Twisting in the Wind (A Little History on Eliot Spitzer)

New York Attorney General Eliot Spitzer has built a national reputation by taking on the biggest Wall Street investment firms, mutual fund brokerages, supermarket chains, Midwestern power plants and even the Mafia on behalf of the "little guys." The aggressive state prosecutor is known for making creative use of New York's strong anti-fraud laws to force changes at the national level.

Opponents say the Princeton and Harvard Law-educated son of a Bronx real estate developer has ulterior motives when he uses media leaks and threats of indictment to go after businesses and strong-arm the "big guys" to the settlement table: contributions to fund his political ambitions.

Spitzer's latest target gives some credence to their criticism. Last month, he subpoenaed four of the world's largest music companies as part of his probe on alleged price-fixing to make up for declining CD sales. But this is hardly a case of cheating elderly retirees or defrauding small investors. The "victims" are people who don't want to pay more than the 99 cents Apple now charges to legally download the latest hit songs to their iPods. Boo-hoo for them, but is this really an indictable offense?

In November, two of the giant music companies under investigation - Warner Music and SonyBMG - agreed to pay a total of $15 million to settle another Spitzer investigation into radio "payola," or bribing radio DJs to play certain songs more frequently on their playlists. While payola is admittedly an underhanded and unethical way to get airtime for their clients, unless these radio stations promised to give every rock group equal time, where's the crime? Who's the victim? Can listeners now claim damages because they didn't get to hear their favorite song as often as they'd like?

The only announced Democratic candidate for the 2006 New York governor's race and the front-runner to replace Republican Gov. George Pataki, Spitzer has more recently been accused of threatening former Goldman Sachs Chairman John Whitehead after Whithead wrote a Wall Street Journal op-ed in April defending former American International Group Chairman Maurice Greenberg - who was forced out by another Spitzer investigation four decades after building the world's largest property and casualty insurance company. Spitzer filed a civil lawsuit against AIG in May, but no trial has been scheduled and no charges have been filed against Greenberg himself.

Whitehead contends that the New York attorney general is engaged in an "increasingly relentless crusade against boards and senior executives" who often find it easier - and cheaper - to settle than fight back. In December 2002, 10 of Wall Street's biggest investment banks settled out of court after Spitzer's office raised questions about whether their stock analysts were defrauding smaller investors in order to protect their much larger investment banking clients. But if that's what was indeed happening, shouldn't at least some of these crooks be sitting in a jail cell by now?

Ever since he was named Time magazine's 2002 "Crusader of the Year" and likened to Superman by The New York Times, Spitzer's office has collected billions of dollars from thousands of companies that have come under the scrutiny of the 600 lawyers who work for him.

But not everybody backs down. Former Bank of America broker Theodore Sihpol was one of the few to refuse a Spitzer plea bargain, which included jail time, and opted to defend himself against charges that a hedge fund he worked for engaged in illegal "late trading." This June, a jury found Sihpol not guilty on 29 counts and the judge declared a mistrial on four others after a lone juror voted to convict. The director of the Security and Exchange Commission's enforcement division later testified before Congress that placing or confirming mutual fund orders after 4 p.m. - but before the stock price had been recomputed for the day - was accepted practice in the industry, not a criminal conspiracy.

When you've lost your job and have to pay mind-boggling attorney's fees, even vindication can be bitter. But it's a lot better than being left in limbo.

It's naïve to think that there are no other Enrons or WorldComs out there. But whenever prosecutors uncover illegal activity, those involved have the right to a fair and speedy trial. A media announcement of an indictment without a specific trial date soon thereafter unfairly damages a person's reputation when they are least able to defend themselves.

If prosecutors have enough evidence to secure an indictment, they should proceed to trial at once. If they don't, they should keep their mouths shut. Leaving somebody twisting in the cold wind of public opprobrium is cruel and unusual punishment, especially since you're supposed to be considered innocent until proven guilty in a court of law.

And to prevent even the hint of a conflict of interest, every state should pass a law that bars prosecutors like Spitzer from accepting campaign contributions from the objects of past, present or future investigations. That would have made it illegal for Spitzer to accept much of the nearly $8 million in cash he already has on hand, but would have also greatly clarified his intentions.

And if the New York attorney general bristles at the extortion implications behind that suggestion - without any real proof to back it up - now he knows how Maurice Greenberg and Theodore Sihpol must feel.

Nice find. Thanks for the ping. Here's another Spitzer outrage.

Last March 20 Spitzer was absent from the St. Patrick's Day Parade when thousands upon thousands of potential voters lined up along Fifth Avenue.

But Spitzer is a lawyer, and lawyers know on which side of the bread the political butter is to be found. So Spitzer —the announced 2006 gubernatorial candidate - was at the Plaza hotel, addressing lawyers. And not just any lawyers----trial lawyers — legendarily lucrative sources of campaign cash — gathered for a conference to swap tips on how best to boost business by suing the pants off someone. The attendees paid $1,300 apiece to attend the event organized by renowned altruist . . . now-deceased Johnnie Cochran.

Another focus of the conference: blocking tort reform. President Bush dealt lawyers a blow when he won passage of the Class Action Fairness Act, which will crimp their ability to "shop around" their cases for the most sympathetic judges. Guess they're getting nervous.

This is a more dangerous abuse of power than anything alleged against President Bush, yet the liberals don't care because of the target of the abuse.

No surprise there.

There's an article in today's New York Post about the time Spitzer threatened one of Hannity's producers. Hannity is searching for the tape.

Eliot Spitzer is a lot like Chuck Schumer - they both never met a microphone they didn't like. Chuckie hates Eliot, according to media reports. Both are grandstanding politicians that would do anything to get power. Chuckie's committee pulling Michael Steele's credit report is probably a misdemeanor compared to the things Spitzer has been doing under color of law. There's evidence that Spitzer has been funneling settlement proceeds (a.k.a. extortion payments) to non-profits that turn around and give a large percentage to Spitzer and his PACs. Standing up for the little guy, he's not. Standing up for Eliot Spitzer is more like it.

dragging out allegations about greenberg 35 years ago is so transparent, if the NY voters elect this guy they deserve everything they are going to get, just as the chavez voters got in '98.

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