Eliot Spitzer

Eliot Spitzer (born June 10, 1959) is the Attorney General for the State of New York.

Biography

Spitzer was born and raised in Riverdale, the Bronx, New York by observant Austrian Jewish parents (although he is reportedly secular). He is a graduate of Horace Mann School. He attended Princeton University and was elected chairman of the undergraduate student government, graduating in 1981. He then went to Harvard Law School, where he joined the Harvard Law Review and became an editor. At Harvard Law, he met and married Silda Wall. They have three daughters.

After law school, Spitzer clerked for Judge Robert W. Sweet in Manhattan, then joined the law firm of Paul, Weiss, Rifkind, Wharton & Garrison. He stayed there for less than two years before leaving to join the Manhattan district attorney's office.

Spitzer joined the staff of Manhattan District Attorney Robert M. Morgenthau, where he spent six years pursuing organized crime. His biggest case came in 1992, when Spitzer led the investigation that ended the Gambino organized crime family's control of Manhattan's trucking and garment industry.

Spitzer left public service in 1992 to join the law firm of Skadden, Arps, Slate, Meagher & Flom, for a short time. He quit in 1994 to run for the office of New York State Attorney General.

Young and not well known, Spitzer finished fourth in the four-person Democratic primary. He ran again in 1998, winning the Democratic primary and then narrowly defeating the Republican incumbent, Dennis Vacco. Spitzer was criticized for circumventing campaign finance laws, by borrowing $9 million from his father for these two elections.

Traditionally, state attorneys general have pursued consumer rights cases. Often, this focuses on fraud that is local and unique, avoiding areas in which the federal government maintains oversight. Spitzer has gone after fraud that is nationwide and pervasive, stepping in where he saw federal actions lacking and drawing as much fire as praise. Among his most famous efforts:

• Spitzer sued out-of-state power plants to reduce acid rain and smog in New York. Since these were out of his jurisdiction, he filed under the federal Clean Air Act.

• When Spitzer saw a lack of enforcement by the Securities and Exchange Commission over Wall Street, he went after Merrill Lynch for providing corrupt financial advice. This led to a settlement that has greatly reduced ties between research and investment banking.

• Mutual fund companies allowed select clients to file late trades costing smaller clients money. Spitzer and his staff's proof of this in court led to hundreds of millions in fines, and considerable market reform with an idea to reducing the recurrence of this practice, which was benfitting large, often institutional and corptate investors, to the detriment of smaller ones, usually individuals.

• Music publishers were holding back millions of dollars in royalties from artists, because they were unable to find them. Spitzer forced the publishers to locate and compensate those artists.

• Spitzer's office is investigating contingent commissions in the commercial insurance business. These are fees paid based on the volume and profitability of insurance business generated by producers. They provide an incentive for insurance brokers to recommend more costly insurance to their clients, presenting a conflict of interest. While many large brokerages such as Marsh & McLennan Companies (against whom Spitzer filed his original suit), Aon and Willis announced plans to stop the practice of contingent commissions, many argued that the practice was not to blame for the rigged bids uncovered by Spitzer. Indeed, the practice accounted for about only five to seven percent of total revenues for brokers and did address a traditional misalignment of interests in insurance between the carrier and the producer. Under a traditional flat commission structure the latter has less incentive to submit risks with an eye for long-term loss potential in mind. So-called finite insurance products, that may more closely resemble a loan than insurance, were also investigated, even if there was "transferrence of risk" involved.

• Subpoenas have been served on music industry giants in an investigation into "payola", the illegal compensation of radio stations for playing certain songs.

Criticism of Spitzer

Critics of Sptizer claim that his methods are to bring a lawsuit against major companies with the intent to drive down the firm's share price to force it to seek a settlement. Conservatives and business leaders have criticized Spitzer for his aggressive tactics and his unwillingness to take his financial-services industry cases to court, while liberals have hailed his take-no-prisoners approach as a runaround of corporate-captured federal agencies, courts, and Congress.

Political aspirations

On December 7, 2004, Spitzer announced his intention to run for Governor of New York in the 2006 elections. Other prominent Democrats who had been considered possible candidates (Charles Schumer and Andrew Cuomo) have decided not to run, leaving Spitzer as the overwhelming favorite to be the Democratic nominee. The incumbent Republican Governor, George Pataki, has not announced whether he will seek a fourth term. Recent polls [1] show Spitzer leading the incumbent governor by a margin of 15-20 %.

See also