ELIOT SPITZER’S RETURN
The Spitzer Method
The AG who abused power now wants to control NYC’s money.
Eliot Spitzer couldn’t be trusted to responsibly enforce or even to obey New York’s laws in the state’s highest offices. Yet now the disgraced ex-Governor is running for comptroller so he can control New York City’s money.
He is no doubt hoping that New Yorkers have forgotten that even before his use of prostitutes forced him to resign in 2008 (see “Notable & Quotable” nearby), his popularity was falling thanks to his abuse of power. His staff had been caught using New York’s state police to gather dirt on a political adversary. Mr. Spitzer, who as a candidate promised to reform Albany, had quickly become its most disturbing symbol, a man who would destroy opponents for his own political agenda.
This was the same Eliot Spitzer who as Attorney General called John Whitehead after the former Goldman Sachs chairman published an article on this page defending former AIG CEO Hank Greenberg. “I will be coming after you,” Mr. Spitzer said, according to Mr. Whitehead’s account. “You will pay the price. This is only the beginning and you will pay dearly for what you have done.”
Jack Welch, the former head of GE, said he was told to tell Ken Langone—embroiled in Mr. Spitzer’s investigation of NYSE chief Richard Grasso—that the AG would “put a spike through Langone’s heart.”
Encouraged by a press corps that largely adored Mr. Spitzer and profited from his leaked smears, some New Yorkers applauded Mr. Spitzer for his willingness to take on the titans of Wall Street. Only later would it be clear how much damage he had done.
After he used the threat of a corporate indictment and death penalty to force AIG’s board to fire Mr. Greenberg, the new management made the giant mortgage bets that would inflame the financial crisis. Shareholders also suffered greatly when Mr. Spitzer forced a management decapitation at insurance broker Marsh & McLennan and installed as CEO Mike Cherkasky, a nice guy who knew nothing about insurance.
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Eliot Spitzer
As successful as Mr. Spitzer’s prosecutions were in the media, they didn’t fare as well in the courts. The Grasso case collapsed in 2008 when the defendant won a complete victory at the Appellate Division of the New York State Supreme Court. After accusing Mr. Greenberg of criminal fraud on television, Mr. Spitzer never bothered to file a criminal case, and much of his civil suit was quietly dropped a year after Mr. Greenberg left AIG.
The Marsh prosecutions appeared at first to be more successful. But in 2010, a Manhattan Supreme Court justice vacated the felony convictions of two former Marsh employees because the New York Attorney General’s office had failed to turn over potentially exculpatory evidence to the defense.
To this day, Mr. Spitzer is encouraging the AG’s office to resist a judge’s order to search Mr. Spitzer’s private emails for communications related to AIG and Mr. Spitzer’s contacts with the media. An appeal of the judge’s order is scheduled for argument in September. A true public servant would insist on transparency for such documents that clearly aren’t privileged. But Mr. Spitzer knows that the methods he used to attack prominent New Yorkers would not look better in the sunlight.
This is the Spitzer political method, yet now he wants control of New York City’s pension funds. Normally we wouldn’t care much about a candidate for NYC comptroller, but putting this guy back in any job with discretionary power would be like putting Dennis Kozlowski back in charge of Tyco.
What should disqualify Mr. Spitzer isn’t merely the prostitution, though he did commit a crime while he was the state’s chief law enforcement officer and could have been prosecuted. And it isn’t merely deceiving the public, though he did make himself vulnerable to blackmail. What ought to be disqualifying is the way he abused the AG’s office to punish people for his own selfish ends.
