Eliot Spitzer, candidate for Governor of NY, thinks it's
time to lighten up on Wall Street.
After nearly three years of high-profile prosecutions of investment banks, mutual funds and insurance companies, Attorney General Eliot Spitzer of New York said yesterday that he is ready to cede those investigations to federal regulators.
Mr. Spitzer said he believed the era of state attorneys general crusading against misdeeds on Wall Street was ending. He said he was concerned that 50 different investigations would balkanize regulations, and added that once-lax federal agencies had become more aggressive about rooting out fraud and wrongdoing.
The shift, first reported in The Financial Times, represents a remarkable turnabout for Mr. Spitzer, who has built a reputation as a giant-killer with his investigations of Merrill Lynch, one of the country's largest brokerage firms; Marsh & McLennan, the world's largest insurance broker; and Richard A. Grasso, the former chairman of the New York Stock Exchange.
Spitzer, as a New Yorker, appreciates Wall street for its contributions to both the NY economy and the political business. So is this a way to position himself for the gubanatorial run?
His decision comes just two weeks after he declared his candidacy for governor of New York in 2006, a campaign in which he will need to raise large sums to be competitive. Traditionally, many of those donations in a governor's race come from Wall Street, but Mr. Spitzer said his move away from big-business investigations was not related to his campaign.
"This has nothing to do with that," Mr. Spitzer, a Democrat, said in an interview yesterday. "If you think of it a zero-sum game, if the feds begin to do what they need to do, the relative role of state agencies would diminish. Nothing I've said means that we wouldn't do all our cases over again. But as the pendulum swings, I think the feds have come back a bit."
But Stephen J. Minarik, chairman of the state's Republican Party, said the shift was a bald political move timed so the newly declared candidate for governor could distance himself from any criticism that Wall Street investigations had hurt the state's economy.
"I think he's trying to do an about-face," Mr. Minarik said. "It's hard. Leopards don't change spots very often."
Spitzer's one of the best and brightest of the new Democrats running for office. Yet even the best of them has to deal with political reality. Will he be criticized for accommodation? Will he be accused of political grandstanding but only when it's convenient?
Sure. in fact, it's guaranteed. The question is, which side will be doing the criticizing? In this reality-based world, any pol who runs has to make some accomodations and some compromises. That will be unacceptable to some, but perfectly reasonable to others. This is not a call to drop criticism of politicians; it's a call to recognize the time and the place for the criticism. Sometimes core values need to be defined and the criticism is justified. Sometimes to survive, the person running has to position themself where they think they need to be. And sometimes the criticism is self-defeating and needs to be withheld until after the win... and then not withheld at all.
It's not always obvious where the line is, but as with Spitzer, sometimes it's worth thinking about before that analysis is posted or that email is sent. That is, if winning elections is what we want. And that's not a matter of that dreaded word 'electablity', it's a matter of common sense, especially with folks like Spitzer with a track record. after all, the repub state party chair is right. Leopards don't change their spots very often. That's one reason Howard Dean is cut more slack than any other politician on these pages, an attitude that should be (perhaps) extended to a few more pols, especially the ones with a track record. Spitzer just might be another.