Thursday, June 16, 2005

Spitzer Losing Ground: Court Loss Spurs Poll Drop

Newsday reports the gap between Pataki and Spitzer is closing with a 10 point swing:

Pataki 37%
Spitzer 50%

This just after Spitzer's big setback as he lost his case against Bank of America broker, Theodore Sihpol:
A jury of seven women and five men in Manhattan acquitted Mr.Sihpol, 37, of 29 counts of larceny, securities fraud, and falsifying business records following six days of deliberations. The jury deadlocked on four counts, leading New York State Supreme Court Justice James Yates to declare a partial mistrial.

The acquittal imperils three similar Spitzer prosecutions scheduled for trial in the fall. Mr. Sihpol's trial was the first to arise from Mr. Spitzer's investigation of mutual fund trading and may encourage other accused executives to go to trial rather than settle, as most have during a series of inquiries by his office into the financial industry over the past three years.

Friday, June 10, 2005

Spitzer's Defeat

The WSJ has a great editorial on Spitzer's defeat in the Siphol Case in which Mr. Sihpol's defense team was so confident in its case that it didn't call a single witness.

More coverage of this case to come.

Wednesday, June 08, 2005

Alexander Hamilton on Eliot Spitzer

AEI's Federalism Project released a paper titled "Government by Indictment" written by Michael Greve who apparently succinctly (and correctly) considers Eliot Spitzer to be "a trial lawyer with a badge". After reading James Tierney’s description I thought I might like it (and I did).

This paper is important because it refutes Eliot Spitzer's contention that Federalism justifies his continuous intrusions into what should be the SEC's territory.

The abstract reads the following way:
"Government by Indictment" provides a critical analysis of national policymaking by state attorneys general. Increasingly, state AG investigations and prosecutions of major corporations go beyond the objective of punishing individual wrongdoing, or even of changing the conduct of corporate entities. Nowadays, many AG campaigns--which increasingly take the form of multistate actions--attempt to form the internal operations and business models of major American industries.

To that end, attorneys general file indictments that are designed to exact settlements from defendants who cannot afford to bet the company. "Government by Indictment" is a fitting description of this style of law enforcement. The adverse consequences of AG activism reach beyond mere economics; they affect the integrity of American political institutions at all levels. Unchecked AG activism will spell: The re-regulation of major sectors of the U.S. economy; The cartelization of major American industries; The increased dominance of the plaintiffs bar over American politics; and Substantial wealth transfers from productive enterprises to plaintiffs lawyers and advocacy organizations with an aggressive agenda to re-regulate the economy.

In the conclusion Greve gives his spin on what American Founder and Federalist Papers author Alexander Hamilton would have thought of Eliot Spitzer:
The great Hamilton did not know Eliot Spitzer, but he knew the type. Listen to the AGs’ hysterical protests against the most modest attempts to preempt extraterritorial exercises of state authority: does not Hamilton’s prediction that state officials will “resist” the Constitution sound quaintly understated? Consider the befuddled response—by Congress, by the courts, by corporate interests, by legal scholars—to the AGs’ states’ rights cant: can one doubt that the AGs have already “aggrandized themselves by the confusions of their country”? And what are the various multistate settlements and investigations, from the MSA to General Spitzer’s ad-hoc global warming coalition, but so many single- purpose “partial confederacies.”

For the foreseeable future, state AGs will continue to serve as the favored access point for regulatory enthusiasms. Their doors are always open for business of this sort, and they confront no serious institutional obstacles. A return to the constitutional order, if it is to occur at all, will require the patient work of a generation, not merely a few well-funded lawsuits or lobbying campaigns. It will require a hard-nosed recognition that the AGs, like the state demagogues of Hamilton’s days, cannot be appeased; they have to be confronted. That confrontation ought to proceed from a candid, clear-eyed appreciation of what AG activism is and what it is not.

AG activism is not “devolution” or decentralization. It is rather a formally decentralized process that systematically yields uniform, centralizing policies, of a kind that the central political institutions themselves have declined to adopt. To state that empirical observation is to recognize the system’s absurdity.

Monday, June 06, 2005

Spitzer's Competition

Check out the newest addition to the side bar showing other politicians who have been named as possibly candidates for the 2006 gubernatorial race.

As the status of any of them change I will update the projections of likely running, possibly running, and those whom I consider to have a outside chance at running.

More on why I placed politicians in certain categories in the coming days.

Spitzer's Mysterious Ferrer Endorsement

The Daily News reports that two months after promised, Spitzer still has yet to have a news conference announcing his endorsement of mayoral candidate Fernando Ferrer. The Daily News notes:
"That's prompted observers to wonder if Spitzer, who's running for governor next year, is keeping Ferrer at arm's length after flaps surrounding his Diallo comments and his stock-transfer tax proposal."
For more on Ferrer's Diallo comment read this NY Times article.

Sunday, June 05, 2005

Suozzi's Profile Continues to Grow

Both the Daily News and Newsday ran AP articles about Suozzi posing a problem for Spitzer's run. The Daily News article notes:

"the Suozzi factor hovers like a dark cloud over state Attorney General Eliot Spitzer's plans to run for governor."

The articles also note the continued pressure being applied by McCall for Suozzi not to run including an interesting statement from McCall dennouncing primaries:
"The primary hurt. There were two Democrats going to the same sources for money. I had to divide money with my Democratic opponent," McCall said, referring to the challenge he faced from ex-federal Housing Secretary Andrew Cuomo.

"Primaries are always bad," added McCall.
While there is no doubt that the heated primary hurt McCall when he challenged Pataki, contested primaries can have many positive aspects, such as ending up with the strongest possible candidate, and one who has proven their ability to campaign and fundraise.

Of course what really is telling about McCall's comment is that he would prefer a return to the Tammany Hall days when candidates were annointed by party bosses rather than chosen by the people. Obviously since McCall owes Spitzer (who gave McCall a pass during the Grasso NYSE investigation), if it were up to McCall, Spitzer would be annointed the Democratic nominee without asking Democrats to vote in a primary.

Saturday, June 04, 2005

Spitzer in the News

Business Week:
Spitzer May Get His Day in Court
Under fire, he finds himself facing a most tenacious foe: Ex-AIG boss Hank Greenberg
"the crusading New York Attorney General has shown himself a master at trying cases in the court of public opinion.

Spitzer's modus operandi is now familiar: Call in TV crews to announce a lawsuit with sweeping allegations of wrongdoing. It's been a hugely successful formula."

LA Times:
It's Déjà Vu: Eliot Spitzer Has His Eye on a Bigger Prize
"Michael Milken was a California target, so future political fundraising efforts within the New York investment banking community were not threatened by strong action against him...

don't be lulled into thinking he is doing it for the little guy."

Friday, June 03, 2005

WSJ: Spitzer Calls in Favor from McCall

Tom Suozzi has become a thorn in Eliot Spitzer's side and now Spitzer's past political favors to fellow Democrat Carl McCall is paying off to help Spitzer deal with a potential Suozzi run.

Today the Wall Street Journal editorializes (subscription required) about former Pataki challenger Carl McCall's warning (or should we say threat) to Suozzi not to challenge Spitzer in the Democratic Primary from yesterday's NY Times:
"Tom already has his problems in the party, and a primary run would drain resources, create divisions and not be well received," said H. Carl McCall, the Democrats' last nominee for governor, who has warned Mr. Suozzi about the 2002 primary fight with Andrew Cuomo that cost Mr. McCall millions.

"I've told Tom, and others have told him, that he should forgo the race," Mr. McCall added.

"He has a real future in this party. A run against Eliot Spitzer, especially if it goes badly, could harm Tom's career, maybe permanently."

Back in May 2005, Spitzer was widely criticized for giving McCall a pass while pursuing NYSE head Dick Grasso for his "excessive" $187 million pay package that McCall approved. At the time McCall was the head of the compensation committee and other committee members felt he was to blame because he "didn’t do enough work in preparing the committee to vote on the pay deal".

When Grasso refused to back down The Economist described Grasso's countersuit and Spitzer's own conflicts the following way:
Mr Grasso has not taken this lawsuit lying down. He has tried to turn the tables on Mr Spitzer, saying that the decision by the Democratic attorney-general to sue “smacks of politics”. In particular, Mr Grasso has asserted that Mr Spitzer chose not to go after Carl McCall, a fellow Democrat who had chaired the exhange's compensation committee, or the “powerful CEOs who voted for my compensation year after year [because] Mr Spitzer is running for governor, and running hard”. Mr Grasso is also reported by the Wall Street Journal to be threatening to bill the exchange for his legal fees under an indemnity clause in his employment contract.

The Wall Street Journal nicely sums up Spitzer's conflict in its editorial titled "A Friend in Need":
The decision to spare Mr. McCall looked selective and suspicious to everyone who understood Mr. Spitzer's gubernatorial ambitions and his desire to please party elders when it looked like Democratic Senator Chuck Schumer might also enter the race. Mr. Schumer later decided against a run, but now we have Mr. McCall riding to Spitzer's rescue to help fend off a different primary challenger. A friend indeed.

Eliot Spitzer's numerous conflicts of interest are becoming the theme of his campaign. While there is nothing he can do about his past conflicts (thought the NY voters hopefully will see that they make him unfit to hold the Governor's office) Spitzer Watch continues to call for Spitzer to resign from his position as NY Attorney General.

Thursday, June 02, 2005

Flashback: Spitzer's Toilet Investigation

October 8, 2004

Spitzer Watch wasn't around when this news hit but one can only imagine the potential for great headlines:
Attorney General Eliot Spitzer said on Thursday an investigation showed that attendants in upscale New York City restaurants were not receiving any wages and in fact were paying for the privilege of mining tips in bathrooms in exchange for providing toiletries and a hand towel.
Spitzer filed a $4 million lawsuit against Royal Flush, the city's main placement service for bathroom attendants. Company officials were unavailable to comment.
Source: Professor Bainbridge (originally from CNN)

"Spitzer Left His Balls in the Parking Lot"

(You can't make that headline up!)

San Francisco Attorney Ray Bourhis criticizes Spitzer sharply for acting not in the interest of justice but in order to generate good press coverage:
“Spitzer fined the company $15 million – which is like fining you and me 45 cents. It is totally ridiculous... It sounds good for the press release, but it is bs."
Now we have seen both corporate lobbyists and anti-industry critics take Spitzer to task for ignoring his duty of seeking justice in the courts and instead using the media to generate publicity with the goal of furthering his political career.

Spitzer Holds Big Money Fundraiser in New Mexico

Anti-Corporate crusader and walking conflict of interest Eliot Spitzer held a $500 per person fundraising dinner with New Mexico Governor and Democratic Governors' Association chairman Bill Richardson.

Questions:

Do any of these big money donors have connections to Wall Street? Could such companies be investigasted by Spitzer in his position as NY Attorney General?

Suozzi Gaining Dem Support for Gov Race?

Nassau County Executive and possible Spitzer primary opponent Thomas Suozzi could be gaining support from NY Democrats for a run at the Governorship.

Central NY NBC affiliate WSTM reports the Spitzer campaign is upset at Democratic Rural Conference Chair, Stuart Brody, for supporting Suozzi.