Tuesday, April 19, 2005

"Crusader of hypocrisy" - New York Attorney General Eliot Spitzer

Eliot Spitzer has been on a mission to set a new standard for CEOs in corporate America; a standard of high morality and less conflict of interest. He has been effective in regulating and bringing justice to much corporate scandal. I believe the inflection point was the unveiling of a 55-page lawsuit against the former chief of the New York Stock Exchange, Richard "Dick" Grasso. In this lawsuit, Spitzer charged Grasso with deception, conflict of interest and the receipt of excessive pay. Grasso fired back with a defense with an op-ed page in The Wall Street Journal. Grasso, I believe, correctly accused Mr. Spitzer of playing politics as he was becoming less of a crusader for the "little guy" and more of a cowboy with tunnel-vision sight set on Albany.
In Fall 2004, the Spitzer crusade made its way to Marsh & McLennan to remove powerful, republican, CEO Jeffrey Greenberg. Cherkasky, who was Spitzer's former boss as investigations chief for the New York County district attorney, was named chief executive of the company's Marsh Inc. risk and insurance services unit shortly after. Most recently and shameless, Spitzer threatened AIG with an indictment if longtime chairman, Maurice "Hank" Greenberg, continued at the company's helm. Hank Greenberg stepped down as chairman 48 hours after Spitzer threatened AIG with an indictment. "As long as Hank's still the chairman, AIG is still accountable," Spitzer told AIG's outside lawyers. Following this, Spitzer went on television to pronounce that the transactions at AIG were "wrong" and "illegal."
William J. Holstein, editor in chief of Chief Executive magazine, says it best, "the New York attorney general both charges and convicts in the court of public opinion. The pattern of overcriminalization is of deep concern to many chief executives....Too much publicity can be deem prejudical"
After all this is said and done, I realize my view is a controversial one. The irony is too great to ignore. Spitzer's crusade to stand up for the "little guy" has turned into a hypocritical, take out political enimies at all costs with the resources of New York State. I am not defending any of the people or entities that Spitzer has brought charges against but I feel Spitzer is too quick to make a media spectacle of a situation and convict in the press instead of a defendant's right of due process.
In the case of Dick Grasso, what ever happened to this lawsuit? Was Spitzer's goal to kick him out of the NYSE, convict him in the media, tarnish his image, and move on to his next victim? Very possible.
Grasso was a great leader of the NYSE. Grasso, a 35-year veteran of the exchange, climbed through the NYSE ranks and was appointed chairman and CEO in 1994. He was one of the greatest leaders of the NYSE in one of the hardest times during September 11th, 2001. After 9/11, many financial-industry executives doubted the reopening was possible in such a short period of time. But Grasso wouldn't take no for an answer. Somehow, working around the clock, he managed to get the job done.
Hank Greenberg, created one of the best companies in the history of the United States. AIG, a triple A rated firm with pristine track record. Spitzer has publicly claimed fraud and illegal activies regarding an area of insurance with extremely vague and little regulation. It is obnoxious to cry criminal activty regarding such loosely regulated and vague insurance operations. Where is the due process? There is none in the state of New York with Spitzer on his Crusade! He is the biggest abuser of his office of them all! Spitzer should look in the mirror and look at the gigantic conflict of interest running rampid through the office of the New York State Attorney General. Mr. Spitzer, you drew a new line of high morality and less conflict of interest; it applies to everyone, including you.

12 Comments:

Blogger Jeffrey said...

Mr Wall St Commentator. Bravo.

12:19 PM  
Blogger Slant Point said...

Welcome to the Blogosphere!
Scott of SlantPoint.com

5:02 PM  
Blogger JLP said...

Michael,

You raise some very good points! Spitzer has turned into a little bully.

Oh, and you left out the part about Spitzer selectively leaving out his buddy Carl McCall when he went after the NYSE board of directors. ALL the board approved Grasso's pay package. Therefore, they should ALL be held accountable if something was wrong.

Has Spitzer pursued any Democrats? Hmmm... I'd like to know the answer to that.

JLP

AllThingsFinancial

5:03 PM  
Blogger KudlowTruthSquad said...

Number of Republicans are much higher than Democrats on Wall Street. If you know any Democrat that is doing things against the law, send an e-mail to Spitzer. If he won't take action, send an e-mail to SEC. Thats all it takes.

You are welcome to hate Spitzer.
And you guys can kiss each other doing so.

But there was definitely wrong doing going on on Wall Street. And he tried to correct some of them. In some cases, he probably went too far. But to say that everybody on wall street is a "saint" is ridiculous.

These guys (mutual funds) were stealing from America's grandmothers.

It is hard for me to believe that the Wall Street firms with their best lawyers would settle for $1.6 Billion (Billion with A BIG B) if they did not do anything wrong.

For an individual investor like me, I am glad somebody is standing up to protect my rights.

Continue kissing each other.....

5:39 PM  
Blogger JLP said...

kudlowtruthsquad,

Nice, mature response. Nobody's kissing anybody.

WHAT about Carl McCall? Why isn't Spitzer pursuing him?

Spitzer was right to pursue the mutual fund companies. What I have a problem with is him saying that AIG is guilty when NOTHING has been proven.

JLP

AllThingsFinancial

6:19 PM  
Blogger KudlowTruthSquad said...

Carl McCall? Why is he not being pursued? I dont know, but if you have enough evidence, you can get him prosecuted even if Spitzer does not want to prosecute him.

This is America. Democrats like Martha Stewart do go to jail, even though her crime was relatively small.

Why does Greenberg take the fifth. If I read it right, he took the fifth on all of the 137 questions posed to him? This is the guy who built the AIG empire? Can't answer any ONE of 137 questions?

Same thing with Democrats like Franklin Raines? Why take the fifth if you have done nothing wrong?

It is not about democrats or republicans. It is about criminals and the rest of us.

Prosecution of Bernie Ebbers was a good start. I hope Ken Lay is next..may be Raines and Mccall after that, who knows?

6:38 PM  
Blogger Michael Orecchio said...

I would take the fifth as well if I was previously being assumed guilty via the media. Who wouldn't take the fifth when talking to a DA who prior to meeting with you goes on the national TV making his charges seem like the only truth in the matter. I just think Spitzer abuses the mass-media channel.

What about Dick Grasso, where is that trial? It seems as if Spitzer, AT TIMES, likes to convict in the media to gain clout and then move on.

6:45 PM  
Blogger Coop said...

The cover story of the latest issue of Forbes (available online) also discusses AG Spitzer's prosecution through media tactics, in an article discussing his clash with David Boies over AGI.

12:39 PM  
Blogger Paramendra Bhagat said...

Eliot Spitzer

8:38 PM  
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3:43 AM  
Blogger Mike said...

Looks like Spitzer finally got what was coming to him.

8:23 AM  

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