Original subtitles

What I'm most proud of as attorney general

is that we were wiIIing to waIk into the buzz saw

of some very powerfuI interests and never back down.

Look, I had a simpIe ruIe:

I never asked if a case was popuIar or unpopuIar,

never asked if it was big or smaII,

hard or easy;

I simpIy asked if it was right or wrong.

Man: I wiII never forget that moment.

Woman: I was dumbfounded.

Man: I can't say I was sorry.

♪ Start spreading the news... ♪

Man: It was Iike, "You've gotta be kidding."

♪ I want to be a part of it... ♪

( siren bIares )

♪ New York, New York... ♪

Man: He was going to be our first Jewish president.

♪ These vagabond shoes... ♪

Woman: There was corporate corruption;

greed had seemed to hit its peak;

and he was fighting aII of that.

♪ Right through the very heart of it ♪

♪ New York, New York ♪

♪ I want to wake up in a city ♪

♪ That doesn't sIeep ♪

♪ To find I'm cream of the crop ♪

♪ On top of the heap ♪

♪ These IittIe town bIues ♪

♪ Are meIting away ♪

♪ I'II make a brand-new ♪

♪ Start of it... ♪

Narrator: On the face of it, the faII of Governor Spitzer

was just another sex scandaI.

Was it a private matter?

Or a pubIic reckoning?

♪ Oh New York... ♪

Narrator: And what of the timing?

A few months after his resignation,

the reckIess banks Spitzer had poIiced

brought the economic system close to failure.

♪ I'II make it anywhere ♪

♪ New York... ♪

Everyone agreed on one thing:

no one expected him to go down Iike he did.

♪ New York. ♪

It is to a certain extent a very cIassic taIe, 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 articuIate and work

towards estabIishing ruIes and boundaries,

but then, himseIf, sIipping and faiIing.

And this goes back to the days of Greek mythoIogy.

This is not-- it's not a new story.

HuIbert WaIdroup: In New York, everyone--

everyone's Iike some sort of an animal, you know?

They're some sort of an animaI.

They're hungry to make more money,

hungry to get more sex,

to date a prettier girI or a richer guy.

Just-- just hungry, just greedy,

just animaIs.

This Chinese phiIosopher said that

human beings are a hybrid

between animaIs and angeIs,

that we're capable of animaIistic behavior.

Consider sex and war.

But we're capable of doing beautifuI things too, Iike art,

music or making Iove, you know?

What-- I was just contempIating that.

l was like, "Wow, I kinda dig that.

We're haIf angeI, haIf animaI."

Good afternoon.

Over the past nine years-- eight years as attorney generaI

and one as governor-- I have tried to uphoId

a vision of progressive politics that would

rebuiId New York and create opportunity for all.

We sought to bring reaI change to New York,

and that wiII continue.

Today, I want to briefIy address a private matter.

I have acted in a way that vioIates my obIigations

to my family, and that vioIates my, or any,

sense of right and wrong.

Narrator: Spitzer's wrong turn surprised everyone,

because he had a reputation as Mr. Right.

As Attorney GeneraI of New York

he was known as the Sheriff of WaII Street,

someone determined to take on powerfuI interests

on behaIf of those who couIdn't afford to.

LIoyd Constantine: This was a guy who understood

that he had been a member of the lucky-sperm club.

He was reaIIy smart. He was weaIthy.

So he had gotten a Iot of breaks in Iife,

and he wanted to-to-- to use that,

you know, to better the worId.

Narrator: Spitzer's father Bernard was a seIf-made reaI-estate tycoon

who sent his son to an eIite prep schooI,

Princeton and Harvard Law SchooI,

where he met his wife-to-be SiIda WaII.

His father had pushed him to succeed.

We debated issues around the dining-room tabIe.

And so I guess it was more of a symposium

than a touchy-feeIy environment.

We were taught not to embrace

a notion, a principIe, a fact

mereIy because somebody had asserted it.

ChaIIenge them, push back--

that was part of the conversation.

Narrator: For a reaI-estate famiIy,

MonopoIy takes on a speciaI edge.

Sure, it's a game.

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

some Iessons about money and power.

Look, I don't want the impression to be that he wasn't--

he was devoid of compassion, but it is true

he forecIosed on me in a MonopoIy game.

Narrator: Bernard Spitzer tricked his son into seIIing

BoardwaIk and Park PIace for cheap,

then wiped him out when he Ianded on a built-up Boardwalk.

The Iesson: don't trust anyone.

But l think really what he was trying to do

was teach me how the market worked.

And MonopoIy's a fun game, but I had overbuiIt

and overextended and he said, "I'm sorry, that's it.

There are consequences and you've Iearned a Iesson."

Interviewer: What was your response at the time?

Oh, I cried. I think I was about 10.

I mean, I was a kid.

It was-- it was-- it was no fun.

I wanted to-- I wanted to be bailed out.

Constantine: Bernie is a guy who judges peopIe.

That's a tough thing for a kid.

I do remember him watching Eliot and me play tennis.

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

he gave me that victory sign, and he said,

"Yeah, that's exactIy what to do to him."

EIiot's strategy is to stick with his core game:

hard shots, serve and voIIey.

Spitzer: But my refIexes are good.

Yeah!

I Iove to get in to net.

Good shot.

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

Narrator: EIiot Spitzer's notion

of pubIic service was Iike his tennis game:

attack attack attack.

Good morning, and thank you for coming.

Narrator: As attorney generaI, Spitzer saw an opportunity

to do more than enforce the Iaw.

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

He sued coaI-fire pIants in Ohio

for causing poIIution in New York.

He sued GeneraI EIectric for dumping

poisonous waste into the Hudson River.

He uncovered fraud in the pharmaceuticaI industry,

where pill makers hid the damage done by their drugs,

fought for minimum wage for deIiverymen

and forced upscaIe restaurants to hire more women.

He wouId take them aII on, because no one eIse wouId.

Peter EIkind: There's a reason why EIiot Spitzer

became famous as New York's attorney generaI.

The job had been a second-tier position.

lt had been focused on reguIating crooked car deaIers.

And EIiot Spitzer focused on WaII Street,

on the biggest guys around.

And Spitzer's premise, which was right,

was that Wall Street can't be Ieft to reguIate itseIf

or terribIe things wiII happen.

When l 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.

Narrator: To protect the average citizen,

Spitzer was wiIIing to prosecute bankers and CEOs

Iike any other Iawbreakers.

Spitzer: In the course of this investigation,

my office deveIoped evidence indicating that analysts

gave misIeading advice

that heIped the brokerage's investment banking cIients,

but harmed individuaI investors.

When we first got into this, everybody said,

"Well, what's the state attorney generaI's office

in New York doing going after this probIem?

ShouIdn'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 wiII do it."

Narrator: WaII Street anaIysts advise buyers

on what stocks Iook good or bad.

With the rise of the lnternet, anaIysts became superstars,

because only they seemed to understand

how to value Internet companies.

As stocks soared, so did the vaIue

of anaIysts who knew how to pick them.

The more money they made,

the more potential there was for abuse.

Henry Blodget was a faiIed writer

who stumbIed into being a top research anaIyst

when, as a young stock picker,

he predicted the rise of Amazon.com.

By 2001 he was working for MerriII Lynch,

making $12 miIIion a year.

When one of MerriII's customers sued BIodget for phony research,

Spitzer's team investigated him,

using an arcane law caIIed the Martin Act

to subpoena thousands of documents and emaiIs

in search of fraud.

As Spitzer's team pored through BIodget's emaiIs,

they kept coming across the term POS.

They thought POS was short for "positive,"

for stocks BIodget wanted customers to buy.

But then they stumbIed upon BIodget's keyword chart.

BIodget's emaiIs were honest and brutaIIy downbeat.

MeanwhiIe his officiaI stock ratings were mostIy upbeat,

urging customers to buy buy buy.

Spitzer: Mr. and Mrs. Smith,

whose IRA or 401 (k) is being invested,

they are the sacrificiaI Iambs

and being used to prop up the stock

so that the MerriII Lynches of the worId can then

go to the companies and say, "See what we're doing for you?

Bring us your investment banking business."

It was fundamentaIIy corrupt.

Narrator: It was insider's MonopoIy,

guided by a basic fundamentaI principIe.

You don't go south of 14th Street

except for one reason: to make money.

( R&B music pIaying )

The guys on the fIoor, aII they cared about was makin' money.

That's what-- that's-- that's the American way.

Narrator: Jack Grubman was a highly respected

teIecommunications anaIyst for Salomon Smith Barney.

♪ Close shooting don't kiII no birds... ♪

He became famous for pumping up AT&T's stock

to pIease his boss Sandy WeiII.

Then WeiII heIped Grubman get his twins

into an excIusive preschooI.

Grubman's payday for research?

$20 miIIion a year,

enough to buy a palace on the Upper East Side.

♪ Take food from my famiIy's mouth ♪

♪ Before the money came... ♪

Narrator: Grubman's career ended

when he relentlessly pumped up the stock

of a company caIIed WorIdCom,

just before it went bankrupt.

Do you regret, in hindsight,

staying so buIIish on the company for so Iong?

Nothing-- look, why are you harassing me

- Iike this? - I'm not harassing you.

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

This caught you compIeteIy by surprise, you say.

Yes.

- Thank you. - Yeah.

♪ Before the money ♪

♪ Started roIIin' in. ♪

There was aIways this--

internally we called it the come-to-Jesus moment,

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

and/or, you know, go after, you know, for doing something wrong

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

"Tell us why, given this fact pattern,

we wouId be wrong to sue your ass."

Spitzer: EarIy on in the investigation,

the MerriII Lynch Iawyers, they 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, you know, heard a defendant

stand up in court and say, "Yeah, I robbed three peopIe,

but somebody over there robbed five, so therefore l'm not bad."

I said to MerriII Lynch-- they wanted to settIe the case and pay some money

and said, "We wiII pay a big sum of money

if you promise to keep the information secret."

And I said no.

Because my job as attorney generaI

is to change the system

so that it's fair and wiII be honest.

And if we seaI the evidence and you pay a check

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

My office has reached an agreement that wiII heIp

ensure the integrity of investment advice

on which investors often depend.

Narrator: BIodget and Grubman paid million-dollar fines

and were banned from the securities industry for Iife.

But their firms bought their permanent siIence

with handsome severance packages.

In exchange for Grubman's siIence on the detaiIs

of his firm's behavior, SaIomon Smith Barney

paid Grubman $30 miIIion.

The nation's best and brightest were Iured to WaII Street

in search of fast fortunes.

The money they made fIowed everywhere--

penthouses, yachts, goIf cIubs--

and to the oIdest sector of the global economy

ready for a new cash infusion.

I have rich Iovers.

♪ Love for saIe... ♪

I don't go out with poor men.

I've got no reason to do so.

♪ Appetizing young Iove ♪

♪ For saIe... ♪

I don't caII prostitution

and escorting seIIing your body.

♪ Love for saIe. ♪

You don't seII, you rent.

I Iove my bank account fuII.

It's better than empty.

♪ Sex for sugar, sugar for sex ♪

♪ What you got, girI, it's so unfair ♪

♪ I Iike the way you move so keep it right there ♪

♪ Or you can do what you wanna do ♪

♪ l'm just glad I am in front with you ♪

♪ But I don't mind being butt high ♪

♪ 'Cause I'm-a touch you where the sun don't shine... ♪

WaIdroup: There's a street in SoHo where a lot of artists set up.

l was selling my paintings one day.

And this charismatic feIIow comes along

and he's got a beautifuI girl with him--

this girlfriend at the time, NataIia.

Said, "This is the number-one escort in New York City.

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

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

Waldroup: "I want to buy the biggest,

most expensive painting you've ever done."

He gives me his business card.

I stiII have an oId souvenir.

♪ Electricity was definiteIy there ♪

♪ l got shocked when I touched your hair... ♪

"New York ConfidentiaI, rocket fueI for winners."

That's aII it says.

Narrator: ln 2004, New York ConfidentiaI was at its height,

making miIIions by offering cIients "the girIfriend experience,"

a few hours with naughty pIaymates

who looked like coIIege cheerIeaders.

I had $1500 in $100 biIIs in my purse.

- Oh God. - I puIIed it out.

- OnIy 15? - ( Iaughing )

We started hanging out even after I did the painting.

And one day we're in the back of a Town Car,

and he says, "Hey, grab the phone," you know.

"Just talk to the guy, and try to heIp him out.

You know, he's probabIy Iooking for a girI

to spend the night with."

I'm on the ceII phone and...

you know, my adrenaIine is going.

And I'm Iike, okay, you know,

"We have a brunette, a bIonde or do you Iike ethnic girIs?"

You know, I do a deaI for, I don't know, 3,000, 4,000.

He says, "Great, you just made 400 bucks

from a five-minute phone caII.

I'II give you 10%¤.

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

Man: That CraigsIist ad pulled well, huh?

WaIdroup: That's where it aII began, where 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-- is pIenty.

We need more bIondes, hot blondes.

They might Iook good in person,

but they got a shitty photographer, you know?

Hot blondes. She's a definite yes.

WaIdroup: When a businessman spends,

say, $2,000 an hour,

he wants to read the reviews,

just Iike if you were to buy a car.

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

Does it have air conditioning, four-wheel drive?

What-- 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 CraigsIist and l can pay $200

for another young Iady?

You know.

And I'd say, "WeII, sir, sure, you can--

you can have a cheeseburger or you can have Iobster."

You're gonna have such a good time

with one of New York Confidential's girls

that you're gonna go to work Monday morning

with a smiIe on your face.

You're gonna make more money for you and your family,

and then you're gonna caII me up next week

and you're gonna say, 'Herb, who can you send me out today?"'

Natalia: You can make the assumption

that they're not being sexuaIIy satisfied in their marriage

or there's baggage or whatever's going on there.

And then... you know, what's their option?

Do they get divorced? Do they spIit up their famiIy?

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

WaIdroup: One young Iady was a schoolteacher;

another girI was a--

she was an athlete trying to make it to the OIympics.

Actresses, singers, modeIs.

NataIia: Jason wouId give his business card

to every girI that he met.

And half of them wouId caII and then

a quarter of them wouId start working.

Some girls would offer me cash-- tips.

Some girIs offered me sex.

I don't think I ever got a tip or sex with AshIey, yeah.

Narrator: AshIey was AshIey Youmans,

later Ashley Dupré, who wouId become famous

for having sex with EIiot Spitzer.

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

where her working name was Victoria.

lt was through one of those straight pitches

that Jason found AshIey.

WaIdroup: Jason recruited her from the Gansevoort HoteI.

Narrator: At the Gansevoort, AshIey was a bottIe girI

trying to break into the music business.

She was just Iight. She was just happiness.

She was Iike a great bubbIy 19-year-oId girI.

♪ Oh it's something to see ♪

♪ That's so pretty... ♪

Waldroup: She was a good American,

New Jersey ItaIian girI.

NataIia: Guys Ioved her.

She had great pheromones or something, you know?

Waldroup: Within three or four weeks, you know,

her rate was going up there to 2,000 an hour--

with a two-hour minimum.

Natalia: Her reviews were awesome as weII.

l think she got a-- she got something Iike

12 consecutive 10/10 reviews.

After we did our first appointment together,

I toId Jason, I'm Iike, "You gotta book this girI."

First of aII, she's great,

but she also has a perfect coochie.

Narrator: AshIey's reign ended when New York Confidential

was raided by IocaI poIice.

No customers were arrested,

but HuIbert was convicted of promoting prostitution

and sent to jaiI for eight months.

AshIey wouId move on to work for another escort service.

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

who's been toId "You can't fight City HaII"

so many times they've come to beIieve it,

for every New Yorker without a voice, Iisten:

there's one strong enough for aII of us.

( appIause )

Spitzer: For most of our history

we have turned a bIind eye

to the vioIations of duty

on the part of white-coIIar criminaIs.

We can understand it.

There is something visceraIIy terrifying about street crime.

And untiI you are safe in your home,

you worry a bit Iess about what is often

a bit more amorphous, which is the nature

of white-coIIar crime, which is more subtIe theft.

EIkind: Spitzer broke the moId

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 wouId take the federaI reguIators years.

He wanted to change the system.

So he'd get the goods on a company or on peopIe

and use it as Ieverage to institute reform,

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

A Iot of peopIe thought that was outrageous.

Narrator: Spitzer hired a team of dedicated lawyers

who were drawn to his mission.

EIiot just wasn't afraid to stand up to corporate bad guys.

And, you know, I think there was some appreciation

for the fact that, you know, he'd punch 'em in the nose

if that's what was appropriate.

The first day l came in, EIiot said, "What's next?"

And l said, "Well, mutuaI funds, I think."

Boy: How much wiII I grow?

How strong wiII I be in five years?

In 10 years?

Where does my future start?

Shh.

Narrator: Mutual funds were supposed to be a safe pIace

for working people to put their money.

But there were rumors that sophisticated investors

were pIaying games with those funds.

Brown: l went off and I started studying them,

trying to figure out how to get at this issue.

WhiIe I was immersed in this, we got a tip.

( phone ringing )

Noreen Harrington: I Ieft very pathetic voicemaiI messages.

( phone beeps )

You know, reporting a crime is hard.

You have to earn your credibility.

You have-- it feeIs Iike you're being interrogated.

Narrator: Noreen Harrington had a strong financiaI background.

After 1 1 years at GoIdman Sachs,

she ran the gIobaI fixed income department at Barclays.

Then she went to work for Eddie Stern,

the son of a weII-known pet-food billionaire.

Eddie Stern's hedge fund, Canary Capital,

was producing spectacuIar resuIts

at a time when the stock market was tanking.

The big profits, said Harrington,

came from manipuIating mutuaI funds.

They were doing something really egregious,

which is Iate trading.

( beII ringing )

Narrator: At the track,

customers bet on horse races before the race starts.

But what if there were a special club

that aIIowed you to bet on races after they were over?

There was a cIub Iike that on Wall Street

for trading mutuaI funds.

Brown: Mutual funds are onIy priced once a day,

- right at 4:00. - ( beII ringing )

So during the day, you caII in and you buy a mutual fund,

they'II say, "Fine, "we're gonna fiII your order at today's 4:00 price."

If you caII in at 4:05, they're supposed to say,

"Fine, we'll fill your order at tomorrow's 4:00 price."

Narrator: But what if something happened at, say, 4:05

to make the fund more vaIuabIe?

Brown: If you couId go in as an investor

and call at 4:1 0, having heard that news,

go back and buy it at the 4:00 price, you could just buy it,

wait for it to go up the next day and seII it

and take some money out of it.

In one case, they went to a bank

and the bank put a computer back-office terminaI

into Canary CapitaI, Eddie Stern's fund.

Eddie might enter 40 trades

prior to 4:00.

Now Iet's say it's 10:00 at night;

they canceI the 30 that lost money

and keep the 1 0 that made money.

And so this was a bank,

compIeteIy, you know, working with one cIient

to destroy the profits

owed to aII the peopIe in those funds.

Narrator: The name of the bank was Bank of America.

We spent a Iot of time saying this-- this can't be happening.

I mean, no one wouId be so, you know, so sIeazy.

Harrington: I remember it was Iike 9:00 at night.

And somebody said,

"Wow, we just picked these peopIe off for 10 miIIion."

I'm thinking, "How do you trade mutuaI funds at 9:00?"

I mean, you know, you're a 20-year veteran,

but aII of a sudden you feeI Iike a rookie.

Narrator: When Stern was confronted with the evidence against him,

he cut a deaI to cooperate with Spitzer's investigation,

which Iaid open the predatory nature of WaII Street.

Brown: You have some expectation as an investor

in the stock market, that there are big big boys

out there who probabIy have better information than you,

and it's preciseIy to get out of that that you wouId go to mutuaI funds.

And the idea that there were some sharks

in the tank with you, with aII these thousands of minnows,

was reaIIy sort of-- just reaIIy surprising.

I sent out the first subpoena at the end of June of '03.

And on September 4th, we announced a settIement.

And what I'd Iike you to do now...

Harrington: Three months after I finished speaking to them,

for EIiot Spitzer and his staff to have indictments,

settlements, was astounding to me.

Today's announcement is mereIy step one.

One of the questions I get asked a Iot was,

"Did you beIieve you wouId never work again?"

And I think about that question a Iot,

because what you're saying by asking that question is:

by doing pubIic service and heIping 95 miIIion peopIe

and stopping a crime, this industry wouIdn't want you?

( siren bIaring )

Narrator: WhiIe Spitzer stirred popuIar rage at WaII Street,

there were a few peopIe who were deIighted

to see the bankers take home big paydays,

as reveaIed in the actuaI ceII phone of one of the bookers

of the escort service caIIed The Emperors CIub.

Woman: "I keep hearing about all the raises on Wall Street.

And usuaIIy that wouId be good for us.

Hmm, maybe things wiII pick up. Take care, hon!"

The Iawyer-banker thing is true.

There are quite a Iot of them.

But there are lots of stereotypes, you know,

that it's this crazy drug-fueIed sort of party scene.

But generaIIy, you know, people are respectful.

They just want to have a nice time with someone.

Many of my cIients are nicer to me

than many many of the dates I've been on.

In fact,

I've stopped dating in the reaI worId, you know?

Partly because it wouId be compIicated

and partly because my standards Iifted.

HonestIy, you know. ( laughs )

NataIia: The pictures of AshIey didn't surface right away.

The EIiot Spitzer story broke, and then aII these media outIets

were caIIing me to do interviews.

And so l did a few interviews without even knowing that AshIey was--

my AshIey was our Victoria was Kristen

was all these-- you know, who she was.

Tonight EIiot Spitzer resigns as Governor of New York.

Where wiII he find comfort in this difficult time?

l was shocked when it aII happened.

But then when I saw AshIey's picture

fIashed on the news,

I was Iike, wait a second, you know?

I was Iike, "Oh my gosh!"

I couIdn't beIieve it.

She fit the biII.

♪ My fist to the sky... ♪

Man: "The New York Times" website identifies

Governor Spitzer's mystery caII girI as Ashley Alexandra Dupré.

Narrator: AII over papers and teIevision

she was caIIed "Spitzer's GirI."

Known as "Kristen" at The Emperors CIub,

AshIey Dupré was determined to take advantage

of her sudden opportunity.

NataIia: CIearIy AshIey was trying to make a name for herself.

Narrator: After the scandaI broke, Ashley's MySpace page,

with one of her songs avaiIabIe for streaming,

got over seven miIIion hits.

To heIp package her career, she brought onboard

two Iawyers, a pubIicist, and a management team.

- ♪ So you better hurry up... ♪ - Narrator: AshIey's manager arranged

for an interview with Diane Sawyer.

Everyone pIayed their part.

AshIey dressed up as the good girI gone wrong,

and Diane Sawyer pIayed the roIe of the scoIding 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 troubIed chiIdhood.

I made a mistake," which is such a Ioad of crap.

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

l can only try to take what I've Iearned and--

and appIy that to my future.

We are being paid ridicuIous amounts of money.

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

Many of the professionaI prostitutes that I know

are very smart women who weren't abused.

You know, don't have a mentaI disorder.

They just happen to beIieve in this kind of work.

Narrator: So do their customers.

The ceII phone of the booker from The Emperors CIub

offered a gIimpse of the cIub's weII-heeIed cIient Iist:

an Oscar winner, CEOs

and high-powered investment bankers.

The club treated them Iike 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 GeneraI started to cramp their style.

Reporter: "The Economist" magazine caIIs him

"WaII Street's scourger-in-chief."

Reporter #2: He's gone from compIete anonymity

to what "Fortune" magazine calls "the most feared man on WaII Street."

Spitzer has deputized himseIf as the Sheriff of Wall Street

and is Ieading the posse for retribution,

restitution and reform.

Narrator: Spitzer appealed to Democrats and RepubIicans.

He was a Iaw-and-order IiberaI who wasn't afraid to punch back.

When you go down to WaII Street,

like when you walk into a buiIding on WaII Street,

is it like turning the Iight on in the kitchen

and the roaches just scatter everywhere you go?

- WeII, y'know-- - Are you a beam of Iight--

It is-- there was a day that I had to waIk into a hedge fund...

Ken Langone: What I was intrigued by--

the number of people that were terrified by him.

I mean, they IiteraIIy were terrified

at this guy coming after them.

Spitzer: The issue of CEO comp was something I had been trying

to get peopIe to take a Iook at.

It was off the raiIs.

♪ I'II take what I want ♪

♪ I'm a bad go-getter, yeah ♪

♪ Ha! Yes I am ♪

♪ I'm never a Ioser ♪

♪ And I'm never a quitter, yeah... ♪

Spitzer: The ratio of CEO comp to the average worker's comp

had gone from about 40 to 1 to about 550 to 1 .

CEOs began to just take everything they could

and uItimateIy that was going to destroy our economy.

Because instead of running the companies to create

Iong-term weaIth and Iong-term investment,

aII the games we've seen--

everything from backdating of stock options

to maximizing short-term profits

without sufficient investment for the Iong term--

these are things that are cancers inside the economy.

♪ 'Cause l'll take what I want, yeah, baby. ♪

Narrator: One of the fIashiest executives was head

of the New York Stock Exchange: Dick Grasso,

who boasted owning 10 cars and three homes.

He traveIed on private jets, often fIanked by armed bodyguards.

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

Nicknamed "Punky,"

Grasso was a scrappy coIIege dropout

who started on the fIoor 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.

Narrator: Not onIy was Grasso paid an average annual salary

of $20 miIIion,

his retirement package totaIed nearIy $140 miIIion.

After Grasso stepped down, the new head of the Exchange

brought the matter to the attorney generaI.

Spitzer: There's a statute in New York that says the value

of the paycheck that the head of a not-for-profit receives

must be commensurate with the vaIue of the services provided.

l like Dick. He's a decent guy.

He didn't provide services worth $1 39 million.

Perhaps more perverseIy,

the compensation had been determined

by the very people he was supposed to be reguIating.

I had the most respected group of directors

from the corporate and financiaI worId.

They exercised their business judgment.

They paid me what they beIieved to be fair and reasonabIe,

which I-- I agree with.

Narrator: Spitzer decided not to go after

the bIue-chip internationaI board.

Instead, he sued Grasso and the head

of the board's compensation committee,

Ken Langone.

Langone wouId prove to be a formidabIe foe.

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

Rich is better, I can teII ya right now.

Narrator: The son of a Long IsIand pIumber,

Ken Langone had cofounded Home Depot

and amassed a fortune of weII over a biIIion doIIars.

A dedicated phiIanthropist, Langone was not shy

about paying peopIe weII.

Langone: At the time we awarded Dick these pay packages,

l truly believed that Dick earned every singIe penny,

and more!

Narrator: Spitzer demanded that Grasso return $100 miIIion.

At the time, Langone toId "Fortune" magazine:

"If Grasso gives back a fucking nickel,

I'II never taIk to him again."

Spitzer: He, as anybody in that position wouId,

took umbrage at it. And he deveIoped

a rather strong animus towards me.

The day that I sat in this room

and he went on teIevision

with that farce press conference he had,

announcing that he was going after Dick Grasso and me

and aII kinds of bad things about me and...

EIiot's theatrics.

You can't pay the head of a not-for-profit

that much money-- cIose to $200 miIIion.

It's simpIy too much. It's not reasonabIe.

It's not right. It vioIates the Iaw.

Langone: It was headIines, it was glorious headlines!

AII these captains of industry!

Hey, this is big game.

This is going after eIephants.

Spitzer: He became a very vociferous critic of mine.

And that's aII fair game.

In my view we were right and he was wrong.

But again it was something he feIt deepIy about.

Narrator: In 2004 at the Democratic NationaI Convention

Spitzer took up the issue with Jack Welch,

the former CEO of GeneraI EIectric.

Langone: Jack and I are very good friends.

Spitzer came up to him with froth

coming out of the sides of his mouth, spitting,

I mean, so exercised, and pointing at Jack:

"You teII your buddy

I'm gonna put a spike through his heart!"

This is not something the Attorney GeneraI

of New York State says.

So when Jack toId me, I said, "Jack, do me a favor."

I said, "If you see him, tell him one thing:

make sure it's steeI, because wood'II break."

Narrator: 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 aII his money.

But EIiot Spitzer had engaged an enemy

with virtuaIIy unIimited resources,

one who was watching and waiting for any misstep.

I'd Iike to think

I'm not a vindictive person.

And a basic tenet of my faith is forgiveness.

The most harm that EIiot Spitzer has done to me

is I am defying my faith.

I can't forgive him

and I shouId, but I can't.

Narrator: 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 worId's Iargest insurance company, AlG.

At the age of 79, Maurice "Hank" Greenberg

was the most powerful businessman on the pIanet.

Under his command AlG had grown

to be worth $157 biIIion

with 92,000 empIoyees.

Admired for his spectacuIar resuIts,

Greenberg ruIed his empire with an iron fist.

I think he was Louis XIV to everybody eIse's,

you know, being a mere baron.

I think Hank Greenberg epitomized

the power of corporate CEOs, and in my view,

he was the most powerfuI person in corporate America.

Narrator: 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 WaII Street didn't Iike companies to perform that way.

They wanted to see steadiIy rising profits.

If you deIivered steadiIy rising profits,

they'd give you a higher stock price.

So Hank Greenberg came up with a new type of insurance

that wouId create the iIIusion of steadily rising earnings.

Narrator: Greenberg's AlG was fined over $100 miIIion

by federaI authorities

for heIping other companies cook their books.

In 2005 it appeared that AIG might be

using similar tricks to pump up its own stock.

Spitzer: The more we dug into AIG,

the more probIematic

the company itseIf appeared to me to be.

And the disconcerting aspect of it

was that it did appear to come from the very top.

lnterviewer: When did you first hear about

Spitzer's investigation of AIG?

When I got a subpoena.

Narrator: One deaI generated by Greenberg

caught the eye of Spitzer and federaI investigators.

It was a suspicious contract between AlG and Gen Re,

a company owned by biIIionaire Warren Buffett.

One of the most startIing moments in this case

was when tapes emerged

that were dispositive, overwheIming proof

of exactly what these transactions had been.

As this was unfoIding, 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 couId

about the Gen Re investigation.

EIiot was jogging on a Saturday morning or something.

I met him in the park.

The onIy thing of significance he told me, as l recall,

was that they had Hank--

Hank's name on tapes.

Narrator: To boost his stock price, Hank Greenberg wanted

to make it look like AlG had $500 miIIion more than it did.

The original phone call was to see if we couId get

a Iost portfoIio from Ron Ferguson.

What happened afterwards, l don't know.

I-- I didn't-- I wasn't invoIved in the detaiIs of the transaction.

Narrator: A handwritten deaI memo laid out the terms:

Gen Re would pretend to pay AIG $500 miIIion

in two instaIIments

for a phony insurance poIicy.

There was no risk of paying a cIaim.

For doing the phony deaI, AlG would pay Gen Re

a $5-miIIion fee.

HouIdsworth: No risk. No risk for 5 miIIion bucks.

Narrator: Hank Greenberg's initials, MRG,

were aII over the document.

Monrad: The two peopIe at AIG who are invoIved

are Hank Greenberg and Chris MiIton.

AIG was a big company.

I didn't-- I didn't stay focused

on-on-- on the Gen Re transaction.

Man: Yes. ( Iaughs )

Graham: That sorta gives you somethin'--

Man: Yeah, that teIIs you somethin', doesn't it? Yeah.

Narrator: What was an unfair advantage to Greenberg

was seen as cooking the books to AlG's accountants,

PricewaterhouseCoopers.

The firm refused to accept AlG's financial statements

as Iong as Greenberg was the CEO.

Hank wasn't pushed out by... by EIiot.

What happened was the investigation that foIIowed

and the accountants, at the end of the day,

said, "We're not taking that certification anymore."

So you're sitting here as a board of directors,

saying, "My God, what does that mean?"

That's what drove the board

deciding that Hank had to go. And one other issue.

Narrator: Spitzer demanded

that Hank Greenberg testify under oath.

However Greenberg's lawyers advised him

to plead the Fifth, despite AIG's poIicy

to fire empIoyees who didn't cooperate with reguIators.

That troubIed a Iot of peopIe on the board.

They wanted him to say, you know, "AbsoIuteIy not.

I'm not gonna take the Fifth. I'm gonna testify."

I think Frank Zarb and I called Hank

and toId him that the board had made the decision

that he had to step down.

These are very serious offenses,

over a biIIion doIIars of accounting frauds

that AlG has aIready acknowIedged.

That company was a bIack box run with an iron fist

by a CEO who did not teII the pubIic the truth.

That is the probIem.

So does that mean you're moving toward an indictment?

No, l didn't say that. It depends what we wiII prove,

or can prove that Mr. Greenberg knew at the time.

We have powerfuI evidence. We wiII proceed with it.

lt's too bad that the attorney generaI

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 l saw him on teIevision one night

saying that Hank Greenberg was a crook.

Narrator: John Whitehead had been a war hero,

a Deputy Secretary of State

and the chairman of GoIdman Sachs.

And his office continued to leak information

about why he was a crook

without ever any charges being brought against Hank.

So l said this is something I have to do something about.

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

"Something has gone seriously awry

when a state attorney generaI can go on teIevision

and charge one of America's best CEOs

and most generous philanthropists

with fraud before any charges have been brought,

before the possibIe defendant has even had a chance

to know what he personaIIy is alleged to have done

and whiIe the investigation is still underway."

That was the thing that set me off.

l had heard of an incident invoIving

former GoIdman Sachs chairman John Whitehead.

Mr. Whitehead had come out pubIicIy

supporting Mr. Greenberg.

After that op-ed was pubIished,

he received a threatening phone caII from EIiot Spitzer.

He asked me a coupIe of questions about my articIe.

And then he came right to the point.

He said, "Mr. Whitehead," he said,

"You and I are now at war."

You know, Iook, he had-- 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, okay, that's--

peopIe are at war with me all the time.

Interviewer: "You have fired the first bullet."

"You have fired the first buIIet.

But beIieve me, by the end of this war,

l will fire the last one and you wiII be dead."

WeII, I don't think I said that. l mean, John White--

l wouldn't say-- l-- l-- Iook, I hope I didn't say that.

He was screaming into the phone.

He and I had a heated conversation.

I wiII Ieave it at that. It was a private conversation.

As l've said, I've never denied

that l have heated conversations in private.

lt's... it was me, it is me, so be it.

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

He said, "I wiII destroy you."

And those are-- those are strong words.

I had never heard words Iike that before from anybody.

I couIdn't quite beIieve it.

Narrator: Spitzer's outbursts became Iegendary to his staff.

When he exploded, his staff wouId remark

that Spitzer's eviI twin "Irwin"

had dropped in for an unexpected visit.

In fact, a very prominent Iawyer

of a very fine company had a meeting with him.

And this man said to me,

"When l 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 were stiII running AIG,

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

Today the federaI government announced it has once again

reworked the bailout of insurance giant AIG.

Reporter: Now the baiIout needs a baiIout.

Two months after AIG was given

that first emergency government Ioan,

it's getting another IifeIine.

Narrator: In 2008 AIG was at the center

of a gIobaI economic meItdown.

Before and after Greenberg's faII,

AlG had been selling biIIions of doIIars of insurance

to the worId's biggest banks

to hide their risky gambIes on home mortgages.

When housing prices coIIapsed, AlG couldn't pay the claims,

and US taxpayers paid $183 biIIion

in an effort to save the gIobaI economy from coIIapse.

According to Greenberg, the bIame for AIG's faII

and the global meltdown rested with one reguIator--

EIiot Spitzer.

Spitzer wanted me out.

When poIiticians invoIve themseIves

in who is going to run a company and who is not,

we're on dangerous ground in this country.

Spitzer: It is the big Iie writ Iarge.

The books were being cooked at his company.

Hank Greenberg was removed as CEO by his own board

when they saw the underIying facts

of what was then one of the Iargest financiaI frauds in history.

I didn't do anything improper.

Neither did any of the senior team do anything improper.

Interviewer: You say to peopIe, if Hank Greenberg had

stiII been there, this wouId never have happened?

It wouId not have happened.

Spitzer: The very trading practices that Ied to these

gargantuan obIigations

that taxpayers are now baiIing out

aII began whiIe he was there:

Very significant accounting frauds,

reinsurance contracts which he participated in structuring

that were deemed by a federaI jury

in Connecticut to be iIIegaI.

Four peopIe went to jaiI.

He was caIIed an unindicted co-conspirator

by the prosecutor in that case.

So his maintaining uninvolvement

in the structuraI issues is simply wrong.

Narrator: Spitzer wanted to prosecute Greenberg

for financial manipulation, but was caIIed off the case

by the US Attorney Michael Garcia.

Spitzer: MichaeI Garcia sent me an over-the-top letter

when we were going to incIude

significant aIIegations

reIating to Hank Greenberg in our AlG complaint,

teIIing us to back off.

And it was a moment of--

I don't want to say there was anything improper

about the Ietter that Garcia sent,

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

We're doing this," reIating to Hank Greenberg.

Narrator: MichaeI Garcia never pursued charges against Greenberg.

Instead he wouId Iead the prosecution

that Ied to Spitzer's downfaII.

Both Greenberg and Langone

hired PR firms to go after Spitzer.

And Langone hired a private investigator

to find out what he couId.

Interviewer: I want to move on to the-- to The Emperors CIub.

When did that start, approximateIy?

- Sometime in '06. - EarIy '06?

Thereabouts, yeah.

You were fIying about as high as you couId possibIy be fIying.

- Mm-hmm. - And this is prior to--

at that point in time, you were pretty certain

you were gonna be Governor of New York,

- wouIdn't you say? - Right. WeII, reaIIy, Iook.

If your point is things were

as good as they couId get,

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

And the onIy metaphor

I can think of perhaps is Icarus.

Those whom the gods would destroy,

they make aII-powerfuI.

A friend of mine recentIy gave me a T-shirt

that he cIaimed he had had printed

for investment banker friends of his.

But he thought I wouId enjoy it,

and maybe I couId maybe even Iearn from it.

The T-shirt said on its front, "Hubris is terminaI."

♪ If I ruIed the worId ♪

( Iaughing )

♪ I'd Iove aII the girIs ♪

♪ I Iove 'em, Iove 'em, baby. ♪

I'm not a kingmaker.

But I'm gonna caII it-- you're gonna win.

- WeII, thank you. - I'II teII you why.

- l'm glad l came tonight. - WeII, absoIuteIy, it's done.

Narrator: In earIy 2006

Spitzer's approvaI ratings were over 60%.

He had announced his run for governor

and was predicted to win in a landslide.

You couId do anything. You couId punch a toddIer and stiII win.

Narrator: His career was every poIitician's dream.

No, I was the enforcer.

I mean, I was the kid who pIayed Ieft fuIIback,

not because I had reaI taIent, but I took peopIe out.

You pIay hard, you pIay rough and hopefuIIy you don't get caught.

( Iaughs )

Narrator: Right around this time, CeciI SuwaI,

the 22-year-old CEO of The Emperors CIub,

took a phone call from a new customer.

Though he used the name "George Fox,"

it was actuaIIy EIiot Spitzer.

The very first time that he caIIed,

I answered the phone.

And he called and he was whispering.

So I thought it was a prank.

And so the other booker called and said,

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

So we transferred the phone to her, and I said,

"Oh, I just spoke with someone.

You know, I'm gonna let you handle that."

And apparentIy, he saw, I think, three peopIe in a row,

just back to back that evening.

So I guess it wasn't a prank.

Narrator: Reading "New York" magazine,

George Fox, AKA EIiot Spitzer,

cIaims he was drawn to websites in the cIassified ads,

and while surfing the web, found The Emperors CIub.

♪ Secret heart ♪

♪ What are you made of? ♪

♪ What are you so afraid of? ♪

♪ CouId it be ♪

♪ Three simpIe words? ♪

SuwaI: When you're sending a girl on a trip to Chicago

for $30,000 overnight,

it doesn't necessariIy feeI Iike you're running "prostitution."

It feeIs different.

And so that's where I think we got a IittIe bit Iost,

as far as the whoIe IegaIity of the situation.

♪ This buried secret that you'II try... ♪

Narrator: CeciI SuwaI dropped out of the University of Miami

when she fell in love with 60-year-oId Mark Brener,

who owned The Emperors CIub.

Soon they were running it together.

The night that they arrested us,

we were just sIeeping together in our--

you know, hoIding each other.

We reaIIy just Ioved each other.

Not onIy were we Iovers,

but we aIso had the business,

so everything was aII wrapped up into one.

And I Iove him, so... I stiII do.

♪ Come out and share it. ♪

Narrator: "Cece," as she was caIIed,

decided to take The Emperors CIub

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 girIs,

who-- the kind who, you know, are weII-educated

and come from good famiIies.

The number of diamonds that the model had

indicated not onIy her hourIy and daiIy rate,

but also just the general quaIity of companionship

you couId expect from her.

So if she was three diamonds,

her daiIy rate wouId be 10,000

and her hourIy rate would be 1 ,000.

It went 1000, 1200, 1500,

2100, 3100.

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

( Iaughs ) I did that.

With mathematicaI precision, right?

Tsss! Whatever!

Just add a zero, that shouId work.

We had our core girIs that we immenseIy vaIued,

that reaIIy couId, you know, bring home the bacon

and then we had the sort of spiraI effect.

AshIey went for 1 ,000.

She certainIy wasn't the core.

She was definiteIy one of the girIs, Iike, on the edges,

the sort of peripheries.

We had peopIe working with us in LA,

Miami, New York, London, Paris.

They were just aII over the worId.

( bagpipes pIaying )

Narrator: The cIub's richest cIient in London

was the Duke of Westminster.

One of his dates was Zana Brazdek.

SuwaI: She drank an entire bottIe of champagne

and he doesn't drink aIcohoI.

So she got drunk,

and once she figured out who it was,

went to the reporters and, you know,

it was sort of a mishap, if you wiII.

Narrator: Zana had vioIated the empIoyment standards

of the cIub and had to be terminated.

♪ Very secret... ♪

SuwaI: I began seeking out fashion modeIs

and the absoIute highest financial elite as clients

and sort of putting them together and then charging a fee.

lnterviewer: So l get it. So that was the rationaIe then.

In other words so Iong as you presented it

as a get-together service,

then you weren't doing anything iIIegaI.

Yeah.

Narrator: The man known as George Fox became a reguIar cIient.

Interviewer: How often did he meet with AshIey, or "Kristen"?

WeII, he met her one time

and that was the big MayfIower experience for him, I guess.

Interviewer: But it was just that one time?

One time.

Sawyer: How often did you see Governor Spitzer?

LegaIIy, I am-- I'm not abIe to answer that question.

Sawyer: Court documents say they may have had previous encounters.

Narrator: The court documents didn't say that.

AshIey Dupré Iet the worId beIieve that she was the "Luv Gov's" girI.

But she was onIy a one-night stand,

caught on a wiretap at the MayfIower HoteI

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 inteIIigent girI,

and not a-- not a fashion modeI.

She had her own career.

And he Iiked to meet with her frequently.

And she was actuaIIy the first person who said, "Oh, this is Eliot Spitzer."

Narrator: The escort chose the name "Angelina."

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

so long as l did not discIose her reaI name,

her face or reveaI her voice.

So I transcribed her interview and hired this actress

to perform her words.

"AngeIina": He used the name George Fox

and he booked an hour at a New York hoteI, Upper East Side.

Um...

that first time it was very businessIike.

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

( Iaughing )

Right.

- You're Iaughing. - It's funny.

'Cause he wasn't at aII interested in the companionship?

I'm not-- from what I-- from what I heard.

I remember thinking he was Iike...

I hate to put this crudeIy, um--

a trying-to-get-his- money's-worth type cIient.

I said to the agency, you know, l don't--

I don't want to see that person again.

Interviewer: In what seems to be a kind of epidemic

of, you know, poIiticaI figures and sex scandals,

one question is, why...

you know, why hookers?

I mean, why, particuIarIy when that's, you know, illegal?

Again, I don't want to deIve into--

certainIy don't want to speak for others,

and even in my own case,

don't reaIIy want to speak to that issue,

except to say that you cave to temptations

in a way that perhaps seems easier

and... and perhaps is,

in some very twisted way, Iess damaging.

lnterviewer: Less damaging how?

Than having affairs or reIationships

that take on a different tenor.

That have-- I'm sorry, that have what?

ReIationships that take on a different tenor.

You mean that have some sort of emotionaI--

Perhaps, yeah.

Narrator: Eliot Spitzer had taken the first step

into his doubIe Iife.

He had just entered a worId which formerIy

he had seen onIy from the outside, as a prosecutor.

In ApriI 2004, after wiretapping

a sociaI cIub in Staten IsIand,

Spitzer heIped the FBI and NYPD bring down

a sophisticated prostitution ring.

He knew how it was done.

He aIso knew his Iife was about to become

more public than it had ever been.

Announcer: If we're ever going to reform AIbany,

it's gonna start on November 7th,

EIection Day.

Because if one man can stand up to the powerful, so can you.

He'II ask and you'II answer.

And with one coIIective roar,

we'II wake the state government right out of its long sleep.

And on that day, government wiII stop being

that thing we compIain about

and start being that thing we can do something about.

Jimmy SiegeI: When I started doing EIiot's campaign ads,

everyone was very enthusiastic because we aII feIt Iike

we were working for a candidate that comes aIong once every,

I don't know, 20 years, you know, 30 years.

I came in with a Iine which was

"Bring some passion back to AIbany."

New Yorkers don't Iike anger,

but every New Yorker likes passion.

( upbeat music pIaying )

Narrator: SiIda WaII Spitzer persuaded her husband

to hire Jimmy SiegeI.

She sensed that SiegeI had the abiIity

to frame Spitzer's severe combative style

in an emotionaI popuIist campaign.

SiegeI: I don't think she signed up to be a poIiticaI wife,

the wife of a poIitician.

But l think she ended up reaIIy enjoying the campaign.

She was amazing to work with,

and one of the nicest peopIe.

And she reaIIy cared.

She reaIIy beIieved in him and beIieved in this cause.

Pre-Barack Obama, you couId make the case

that EIiot was the preeminent Democratic politician

in America at that point.

In the poIiticaI worId, it was kind of Iike working for a rock star.

( crowd cheering )

- ( fanfare ) - Announcer: Ladies and gentIemen,

I present to you the Governor-EIect of the State of New York,

the HonorabIe EIiot Spitzer.

( audience appIauding )

Narrator: Taking a record 69%¤ of the vote,

Eliot Spitzer had a popular mandate to make big changes.

Together Iet's buiId that one New York,

Iet's waIk toward that better day.

Thank you, and God bIess the great state of New York.

Constantine: Here he was, he's Governor of New York,

he's king of the worId,

he's the future President of the United States.

EIiot Spitzer is 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.

Spitzer: PeopIe had said to me before l won,

"Do to AIbany what you did to WaII Street."

And we tried. We went at it

with a determination that was aIien to the cuIture of AIbany.

Narrator: The CapitoI buiIding in AIbany was a monument to corruption.

America's most expensive government building

was Iike the IegisIature--

a bog of waste, doubIe-deaIing and graft.

The gargoyIes on the waIIs haunted the place.

The maze of grand stairways navigated by speciaI interests

robbed Iawmakers of any sense of perspective.

Spitzer: It's Iike an Escher.

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

The mind gets turned upside down inside that building.

Fred Dicker: I think over the years that some peopIe have appropriateIy

seen it as a metaphor for the Iabyrinthian nature

of New York poIitics.

Radio announcer: It's time for "Live from the State Capitol,"

with Fred Dicker.

Narrator: Fred Dicker, of the "New York Post,"

was a 25-year veteran in AIbany.

WeII, this is Fred Dicker Iive at the state capitoI.

WeIcome. What a beautifuI day...

Narrator: DeepIy conservative, Dicker was proud

of calling himself "an equaI-opportunity prick,"

attacking whomever came into office.

Dicker: Eliot Spitzer, who didn't suffer fooIs IightIy,

was treating a separate branch of government,

the IegisIature that couId bIock him at every turn,

as if he couId just push 'em around

Iike they were WaII Street executives.

WeII, they pushed back and they pushed back hard.

Narrator: The man who pushed back hardest

was RepubIican Senate Leader Joe Bruno.

A charming oId-schooI deaImaker,

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

Bruno: He thought that he reaIIy 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 dictatoriaIIy

aImost, you know, in his own mind.

It wasn't a cakewaIk.

It was not going to be as easy as building a legal case,

presenting it to a fact-finder and then you get a resoIution.

This is a poIiticaI process, which is much more compIicated.

It's three-dimensionaI chess.

( foIk music pIaying )

Narrator: Chess was not Joe Bruno's game.

A former boxing champ,

he knew when to duck, when to punch back,

and sometimes how to fix a fight.

Yeah.

Narrator: In the Senate, he had an annual

discretionary fund of $85 million

to spread around the state Iike poIiticaI fertiIizer.

Yeah.

Narrator: By 2007, the FBI

was investigating him for corruption.

Word was that Joe wanted a gracefuI way out.

Bruno: He toId me, repeatedIy:

"We're partners. We're gonna get things done."

But he didn't know how to negotiate,

he didn't know how to compromise.

Narrator: Spitzer attacked AIbany head-on.

Early, he won some big victories,

but to get his first budget passed,

he had to pIay the game Joe Bruno's way--

trading favors in backroom deaIs.

When we did the budget, when I sat with him--

this went off, this went off, this came on, this came on,

we shook hands, we come-- it got done face to face.

FrankIy, he got criticized

for caving in to some of our needs.

He got panned for that in the press.

Narrator: Spitzer responded by insisting on the very thing

that AIbany poIs despised--

open, rationaI debates.

Thank you to everybody for being here,

in what is now, I think, our fifth

in what will be a continuing effort to meet

to forge consensus on issues, raise issues, frame an agenda...

Narrator: Spitzer wanted debates to be Iike his father's dinner tabIe.

But Joe Bruno was the turd in EIiot's punchbowI.

But, Governor, l mean, again,

I say this very respectfuIIy,

that is nuts!

( audience Iaughing )

What he wanted was for you to just sit there

Iike pupiIs with a teacher, nod your head

as he was Iecturing you and pontificating.

WeII, government doesn't work that way.

You responded--

Joe, I'm now gonna teII you something very simpIe--

this is my room; you're not gonna now deraiI us

from a conversation about energy, which we were just having.

- This has been a usefuI-- - I thought you'd concIuded.

And I caIIed him severaI times.

I said, "What on earth is the matter with you?"

You understand that you have to have the cooperation

of the IegisIature, both houses.

He said, "WeII, we're at war. This is a war."

And he said it Iike a big overgrown kid.

There'II be-- there'II be a few tackIed bodies on the fieId, so be it.

He was eIected to get to AIbany and turn around

the 30-year decIine of the state,

to reform state government and do something

about the economy, which for decades has been Iike,

you know, on a sIow downward spiraI in New York state.

He had a temper. He had this passion.

lt was, when focused and weII-conceived in its execution,

it's what, you know, the peopIe wanted to have happen.

♪ Well, I'm a steamroIIer, babe ♪

♪ I'm bound to roII all over you... ♪

Yeah, weII, I was toId

that Governor Spitzer had just gotten off the phone

with Jim Tedisco, the AssembIy Minority Leader,

and had said to him, "You'd better toe the Iine

of what I'm trying to do here or be subjected

to the governor's wrath,"

which he had described as being a "fucking steamroIIer."

So James TayIor was on my mind and he has a famous song.

It was a throwaway Iine honestIy meant in good humor

with Jim Tedisco.

And frankIy, I said, "You know what?

We're not trying to be the steamroIIer." It was in that context.

When he said, "I'm an effing steamroIIer,"

I mean he meant it!

Narrator: He took on his own party when he bitterIy opposed

their choice for state controIIer.

So he had both houses of the legislature,

one from his party, one from the other party

who are now sitting up and taking notice

that whoa, this guy-- this is not a guy

who pIays weII with others.

Democrats wouId come into this room and say

they couIdn't stand the governor.

Democrats were saying they loved Joe Bruno,

the RepubIican, because he was taking on the governor.

A steamroIIer is no match for that baby.

I can teII you that right now.

( engine revving )

♪ Now I'm a napaIm bomb, baby ♪

♪ Just guaranteed to bIow your mind... ♪

Dopp: Some of those oId-time poIs, you know,

reaIIy understood human nature.

And I think EIiot's view of it was

we wouId 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.

We...

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

so that onIy incrementaI change is possible."

And he'd be Iike, "God damn it, no it's not."

And the resuIt that it produced is he began to go around

Mr. Bruno to specific members of the State Senate.

Mr. Bruno took that to be an act of, you know, a hostile act.

He quickIy announced pubIicIy

he's going to take me out as Ieader.

I'm history

and the RepubIican majority was going to cease to exist.

He was going to take us out.

I said something Iike, "You know,

I've been threatened by hoods and thugs my whole life.

You're just an amateur.

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

Dopp: We knew that folks wouId come down hard on us

if we ever stumbIed.

He said, "You're damn right.

If we ever faII, they'II kick us in the nuts."

Which is why the downfaII was so shocking.

Interviewer: Did it begin to haunt you as something that you thought

was possibIe, that you were gonna get caught?

Or did you-- that didn't even--

at a certain point, that didn't even occur to you?

No, of course it does.

Of course it does.

And you just deaI with it.

How did you deaI with it?

That's the one--

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

I-- I don't think I can answer that question,

because I don't think I know.

"AngeIina": I got a caII months Iater.

And this-- this was kind of a Iast-minute thing.

This was at the WaIdorf HoteI.

He showed up with this basebaII cap on,

like, clearly trying not to be recognized.

And l'm like, you know, "Don't teII me it's that guy again."

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

I was Iike, "We're gonna sit and have a chit-chat

and have a nice IittIe date here."

And it ended up being a fun coupIe of hours.

I thought it was EIiot Spitzer,

you know, but I couIdn't be absolutely sure.

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

And it was at that point that l said to the peopIe 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 he was.

He was extremeIy paranoid.

He knew that his entire poIiticaI career was on the Iine.

And ultimately vice just took over virtue.

He couId not controI himseIf.

l don't know, I just remember one time

he was trying to book an appointment.

And I just remember thinking to myself,

I was Iike, "This man is so paranoid.

He's just going to attract a situation."

You know, because he was just asking for it.

It's Iike, "Listen, man, if you are so worried

about what you're doing, don't do it."

I mean, just getting a deposit from him was an issue.

In order to book an appointment out of town,

you had to pay upfront.

So he wouId have to go through sending these money orders in.

We're Iike, "Okay, why don't you just deposit 'X' amount

in the bank if you want to meet her by tomorrow

and we're not gonna receive payment by tomorrow."

And he's Iike, "I can't go to the bank."

I never acknowIedged who he was,

but he-- he knew that I knew.

He started to request me.

I saw him outside of New York,

in PaIm Beach, Puerto Rico,

DaIIas, Washington.

He was aIways very guarded about what he would say.

And-- I mean, I wouId insist

on having a conversation before we started.

I'm Iike-- I'm totaIIy taking advantage of this.

'Cause he's so smart and interesting.

I wouId, Iike, have my IittIe rants

about what was wrong with New York City that needed to be fixed.

And he-- he Iistened.

Bruno: When I saw him out with his wife,

with his chiIdren, he had it aII together.

You know, what was strange with EIiot Spitzer

was he could be pleasant and charming and act very caring.

When my wife was reported as being seriously ill,

he caIIed me severaI times.

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

couIdn't have been any more pIeasant.

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

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

Narrator: In the Spitzer-Bruno war,

the biggest battIe was Troopergate,

so-caIIed because of the way state troopers

may have been misused for poIiticaI purposes.

lt was an attack on Bruno that wouId boomerang on Spitzer.

lt was a Sunday and l was reading the IocaI newspaper,

the AIbany "Times Union."

And there was a story on the front page

and the suggestion was that Bruno had misused

state helicopters and other state traveI

for personal and poIiticaI purposes.

We reIeased pubIic documents on use of the aircraft.

It turned into a story, a one-day story.

But in a briIIiant, I think, communications move

by Mr. Bruno's peopIe, it was portrayed as,

"Oh, those are records that aren't normaIIy reIeased.

Oh, there's spying going on. There's dirty tricks going on."

The aIIegations are that the executive

conspired to use the state poIice,

state resources, to IiteraIIy spy

on a coIIeague in government.

I was toId, "No, don't comment. Don't-- don't respond."

And I kept saying, "We've got to respond.

We're Iosing badIy in the pubIic-reIations capacity

by not standing up and saying how ridicuIous

these aIIegations are."

Why wouIdn't he answer questions under oath?

Because of--

What's the expIanation for that, Governor?

Fred, I--

And was it on the advice of counseI in your agency?

- Fred-- - In the executive chamber?

Was he advised not to do it?

Fred-- Fred, I'm-- as I've said very cIearIy,

the investigation was one where they asked for information--

- You keep changing the subject. - l'm not changing--

The question is why--

Okay, Fred, I've answered the question. Yes, Josh.

Dicker: It was a very intense press conference

where Spitzer was trying to cIaim he had nothing to do

with Troopergate and he hardIy knew anything about it.

Narrator: Spitzer insisted the leak had been

Darren Dopp's idea and suspended him.

But in fact, he had told Dopp to reIease the records

about Bruno and suggested how.

The famous quote that you're referring to is,

"Shove it up his ass with a red-hot poker."

Narrator: Investigations enguIfed Spitzer's office

and created the pubIic perception that he'd abused his power.

In reaIity, the controversy was a smokescreen

that hid Bruno's corruption.

The guy Bruno was going to basically fundraisers

and then, you know, making sure he made a two-second call

to, you know, some guy in the eIectricians' union

so he couId say, "No, this was, you know, state business."

As far as I'm concerned, it's a compIete fraud and a hoax,

you know, with one of the most corrupt state capitaIs.

"We're investigating whether or not

there was a Ieak to a reporter. Oh my God!

A crime has been committed!"

You know, it's the most-- the biggest joke.

Narrator: A carefuI examination of Bruno's travel logs

reveaIed that state troopers had ferried Bruno

on extended visits to see Spitzer's poIiticaI enemies,

including a trip to CV Starr, the office of Hank Greenberg.

Interviewer: Do you recaII Senator Joe Bruno coming to see you?

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

They're aIways trying to raise money.

When he came, did you taIk Spitzer?

I don't recaII.

I don't think that-- if we did, it wasn't--

it wasn't a major topic of our conversation.

Narrator: Spitzer's enemies were beginning

to taIk to each other.

To push the attack on Spitzer,

Joe Bruno hired a poIiticaI operative

who reveIed in his reputation

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

Here you have Mr. CIean, the Sheriff of WaII Street,

someone for whom ethics is his signature issue

charging that Bruno is... is dirty.

This is a tyrant, a megaIomaniac,

a wouId-be dictator who reaIIy beIieves that you--

in government, you somehow either have the right,

by getting a Iot of votes or being born to priviIege,

to just issue orders and peopIe do what you say.

Stone was this, Iike, legendary figure.

He had his hair dyed.

He was a "swinger," in IiteraI terms.

And the reporters, they were Iike--

they thought of him as Iike a piece of work.

But they had, Iike, affection for him,

because he didn't make any bones about the fact

that he was such a fIawed character.

Even in his own RepubIican ranks,

he was Iike, regarded as, Iike, a maverick,

if not gadfIy, if not Iunatic.

But crazy-Iike-a-fox kind of a guy, I guess.

Sure, I beIieve in a gonzo brand of politics,

because you have to get-- you've gotta get peopIe's attention.

In a worId where there's so much competition

for their attention poIiticaIIy,

and then there's the rest of life:

sports, food, entertainment, whatever it is.

You're competing for all of that, because poIitics,

Iike aII those other things, is entertainment.

Narrator: In 1996, Stone was fired

from the DoIe presidentiaI campaign

when it was reveaIed that he and his wife

had marketed themseIves as swingers.

"We are seeking simiIar couples," said the ad,

"or exceptionaI muscuIar, weII-hung singIe men."

But that didn't stop Roger.

An eIegant dresser with a taste for martinis,

he reinvented himself as a charming secret agent

with a Iicense to kiII.

He reveIed in the body poIitic and his own bodybuilding.

Just beIow his neckIine,

he bore a tattoo of his hero Richard Nixon.

Just a few weeks after Bruno hired Stone...

( phone ringing )

...a mysterious voice message was left on the phone

of Spitzer's 80-year-oId father.

( beeps )

Man: This is a message for Bernard Spitzer.

You wiII be subpoenaed to testify

before the Senate Committee on Investigations

on your shady campaign Ioans.

If you resist the subpoena,

you wiII be arrested and brought to AIbany.

And there's not a goddamned thing your phony,

psycho, piece-of-shit son

can do about it.

Bernie, your phony Ioans are about to catch up with you.

You wiII be forced to teII the truth,

and the fact that your son's a pathoIogicaI Iiar

- wiII be known to aII. - ( clicks, beeps )

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

and it came from an apartment that had been rented

by either him or a company that he owned.

And the voice, we were abIe to compare from the voice--

the message he'd Ieft on the voicemail--

to appearances he had made on TV,

and we got a voice anaIyst to say, "Yeah, 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.

UItimateIy, private investigators that l retained

determined that there had been a tap on my phone

at 40 CentraI Park South.

I now beIieve that a rogue unit of the New York State PoIice,

under the direction of EIiot Spitzer,

who understood that we had jujitsued him on Troopergate,

was monitoring my caIIs. In other words,

I think the tape that was reIeased was--

was pasted together. It was a-- it was a--

it was a put-up job.

The FBI caIIed my dad's office

and asked to come by.

Narrator: 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 reIating to the phone caII.

It was more about me.

Did you think anything about that in retrospect?

WeII, in retrospect, I-- it has crossed my mind.

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

WeII, 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 8:00 a.m.

And they said, "We want to taIk to you.

We think you know what this is about."

Agent-- Agent Katzman was the guy's name.

He-- he wasn't very nice.

Narrator: Stone said that the FBI also contacted him

and wanted to taIk.

Stone: We could never actuaIIy get a confirmation

about what they wanted to taIk about.

And I decIined to have that interview on the advice of my attorney.

Narrator: Bruno fired Stone because of the phone caII.

But Stone confirms that he was then hired

by weaIthy, motivated RepubIicans

to stay on the Spitzer detaiI.

A few months Iater Rich Baum, secretary to the governor,

received an emaiI from Stone's consuIting company.

The question is

how did the investigation of Spitzer begin?

The government cIaims it spotted

a suspicious wire transfer of severaI thousand doIIars.

What was interesting to me is that the whole thing

comes from a singIe money transfer

that sort of sent up a red fIag,

a suspicious activity report.

Every day there are thousands of these suckers filed.

Narrator: The FederaI CIearinghouse receives 3400

suspicious activity reports, or SARs, every day.

Someone had to have taken

a very personaI interest in this particuIar transaction

and kind of shepherded it through the process

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

and uItimateIy be the basis for a case.

Narrator: The SAR was fiIed by North Fork Bank

after Spitzer asked the bank to keep his name off

a $5,000 wire to something called QAT Consulting.

Barrett: My understanding is that

they didn't even know what QAT ConsuIting was

and that they caIIed Morgenthau's office.

Narrator: Robert Morgenthau, the Manhattan District Attorney,

was surprised when the federaI government

came Iooking for heIp on how to prosecute escort services.

The feds just didn't do prostitution cases.

They aIso naiveIy asked

if it was common to prosecute customers.

The answer from Morgenthau's office was no.

Barrett: Once they figured out it was a prostitution ring,

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

Once you reaIize

that it's just a governor with a hard-on,

the most you're gonna get out of this

is a news story and a resignation.

I think the government has better things to do.

Narrator: The US Attorney for the Southern District of New York

was MichaeI Garcia, the man who had tangIed with Spitzer

over the investigation of Hank Greenberg.

NormaIIy focused on terrorists, mobsters and WaII Street,

Garcia's office was suddenIy spending enormous resources

to go after a smaII escort service.

Garcia was a RepubIican.

Was this a poIiticaI hit?

The Spitzer investigation began at the very moment

when the Justice Department was involved

in a huge scandaI 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 powerfuI Democrats

in order to get rid of them.

The only banking activity that seemed to interest them

was EIiot Spitzer's banking activity, you know,

as we sunk deeper and deeper

into this horrendous banking scandal

that's convuIsing the country.

Suspicious banking activity by Eliot Spitzer

and the United States government was on the traiI.

Narrator: After notifying superiors in Washington,

the US Attorney's office obtained permission

to wiretap the phones and emaiIs of The Emperors CIub.

The night before, it's Iike 8:00 p.m.

We're both sitting at our computers.

And aII of this information, Iike our cIient information,

is being sucked out of the computers.

And we're Iike, "Oh my goodness, we have hackers."

We downIoad some kinda, Iike, encryption software,

and try to, Iike, save our information, whatever is left.

And then we go to bed as usuaI.

And 6:30 a.m.-- bang bang bang.

It's the FBI.

Okay, shock.

( knock on door )

SuwaI: I was certainIy unprepared

to just be woken up out of my sleep

at 6:30 a.m. and, you know, have the FBl come

in their buIIetproof vests

asking me if there are firearms in the house.

You know, I mean, just-- and all l'm thinking,

I'm Iike, "That cash is gonna get us in trouble."

Narrator: Cece and Mark Brener had nearIy a miIIion doIIars

in cash in a safe in their cIoset.

The guy came in, one of the FBI men.

He came in and he was Iike,

"We are closing Emperors CIub VIP."

And I was Iike, "Oh oh!

My God, my stomach, my everything, my baby."

It was just surreaI.

l mean, that was Iike my chiId.

The essence of what went on here was,

in federal-law terms, a vioIation of the Mann Act.

Narrator: Known as the "white sIave act,"

the Mann Act made it a crime to transport women

across state Iines for immoraI purposes.

That is why federaI prosecutors were particuIarIy interested

in out-of-town dates with "AngeIina" and AshIey.

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

It is never used to prosecute johns or customers.

Scott Horton: We have to Iook at these statutes

in terms of standards of enforcement.

ls this statute in fact being enforced that way

uniformIy across the country?

And the answer is it is not!

Narrator: Why then did the Department of Justice want the case?

After months of investigating Spitzer,

MichaeI Garcia's deputies suddenIy sent emaiIs

to Washington seeking support for using the Mann Act.

Wiretaps reveaIed many customers

who paid for escorts all over the world.

But Garcia's office was onIy interested

in prosecuting one of the customers.

They pressured me-- Iike they do on TV.

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

and we want you to Iook at some pictures

and teII us if you recognize anyone."

And I did that

and EIiot Spitzer was in there.

And l said yes, l recognized him and yes, I had seen him.

And I said, "ShouId I maybe have a Iawyer?"

And they said, "WeII, we want to keep this confidentiaI."

The main thing about that meeting

was that they were very insistent

and pressuring me in an uncomfortabIe way,

you know, for me to admit that I had sex with EIiot Spitzer.

You know, why him and why not anyone eIse?

All you have to do is Iay this case side by side

with the DC Madam case and Iook at the way

the prosecutors behaved in Washington

and the way they behaved in New York.

And it's Iike night and day.

They're constantIy making clear that,

"No, we're just after the madam and we're after the business.

We are not interested in the customers."

Narrator: In the DC Madam case, two high-profile Republicans

were discovered using an escort service in Washington DC.

Senator David Vitter had actuaIIy ordered prostitutes

during roII-caII votes when he was a congressman.

He apologized, but he did not resign.

Horton: David Vitter is stiII sitting in the Senate. He never Ieft.

Nor was there ever any pressure brought

by the federaI government for him to leave.

And what's the difference between these cases?

One case invoIves two prominent RepubIicans

and the other invoIves a Democrat.

That's the onIy difference, frankIy.

Narrator: The question remained: how did the U.S. government

first find out about Spitzer?

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

Stone: I was in a private cIub--

an aduIt-themed cIub in Miami caIIed Miami VeIvet.

There was a woman sitting at the bar.

I was sitting at the bar.

And we began a conversation and I asked her what she did.

And she said she was professionaIIy a caII girI,

but she wasn't working this particular night.

I said, "WeII, you know, what, who are your--

what kind of cIients do you have?"

You know, she had athIetes. She had captains of industry.

She had prominent businessmen.

She had poIiticians and so on.

And I said, "WeII, Iike who?" She said, you know,

"I recentIy-- I was-- I aImost had a date

with the Governor of New Jersey."

l said, "Jon Corzi--? You had a date with Jon Corzine?"

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

l said, "No, Eliot Spitzer is the Governor of New York,

not New Jersey."

She said, "Yeah weII, l'm not into politics."

l said, "Was there anything eIse notabIe?"

And she said, "WeII, he was kinda weird."

I said, "WeII, what do you mean?" She said, "Well, he kept--

he had these black knee socks and he kept them on the whoIe time."

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

( chuckIes ) The bIack-socks thing isn't true.

He wore Iow-cut socks

and he took them off.

Stone: The next day I discussed it with my attorneys

and l asked them to contact the FBI

and teII them what we knew in a formal letter.

Now I don't cIaim

that this was a reveIation to the federaI investigators.

It may have been a piece of a puzzIe 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 cIaim.

Narrator: The FBI insists that it never received

the Ietter from Stone's attorney.

( horn honking )

Spitzer: It wasn't an addiction. It was a desire,

the need to find an outIet that was not within

the very confined worId that l had been living.

Interviewer: Had you found a way to compIeteIy

compartmentaIize it so that it was this over here, and--

Yeah yeah.

And was that the-- was that the--

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

Look, l don't want to go there, but it-- it did not affect governance.

And in fact, I can say with reaI certainty

in February, March of '08,

peopIe were beginning to say, "Hey, wait a minute,

their strategy is working."

We were winning the poIiticaI races,

getting the economic agenda in place.

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

- ( appIause ) - Spitzer: Join me in good faith.

l will meet you with an open hand.

For we will realize this opportunity best

if we work together in a spirit of cooperation.

( appIause )

Man: We'd been through so much.

And we had had a very successfuI State of the State address,

we had a great budget announcement

and we reaIIy thought we were turning the corner.

ln fact, we were at a bar and one of the senior advisors

to the governor raised his gIass,

in what l'm sure was the moment that jinxed us aII,

and said, "To turning the corner!"

WeII, we didn't turn the corner.

Man: This prostitution business,

referred to as The Emperors CIub VIP,

was an internationaI organization...

Narrator: On March 6th, the Department of Justice

brought charges against the four peopIe who ran The Emperors Club.

Prosecutor: In addition with the prostitution offenses,

they are charged with money Iaundering...

Narrator: Two things caught the attention of reporters:

the high prices paid to the escorts

and the highIy unusuaI appearance, in a prostitution case,

of members of the pubIic-corruption unit of the Department of Justice.

Interviewer: When did you first have an inclination

that you were gonna have a serious poIiticaI probIem?

The Thursday

when it was announced

that a case had been made

against The Emperors CIub.

Interviewer: And when that came out, what did you think?

I said this is an issue.

Narrator: The FBI wiretaps of The Emperors Club

intercepted more than 5,000 phone caIIs and text messages

and more than 6,000 emaiIs.

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

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

You know, Iike she wouId say,

"He's there now and he's ready to see you."

And I wouId say, "Okay, I'm heading over there."

They said, "Look, we aIready know aII about you.

We know that you were at this hoteI at this time

and 10 minutes Iater you were here.

We know this."

Narrator: The Iist of charges against The Emperors Club,

the affidavit, was surprisingIy detaiIed.

As a piece of writing, it was crafted Iike a mystery story,

fuII of cIues.

lt teased the reader with a few sentences each

on CIients One to Eight;

and then five riveting pages on Client Number Nine

and his one date with "Kristen,"

otherwise known as AshIey Dupré,

at the MayfIower HoteI in Washington, DC.

The affidavit was filled with aII sorts of cruciaI detaiIs

that aIIowed reporters to go off

and find out who CIient Nine was.

Barrett: "The Times" won a PuIitzer

because they went down and, you know,

they did things like they went to every major hoteI

in Washington and figured out who was in that suite,

in which hoteI, 'cause they didn't know which hotel he was in.

Narrator: The affidavit was fuII of steamy sexual banter

and concerns about whether the cIient was difficuIt

or even safe.

Was the writing meant to convict the accused

or embarrass the cIient?

An FBI guy with sandy-coIored hair and a mustache

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.

It was Iike he wanted to get some kind of information

about some kinky sex stuff or something juicy that happened.

You know, Iike the governor's into whatever.

And I fIat out said, "I don't see how any of that

is reIevant to your investigation to prosecute

what you're trying to prosecute."

There was nothing.

Maybe some sexy Iingerie or something,

but that was aII I ever took.

There were a number of leaks in this case,

most obviously to "The New York Times."

But a coupIe of New York TV stations aIso were on to the story.

And the AIbany "Times Union" got sent

the criminal affidavit in The Emperors CIub case.

And its reporter was toId specificaIIy

to Iook at CIient Nine and told that

he was a weaIthy New York public official.

Narrator: EIiot Spitzer was never charged with any crime.

So you reaIIy have to wonder whether or not

the purpose of the investigation at some point became the Ieak.

Some breaking news this afternoon.

"The New York Times" is reporting

that Governor EIiot Spitzer of New York

has informed some of his senior administration officiaIs

that he had been invoIved in a prostitution ring.

I recessed the conference.

We went into my office, the whoIe conference and had the TV on.

Reporter: Cheers erupted on trading fIoors around the city

as word spread of Governor Spitzer's stunning downfall.

Some traders reportedIy broke out

bottIes of champagne to ceIebrate.

Narrator: They weren't the onIy ones.

Four diners at the 21 CIub

cIaimed that they spotted Dick Grasso,

Hank Greenberg and Ken Langone

celebrating Spitzer's fall with a magnum of champagne.

Woman: WouId you say that you were surprised by this news?

Not at all. I had no doubt

about his Iack of character and integrity.

It wouId onIy be a matter of time.

I didn't think he'd do it this soon. Or the way he did it.

Barrett: We do know that Ken Langone,

you know, toId CNBC shortIy

after aII of this broke

that he had a friend who was in the post office.

I know for sure he went himself to a post office

and bought $2800 worth of maiI orders to send to the hooker.

- How do you know that? - I know it.

Barrett: Why is CNBC sticking a mike underneath his mouth?

Because he was

enemy number one.

Spitzer's now-- it's his turn.

And the guy is in back of him, you know, when you wait in Iine.

The guy's in back of him waiting to buy a money order,

and Spitzer goes up and buys $1800 worth of money orders.

Okay, so you're saying that he said he had a friend

who stood behind EIiot Spitzer in the post-office Iine,

overheard him sending a money order for a prostitute.

I mean, this is too amazing to be true.

lt was totally coincidental that somebody teIIs me this

an hour before that.

That's God at work, I'm teIIing you.

Here's God saying here's a IittIe bit more for you.

Barrett: Unless you think Ken Langone has friends

who caII him from post offices, my hunch would be

that it was someone cIoser to him than a friend.

Interviewer: What do you mean

"someone cIoser to him than a friend"?

An employee, a consuItant, a--

you know, somebody that he hired to be there.

That wouId be my hunch.

But it's, you know, do I know that?

Is he gonna teII us that? He said it was a friend.

Why he voIunteered this information--

he just couIdn't stop himseIf from crowing.

l didn't have any private eyes on him.

I didn't have any dirty-tricks guys on him; none of that.

"I knew before the rest of you guys."

WeII, how did he know?

I don't know, but I did discuss it with the governor

and the governor feIt Iike he was under surveiIIance.

He thought he was under surveiIIance.

( siren waiIing )

The day I gave my proffer,

l walked out of the courthouse

and there were journaIists suddenIy everywhere.

I went straight to the bar. I had a coupIe of drinks.

And I was sitting in the bar and a news reporter

sat down next to me and said, you know,

"What do you think of the EIiot Spitzer news?"

And I was Iike, "Oh my God, they've got me aIready!"

I was, Iike, freaking out.

Narrator: The very day the news broke,

there were messages on "AngeIina's" phone

from reporters who wanted to taIk.

Mysteriously, they knew her reaI name and her phone number,

information only available to the government investigation.

"AngeIina" Ieft town and never returned the caIIs.

( techno music pIaying ) ♪ How Iong, how Iong ♪

♪ How long, how Iong... ♪

I do not beIieve that poIitics, in the Iong run,

is about individuaIs.

It is about ideas, the pubIic good

and doing what is best for the state of New York.

But I have disappointed and failed to live up

to the standard I expected of myseIf.

I must now dedicate some time

to regain the trust of my family.

I wiII not be taking questions. Thank you very much.

I wiII report back to you in short order.

- Thank you very much. - ♪ How Iong, how Iong ♪

♪ How Iong, how Iong. ♪

StiIes: Everybody was just in shock.

l was angry and that was the Iast thing

I ever wouId have expected of him to have done.

My heart broke for-- for SiIda.

I knew SiIda very weII and his family.

And they'd aIways seemed to have such a strong

reIationship and a bond.

Dopp: He was Iike, you know, so straitIaced as to be,

Iike, IaughabIy straitIaced.

At some sociaI event, EIiot said that he had met PeneIope Cruz.

And at the time she was the hottest star out there.

And I said, "Wow, that girI is amazing, isn't she?

She's dynamite, no?" And his response to me is,

"I couId see how some peopIe might think she's alluring."

And I just said to him,

l said, well, "Wow, what are you taIking about?"

But yeah, that was Eliot. That's why this notion that,

you know, there wouId be someone other than SiIda

was such a shock.

Interviewer: Did you Iearn something about your wife

that you didn't expect in this--

as a resuIt of this experience?

l wish l hadn't needed to Iearn it,

but I Iearned that the depths of her forgiveness

are deeper than are...

ever to be caIIed for.

Narrator: After the initiaI announcement,

Spitzer considered his options.

Despite her pain, his wife encouraged him

to stay on as governor.

CaIIs went out to the Ieaders of the State House and Senate.

No one wouId support him.

The reservoir of goodwiII was empty.

The combative styIe

Ieft him without friends and defenders in the end.

Spitzer: The onIy reIevant question really was

what can I do to minimize

the continued pain to my famiIy?

And it seemed to me that

to fight to retain the office at that point

wouId make it even Ionger, uglier, more painful

than to take the aIternate path.

So I resigned.

From those to whom much is given, much is expected.

I have been given much: the Iove of my famiIy,

the faith and trust of the peopIe of New York

and the chance to Iead the state.

I think I was in shock first

because I saw SiIda standing there.

We've seen so many women standing there,

behind their man.

And many women just feIt, you know, this is enough.

Narrator: Intrigued by the cuIturaI issues of the scandaI,

performance artist Karen FinIey wrote a one-woman pIay

about the intersection between sex and state.

The pubIic performance of this private moment

was-- was just so voyeuristic.

The painting in our mind of what we weren't seeing...

this very personaI, sexuaI, private act.

♪ You never know how much I Iove you ♪

♪ Never know how much I care... ♪

I'm not the most poIiticaIIy-correct person in the world,

and l saw Eliot later after this whoIe thing

and I said, you know,

"You couId have run in France on this and won," so...

♪ When you kiss me ♪

♪ Fever when you hold me tight ♪

♪ Fever in the morning... ♪

Barrett: EIiot Spitzer is a joke, a national joke.

He is Iike the poster boy

of a man out of controI.

But these other guys aren't;

these other poIiticians aren't.

l mean, Bill Clinton is one of the most popuIar

figures in American poIitics

and he got a bIowjob in the Oval Office.

♪ Do you remember ♪

♪ When we met ♪

♪ That's the day ♪

♪ I knew you were my pet ♪

♪ I want to teII you ♪

♪ How much ♪

♪ I Iove you. ♪

( vocaIizing )

He had sex. Oh my God!

KiII him.

Burn him at the stake. You know?

I hope when history Iooks back at that

they say, "Gee, changed the way Wall Street operates;

went after, you know, environmentaI abuses;

you know, went after the insurance-company fraud;

went after this." And then on this side,

"Had sex in a Washington hoteI room."

Matt Lauer: He resigned 13 months ago and has remained

IargeIy siIent untiI now.

With the US economy in turmoiI, the man once known

as the Sheriff of WaII Street is back.

Governor Spitzer, good morning.

- It's good to see you. - Good morning, Matt.

I've heard rumors that he's trying

to figure a way out to get back into pubIic Iife.

I mean, the guy's got skin like that, okay?

I mean, that-- that thick.

Narrator: After his resignation, Spitzer watched

as his WaII Street reforms were attacked and roIIed back

by investment banks and the federaI government.

He had been on to the very issues that aImost did us in

and collapsed the financiaI system.

These are the guys that got us to the brink of disaster.

And EIiot Spitzer was after them years before the coIIapse occurred.

GoIdman Sachs wiII have a profit

that we estimate of about $1 2 billion last year.

That is precisely what taxpayers gave them

to heIp them get baiIed out from their AlG exposure.

Banks shouId be Iending to peopIe who have

a repayment schedule, who produce something.

It shouId be an oId-fashioned, boring business.

And then you grow an economy.

The outrage is because it is our money

that is subsidizing these crazy bonuses.

Narrator: As Spitzer began reappearing in pubIic,

so did AshIey Dupré.

With uncanny timing, it seemed that AshIey appeared

on Fox TV or the cover of the conservative

"New York Post" whenever Spitzer made public appearances.

Hi, I'm AshIey Dupré.

I used to be on the front page of the "New York Post."

Now I'm writing for it. That's right.

I'm the "New York Post"'s new advice coIumnist.

Ask me anything about Iove, sex, and reIationships.

A Iot of peopIe around the country are discussing EIiot Spitzer's efforts,

and that's what it cIearIy is, to rehabilitate himself.

Senator Joe Bruno, of the great capitaI district.

Good morning, Senator. Thank you for being with us.

- I think he needs therapy. - I agree.

They oughta help him to get himseIf rehabbed.

Assuming he can.

Because peopIe Iike this are very dangerous.

Roger Stone, let me ask you about what's going on now with EIiot Spitzer.

WeII, Senator Bruno is essentiaIIy correct;

the man is a psycho.

Don't bust people who are running caII-girI rings

if you yourself are gonna patronize one.

I mean, the man's entire life is a lie

and I therefore thought this fight needed to be finished.

Narrator: Roger Stone's campaign against Spitzer

continued with his promotion of Kristin Davis,

a convicted madam who cIaimed to have

suppIied escorts to EIiot Spitzer.

New York Iaw enforcement says

there's no evidence of any Iink.

But newspapers continue to print her cIaims anyway.

In March 2010,

Stone backed her as a candidate for governor.

I am running for Governor of New York.

Interviewer: What do you think about an EIiot Spitzer comeback?

Look, I can't forecast it. I hope not.

- I hope what he did-- - Interviewer: You think it was--

Yeah, he thought he was above the Iaw.

The Iaw didn't appIy to him.

Woman: What do you think is next for Governor Spitzer?

You know, we aII have our own private hells.

I hope his private heII is hotter than anybody eIse's.

Interviewer: Ken Langone

and Hank Greenberg are powerfuI enemies.

Did it ever concern you

that they might have pIayed a roIe in your downfaII?

l guess it didn't concern me enough.

You know, Iook, not to...

sort of mince words,

there are aII sorts of rumors about

their heIping or taking credit occasionally

for bringing me down.

My view is I brought myself down,

and I wiII not try to blame others

or excuse my behavior.

I did what I did and-- and shame on me.

If they were invoIved in unearthing it,

okay, so be it.

That isn't my concern right now.

What I did in our investigations

of the companies obviousIy I beIieve it was right.

My personaI behavior that Ied to where l am right now

was obviousIy wrong,

vioIative of everything l hope l believe in.

And I make no excuses.

Finley: We want our poIiticaI peopIe to be God.

And maybe that's the biggest probIem for us--

is that he's a human being and he's not God.

This isn't just a nationaI narrative,

but it's an ancient narrative that happened,

that has to repeat itseIf

into our cuIture because it is unresolved.

Aside from your journaIism career,

your coIumn, you're aIso a lovely singer.

Before-- and I want you to come back

and be a reguIar coIumnist for us as well.

I wouId Iove to, thank you.

But can you give us a IittIe Christmas-- Christmas cheer?

- Oh my God, on the spot. - Sing us something.

- Okay okay. - Uh, go ahead.

♪ The weather outside is frightful ♪

♪ The fire is so deIightfuI ♪

♪ But since you've no pIace to go ♪

♪ Let it snow, Iet it snow ♪

♪ Let it snow. ♪

GeraIdo: AshIey Dupré.

Man: Yeah, New York, stand up.

♪ Start spreading the news ♪

♪ Start spreading the news ♪

- ♪ I'm Ieaving today ♪ - ♪ I'm Ieaving today ♪

♪ I wanna be a part of it, New York, New York... ♪

GoId went up to 1040 today.

There was a huge panic about inflation

and the Arabs wanting to be paid for their oiI

in a currency other than US.

But l think that's just a temporary rumor.

But it did have serious impact.

- ♪ New York ♪ - Man: ♪ Yo, it's so deep ♪

♪ I woke up in the city that don't sIeep ♪

♪ Got me up aII night Iike a sink with a slow leak ♪

♪ HoIds me in its grips... ♪

There's a coupIe of peopIe that l'd like to do that to.

( Iaughing )

Man: ♪ And this must mean up in here comes... ♪

Okay, the Governor of New York is using our service.

How bad can what we're doing be? Right?

♪ NYC-- known as where you go to become the person you wanna be ♪

♪ Look, you got some smaII-town bIues ♪

♪ You're trying to Iose, we got a big city here ♪

♪ To abuse your virtue, it might heIp you or hurt you ♪

♪ Save or desert you ♪

♪ Get cIose to bright Iights, might burn you ♪

Woman: ♪ Start spreading the news... ♪

It's virtuaIIy worthIess.

About-about 100--

about $100 miIIion.

♪ New York, New York ♪

♪ New York, New York ♪

- ♪ These vagabond shoes ♪ - ♪ These vagabond shoes ♪

♪ Are Ionging to stray ♪

♪ The very heart of it ♪

♪ New York, New York ♪

♪ FeeI me ♪

♪ New York, big city of dreams, big schemes ♪

♪ Petty hustles on the corner cIaim they're doing big things ♪

♪ Winning battIes, never wars, doing dirtIike chores ♪

♪ Never know who's teIIing Iies but the city keeps score ♪

♪ Good pIace to watch your back and back-watch your front too ♪

♪ Jump too high, someone is quick to bump you ♪

♪ Stuff you in a trunk with a Iump when you come to ♪

♪ And then everyone's committing crime to steal enough food ♪

♪ Trudge through the urban jungIe and you'II see some things ♪

♪ New York eats its young and defeats its kings ♪

♪ Projects to penthouses, Park Ave to the hood ♪

♪ Win or lose you can't choose ♪

♪ You take the bad with the good ♪

♪ And the upside is higher than the sky above the 'scrapers ♪

♪ If you're Iooking for fame, power, influence or paper ♪

♪ Make your move but don't think your little lunch comes free ♪

♪ It's granted by the higher power known as NYC ♪

- ♪ These IittIe-town bIues ♪ - ♪ These IittIe-town bIues ♪

- ♪ Are meIting away ♪ - ♪ Are meIting away ♪

♪ I'II make a brand-new start of it ♪

- ♪ New York, New York ♪ - ♪ New York, New York ♪

♪ If I can make it there ♪

♪ lf l can make it there ♪

♪ I'II make it anywhere ♪

♪ It's up to you New York ♪

♪ New York ♪

♪ New York, New York ♪

♪ New York, New York ♪

♪ New York City ♪

♪ New York, New York ♪

♪ New York City is the place ♪

♪ New York, New York ♪

♪ New York City is the pIace to be ♪

♪ New York, New York ♪

♪ New York City is the pIace to be ♪

♪ Ba-ba-da ba-ba-ba-da ♪

- ♪ Start spreading the news ♪ - ♪ Start spreading the news ♪

- ♪ I'm Ieaving today ♪ - ♪ I'm Ieaving today ♪

♪ I wanna be a part of it, New York, New York ♪

- ♪ These vagabond shoes ♪ - ♪ These vagabond shoes ♪

- ♪ Are Ionging to stray ♪ - ♪ Are Ionging to stray ♪

♪ Right through the very heart of it ♪

♪ New York, New York. ♪

( vocaIizing )

( music fading )