by Paul D. Collins

The following seamless story of human compromise, and the protection racket surrounding it, spans decades and continents. This is how it works. Listen up.

When the Eliot Spitzer Emperors Club prostitution scandal broke out on March 10, 2008, the first person this author thought to call was retired legend, New York Police Detective James “Jim” Rothstein. As a cop, Jim took on organized pedophile rings, arrested Watergate burglar and CIA operative Frank Sturgis, and testified before the New York State Select Committee on Crime.

Jim knows all about sexual blackmail operations, which he refers to as “human compromise.” To Jim, the Spitzer scandal was a perfect example. “It’s like déjà vu,” said Rothstein. And to Rothstein, GOP operative Roger Stone was the key to the compromising of Governor Spitzer (Rothstein).

“Watch for this guy, Stone,” Jim said in a telephone interview on March 10, 2008. “I saw him in an interview about Spitzer a few days ago and thought I recognized him. I looked back at my old investigations and remembered that he was part of Roy Cohn’s whole thing.”

Jim was referring to Roy Cohn’s sexual blackmail operation. According to Jim, this operation was conducted “under the guise of fighting communism.” During his time as a police detective, Rothstein had an opportunity to sit down with infamous McCarthy committee counsel Roy Cohn. Cohn admitted to Rothstein that he was part of a rather elaborate sexual blackmail operation that compromised politicians with child prostitutes (Rothstein).



Roger Stone began working with Cohn when he was the northeast chairman of Reagan’s 1980 campaign. Cohn and Stone had begun building an alliance a year earlier when Cohn introduced Stone to mobster Fat Tony Salerno at Cohn’s Manhattan townhouse (Labash). According to the Weekly Standard’s Matt Labash, “Stone loved Cohn.” Stone said of Cohn: “He didn’t give a [expletive] what people thought, as long as he was able to wield power. He worked the gossip columnists in [New York] like an organ” (Labash).

By his own admission, Roger Stone is the informant that told the FBI about Governor Spitzer’s use of prostitutes from the Emperors Club VIP four months before the New York Governor’s resignation (Bone). Stone’s operations against Gov. Spitzer began in June of 2007, when the Republican operative was hired for $20,000 a month, by Republican State Senate leader Joseph Bruno, to rid New York State Republicans of the pesky New York Governor (Labash).

According to Attorney General Andrew Cuomo, top officials of the Spitzer administration had the state police create documents that would make it appear as if Senator Bruno had misused the New York state air fleet (Matthews). Gov. Spitzer was waging political war on Bruno. Bruno did not like that one bit and was looking for payback.

But Senator Bruno was not the only one out to get Spitzer. According to Matt Labash, Roger Stone was working with “a loose collection of co-conspirators” to bring down the New York Governor. In Agatha Christie’s Murder on the Orient Express, Inspector Hercule Poirot remarked: “There are too many clues in this room.” The same principle applies in the Spitzer case.

The Wall Street Mafia

Students of Criminology are well aware that there are different varieties of organized crime. There’s the Italian mob. There’s the Japanese mob. There’s the Chinese mob. There’s even a Jewish mob. But what many people do not realize is that there is also a Wall Street mob. When Gov. Spitzer resigned, the Wall Street mob stood up and cheered … literally. According to Bloomberg reporter Chris Dolmetsch, a group of traders on the New York Stock Exchange floor began to applaud as they watched Spitzer resign on television.

When Eliot Spitzer was New York’s attorney general, he had sued New York Stock Exchange Chief Richard Grasso for failing to tell the board about Grasso’s compensation. One of the cheering traders, Timothy O’Connell of DRU Stock Inc., said the traders were angry with Spitzer because “Grasso was a voice for this community” (Dolmetsch).

It is interesting that O’Connell referred to Grasso as Wall Street’s “voice.” Perhaps Richard Grasso had been speaking for Wall Street in 1999 when, as Chief of the New York Stock Exchange, he flew into a demilitarized region of Colombia’s southern jungle and savanna to talk face-to-face with members of the general secretariat of the Revolutionary Armed Forces of Colombia (a.k.a. FARC) (see, “NYSE Chief Meets Top Colombia Rebel Leader”). As NYSE Chief, Grasso discussed “foreign investment and the role of U.S. businesses in Colombia” with the representatives of FARC’s high command.

Grasso wanted FARC to invest its money on Wall Street. Where exactly did FARC’s money come from? During his May 20, 2003 testimony before the Senate Judiciary Committee, FBI Assistant Director Steven C. McCraw stated that FARC was “strongly tied to drug trafficking in Colombia” (“Testimony of Steven McCraw, Assistant Director, Office of Intelligence, FBI before the Senate Judiciary Committee”).

On March 2, 2004, a federal grand jury charged two high-level FARC members, Simon Trinidad and Mono Jojoy, with “issuing orders regarding the acquisition, transportation and sale of cocaine by various fronts of FARC and the movement of drug money” (“High-Ranking Member of Colombian FARC Narco-Terrorist Organization Extradited to U.S. on Terrorism, Drug Charges”). A Department of Justice press release elaborated on the grand jury’s indictment of the FARC members:

The indictment alleges that Trinidad managed and controlled money for the FARC that was used by the organization to conduct cocaine trafficking activities. The indictment alleges that Trinidad announced to local coca growers the price the FARC would pay them for each kilogram of cocaine base, and advised them that the quality of their cocaine base was “inferior” and “needed to be improved.” The indictment further alleges that Trinidad met with and received money from or supplied money to other FARC drug traffickers, that he attended drug-trafficking meetings, and that he spoke of sending cocaine to the United States.

The FARC’s adventures into narcotics trafficking began in the 1980s (“Colombia’s most powerful rebels”). Since then, the FARC has taxed “every stage of the drug business, from the chemicals needed to process the hardy coca bush into cocaine and the opium poppy into heroin, right up to charging for the processed drugs to be flown from illegal airstrips they control.” The FARC brings in $300 million in drug money each year. According to the BBC, the FARC’s involvement in the drug trade has helped to make the group “the richest insurgent group in the world.”

If the Wall Street mob is not above doing business with drug traffickers, they would certainly have no qualms with politically destroying the New York Governor.

Attorney General v. Predatory Lenders

Did Gov. Spitzer also incur the wrath of the Bush administration and its predatory mortgage lender cronies? In a February 14, 2008 article for the Washington Post, Spitzer claimed that, when he was New York’s attorney general, Spitzer joined with the other 49 state attorneys general in fighting lenders who “were misrepresenting the terms of loans, making loans without regard to consumers’ ability to repay, making loans with deceptive ‘teaser’ rates that later ballooned astronomically, packing loans with undisclosed charges and fees, or even paying illegal kickbacks” (Spitzer).

According to Spitzer, the state attorneys general “brought litigation or entered into settlements with many subprime lenders that were engaged in predatory lending practices” (Spitzer). Then Spitzer’s Washington Post article dropped a bombshell concerning the Bush Administration’s response to the state attorneys general actions against predatory lenders. Spitzer accused the Administration of using the Office of the Comptroller of the Currency (OCC) to obstruct the states’ efforts.

According to Spitzer, the OCC’s invocation of an 1863 National Bank Act clause allowed the federal agency to usurp state laws concerning predatory lending. The OCC had also established new rules that rendered impotent the state consumer protection laws against national banks. Spitzer was essentially blaming the Bush Administration for the current crisis in the financial markets.

The Power Elite does not want every Establishment name on the Emperors Club VIP’s client list to get out. Only the disloyal are to have their skeletons pulled out of the closet. This means operatives may be in place to prevent collateral damage. One of those people may be Judge Leonard Sand. Sand is the federal judge that signed the warrant against Gov. Spitzer. According to James Rothstein, Judge Sand is a “good and honorable man.” But Sand is also someone who may stop a case when he feels the pressure coming down from the Establishment (Rothstein).

Bay of Pigs – JFK Connection

Rothstein’s own experience with Sand bears out this contention. When Watergate burglar and CIA operative Frank Sturgis sued James Rothstein in 1976 for false arrest and other charges, it was Judge Leonard Sand who had presided over the case. Rothstein had arrested Sturgis when Sturgis was on his way to the home of Marita Lorenz to kill her. According to Rothstein, Frank Sturgis claimed that the murder was sanctioned by powerful people.

Powerful people had reasons to be angry with Lorenz. “Marita was sent by the CIA to Cuba to kill Castro,” said Rothstein. “But instead of killing him, she ended up shacking up with him.”

According to Rothstein, Marita Lorenz was planning to go before the House Select Committee and tell all she knew about the Kennedy assassination. Was Sturgis afraid Lorenz was going to incriminate him? Both Rothstein and Sturgis had been involved in the Bay of Pigs invasion (Rothstein). Rothstein decided to use this fact to find out a few things from Sturgis.

“I was on the aircraft carrier Essex during the Bay of Pigs invasion,” said Rothstein. “The Essex was a ship that was not supposed to exist. When I told Sturgis I was on the Essex during the invasion, he told me, ‘The only way you could know that is if you were there.’ So I gained his trust and he talked to me for two hours” (Rothstein). During their discussion, Frank Sturgis claimed to James Rothstein that he was involved in the Kennedy assassination (Rothstein). “Sturgis said he was one of two shooters on the grassy knoll,” said Rothstein.

Was Marita Lorenz going to tell the House Select Committee about Frank Sturgis’ role in the JFK assassination? While Sturgis may have been following orders when he went to kill Lorenz, it is also possible that Sturgis did not want her to say anything that could land him behind bars … or executed. Sturgis did not want James Rothstein talking either, so he sued Rothstein. Apparently, there were powerful people who did not want Rothstein to testify about what Sturgis had told him about the JFK assassination.

“Sturgis had the same lawyer that represented William Calley of the My Lai Massacre,” said Rothstein. “There is no way Sturgis could have paid for that representation.” According to Rothstein, Judge Sand pulled him into his chambers and negotiated with Rothstein to not testify. “The city paid a fine and my partner and I received an accommodation,” said Rothstein. “And I didn’t talk. And that’s where I got out. Because I knew when to get out.”

According to James Rothstein, Judge Sand could not allow Frank Sturgis’ lawsuit against Rothstein to become a slippery slope that would open up the issue of the JFK assassination.

Collateral Damage

So Judge Sand signed the warrant against Eliot Spitzer. But the Emperors Club VIP had almost certainly serviced other Establishment figures. Rothstein hypothesizes that the Governor’s enemies were being serviced by the same prostitutes, and found out through those prostitutes that Spitzer was a client. Judge Sand may have limited his actions to Spitzer alone because he did not want to incur the wrath of the Establishment (Rothstein).

The federal investigation against the ex-governor is headed by Michael J. Garcia, the United States Attorney for the Southern District of New York. Garcia is a Bush appointee (“Michael J. Garcia, Former Assistant Secretary for Immigration and Custom Enforcement (ICE), 2003-2005″). Is it Garcia’s job to prevent that military doublespeak known as “collateral damage”?

Michael Garcia is also involved in the case of Russian former GRU major and arms dealer Viktor Bout, nicknamed the “Merchant of Death.” Garcia indicted Bout for arms deals with the FARC (Casey), but Bout did not just do business with Colombian rebels. The Russian “Merchant of Death” has also done business with people close to U.S. Attorney Garcia’s boss, George W. Bush.

In 2004, it was discovered that the Pentagon, the Coalition Provisional Authority in Iraq, the Air Force, and the Army Corps of Engineers were permitting U.S. contractors in Iraq to do business with Bout’s air cargo companies, in spite of the fact that the Treasury Department had labeled Viktor Bout an arms dealer and had frozen his assets (Braun). One of the firms doing business with Bout’s network was none other than Kellogg Brown and Root (KBR), which was, at the time, a subsidiary of the multinational corporation formerly headed by Vice President Dick Cheney known as Halliburton (Braun).

Air Bas, a company tied to Viktor Bout’s aviation empire, flew supplies into Iraq for KBR at least four times in October of 2004 (Braun). In fact, Halliburton moved its corporate headquarters to Dubai at a time when Dubai was Bout’s base of operations (Grigg).

It is possible that U.S. Attorney Michael Garcia became involved in the arms dealing case to prevent Viktor Bout from rolling over on clients that were close to George W. Bush. Will Garcia also make sure that the investigation into Spitzer does not touch other Establishment figures?

©2008 Paul D. Collins. Paul is the co-author with Phillip Collins of The Ascendancy of the Scientific Dictatorship (ISBN 1-4196-3932-3), available at He has studied suppressed history and the shadowy undercurrents of world political dynamics for roughly eleven years. He has a B.A. in liberal studies and political science. His research has been published by,, Nexus, and Paranoia.



Bone, James. “Roger Stone: I tipped off FBI about Eliot Spitzer sex scandal.” Times Online 24 March 2008

Braun, Stephen, et al. “Blacklisted Russian Tied to Iraq Deals.” Los Angeles Times 14 December 2004

Casey, Michael. “US Seeks Weapons Suspect’s Extradition.” Associated Press 7 March 2008

“Colombia’s most powerful rebels.” BBC 19 September  2003

Dolmetsch, Chris. “Cheers on NYSE Floor, Shock in Albany: Spitzer’s Fall.” Bloomberg 13 March 2008

“Eliot Spitzer Prostitution Scandal”

“High-Ranking Member of Colombian FARC Narco-Terrorist Organization Extradited To U.S. On Terrorism, Drug Charges.” Department of Justice 31 December 2004

Labash, Matt. “Roger Stone, Political Animal.” Weekly Standard 5 November 2007

Matthews, Cara. “Cuomo: Spitzer aides used State Police to try to damage Bruno.” Lower Hudson Online 24 July 2007

“Michael J. Garcia.” Wikipedia 13 March 2008

Michael J. Garcia, Former Assistant Secretary for Immigration and Customs Enforcement (ICE), 2003-2005.” White House

“NYSE Chief Meets Top Colombia Rebel Leader.” Reuters 26 June 1999

Rothstein, James. Telephone Interview. 10 March 2008

Spitzer, Eliot. “Predatory Lenders’ Partner in Crime.” Washington Post 14 February 2008

“Testimony of Steven C. McCraw, Assistant Director, Office of Intelligence, FBI
Before the Senate Judiciary Committee.” Federal Bureau of Investigation 20 May 2003