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Client 9 is dedicated to bringing you the latest on Eliot Spitzer and his involvement with the prostitution ring, The Emporers Club, hookers etc! Below you will find past news regarding Eliot Spitzers. In one sense I feel bad fot the guy ... he actually needed some escort therapy! Damn dood... lighten up! |
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Spitzer Helps Donors Skirt $10,000 Limit He Set
(New York Times) -- On Dec. 3, Richard P. Richman, a real estate developer from Connecticut, wrote a check to Gov. Eliot Spitzer’s campaign account.
The check was for $10,000, less than one-fifth of the maximum donation allowed under New York State law. But it was all he could give to the governor, who had imposed strict limits on what he would accept from donors as part of his highly publicized pledge to end the excesses of special-interest money in Albany.
So Mr. Richman took out his checkbook again. This time he gave $15,000, but sent it to the state Democratic Party, which Mr. Spitzer is now tapping in his drive to rid Albany of the Republican Senate majority.
Dual donations like Mr. Richman’s are not uncommon. Despite his high-profile pledge, Mr. Spitzer’s political organization has raised more than $1 million above the cap he imposed on himself, by directing his donors to the state party account, which he controls.
The strategy has helped bring the governor and his party within one seat of gaining control of the Senate. But it has raised questions about whether Mr. Spitzer is living up to the high ethical expectations he set, especially among those who looked to him to change the way business is done in Albany.
“It’s not meaningful if you raise the ethical bar but you have a very effective work-around,” said Russ Haven, the legislative counsel for the New York Public Interest Research Group. “That doesn’t net you any reform to the system.”
Mr. Spitzer’s aides acknowledge encouraging contributors to give to both accounts, but say they are abiding by the law and the governor’s pledge, while trying to match the bare-knuckle politics of state Republicans.
“Reform needs action; it’s not a rhetorical device,” said Ryan Toohey, the governor’s top political strategist and the architect of the Democrats’ efforts to win the Senate. “So long as the Republican Senate is there, reform is going to be too often frustrated by their obstructionist tactics.”
The governor could not have been more emphatic when he initially announced his policy. On Nov. 30, 2006, before even taking office, Mr. Spitzer held a news conference to unveil a number of reforms he intended to undertake, with the $10,000 limit the most eye-opening proposal — well below the $55,900 that statewide candidates can accept.
“I think this is unprecedented,” the governor said at the news conference. “I do not know of another instance where others have acted unilaterally.
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Eliot Spitzer: A New Team in Albany Was Often Eager to Fight (NY Times) On New Year’s Eve, when Eliot Spitzer was sworn in as governor of New York in a small ceremony at the governor’s mansion, Assemblyman Mark Weprin of Queens was among the select few invited to toast his inauguration.
Within weeks, though, Mr. Weprin found himself on the outs with the Spitzer administration because he supported a fellow assemblyman, Thomas P. DiNapoli, for state comptroller over one of the financial experts that Mr. Spitzer favored for the job. What had seemed to Mr. Weprin and other Assembly Democrats as a simple difference of opinion was, to the Spitzer camp, betrayal.
Suddenly the administration was no longer calling Mr. Weprin.
“I’m close to Eliot — I was as close as anyone was to Eliot, was thrilled as hell to have him elected governor after spending 12 years in this George Pataki malaise,” Mr. Weprin said yesterday. “And within 25 days he made it us versus them, and I wasn’t sure what team I was supposed to be on.”
That us-versus-them mentality has been a hallmark of the Spitzer administration, which used its mandate to change state government to engage quickly in a series of well-publicized fights with lawmakers in both parties, Albany lobbyists, the state’s powerful health care industry, and most bitterly with Joseph L. Bruno, who as the Senate majority leader has blocked many Spitzer initiatives.
This week, though, a withering report by the attorney general’s office found that some of Mr. Spitzer’s top deputies crossed an ethical line by ordering the State Police to gather embarrassing information about Mr. Bruno to share with reporters.
The report and its revelations have rocked an administration that appeared to relish political combat — a Spitzer biography, after all, was called “Spoiling for a Fight” — and they raised new questions about the bellicose, competitive ethos of an administration that has at times seemed more adept at breaking eggs than at making omelets.
Mr. Weprin, for one, hopes that the scandal is a turning point for the governor. “He can move forward,” he said. “I’m hoping he can realize that this too shall pass. He’s accomplished a lot — there have been a lot of changes in Albany that he has been responsible for. He’s a brilliant guy, he’s a smart guy, he’s a passionate guy, and he has the ability to be a great governor. But he needs to go from here working in a more diplomatic manner to accomplish the agenda he’s talked about.”
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Eliot Spitzer - The Three Crusades : In January 2005, Gretchen Morgenson, the New York Times's ferociously anti-business business reporter, used her newspaper column to give Spitzer a facetious award: "To Eliot Spitzer, the New York attorney general, for finding corruption in the third financial services industry in as many years. First it was Wall Street research, then the mutual fund industry. In 2004, it was the insurance business's turn." The legal and economic specifics of these three cases cannot be examined here in anything like the detail they merit. I hope to take up each separately in future articles. The following analysis, however, gives the general outline of the three investigations and abstracts the overall approach that Spitzer takes. From that, we shall see how the approach emerges from the character and morality of Eliot Spitzer.
Wall Street Research. Acting on a hunch that Wall Street investment advice was biased, Spitzer used the Martin Act to demand innumerable e-mails from the firm of Merrill Lynch. On April 8, 2002, he issued a press release announcing that Merrill's analysts had "skewed" their stock ratings to win business for Merrill's investment-banking division and to punish firms that did not do business with it. The most damning of the e-mails were tossed to a mob of anti-capitalist reporters with predictable results. "Merrill Lynch Stox Shocker" screamed the New York Post.
Earlier that day, Spitzer's assistant Eric R. Dinallo had filed an affidavit with the New York Supreme Court seeking authority to gather further evidence for his investigation of analysts' hype. In setting forth the "statutory framework" under which Spitzer sought authority to seize records, Dinallo helpfully noted the beauties of the Martin Act: "It prohibits and makes illegal any fraud, misrepresentation, deception, concealment, promise or representation that is beyond reasonable expectation [in the New York securities industry]. . . . Unlike federal securities laws, no purchase or sale of stock is required, nor are intent, reliance, or damages required elements of a violation." Bluntly, a person may be prosecuted for behavior often considered sinful (misrepresentation), even if there was no intent to defraud and even if no harm resulted.
Over the next week, according to Charles Gasparino, the Wall Street Journal reporter who covered the case, "Merrill lost $5 billion in market value. By the end of the month, Merrill's stock declined $11 billion." Shares dropped from 53.45 at the time of Spitzer's denunciation to 40.80 on May 7, a decline of 23.57 percent. The first three weeks of May showed little recovery in stock price, and on May 21 Merrill settled.(36) Time summed up the outcome: "Merrill agreed to pay the fine, apologize and reform the way it paid its analysts. . . . Some felt [Spitzer] was too lenient with Merrill, which can easily afford $100 million (average profit over the past three years: $2.35 billion). Moreover, no one went to jail." On April 28, 2003, ten securities firms reached a so-called "global settlement" with federal and state officials, costing $1.4 billion and involving many new rules; two more firms settled the following year.
The seven steps of a Spitzer inquisition were all present here in his first crackdown on the impious. (1) Business Utopianism. Denounce the realities of business, especially the pursuit of economic self-interest, as ethically sordid—in this case, denounce the reality that hustle and hype are the Brownian motion of commerce, from the rug merchants of the Middle East to the stockbrokers of Wall Street. Universal Fiduciality. Ignore the rule of "caveat emptor" and the responsibility of market participants to look out for themselves. In the name of equality, insist that business leaders have a fiduciary responsibility to all their customers, investors, workers—indeed, to the public at large. Money magazine put this question to Spitzer directly: "What do you say to the public in the wake of all this? Do they also share some of the responsibility?" Spitzer's response: "I don't want to say the public shares responsibility." The sleaziest lout could not perpetrate a greater fraud on the stock-buying public than the politician who assures them that government will save them from the effort of "caveat emptor." The Bloody Shirt. Find a handful of acts that cross the line into inexcusable (though not necessarily illegal) behavior. In this case, Spitzer found a few e-mails where hype had passed into lying. Extra-legal Punishment. Use these examples of deplorable (though perhaps legal) behavior to publicly smear and threaten an entire company and its top executives, putting it and them under a cloud and driving down the company's market value. Play the Good Cop. Offer a lenient penalty in exchange for the right to dictate corporate policy. Repeat as Needed. Use the above sequence of steps as often as necessary to restructure an entire industry in conformity with the morality of Eliot Spitzer.
But the final step is the true key to a Spitzer settlement. A Virtue-cratic Takeover. Make it clear that Eliot Spitzer and his morally superior minions are now in charge. Executives may be allowed to pretend they are running their companies. Lawyers may be allowed to pretend that objective rules and regulations exist. But the hard truth is that the company or the industry must behave in ways the ayatollah general decides are ethical. When Fortune reporter Julie Schlosser interviewed Spitzer after the global settlement, they had the following exchange:
Schlosser: "The settlement bars analysts from banking-side sales pitches or road shows. Can their revenue and earnings estimates be mentioned during those meetings?"
Spitzer: "We are going to make it very clear to them that use of content by the investment bankers is not something we expect to be hearing about."
Schlosser: "You mean it won't be legal?"
Spitzer: "Let me leave it at that right now."
So much for the law-governed market.
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Eliot Spitzer - The Martin Act: In order to enforce his morality, Spitzer frequently uses an old law that allows him to criminalize behavior not obviously illegal and, by threatening business executives with prison and economic ruination, mandate such reforms as may spring from his moral sense. The law that Spitzer has employed for these purposes is New York's 1921 Martin Act, as amended in the 1950s. (Formally, it is New York State's General Business Law, Article 23-A, which includes Sections 352-359. One prosecutor says of the Martin Act: "It is one of the broadest anti-fraud statutes ever devised, at least in a democratic society." According to Nicholas Thompson, senior editor of Legal Affairs:
It empowers [New York's attorney general] to subpoena any document he wants from anyone doing business in the state; to keep an investigation totally secret or to make it totally public; and to choose between filing civil or criminal charges whenever he wants. People called in for question during Martin Act investigations do not have a right to counsel or a right against self-incrimination. . . . Now for the scary part: To win a case, the AG doesn't have to prove that the defendant intended to defraud anyone, that a transaction took place, or that anyone actually was defrauded.
This outrageous law survived during decades of improvements in defendants' rights principally because attorneys general had "by gentleman's agreement" used it only against the sleaziest frauds.(26) Spitzer and his colleagues make no such distinctions. Greed is greed and should be rooted out.
Of course, greed is not illegal, even under the Martin Act, but Spitzer can always count on anti-capitalist journalists to publicize any self-seeking behavior he uncovers through a Martin Act investigation.
When the resulting bad publicity hammers the company's stock price, the temptation to negotiate becomes overwhelming. And when, as often happens, an executive appears to have run afoul of the Martin Act, the desire to defend economic liberty yields to the desire to preserve personal liberty. At that point, Spitzer unveils his deal: get gentle treatment for the company and its executives—in return for a thorough-going makeover of the entire industry in accordance with Spitzer's idea of the moral. The result: a leftist scheme—which in a free society could not have been imposed at all and in a democratic society would have faced years of debate—is achieved by one self-righteous prosecutor in a matter of months, weeks, or even days. As Fortune magazine wrote in a laudatory article: "What's truly stunning is [Spitzer's] ability to force reform—to root out institutionalized sleaziness with lightning speed. . . . Congress and federal regulatory agencies such as the SEC take years, if they're lucky, to shape an industry or reshape its basic practices. . . .
Yet Spitzer, an elected official from a single state, has turned entire industries upside down." In short: "Morality NOW!" Savonarola might have said just as much.
Indeed, completing the parallel with the Dominican zealot (who was also a popular hero in his day, we should remember), Spitzer not only makes business executives of targeted firms promise to reform, he also forces them to kiss the rod that has chastised them and confess that they have been moral failures, thus vindicating the superior virtue of Eliot Spitzer. Last year, evidently, one of Spitzer's corporate victims failed to appreciate how key is this ethical kowtow to Spitzer. According to the Wall Street Journal: "People privy to the talks say Marsh & McLennan has bristled at the potential statement of contrition." Finally, Marsh understood that there was no way to end Spitzer's persecutions but through self-abasement and it agreed to call the behavior in question "shameful."
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Spitzer Aides Cited for Use of Police to Tarnish Bruno (The New York Times) -- ALBANY, July 23 — Gov. Eliot Spitzer’s aides, including one of his closest advisers, improperly used the State Police to gather information about the governor’s chief rival, Joseph L. Bruno, the State Senate majority leader, in an effort to plant a negative story about Mr. Bruno and damage him politically, according to a report on Monday by the attorney general’s office.
Spitzer aides, chiefly his communications director, Darren Dopp, concocted a false story for why the information was being gathered, saying the governor’s office acted after receiving a press request seeking details of Mr. Bruno’s use of state aircraft, the report said.
Mr. Dopp later made misleading statements about the involvement of the governor’s office in the effort, the report indicates. The report concludes that Mr. Bruno’s use of the helicopters — on trips that included both political and legislative events — was proper.
Minutes after the report was made public, Mr. Spitzer announced he was suspending Mr. Dopp indefinitely without pay. He said he was also dismissing his liaison to the State Police, the assistant secretary for homeland security, William Howard, and moving him to an unspecified job outside the governor’s office.
The report was a blow to Mr. Spitzer, a former prosecutor who came into office less than seven months ago with a reputation for integrity and who promised to bring a new ethical climate to Albany.
And fallout from the report may endanger central elements of the agenda that Mr. Spitzer laid out at the beginning of his term. On Monday, some Republican officials signaled their intent to revisit a deal struck with the governor last week to overhaul the state’s campaign finance laws.
At a somber news conference Monday that had the air of a cross-examination — with Mr. Spitzer, a Democrat, in the unaccustomed role of defendant — the governor insisted that he knew nothing about the effort to damage Mr. Bruno, a Republican.
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Eliot Spitzer - The Year of Governing Dangerously (Vanity Fair): “Many thought Eliot Spitzer was the guy who could clean up Albany—until he went to war with almost every politician, of either party, in New York State. Interviewing the governor, the author tries to make sense of Spitzer’s troubling, tantrum-filled year.
t was Inauguration Day—Day One, the day everything was supposed to change. The strains of “Fanfare for the Common Man” dissolved into the chilly Albany air, and Governor Eliot Spitzer, Princeton ’81, Harvard Law School ’84, rose to speak. “Like Rip van Winkle … New York has slept through much of the past decade while the rest of the world has passed us by,” he declared as his predecessor, George Pataki, squirmed nearby. But now “the light of a new day shines down on the Empire State.” (He’d ignored everyone else’s counsel to hold the ceremonies indoors, and the comparatively mild weather, at least for the tundra in January, was surely another sign the gods were with him.) He promised leadership as ethical and wise as all New York. He called on his fellow citizens to enter “the arena,” just as his idol, Theodore Roosevelt, had once urged, and as he himself had done. Then he went Churchillian. “Lend your sweat, your toil, and your passion to the effort of building One New York,” he implored. “My fellow New Yorkers, our moment is here. Day One is now.”
For all the soaring rhetoric, though, the phrase people would most remember from Eliot Spitzer’s inauguration last New Year’s Day came not from Eliot Spitzer at all. It came later that day, when James Taylor sang for the new governor and over a thousand guests at an arena—not the kind T.R. had in mind—nearby. That phrase, combined with Spitzer’s vulgar enhancement of it, would take its place in American political lore, alongside “the only thing we have to fear is fear itself” and “Ask not what your country can do for you” and “I’m not a crook”—and would become his unofficial motto, though no one would know this for a few more weeks. “I’m a steamroller, baby,” Taylor sang. “I’m bound to roll all over you.”
In late January, Jim Tedisco, a Republican and the minority leader of the State Assembly, was driving to Albany on the Governor Thomas E. Dewey New York State Thruway—named for the last crime buster before Spitzer to catapult himself to the capital—when his cell phone rang. It was the governor, asking him to attend a press conference announcing ethics-reform legislation. Tedisco resisted; he’d just been excluded from some key meetings, and feared he’d merely be a prop. (Spitzer recalls it was Tedisco, dissatisfied with his treatment by the governor, who initiated the discussion.) That was when he got what’s now known around Albany as the “Full Spitzer,” or at least the electronic version, minus the bulging veins and spluttering that eyewitnesses get to see.
Spitzer’s voice suddenly changed, Tedisco recalls: it became louder, shriller, more guttural, more menacing. In three weeks he’d done more for New York State than any governor in history, Spitzer screamed. He was having enough trouble with the other goddamned legislative leaders, he went on; Tedisco would do what he was told—or he’d be crushed. As if the point weren’t sufficiently clear, Spitzer put it another way, courtesy of James Taylor. “Listen,” he shrieked, “I’m a fucking steamroller, and I’ll roll over you and anybody else.”
“I was thinking to myself, My God, is this really the governor?” Tedisco recalls. “To tell you the truth, I almost drove off the thruway It’s almost like an addiction he has to be confrontational,” Tedisco goes on. “The only way to help him is to buy a Dale Carnegie course for better communication skills, or 10 counseling lessons on temper control.” And it was all such a pity, given the high expectations for the man. “He had everything going for him,” Tedisco says. “He’s the one guy who could have turned this whole thing around.”
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Eliot Spitzer's Real Agenda (Real Clear Politics) - New York Attorney General Eliot Spitzer appeared on Comedy Central late last year, admitting to host Stephen Colbert that as a kid he was the "enforcer" on the soccer team, the guy who "took people out." "You play hard, you play rough, and hopefully you don't get caught," he said. The AG was trying for a laugh, but it may have been one of the more revealing insights into his career.
Mr. Spitzer has certainly played hard and rough in his time as New York's top law enforcer, and for the most part he hasn't got caught. More telling is his reaction when he is called out, as is happening more often now that the business community has started to challenge his authority. Mr. Spitzer, now running for the governor's mansion, has responded to a growing list of accusations of abuse by denying, dissembling and developing convenient cases of amnesia.
A recent example has to do with just how he came to sue former New York Stock Exchange chief Dick Grasso over his $140 million pay package. In February, Mr. Spitzer appeared on CNBC's "Mad Money," and told his audience: "I had a duty to bring it when John Reed, who was then the CEO/chairman of the board of the NYSE . . . walked into my office and gave me the Webb report [a NYSE investigation into Mr. Grasso's compensation] and said 'Eliot, our board doesn't want to handle this, you have to.' "
That's certainly a convenient explanation of events, especially now that Mr. Grasso's legal team is digging into information that it hopes will show Mr. Spitzer brought the case solely to further his political career. Inconveniently for the AG, Mr. Reed has a different recollection. In a recent deposition, he was asked if Mr. Spitzer's description on "Mad Money" was "true." "No. No. It's--I don't want to get into truth or not-truth--it is not a good description of what happened."
Mr. Reed went on to say that it was he who'd received a call from Mr. Spitzer saying he'd be "happy" to receive the Webb report. Granted, this is one man's word against another, and the litigation has become so ugly that both sides have an interest in denying responsibility--though it's also worth noting that at least one was speaking under oath.
Or consider when H&R Block CEO Mark Ernst wrote an op-ed in March in these pages defending his company against Mr. Spitzer's lawsuit over Block's retirement savings plans. The suit was designed to generate headlines, coming at the height of tax season, but the facts in the op-ed also suggested it was vastly inflated. While Mr. Spitzer is suing for $250 million, Mr. Ernst noted that the AG had earlier offered to settle for less than $30 million.
Later that very day, the AG told Reuters that Mr. Ernst's claims of settlement demands were "flat-out false." Yet H&R Block had already released a letter that its chief legal officer had sent to Mr. Spitzer weeks before the lawsuit was even announced, which made specific reference to Mr. Spitzer's settlement demands.
And then there's the AIG case, in which a Journal news reporter last year revealed that Mr. Spitzer had threatened to indict the giant insurer (a death sentence) unless the board fired its longtime CEO, Hank Greenberg. Mr. Spitzer has increasingly come up for criticism for that threat, smacking as it does of a complete lack of due process. Surprise! In March a Business Week story reported that "Spitzer's deputy, Michele Hirshman, denies that such a threat was ever made."
On a personal level, the AG has also struggled to explain away his penchant to threaten people in private. Former Goldman Sachs Chairman John Whitehead wrote on this page in December that after he'd published an op-ed criticizing Mr. Spitzer, the AG had called him to say: "Mr. Whitehead, it's now a war between us and you've fired the first shot. I will be coming after you. You will pay the price. This is only the beginning and you will pay dearly for what you have done."
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Wall Street's Top Cop (Time): Now that headline writers refer to eliot spitzer with comic-book-hero honorifics like "the Enforcer" or "Sheriff of Wall Street," it's worth remembering that when the New York State attorney general began his breakthrough investigation of Merrill Lynch in 2001, he wasn't sure what he was doing. A general suspicion about the veracity of investment bankers' advisories had prompted Spitzer to launch a bit of a fishing expedition into Merrill's records. It wasn't turning up much, however, until early 2002, when Eric Dinallo, Spitzer's top aide on the project, came into his office and showed him a blue binder full of e-mail he had compiled that suggested Merrill's analysts had downgraded an Internet company, GoTo.com because it hadn't given Merrill its investment-banking business. Spitzer scanned the pages and realized that, with this e-mail, Dinallo was hitting pay dirt. "Get them all," he said.
Wall Street would never be the same. Spitzer opened an investigation that in just a few months began fundamentally reshaping America's financial markets. Analysts, Spitzer would show, were doctoring their reports--which the public relies on for stock information--to win business for their banks' investment arms or to downgrade companies that didn't play ball. Insiders knew the scam; folks in the heartland had no idea. Spitzer's aggressive pursuit of Merrill Lynch and, subsequently, a dozen other Wall Street firms turned the tables. The new ethics he championed are touching in their simplicity: analysts' ratings should reflect what they actually believe. There has not been such an affirmation of what's right since Moses and the Ten Commandments. "The system was rotten, and no one seemed interested in fixing it," says Spitzer. "So we moved in."
For many Americans, 2002 will go down in history as the year corporations failed them. Story after incredible story of greed and wrongdoing has created an array of new bogeymen: Tyco's Dennis Kozlowski (31 felony counts), Enron's Andrew Fastow (indicted for wire fraud, money laundering and conspiracy), ImClone's Sam Waksal (insider trading). Politicians have huffed and chuffed about how to fix the system, but legislation proposed to date is likely to lack teeth. The Bush Administration responded late to the public's sense of outrage, then seemed to lose focus. In the end, the only man who appeared to be serious about cleaning up the rot was Spitzer, 43, a relatively unknown state official armed with the law, a streak of fearlessness and boxes full of incriminating e-mail.
Spitzer has spent a career pushing the law as a tool for social change. A passionate and partisan Democrat, he has brought cases against a long line of tough adversaries--organized crime, gun manufacturers, air polluters, Korean grocers who don't pay minimum wage. His efforts have not always succeeded. Yet he has consistently used laws in novel ways to address wrongs that were in plain view but seemed intractable to others. And, as was the case with Merrill, his endeavors have been about pursuing a path of justice even before the precise nature of a case is clear. "He's the real deal," says Alan Dershowitz, a Harvard Law School professor who hired Spitzer, in his second year at the school, as a research assistant in the 1980s to help on the Claus von Bulow defense. "He has a creative and innovative mind, and he always wants to do what's right."
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