Inside the Spitzer Investigation

This is a rush transcript from "America's Election Headquarters," March 11, 2008. This copy may not be in its final form and may be updated.


REV. AL SHARPTON, CIVIL RIGHTS ACTIVIST: Those people that did not vote because they were told their votes would not count would in fact be disenfranchised.


MARTHA MACCALLUM, "LIVE DESK" HOST: All right. Well, Sharpton is also threatening to sue if the DNC decides to count Florida's votes as they are right now in the national convention.

HEMMER: All right, Martha. Meanwhile, we're learning more tonight on how this entire prostitution sting involving the governor of New York went down. How did the feds catch on to Eliot Spitzer? How did he get caught at a well-known Washington D.C. Hotel? FOX's Douglas Kennedy has more details on that now. Douglas, hello.

DOUGLAS KENNEDY, FOX NEWS CORRESPONDENT: Yes, Bill. Following the money - that's how they caught Richard Nixon and appears to be how they have now caught Eliot Spitzer. For Nixon, it started with a break-in. For Spitzer, a call to an escort service.



KENNEDY (on the phone): Yes, do you accept credit cards?

UNIDENTIFIED FEMALE: Yes, Visa and MasterCard.

KENNEDY (voice over): If you look on the Internet, escort services take many different forms of payments.

KENNEDY (on the phone): How can I be sure that this won't show up on my credit card statement as an escort service?

UNIDENTIFIED FEMALE: If we happen to take a credit card, it would be something, like, you know, "United Services." It is just something very vague.

KENNEDY (voice over): And it's common for many of them to set up dummy corporations to hide their transactions or launder their money, a practice which has now linked New York Governor Eliot Spitzer to prostitution. This is former New York City detective, Gil Alba -

GIL ALBA, FORMER NEW YORK CITY DETECTIVE: There were irregularities going from the ATM machines in accounts and the banking accounts had a lot of irregularities, and that's how this case started.

According to unsealed federal documents, it was a New York bank that first noticed transfer irregularities from Spitzer to a bogus business called QAT Consulting Corporation.

ALBA: Although they pay (UNINTELLIGIBLE) that, they have to report any irregular or unusual transfers, and here was an unusual transfer in money.

KENNEDY: QAT was in fact a shell for the Emperors Club VIP, the Internet site which Spitzer allegedly used to book high-class hookers. But IRS agents today insisted when they started the investigation, they had no idea what QAT really was.

ALBA: They thought it was either laundering money, getting contribution funds from somebody else or some other irregularity.

ALBA: Still, the agents were quickly able to turn a former employee of Emperor into a confidential informant. They were also able to secure wiretaps on the cell phones for two of the emperors' hooker bookers who eventually took a cal from client number nine asking for a girl to be sent to his hotel in Washington, D.C.

ALBA: And it was obviously his voice and he was calling. They knew he was calling and they knew what the conversation was. So really, they really have him good with that.

KENNEDY: They also have a recorded phone conversation with Kristin, the alleged prostitute who allegedly spent two hours with Spitzer inside room 871 of the Mayflower Hotel.

ALBA: She says that he wanted unsafe sex and she didn't.


KENNEDY: He says the fact that she admits to having sex with Spitzer right after their encounter makes the case airtight. He says at that point, Spitzer has no choice but to ask prosecutors for a plea agreement, which as you know, Bill, may include his resignation. That's it from here. Back to you.

HEMMER: Douglas, thanks for that. Douglas Kennedy this evening.

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