The Wild Eliot Spitzer
Eliot Spitzer says he’ll do in the New York City comptroller’s office what he did in the New York State Attorney General’s office. Assuming he is not lying, that would be a very dangerous thing. New York City voters should remember what he did as AG. Here is a sampling.
As AG, Spitzer twisted a Depression-era law called the Martin Act, intended to police bootleggers, into a despotic sword against corporate New York—the “legal equivalent of King Arthur’s Excalibur,” an informed legal analyst wrote.[i] Writers at Forbes summarized the modus operandi: “The hallmark of a Spitzer trophy is victory by intimidation.”[ii] To give some examples, AG Spitzer:
● coerced Marsh & McLennan’s board to oust CEO Jeff Greenberg, an abuse of power that prompted corporate governance expert Richard I. Beattie, chairman of Simpson Thacher, to condemn Spitzer’s misconduct.[iii]
● pressured AIG’s board to oust CEO Hank Greenberg, an abuse of power that prompted Stanford law professor and former SEC Commissioner Joseph A. Grundfest to lament that if a government official insists that a board fire a CEO, the CEO will be fired, even before any investigation or hearing and even if evidence later shows the government was wrong.[iv]
● blackmailed Merrill Lynch’s board into settling a civil case by saying he would otherwise file assorted criminal charges, dubious as a matter of legal ethics.[v]
● threatened John C. Whitehead, former deputy secretary of state and chairman of Goldman Sachs, for a Wall Street Journal op-ed questioning Spitzer’s tactics, yelling “there is now a war between us and you’ve fired the first shot. I will be coming after you. You will pay the price. . . . You will pay dearly.” [vi]
● bullied friends of Kenneth R. Langone, co-founder of Home Depot and benefactor of NYU medical school, cornering Jack Welch, former chairman of GE, to say he “was so mad that he was going to put a spike through Langone’s heart.”[vii]
● ranted to former New York State Attorney General Dennis C. Vacco about Hank and Jeff Greenberg, that he was going “to take those mother fuckers down.”[viii]
● screamed at a law partner of David Boies, the prominent lawyer who represents Hank Greenberg: “Because your firm is in bed with someone like Hank Greenberg, you have to bear the consequences and I have a bazooka pointed at David Boies, you and everyone else at your firm who is involved.”[ix]
Spitzer brought many down and rattled innocent good citizens. Everyone in New York City should worry that Spitzer will find ways, as he threatens, to radically expand the power of the comptroller to do equally dangerous things in the City. That will include trampling on due process rights and instilling in people fear of out-of-control government officials such he aspires once again to be.
[i] Nicholas Thompson, “The Sword of Spitzer,” Legal Affairs (May/June 2004).
[ii] Daniel Fisher, Carrie Coolidge, and Neil Weinberg, “The Battle of the Titans over AIG: Superlawyer David Boies Takes on Eliot Spitzer,” Forbes (May 9, 2005).
[iii] Cunningham interview with Richard I. Beattie, New York, May 2, 2012; see Brooke Masters, Spoiling for a Fight, p. 236.
[iv] Joseph A. Grundfest, “Over Before It Started,” New York Times (June 14, 2005).
[v] See New York Code of Professional Responsibility, Disciplinary Rule 7-105 (“A lawyer shall not present, participate in presenting, or threaten to present criminal charges solely to obtain an advantage in a civil matter.”). The New York code of legal ethics was revamped in 2009, omitting this prohibition, but did not change the law retroactively. The critical issue is “probable cause.” See New York Code of Professional Responsibility, Disciplinary Rule 7-103 (“A public prosecutor or other government lawyer shall not institute or cause to be instituted criminal charges when he or she knows or it is obvious that the charges are not supported by probable cause.”).
[vi] John C. Whitehead, “Mr. Spitzer Has Gone Too Far,” Wall Street Journal (April 22, 2005); John C. Whitehead, “Scary,” Wall Street Journal (December 22, 2005); Cunningham interview with John C. Whitehead, New York, October 3, 2011.
[vii] Cunningham telephone interview with Jack Welch, March 6, 2012; Cunningham interview with Kenneth R. Langone, New York, October 3, 2011; see also Charles Gasparino, “Wall Street: This Case Is Personal,” Newsweek (September 27, 2004); Opinion, “Spitzer’s Rise and Fall,” Wall Street Journal (March 11, 2008). Spitzer has equivocated or obfuscated concerning this incident. For example, in a Fox Business News interview of November 9, 2011, after the moderator played a clip of Welch quoting Spitzer’s menacing words—that he “will put a spike through Langone’s heart”—the following exchange occurred:
Moderator: “Is that true or not?”
Spitzer: “Not true. But here’s what are the facts.”
Moderator: “Jack Welch is lying here?”
Spitzer: “Jack was not there. Look, Jack and I got along well most of the time. We also pursued GE. Silly little kids stuff. They had some dishwashers that burst into flames when they hit the dry cycle. . . . ”
[viii] See Paul Tharp, “AG Snit Has Hit the Fan,” New York Post (July 10, 2012); CNBC, “Spitzer’s Vendetta vs. Greenberg” (July 10, 2012), available at www.cnbc.com/id/15840232?video=3000102000&play=1; affidavit of Dennis C. Vacco in Smith v. New York State Office of the Attorney General, Index No. 3670-08 (Cahill, J.) (September 27, 2012).
[ix] E-mail from Nicholas Gravante to David Boies, July 10, 2012.