March 11, 2008

Spitzer Then and Now: WSJ Establishes the Linkage

Filed under: Taxes & Government — Tom @ 6:08 am

In a hard-drive saver of an editorial this morning, they let him have it, and he bloody well deserves it:

Spitzer’s Rise and Fall
March 11, 2008

One might call it Shakespearian if there were a shred of nobleness in the story of Eliot Spitzer’s fall. There is none. Governor Spitzer, who made his career by specializing in not just the prosecution, but the ruin, of other men, is himself almost certainly ruined.

….. In our system, citizens agree to invest one of their own with the power of public prosecution. We call this a public trust. The ability to bring the full weight of state power against private individuals or entities has been recognized since the Magna Carta as a power with limits. At nearly every turn, Eliot Spitzer has refused to admit that he was subject to those limits.

….. Mr. Spitzer’s recklessness with the state’s highest elected office, though, is of a piece with his consistent excesses as Attorney General from 1999 to 2006.

He routinely used the extraordinary threat of indicting entire firms, a financial death sentence, to force the dismissal of executives, such as AIG’s Maurice “Hank” Greenberg. He routinely leaked to the press emails obtained with subpoena power to build public animosity against companies and executives. In the case of Mr. Greenberg, he went on national television to accuse the AIG founder of “illegal” behavior. Within the confines of the law itself, though, he never indicted Mr. Greenberg. Nor did he apologize.

In perhaps the incident most suggestive of Mr. Spitzer’s lack of self-restraint, the then-Attorney General personally threatened John Whitehead after the former Goldman Sachs chief published an article on this page defending Mr. 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 former NYSE chairman Dick Grasso — that the AG would “put a spike through Langone’s heart.”

….. There really is nothing very satisfying about the rough justice being meted out to Eliot Spitzer. He came to embody a system that revels in the entertainment value of roguish figures who rise to power by destroying the careers of others, many of them innocent. Better still, when the targets are as presumably unsympathetic as Wall Street bankers and brokers.

Acts of crime deserve prosecution by the state. The people, in turn, deserve prosecutors and officials who understand the difference between the needs of the public good and the needs of unrestrained personalities who are given the honor of high office.

The sad thing is that Spitzer’s “success” while Empire State Attorney General may have given rise to a new generation of AGs who see their jobs as hounding targets and intimidating them into surrender to avoid the vagaries of the legal process and the standards of evidence that accompany it — all while maximizing publicity. Ohio’s Marc Dann, for one, seems intent on following this path in his pursuit of “justice” (?) in the subprime mortgage situation by inventing criminal and civil liabilities out of whole cloth. If you touched it, you must be guilty — and “we don’t need to stinkin’ trial” to “prove” it. Horse manure.

AGs such as these need to be put in their place — which is out of public office. Sometimes, as in Spitzer’s case, they do it to themselves. Others, if they cross the line from enforcing the law through the legal process into bullying and intimidation, need to be shown the door by the voters at the earliest opportunity.



  1. all the hypocrits must go. vitter, craig, and spitzer. that will do for a start.

    Comment by norm — March 11, 2008 @ 9:31 am

  2. Tom, if the Ohio GOP had any brains, guts, heart, or spine, they would be investigating Marc Dann from Day One. All evidence points to the contrary, except that Dann not only has Spitzer’s zeal and ethics, he also seems to share in that special sense of entitltment. Remember his severe overreaction when a reporter reported that the taxpayers were paying his quasi-daughter’s salary in the Sec of State’s office?

    Comment by Kevin — March 11, 2008 @ 9:33 am

  3. Seeing as there is a generation of wall streeters that have seen the financial system of the US as a personal ATM I hope there are more Spitzers out there…just because Elliott thinks with his dick, doesn’t mean the people he went after were not scum sucking thieves!

    Comment by madmatt — March 11, 2008 @ 9:54 am

  4. #3, He chose to shut down whole firms instead of prosecuting the individual “scum sucking thieves.” He should have done exactly what you suggested, and didn’t. That’s the Journal’s point.

    Comment by TBlumer — March 11, 2008 @ 10:59 am

  5. #4 If the firms are profiting by not properly overseeing their staff, then they should be shut down en masse…I have never understood why corporate malfeasance alwayds deserves a pass?

    Comment by madmatt — March 11, 2008 @ 11:58 am

  6. #5, I assume you mean “tried and convicted,” or do you really mean “shut down” without benefit of the legal process?

    Spitzer used bullying tactics and his bully pulpit to shut down firms without the benefit of a trial. That’s bullcrap.

    When he did go to trial, he got his hat handed to him:

    It would be more proper to say he got his a** kicked.

    Comment by TBlumer — March 11, 2008 @ 12:05 pm

  7. No – they should be shut down until they have proven they are in FULL compliance with all federal and state laws…a little punishment for not properly overseeing their staff, a safety check to make sure an issue like the French had with their largest institution recently isn’t happening.

    Comment by madmatt — March 11, 2008 @ 1:58 pm

  8. #7, thank you for providing us with the everyday-language definition of “guilty until proven innocent,” and a perfect precondition for tyranny. You are indeed “madmatt.”

    Comment by TBlumer — March 11, 2008 @ 3:03 pm

  9. #8 and thank you for saying that corporations should be allowed benefit from criminal actions…if a person is out on bail, he is not allowed to do a lot of things that he would normally be allowed to do…why should that rule not apply to a corporation that been found in violation of laws…but not yet convicted? Are you saying a corporation should have MORE rights than an individual citizen…if so why?

    Comment by madmatt — March 12, 2008 @ 10:01 am

  10. #9, oh yeah, that’s exactly what I said (/sarc).

    Beyond the obvious point that a person out on bail isn’t “shut down” as you wish guilty-until-proven-innocent corporations to be in your tyrannical utopia, your absurd argument doesn’t merit a response.

    Comment by TBlumer — March 12, 2008 @ 10:59 am

  11. #10 I hate to tell you but people on bail do have their activities curtailed…they can have bank accounts frozen until a case is resolved, they can be placed under house arrest, they cannot leave the state or the country, they can be drug tested.

    Thus a corporation should be punished/curtailed for its actions…whether they are intentional committed or thru the malfeasance of its employees.

    But I am guessing you are the type who believes that as long as the stockholders are getting a cut any villainy can be condoned.

    Comment by madmatt — March 12, 2008 @ 2:44 pm

  12. #11, Of course I know that people on bail have their activities curtailed. You said you want corps “shut down” (i.e., out of business) pending legal resolution. There’s a world of diff between that and bail restrictions, and you know it (or I hope so).

    As to your last sentence, guess away. You know so little it’s laughable.

    BTW, did you know the verdict against Arthur Andersen was overturned in the Enron situation? Are you happy the firm was shut down anyway and thousands who never came anywhere near the engagement were put out of work even though their FIRM was never proven guilty of anything (first item at link)?

    How much better would it have been to prosecute the offending partner instead from the very beginning? In this case, the Bush Justice Dept. did what Spitzer routinely did to his targets.

    If that’s your idea of “justice,” I just hope you’re never in charge of anything important.

    Comment by TBlumer — March 12, 2008 @ 2:52 pm

  13. Some of the assholes at Arthur Anderson enabled Enron to loot its pensions funds and for thousand of enron employees to lose everything…so yes I think it was well deserved!

    You are the one who voted for bush…I knew he was a scumbag from day 1! Maybe if rethugs believed in OVERSIGHT these problems would not of occurred!

    Comment by madmatt — March 13, 2008 @ 10:57 am

  14. Repeat: If that’s your idea of “justice,” I just hope you’re never in charge of anything important.

    Comment by TBlumer — March 13, 2008 @ 11:17 am

  15. Why is it that out of the at least 100s of clients the first one whose name is leaked is the Gov of New York (D) ?

    Comment by John Ryan — March 13, 2008 @ 2:24 pm

  16. #15, uh, because bankers noticed strange money movements in HIS accounts:


    A criminal investigation began when North Fork Bank notified the U.S. Treasury Department about suspicious activity regarding his bank accounts, the sources said. The suspicious activity involved the transfer of money to shell companies identified as having links to the prostitution ring, they said.

    Comment by TBlumer — March 13, 2008 @ 3:07 pm

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