Wednesday, July 20, 2005

New Polls: Pataki Numbers Up, Spitzer Down Slightly


Newsday reports that Pataki's favorability rating is 52%. That represents his highest rating in months and a huge improvement from the pathetic low of 23% in May.

This just after Pataki's trip to Iowa for the Governor's Association meeting that also included Pataki mulling the possibility of a Presidential run in 2008.

In a head to head matchup Spitzer continues to lead but the gap closed 1 point from the last poll:
Spitzer: 49%
Pataki: 37%
Pataki's 37 percent is the same as he polled last month while Spitzer fell 1 point from 50%.

The article also notes another possible opponent for Spitzer:
There has been some talk in GOP circles of the party turning to Rochester billionaire B. Thomas Golisano as a candidate for governor if Pataki doesn't seek a fourth term. The new poll found Spitzer beating Golisano, 52 percent to 26 percent, if the businessman were on the GOP line.
Golisano (a new addition to the Spitzer's Competition sidebar) has unsuccessfully run for governor three times as the Independence Party candidate and as the billionaire owner of the Buffalo Sabres he would be able to spend large amounts of his own money on the race. Newsday notes that in 2002 Golisano "spent $75 million of his own money... and finished a distant third with just 14 percent of the vote."

Miller's Illegal Mailings

Much has been made of the wasteful use of taxpayer dollars and the political nature of NY City Council Speaker Gifford Miller's $1.6 million mailing. (That's almost $1.6 million more than the $37,000 it was supposed to cost!)

While wasteful spending in the form of franking is always deserving of public criticism, breaking the law is grounds for legal action and as the NY Sun editorial today makes clear Miller did cross the line from wasteful incumbent to law breaker:
There's no doubt that Mr. Miller's mailings were misleading and unacceptably political, which is why council members and government watchdog groups have criticized him for abusing the franking process. Even worse, the massive printing job was divided into 150 smaller jobs to avoid the competitive bidding process that city procurement rules would require of a larger project. Those rules also say that work "shall not be artificially divided" to avoid that process.
With Miller having broken the law it now falls to Spitzer to as Attorney General to hold Miller -a fellow democrat- accountable. Something he has been unwilling to do in the past.

Tuesday, July 19, 2005

Spitzer's Lack of Cooperation with Feds Hurting Investigations

Today's Insurance Journal has an interesting article about the lack of cooperation between parallel justice department and NY Attorney General's office investigations:
Federal securities and justice department officials and lawyers from the office of New York Attorney General Eliot Spitzer, who are pursuing parallel investigations of the insurance industry, have made separate deals with witnesses that harm the other's cases and have generally stopped cooperating with each other since early May, according to a report in the Washington Post citing people familiar with the cases and legal experts.
The article went on to say that Spitzer's side negotiations with one potential witness lead to the cancelling of a joint meeting:
One joint interview with an unidentified witness was canceled after the Securities and Exchange Commission learned that Spitzer had previously met with the witness's lawyer and discussed a deal, according to the report.
Is it any wonder that Spitzer was sued by the Feds?

Monday, July 18, 2005

Spitzer Fails to Do His (Actual) Job

The Empire Journal recently highlighted Eliot Spitzer's failure to do his basic duty and notes:
Eliot Spitzer wants to be Governor of the State of New York.

But if he can’t objectively, fairly and uniformly handle the job as Attorney General of the state, why would he expect anyone to vote for him to be Governor.
The editorial notes that an astonishing...

90% of judges in New York State are illegally in office!:
When the New York State Oaths Project undertook a survey of the 3,300 judges in the state of New York to determine their compliance with the law and to learn just how many of them were legally in office, the results were shocking. Over 90% of the state’s judiciary were illegally in office, illegally plucking a paycheck and benefits from the pockets of taxpayers of New York while they weren’t even legally in office and had absolutely no jurisdiction to find that others had violated the law, to send people to jail and make decisions that would forever impact the lives of others.

Two years ago, a nearly 400-page bound tome of evidence that judges across the state, particularly town and village justices, were not legally in office and were engaged in a fraud upon the public, was hand-delivered to the office of Eliot Spitzer. Short of a form letter acknowledging the receipt, Spitzer didn’t even have the courtesy to respond to the fact that the state’s judiciary was a society of a black-robed lawbreakers. He in fact condoned their violation of the law and allowed their continued non-compliance.
Actually he did more than that... he wants to give them raises!

Greenberg vs. Spitzer

Possibly emboldened by the Sihpol Verdict, AIG ex-chied Hank Greenberg is fighting back against Spitzer's attempts to try the case in the media by publicly commenting on the case himself. Houston lawyer and blogger Tom Kirkendall has covered this case well and reports the following:
In his comments -- which reportedly drew applause at least once -- Mr. Greenberg promised at least one "white paper" that will rebut AIG's restatement of five years worth of earnings and the allegations of accounting improprieties that Mr. Spitzer has made in a civil-fraud lawsuit against Mr. Greenberg and AIG. Mr. Greenberg stated that the white paper would be sent to regulators and then made available to the public.

Mr. Greenberg also advised his audience that AIG's previous accounting for the compensation that Starr International provided to AIG executives had been reviewed and approved by AIG's legal and accounting advisers. Moreover, when AIG board members raised questions about using Starr International as a compensation vehicle, Mr. Greenberg stated that he offered to put the issue to a vote of AIG shareholders, but that the AIG board declined to do so. Finally, Mr. Greenberg stated that a 2003 letter from an outside law firm advised AIG that its disclosure of the Starr International compensation plan in regulatory filings was appropriate.

Wednesday, July 13, 2005

Conflict of Interest: Lawyers For Spitzer

GIVE ME MONEY OR FEEL MY WRATH!!!

Spitzer's campaign website seems to encourage conflicts of interest by specifically soliciting lawyers for their support.

While no other occupation (except maybe student if that qualifies) has its own group, the main page of Spitzer2006.com has a link encouraging lawyers to join Lawyers for Spitzer.

The Lawyers for Spitzer page even includes a pre written email that those who join can use to solicit money from their fellow lawyers:
We all have to play a role in New York’s future and the beginning of real reform in our state. No matter where you live in the United States, the reality is that political campaigns cost a lot of money. If we want real reform in New York – one of the “big four” states – we must actively campaign for Eliot to be our next governor in New York.
Furthermore the possibility that lawyers might have professional dealings with the NY Attorney General's office is completely overlooked on the page through which donors can contribute online. Instead only a small checkbox next to the the following statement serves to monitor conflicts of interest:
By making this contribution I am notifying Spitzer 2006 that to the best of my knowledge neither I nor any corporation which I own or currently control has any matter presently pending with the New York State Attorney General’s office.
Without any mention of employees in this "Contributor's Pledge" it leaves open real ethical concerns because lawyers who might have dealings with the AG's office are free to give the Attorney General $16,200 in the primary and $33,900 in the general election.

But, could over $50,000 in campaign contributions mean special influence from the Attorney General's office?

Certainly it would seem that Spitzer's calls for lowering the individual contribution limit suggest that he thinks it might.

Outlawing Basic Business Strategies?

As someone with experience in a Washington PR department there are basic rules that you learn very quickly. One of them is if you are trying to get media coverage, don't have an event late in the week.

Of course the opposite is also true: if you don't want coverage then a Friday press conference is just what you want to place newspaper coverage on the barely read Saturday paper and television coverage on the Saturday news.

And the same basic principle drives business...

In an article Tuesday on CFO.com Eliot Spitzer's newest attempt to stifle business is examined:
Spitzer's settlement pertained solely to equity analysts who intentionally published false and misleading reports with the aim of benefiting their employer's clients. Cifuentes' complaint reportedly focused on Wachovia's attempt to influence the timing of his reports, both to raise the profile of Wachovia deals and to please the firm's clients.
If AG (Attorney General or is it Aspiring Governor?) Spitzer does decide that timing news to raise the profile of one's company or increase your business is illegal then he would be condemning the most basic common-sense business practice.

Also we would have to expect that in the future Spitzer won't time news to maximize its effect...

So the next time Spitzer calls in a favor to secure an endorsement in a late night meeting or in the shadow of a bigger story should we expect him to call a press conference despite it being 10:30 pm or Super Bowl Sunday?

To not do so would be hypocritical!

Tuesday, July 12, 2005

Spitzer Sued by the Feds

There has been surprisingly little attention paid to lawsuit recently
filed by the Federal Government against AG Spitzer:
Attorney General or Aspiring Governon?"The suit aims to stop Eliot Spitzer's investigation of potential discriminatory lending by the nation's leading banks. The Comptroller of Currency, who oversees banking for the Treasury Department, and a banking trade group, the Clearing House Association, said in their suit the banks were subject to federal and not state regulation.

The attorney general's office is investigating community group claims that blacks and Hispanics are more likely than whites to get higher cost mortgage loans."
What I find interesting about the entire investigation that Spitzer is running is that even if "blacks and Hispanics are more likely than whites to get higher cost mortgage loans" it doesn't necessarily follow that race is a factor in how banks give out loans.

While I only took intro econ classes in college and never had a mortgage even I know that higher credit risk would lead to higher rates and that income would certainly to be a factor in credit ratings for a bank making an individual a large loan (like a mortgage). That being said couldn't the obvious answer be that blacks and hispanics simply have less income (according to recent census data) and thus the lender must balance that risk with higher rates?

In other words, perhaps bankers who give higher mortgage rates to those with lower incomes (who are disproportionately black and hispanic) is doing so because the alternative is not giving them a mortgage at all.

All this forces any reasonable person to conclude that there is a political motive behind this investigation. If that is the case, then Spitzer has taken the cynical approach that it is politically advantageous to make a false yet visible stand in support of blacks and hispanics (even when such a stance actually may hurt those it pretends to help), when the alternative is to do nothing at all.

As for the lack of coverage of the lawsuit against Spitzer, the reason is quite simple: Unlike suits filed by Spitzer, the Feds are confident enough to try the case in the courts, rather than the media. That and they don't have Spitzer's pizzazz for creating media attention or his ambition for higher office.

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Here's the video of the report on NY1:
Dial Up / Broadband (Real Media)

Monday, July 11, 2005

Rethinking Conflicts of Interest

The current issue of Regulation Magazine includes an interesting article questioning common assumptions about the effects of conflict by asking the question:

Can stock analysts’ conflicts of interest benefit investors?

and suggests that in can...

Author, James C. Spindler essentially makes the point that the very inside information that makes the conflicted stock analyst "conflicted" is what makes his analysis of a stock more valuable to investors and that the independent analyst is so independent he can offer no information of value.

Expressing such a viewpoint is probably considered criminal by AG Spitzer. (Then again he dose conveniently ignore his own CONFLICTS OF INTEREST)

The entire article can be found in pdf form here.


[P.S. The long break in posting was due to a now successful job search that will relocate me to Washington, DC. Now that it is mostly settled expect more frequent updates.]