dating in the real world.

Partly because it would be complicated,

and partly because my standard has lifted.

Honestly. You know?

The pictures of Ashley didn't surface right way.

The Eliot Spitzer story broke

and then all these media outlets were calling me to do interviews.

And so I did a few interviews without even knowing that

Ashley - my Ashley - was Victoria, was Kristen, was who she was.

Tonight, Eliot Spitzer resigns as Governor of New York.

Where will he find comfort

in this difficult time?

I was shocked when it all happened.

But then when I saw Ashley's picture flashed on the news,

I was, like, "Wait a second!"

I was, like, "Oh, my gosh!" I couldn't believe it.

She fit the bill.

The New York Times website identifies Governor Spitzer's

mystery call girl as Ashley Alexandra Dupre.

All over papers and television, she was called "Spitzer's girl".

Known as Kristen at the Emperors Club,

Ashley Dupre was determined to take advantage of her sudden opportunity.

Clearly, Ashley was trying to make

a name for herself.

After the scandal broke, Ashley's MySpace page,

with one of her songs available for streaming,

got over seven million hits.

To help package her career, she brought on board two lawyers,

a publicist and a management team.

Ashley's manager arranged for an interview with Diane Sawyer.

Everyone played their part.

Ashley dressed up as the good girl gone wrong

and Diane Sawyer played the role of the scalding mom.

You say the work, but you haven't said the words.

-The work?

-Prostitution.

Escort.

Escort. What's the difference?

-Escort.

-What's the difference?

She catered to the stereotypes of hookers which are, you know,

"Poor me, I had a troubled childhood. I made a mistake."

Which is such a load of crap.

It's... I can't change the past.

I can only try to take what I've learned and apply that to my future.

We're being paid ridiculous amounts of money.

None of these women are forced to do this. And they're not stupid.

Many of the professional prostitutes that I know are very smart women,

who weren't abused, you know.

Don't have a mental disorder.

They just happen to believe in this kind of work.

So did their customers.

The cell phone of the booker from the Emperors Club

offered a glimpse of the club's well-heeled client list.

An Oscar winner, CEOs and high-powered investment bankers.

The club treated them like emperors, and why not?

They made more money than kings.

They enjoyed having their way with women and the world.

So it came as no surprise that they resented it

when the New York Attorney General started to cramp their style.

The Economist magazine calls him Wall Street's scourger-in-chief.

He's gone from complete anonymity to what Fortune Magazine calls,

"the most feared man on Wall Street."

Spitzer has deputised himself as the Sheriff of Wall Street

and is leading the posse for retribution, restitution and reform.

Spitzer appealed to Democrats and Republicans.

He was a law and order liberal who wasn't afraid to punch back.

When you walk into a building on Wall Street,

is it like turning the light on in the kitchen and the roaches just scatter everywhere?

Like a beam of light to the corrupt.

There was a day when I had to walk into a hedge fund...

What I was intrigued by was the number of people who were terrified of him.

They literally were terrified at this guy coming after them.

The issue of CEO comp was something

I had been trying to get people to take a look at.

It was off the rails.

# I take what I want

# I'm a bad go-getter, yeah

# Huh! Yes, I am

# I'll never lose

# And I'll never quit, oh, yeah... #

The ratio of CEO comp to the average worker's comp had gone from about

40 to one to about 550 to one.

CEOs began to just take everything they could and, ultimately,

that was going to destroy our economy.

Because, instead of running the companies to create

long-term wealth and long-term investment,

all the games we've seen, everything from backdating of stock options

to maximising short-term profits without sufficient investment for the long term,

these are things that are cancers inside the economy.

One of the flashiest executives was head of the New York Stock Exchange,

Dick Grasso, who boasted owning ten cars and three homes.

He travelled on private jets, often flanked by armed bodyguards.

His job was to regulate and market the New York Stock Exchange.

Nicknamed Punky, Grasso was a scrappy college dropout who started on the floor and worked his way up.

There's a job opening at the New York Stock Exchange.

Chairman Dick Grasso resigned yesterday over the fury raised by his massive pay package.

Not only was Grasso paid an average annual salary of 20 million,

his retirement package totalled nearly 140 million.

After Grasso stepped down,

the new head of the exchange brought the matter to the Attorney General.

There's a statute in New York that says the value of the pay cheque

that the head of a not-for-profit receives

must be commensurate with the value of the services provided.

I like Dick. He's a decent guy.

He didn't provide services worth 139 million.

Perhaps more perversely, the compensation had been determined by

the very people he was supposed to be regulating.

I had the most respected group of directors from the corporate and financial world.

They exercised their business judgement.

They paid me what they believed to be fair and reasonable, which I agree with.

Spitzer decided not to go after the blue-chip international board.

Instead, he sued Grasso and the head of the board's compensation committee, Ken Langone.

Langone would prove to be a formidable foe.

I've been rich and I've been poor.

Rich is better, I can tell you right now.

The son of a Long Island plumber, Ken Langone had co-founded Home Depot

and amassed a fortune of well over a billion dollars.

A dedicated philanthropist, Langone was not shy about paying people well.

At the time we awarded Dick these pay packages,

I truly believed that Dick earned every single penny, and more.

Spitzer demanded that Grasso return 100 million.

At the time, Langone told Fortune Magazine,

"If Grasso gives back a fucking nickel, I'll never talk to him again."

He, as anybody in that position would, took umbrage at him.

And he developed a rather strong animus towards me.

The day that I sat in this room and he went on television with

that false press conference he had, announcing that he was going after

Dick Grasso and me, and all kinds of bad things about me...

Eliot's theatrics.

You can't pay the head of a not-for-profit that much money,

close to 200 million.

It's simply too much.

It's not reasonable. It's not right.

It violates the law.

It was headlines.

It was glorious headlines.

All these captains of industry. Hey, this is big game.

This is going after elephants.

He became a very vociferous critic of mine, and that's all fair game.

In my view, we were right and he was wrong.

But, again, it was something he felt deeply about.

In 2004, at the Democratic National Convention, Spitzer took up the issue

with Jack Welch, the former CEO of General Electric.

Jack and I are very good friends.

Spitzer came up to him with froth

coming out of the sides of his mouth, spitting at me, and pointing at Jack,

"You tell your buddy

"I'm going to put a spike through his heart!"

This is not something the Attorney General of New York State says.

So when Jack told me, I said, "Jack, do me a favour."

I said, "If you see him,

"tell him one thing - make sure it's steel, because wood'll break."

The case dragged on for years.

In 2008, the New York State Court of Appeals dismissed the case for a bizarre reason.

Since the suit had been brought, the New York Stock Exchange had abandoned its not-for-profit status.

Dick Grasso kept all his money, but Eliot Spitzer had engaged an enemy with virtually unlimited resources.

One who was watching and waiting for any missed step.

I'd like to think I'm not a vindictive person.

And a basic tenet of my faith is forgiveness.

The most harm that Eliot Spitzer's done to me is...

I am defying my faith.

I can't forgive him.

And I should. But I can't.

In Ken Langone, Spitzer had created a mighty enemy.

And then he added another one, when he took on Hank Greenberg,

the head of the world's largest insurance company, AIG.

At the age of 79, Maurice Hank Greenberg was the most powerful businessman on the planet.

Under his command, AIG had grown to be worth 157 billion,

with 92,000 employees.

Admired for his spectacular results,

Greenberg ruled his empire with an iron fist.

I think he was Louis XIV to everybody else's, you know,

being a mere baron.

I think Hank Greenberg epitomised the power of corporate CEOs and,

in my view, he was the most powerful person in corporate America.

Greenberg's measure of his own worth was the stock price at AIG.

The normal cycle of business is that sometimes your profits go up,

and sometimes your profits go down.

But Wall Street didn't like companies to perform that way.

They wanted to see steadily rising profits.

If you delivered steadily rising profits,

they'd give you a higher stock price.

So Hank Greenberg came up with a new type of insurance that would

create the illusion of steadily rising earnings.

Greenberg's AIG was fined over 100 million by federal authorities

for helping other companies cook their books.

In 2005, it appeared that AIG might be using similar tricks to pump up its own stock.

The more we dug into AIG,

the more problematic the company itself appeared to me to be.

And the disconcerting aspect of it was that it did appear to come from the very top.

When did you first hear about Spitzer's investigation of AIG?

When I got a subpoena.

One deal generated by Greenberg caught the eye of Spitzer

and federal investigators.

It was a suspicious contract between AIG and Gen Re,

a company owned by billionaire Warren Buffett.

One of the most startling moments in this case was when

tapes emerged that were dispositive overwhelming proof

of exactly what these transactions had been.

As this was unfolding, Dick Beattie called me

one Saturday morning at home and said, "Let's talk about this."

The board wanted me to find out what I could

about the Gen Re investigation.

Eliot was jogging on a Saturday morning or something.

I met him in the park.

The only thing of significance, he told me, as I recall,

was that they had Hank's name on tapes.

To boost his stock price, Hank Greenberg wanted to make it look like

AIG had 500 million more than it did.

We got a call to see if we could get a loss portfolio from Ron Ferguson.

What happened afterwards, I don't know.

I didn't... I wasn't involved in the details of the transaction.

A handwritten deal memo laid out the terms.

Gen Re would pretend to pay AIG 500 million

in two instalments for a phoney insurance policy.

There was no risk of paying a claim.

For doing the phoney deal, AIG would pay Gen Re a 5 million fee.

HOULDSWORTH LAUGHS

-HOULDSWORTH:

-'No risk. No risk for five million bucks.'

Hank Greenberg's initials, MRG, were all over the document.

-MONRAD:

-'The two people at AIG who are involved

'are Hank Greenberg and Chris Milton.'

AIG was a big company.

I didn't just stay focused on the Gen Re transaction.

HOULDSWORTH CHUCKLES

'Yeah, well, that tells you something, doesn't it?'

What was an unfair advantage to Greenberg was seen as cooking the books to

AIG's accountants, PricewaterhouseCoopers.

The firm refused to accept AIG's financial statements

as long as Greenberg was the CEO.

Hank wasn't pushed out by Eliot.

What happened was, the investigation that followed,

and the accountants, at the end of the day, said,

"We're not taking that certification any more.

"So you're saying you're the board of directors and, my God, what does that mean?"

That's what drove the board

deciding that Hank had to go,

and one other issue.

Spitzer demanded that Hank Greenberg testify under oath.

However, Greenberg's lawyers advised him to plead the Fifth, despite

AIG's policy to fire employees who didn't cooperate with regulators.

That troubled a lot of people on the board.

They wanted him to say, "No, absolutely not.

"I'm not going to take the Fifth. I'm going to testify."

I think Frank Zarb and I called Hank and told him that

the board had made the decision that he had to step down.

These are very serious offences.

Over 1 billion of accounting frauds

that AIG has already acknowledged.

That company was a black box, run with an iron fist,

by a CEO who did not tell the public the truth. That is the problem.

Does that mean you're moving toward an indictment?

No, I didn't say that. It depends what we can prove

that Mr Greenberg knew at the time.

We have powerful evidence. We will proceed with it.

It's too bad that the Attorney General

doesn't come out from behind his office

where he's protected against libel.

I wish he'd come out and say these things as a citizen.

Spitzer attacked Greenberg, and I saw him on television one night

saying that Hank Greenberg was a crook.

John Whitehead had been a war hero, a Deputy Secretary of State

and the chairman of Goldman Sachs.

And his office continued to leak information about why he was

a crook, without ever any charges being brought against Hank.

So I said, "This is something I have to do something about."

So that's what caused me to write that first article.

I had heard of an incident involving former Goldman Sachs chairman John Whitehead.

Mr Whitehead had come out publicly supporting Mr Greenberg.

After that op-ed was published,

he received a threatening phone call from Eliot Spitzer.

He asked me a couple of questions about my article.

And then he came right to the point.

He said, "Mr Whitehead, you and I are now at war."

Look, he had written an op.

I don't know if I said those words or not.

If that's the worst I said, you know... OK, that's... People are at war with me all the time.

"You have fired the first bullet."

"You have fired the first bullet.

"But, believe me, by the end of this war,

"I will fire the last one and you will be dead."

Well, I don't think I said that. I mean, I wouldn't say...

Look, I hope I didn't say that.

He was screaming into the phone.

He and I had a heated conversation. I will leave it at that.

It was a private conversation.

As I've said, I never denied that I have heated conversations in private.

It's a, you know...

It was me. It is me. So be it.

And I think, sometimes, it's how you get things done.

He said, "I will destroy you."

And those are strong words.

I had never heard words like that before from anybody.

I couldn't quite believe it.

Spitzer's outbursts became legendary to his staff.

When he exploded, his staff would remark that Spitzer's evil twin,

Erwin, had dropped in for an unexpected visit.

In fact, a very prominent lawyer of a very fine company

had a meeting with him.

And this man said to me,

"When I came out of his office, I swore I saw the words E.V.I.L across his forehead."

I have no doubt if Hank Greenberg was still running AIG,

AIG would not be in the fix it's in today.

Today, the federal government announced it has once again

reworked the bailout of insurance giant AIG.

Now the bailout needs a bailout.

Two months after AIG was given that first emergency government loan,

it's getting another lifeline.

In 2008, AIG was at the centre of a global economic meltdown.

Before and after Greenberg's fall, AIG had been selling

billions of dollars of insurance to the world's biggest banks

to hide their risky gambles on home mortgages.

When housing prices collapsed, AIG couldn't pay the claims.

The US taxpayers paid 183 billion in an effort to save

the global economy from collapse.

According to Greenberg, the blame for AIG's fall

and the global meltdown rested with one regulator, Eliot Spitzer.

Spitzer wanted me out.

When politicians involve themselves in who is going to run a company

and who is not, we're on dangerous ground in this country.

It is the big lie writ large.

The books were being cooked at his company.

Hank Greenberg was removed as CEO by his own board

when they saw the underlying facts of what was then

one of the largest financial frauds in history.

I didn't do anything improper.

Neither did any of the senior team do anything improper.

And you say to people, if Hank Greenberg had still been there,

this would never have happened?

It would not have happened.

The very trading practices that led to these gargantuan obligations

the taxpayers are now bailing out all began while he was there.

Very significant accounting frauds.

Reinsurance contracts which he participated in structuring,

that were deemed by a federal jury in Connecticut to be illegal.

Four people went to jail.

He was called an unindicted co-conspirator by the prosecutor in that case.

So his maintaining uninvolvement in the structural issues is simply wrong.

Spitzer wanted to prosecute Greenberg for financial manipulation,

but was called off the case by the US Attorney, Michael Garcia.

Michael Garcia sent me an over-the-top letter

when we were going to include significant allegations relating to

Hank Greenberg in our AIG complaint, telling us to back off.

And it was a moment of...

I don't say there was anything improper about the letter that

Garcia sent, but he basically said, "Don't you dare go near this.

"We're doing this." Relating to Hank Greenberg.

Michael Garcia never pursued charges against Greenberg.

Instead, he would lead the prosecution

that led to Spitzer's downfall.

Both Greenberg and Langone hired PR firms to go after Spitzer.

And Langone hired a private investigator to find out what he could.

I want to move on to the Emperors Club.

When did that start?

Approximately.

-Some time in '06.

-Early '06?

Thereabouts, yeah.

You were flying about as high as you could possibly be flying.

At that point in time, you were pretty certain you were going to be

-Governor of New York, wouldn't you say?

-Right.

Well, if your point is, things were as good as they could get,

from a political perspective, I suppose that's right.

And the only metaphor I can think of,

perhaps, is Icarus.

Those whom the gods would destroy, they make all-powerful.

A friend of mine recently gave me a T-shirt that he claimed

he had had printed for investment banker friends of his.

But he thought I would enjoy it and maybe I could even learn from it.

The T-shirt said on its front,

'Hubris is terminal'.

# If I ruled the world

# I'd love all the girls

# I love 'em, love 'em, baby... #

I'm not a kingmaker, but I'll call it. You're going to win.

-Thank you.

-I'll tell you why.

-I'm glad I came tonight!

-Absolutely, it's done.

In early 2006, Spitzer's approval ratings were over 60%.

He'd announced his run for Governor

and was predicted to win in a landslide.

You could do anything. You could punch a toddler and still win!

AUDIENCE LAUGHS

His career was every politician's dream.

I was the enforcer.

I was the kid who played left full-back.

Not because I had real talent, but I took people out.

You play hard, you play rough, and, hopefully, you don't get caught.

AUDIENCE LAUGHS

Right around this time, Cecil Suwal, the 22-year-old CEO of the Emperors Club,

took a phone call from a new customer.

Though he used the name George Fox, it was actually Eliot Spitzer.

The very first time that he called,

I answered the phone

and he was whispering.

So I thought it was a prank.

And so the other booker called and said,

"OK, I'm ready to start answering the phones."

So we transferred the phone to her and I said,

"Oh, I just spoke with someone.

"I'm going to let you handle that."

And, apparently, he saw, I think, three people in a row,

just back to back that evening.

So I guess it wasn't a prank.

Reading New York Magazine, George Fox, aka Eliot Spitzer,

claims he was drawn to websites in the classified ads

and, while surfing the web, found the Emperors Club.

# Secret heart

# What are you made of?

# What are you so afraid of?

# Could it be three simple words? #

When you're sending a girl on a trip to Chicago for 30,000 overnight,

it doesn't necessarily feel like

you're running prostitution.

It feels different.

And so that's where I think we got a little bit lost,

as far as the whole legality of the situation.

# ..This very secret

# That you're trying... #

Cecil Suwal dropped out of the University of Miami when she

fell in love with 60-year-old Mark Brener, who owned the Emperors Club.

Soon, they were running it together.

Ceci, as she was called,

decided to take the Emperors Club in a more high-end direction.

My primary focus at the time was to promote the website

to the right people, to the right kinds of girls.

The number of diamonds that the model had indicated not only

her hourly and daily rate, but also the general quality of companionship

you could expect from her.

So if she was three diamonds,

her daily rate would be 10,000 and her hourly rate would be 1,000.

It went 1,000, 1,200, 1,500, 2,100, 3,100.

And then the day rates, you would just add a zero.

I did that.

With mathematical precision, right?!

Whatever!

Just add a zero, that should work.

We had our core girls that we immensely valued that

really could bring home the bacon.

Then we had this sort of spiral effect.

Ashley went for 1,000.

She certainly wasn't the core.

She was definitely one of the girls, like, on the edges.

Sort of peripheries.

The man known as George Fox became a regular client.

How often did he meet with Ashley?

Well, he met her one time.

And that was the big Mayflower experience for him, I guess.

But it was just that one time?

One time.

How often did you see Governor Spitzer?

Legally, I am not able to answer that question.

Court documents say they may have had previous encounters.

But court documents didn't say that.

Ashley Dupre let the world believe that she was the 'Luv Guv's girl'.

But she was only a one-night stand,

caught on a wiretap at the Mayflower Hotel in Washington DC.

That begged the question, who else was there?

There was someone who he enjoyed seeing most.

And she was very pretty and a very intelligent girl.

Not a fashion model.

She had her own career.

And he liked to meet with her frequently.

She was actually the first person who said, "Oh, this is Eliot Spitzer."

The escort chose the name Angelina.

I discovered who she was and she agreed to speak to me,

so long as I did not disclose her real name, her face,

or reveal her voice.

So I transcribed her interview

and hired this actress to perform her words.

He used the name George Fox.

And he booked an hour at a New York hotel.

Upper East Side.

That first time, it was very businesslike.

You said he wasn't that interested in the companionship.

Right.

-You're laughing. I mean, it's like...

-It's funny.

Because he wasn't at all interested in them as a companion?

I'm not... From what I heard.

I remember thinking he was, like,

I hate to put this crudely,

a 'trying to get his money's worth type client'.

I said to the agency, you know,

"I don't want to see that person again."

In what seems to be a kind of epidemic

of political figures in sex scandals,

one question is, why hookers?

I mean, why, particularly when that's illegal?

Again, I don't want to delve into...

I certainly don't want to speak for others and,

even in my own case,

I don't really want to speak to that issue,

except to say that you cave to temptations in a way that

perhaps seems easier.

And perhaps is, in some very twisted way, less damaging.

Less damaging how?

Than having affairs or relationships that take on a different tenor.

I'm sorry, had what?

Relationships that take on a different tenor.

-You mean, have some sort of emotional...?

-Perhaps, yeah.

Eliot Spitzer had taken the first step into his double life.

He had just entered a world which, formerly,

he had seen only from the outside as a prosecutor.

In April 2004, after wiretapping a social club in Staten Island,

Spitzer helped the FBI and NYPD bring down a sophisticated prostitution ring.

He knew how it was done.

He also knew his life was about to become more public than it had ever been.

CHEERING AND APPLAUSE

Ladies and gentlemen, I present to you

the Governor-Elect of the state of New York,

the Honorable Eliot Spitzer.

Taking a record 69% of the vote,

Eliot Spitzer had a popular mandate to make big changes.

Together, let's build that one New York.

Let's walk toward that better day.

Thank you and God bless the great state of New York!

CHEERING AND APPLAUSE

Here he was as Governor of New York.

He's King of the World.

He's the future President of the United States.

Eliot Spitzer's going to fix up this state

and then he's going to go to Washington and

do the same thing that he just did for New York for the United States.

That was in everybody's mind.

People had said to me before I won,

"Do to Albany what you did to Wall Street."

And we tried.

We went at it with a determination

that was alien to the culture of Albany.

The Capitol building in Albany was a monument to corruption.

America's most expensive government building was like the legislature.

A bog of waste, double-dealing and graft.

The gargoyles on the walls haunted the place.

The maze of grand stairways navigated by special interests

robbed lawmakers of any sense of perspective.

It's like in Escher,

you don't know if you're going up or down, left or right.

The mind gets turned upside down inside that building.

I think, over the years, that some people have appropriately seen it

as a metaphor for the labyrinthian nature of New York politics.

It's time for "Live from the State Capitol!" with Fred Dicker.

Fred Dicker of the New York Post was a 25-year veteran in Albany.

This is Fred Dicker, live at the state capitol.

What a beautiful day it's going to be...

Deeply conservative, Dicker was proud of calling himself

"an equal-opportunity prick",

attacking whomever came into office.

Eliot Spitzer, who didn't suffer fools lightly,

was treating a separate branch of government,

the legislature that could block him at every turn,

as if he could just push them around

like they were Wall Street executives.

Well, they pushed back, and they pushed back hard.

The man who pushed back hardest was Republican Senate leader Joe Bruno.

A charming old-school dealmaker,

he wasn't much interested in Spitzer's reforms.

He thought that he really was, sort of, the second coming.

And that he was going to get

everybody to do what he wanted to do.

I think he started thinking dictatorially, almost,

you know, in his own mind.

I think Eliot's view of it was,

we would force them to do the right thing.

But it's not the way the system is set up.

Again, I don't want to just say you're wrong,

but you are.

LAUGHTER

I'd say to him, "Boss, this system is set up

"so that only incremental change is possible."

And he'd be, like, "Goddamn it, no, it's not."

And the result that it produced is that he began to go around Mr Bruno

to specific members of the State Senate.

Mr Bruno took that to be a hostile act.

He quickly announced publicly he's going to take me out as leader.

I'm history.

And the Republican majority was going to cease to exist.

He was going to take us out.

I said something like,

"You know, I've been threatened by hoods and thugs my whole life.

"You're just an amateur.

"If you think you're going to bother me, you just don't."

We knew that folks would come down hard on us if we ever stumbled.

He said, "You're damn right.

"If we ever fall, they'll kick us in the nuts."

Which is why, you know, the downfall was so shocking.

Did it begin to haunt you as something you thought was possible

that you were going to get caught?

Or did that not even occur to you?

No, of course it does.

Of course it does.

And you just deal with it.

How did you deal with it?

Those are the mysteries of the human mind, I suppose.

I don't think I can answer that question

because I don't think I know.

I got a call months later and this was kind of a last-minute thing.

This was at the Waldorf hotel.

He showed up with this baseball cap on, like, clearly trying

not to be recognised.

And I'm, like, you know,

"Don't tell me it's THAT guy again!"

In that second meeting, I was rather pushy with him.

I was, like, "We're going to sit and have a chit-chat

"and have a nice little date here."

And it ended up being a fun couple of hours.

I thought it was Eliot Spitzer,

but I couldn't be absolutely sure.

So I made a point to look out for him in the papers.

And it was at that point that I said to the people who ran the agency,

"You know who this guy is, don't you?"

And they said, "No."

He was hiding. He didn't want anyone to know who we was.

He was extremely paranoid.

He knew that his entire political career was on the line.

And, ultimately, vice just took over virtue.

He could not control himself.

I don't know.

I just remember one time, he was trying to book an appointment.

I just remember thinking to myself, "This man is so paranoid,

"he's just going to attract a situation."

You know, because he was just asking for it.

It's, like, "Listen, man, if you are so worried about what you're doing, don't do it!"

I never acknowledged who he was, but he knew that I knew.

He started to request me.

I saw him outside of New York in...

Palm Beach, Puerto Rico,

Dallas, Washington.

He was always very guarded about what he would say.

And I would insist on having a conversation before we started.

I'm like, "I'm totally taking advantage of this,

"cos he's so smart and interesting."

I would, like, have my little rants about what was wrong with

New York City that needed to be fixed.

And he listened.

When I saw him out, with his wife, with his children,

he had it all together.

You know, what was strange with Eliot Spitzer was

he could be pleasant and charming and act very caring.

When my wife was reported as being seriously ill,

he called me several times.

And this is right in the height of some of our worst exchanges.

Couldn't have been any more pleasant.

But when he came after me in what was called Troopergate,

then it was apparent that this man really intended to destroy me.

In the Spitzer-Bruno war,

the biggest battle was Troopergate, so-called because of the way

state troopers may have been misused for political purposes.

It was an attack on Bruno that would boomerang on Spitzer.

It was a Sunday and I was reading the local newspaper,

the Albany Times Union, and there was a story on the front page.

Its suggestion was that Bruno had misused state helicopters

and other state travel for personal and political purposes.

A careful examination of Bruno's travel logs revealed that

state troopers had ferried Bruno on extended visits to see

Spitzer's political enemies.

Including a trip to C.V. Starr,

the office of Hank Greenberg.

Do you recall Senator Joe Bruno coming to see you?

Yeah, Joe Bruno would come from time to time to see me.

They're always trying to raise money.

When he came, did you talk Spitzer?

I don't recall that.

I don't think... If we did, it wasn't...

it wasn't a major topic of our conversation.

Spitzer's enemies were beginning to talk to each other.

To push the attack on Spitzer,

Joe Bruno hired a political operative

who revelled in his reputation as

the country's most notorious dirty trickster, Roger Stone.

There you have Mr Clean, the Sheriff of Wall Street,

someone for whom ethics is his signature issue,

charging that Bruno is dirty.

This is a tyrant, a megalomaniac.

A would-be dictator who really believes that in government,

you somehow either have the right, by getting a lot of votes or being

born to privilege, to just issue orders and people do what you say.

Stone was this, like, legendary figure.

He had his hair dyed.

He was a swinger, in literal terms.

Even in his own Republican ranks, he was regarded as a maverick,

if not gadfly, if not lunatic.

But 'crazy like a fox kind of a guy', I guess.

Sure, I believe in a Gonzo brand of politics

because you have to get people's attention.

In a world where there's so much competition for their attention,

politically, and then there's the rest of life.

Sports, food, entertainment, whatever it is.

You're competing for all of that because politics,

like all those other things, is entertainment.

In 1996, Stone was fired from the Dole presidential campaign when

it was revealed that he and his wife had marketed themselves as swingers.

"We are seeking similar couples,"

said the ad, "or exceptional, muscular, well-hung single men."

But that didn't stop Roger.

An elegant dresser with a taste for Martinis,

he reinvented himself as a charming secret agent, with a licence to kill.

He revelled in the body politic and his own bodybuilding.

Just below his neckline, he bore a tattoo of his hero, Richard Nixon.

Just a few weeks after Bruno hired Stone, a mysterious voice message

was left on the phone of Spitzer's 80-year-old father.

This is a message for Bernard Spitzer.

You WILL be subpoenaed to testify

before the Senate Committee on investigations

on your shady campaign loans.

If you resist the subpoena, you WILL be arrested and brought to Albany.

And there's not a Goddamn thing your phoney,

psycho, piece of shit son can do about it.

Bernie, your phoney loans are about to catch up with you.

You WILL be forced to tell the truth.

And the fact that your son's a pathological liar

will be known to all.

We spent some time and effort to see where it came from.

It came from an apartment that had been rented by either him

or a company that he owned.

And the voice, we were able to compare from the voice message

he'd left on the voicemail to appearances he had made on TV.

And we got a voice analyst to say it's the same voice.

And people who knew him said, "Yeah, that's Roger Stone's voice."

The tape did sound eerily like me.

Ultimately, private investigators that I retained determined that

there had been a tap on my phone at 40 Central Park South.

I now believe that a rogue unit of the New York State Police,

under the direction of Eliot Spitzer, was monitoring my calls.

In other words, I think the tape that was released was pasted together.

It was, er, it was a...

It was a put-up job.

The FBI called my dad's office and asked to come by.

On September 6th, 2007, Agent Katzman from the FBI

visited Bernard Spitzer at his Manhattan offices.

The questions didn't focus much on what Roger Stone had done,

or allegedly done, or the issues relating to the phone call.

It was more about me.

Did you think anything about that in retrospect?

In retrospect, it has crossed my mind.

And it crossed your mind in what way, since then?

Well, wondering whether this was part of the investigation

that led to my downfall.

The FBI showed up at my apartment.

They just showed up at 8am and they said, "We want to talk to you.

"We think you know what this is about."

Bruno fired Stone because of the phone call.

But Stone confirms that he was

then hired by wealthy, motivated Republicans

to stay on the Spitzer detail.

A few months later, Rich Baum, Secretary to the Governor,

received an email from Stone's consulting company.

The question is, how did the investigation of Spitzer begin?

The government claims it spotted a suspicious wire transfer of several thousand dollars.

What was interesting to me

is that the whole thing comes from a single money transfer

that sort of sent up a red flag.

A suspicious activity report.

Every day, there are thousands of these suckers filed.

The Federal Clearinghouse receives 3,400 suspicious activity reports,

or SARs, every day.

Someone had to have taken a very personal interest in this

particular transaction and kind of shepherded it through the process

in order for it to be the subject of a lot of attention and,

ultimately, be the basis for a case.

The SAR was filed by North Fork Bank, after Spitzer asked the bank

to keep his name off a 5,000 wire

to something called QAT Consulting.

My understanding is that they didn't even know what QAT Consulting was,

and that they called Morganthau's office.

Robert Morgenthau, the Manhattan District Attorney,

was surprised when the federal government came looking for help on how to prosecute escort services.

The feds just didn't do prostitution cases.

They also naively asked if it was common to prosecute customers.

The answer from Morgenthau's office was, no.

Once they figured out it was a prostitution ring,

then it seems to me you're at a juncture on the road here.

Once you realise that it's just

a governor with a hard-on,

the most you're going to get out of this is

a news story and a resignation.

I think the government has better things to do.

The US Attorney for the Southern District of New York was Michael Garcia,

the man who had tangled with Spitzer over the investigation of Hank Greenberg.

Normally focused on terrorists, mobsters and Wall Street,

Garcia's office was suddenly spending enormous

resources to go after a small escort service.

Garcia was a Republican.

Was this a political hit?

The Spitzer investigation began at the very moment when

the Justice Department was involved in a huge scandal of its own.

And the issue was whether the Justice Department was hiring and firing

US attorneys based on politics.

And whether it was going after powerful Democrats,

in order to get rid of them.

The only banking activity that seemed to interest them

was Eliot Spitzer's banking activity.

As we sunk deeper and deeper

into this horrendous banking scandal that's convulsing the country,

suspicious banking activity by Eliot Spitzer and the United States Government was on the trail.

After notifying superiors in Washington,

the US Attorneys' Office obtained permission

to wiretap the phones and emails of the Emperors Club.

The night before, it's, like, 8pm.

We're both sitting at our computers and all of this information,

our client information, is being sucked out of the computers.

And we're, like, "Oh, my goodness! We have hackers."

We download some kind of encryption software and try to,

like, save our information, whatever's left.

And then we go to bed as usual.

And, 6:30am, bang, bang, bang.

It's the FBI.

OK? Shock.

KNOCKS ON DOOR

Miss Suwal, are you home?

I was certainly unprepared... to just be woken up

out of my sleep at 6:30am and have the FBI come in their

bullet-proof vests, asking me if there are firearms in the house.

And all I'm thinking, like, "That cash is going to get us in trouble."

Ceci and Mark Brener had nearly 1 million in cash

in a safe in their closet.

One of the FBI men came in and he was, like,

"We are closing Emperors Club VIP."

And I was, like, "Oh! Oh."

My God, my stomach, my everything.

My baby. It was just surreal.

I mean, that was, like, my child.

The essence of what went on here was, in federal law terms,

a violation of the Mann Act.

Known as the White-Slave Act, the Mann Act made it a crime to

transport women across state lines for immoral purposes.

That is why federal prosecutors were particularly

interested in out-of-town dates with Angelina and Ashley.

In recent years, it's used to go after child prostitution rings.

It is never used to prosecute Johns or customers.

We have to look at these statutes in terms of standards of enforcement.

Is this statute, in fact,

being enforced that way uniformly across the country?

And the answer is, it is not.

Why, then, did the Department of Justice want the case?

After months of investigating Spitzer,

Michael Garcia's deputy suddenly sent emails to

Washington, seeking support for using the Mann Act.

Wiretaps revealed many customers who paid for escorts, all over the world.

But Garcia's office was only interested in prosecuting

one of the customers.

They pressured me, like they do on TV.

And they said, "We know you worked for this agency.

"And we want you to look at some pictures,

"And tell us if you recognise anyone," and I did that.

And Eliot Spitzer was in there and I said I recognised him

and I had seen him.

And I said, "Should I maybe have a lawyer?"

And they said, "Well, we want to keep this confidential."

The main thing about that meeting was that they were very insistent

and pressuring me in an uncomfortable way, you know,

for me to admit that I had sex with Eliot Spitzer.

You know, why him and why not anyone else?

The question remained,

how did the US Government first find out about Spitzer?

Was the FBI tipped off by one of Spitzer's enemies?

I was in a private club, an adult-themed club in Miami, called Miami Velvet.

There was a woman sitting at the bar.

I was sitting at the bar and we began a conversation.

I asked her what she did and she said she was professionally a call girl,

but she wasn't working this particular night.

I said, "What kind of clients do you have?"

She had athletes.

She had captains of industry.

She had prominent businessmen.

She had politicians and so on.

I said, "Well, like who?"

She said, "Recently,

"I almost had a date with the Governor of New Jersey."

I said, "Jon Corzine? You had a date with Jon Corzine?"

She said, "Who's he? I had a date with Eliot Spitzer."

I said, "No, Eliot Spitzer's the Governor of New York, not New Jersey."

She said, "Yeah, well, I'm not into politics."

I said, "Was there anything else notable?"

She said, "Well, he was kind of weird."

I said, "What do you mean?"

She said, "Well, he had these black knee socks and he kept them on the whole time."

So I ask you, what kind of guy fucks with his socks on?

The black socks thing isn't true.

He wore low-cut socks.

And he took them off.

The next day, I discussed it with my attorneys and I asked them to

contact the FBI and tell them what we knew in a formal letter.

Now, I don't claim that this was a revelation to the federal investigators.

It may have been a piece of the puzzle that they were putting together.

I may have started an investigation in an area they weren't looking at.

I have no idea. And I haven't made any claim.

The FBI insists that it never received

a letter from Stone's attorney.

It wasn't an addiction. It was a desire.

A need to find an outlet that was not within

the very confined world that I had been living.

Had you found a way to completely compartmentalise it?

Yep. Yeah.

And was that the beauty of it, in a way, as you saw it?

Look, I don't want to go there, but it did not affect governance and,

in fact, I can say with certainty

in February/March of '08,

people were beginning to say,

"Hey, wait a minute, their strategy is working."

We were winning the political races,

getting the economic agenda in place.

People were beginning to see that the chess game was playing out.

APPLAUSE

Join me in good faith. I will meet you with an open hand.

For we will realise this opportunity best

if we work together in a spirit of cooperation.

APPLAUSE

We'd been through so much.

And we'd had a very successful State of the State Address.

We'd had a great budget announcement.

And we really thought we were turning the corner.

In fact, we were at a bar and one of the senior advisers to the Governor

raised his glass, in what, I'm sure,

was the moment that jinxed us all, and said, "To turning the corner!"

Well, didn't turn the corner.

When did you first have an inclination

that you were going to have a serious political problem?

The Thursday when it was announced

that a case had been made against Emperors Club.

And when that came out, what did you think?

I said, "This is an issue."

The FBI wiretaps of the Emperors Club intercepted

more than 5,000 phone calls and text messages and more than 6,000 emails.

They knew where I'd been. They had dates and times.

On one trip, the booker and I were texting back and forth.

She would say, "He's there now and he's ready to see you."

And I would say, "OK, I'm heading over there."

They said, "Look, we already know all about you.

"We know you were at this hotel at this time and, ten minutes later, you were here. We know this."

The list of charges against the Emperors Club in the affidavit

was surprisingly detailed.

As a piece of writing, it was crafted like a mystery story, full of clues.

It teased the reader with a few sentences each on Clients 1 to 8.

And then five riveting pages on Client number 9.

And his one date with Kristen,

otherwise known as Ashley Dupre,

at the Mayflower Hotel in Washington DC.

The affidavit was filled with all sorts of crucial details

that allowed reporters to go off and find out who Client 9 was.

The Times won a Pulitzer because they did things like, they went to

every major hotel in Washington and figured out who was in that suite in which hotel,

cos they didn't know which hotel he was in.

The affidavit was full of steamy sexual banter,

and concerns about whether the client was difficult or even safe.

Was the writing meant to convict the accused, or embarrass the client?

An FBI guy with sandy-coloured hair

and a moustache brought up something from the wiretap.

He said, "We heard that sometimes, you were asked to bring sex toys."

And the guy kept pressing me.