Mr. Spitzer Senior on son, Eliot - Harvard Law Student, anti-business crusader, Attorney General of New York, Governor of New York, FAP (Future American President) and err, Client Nine.
It is somewhat ironic that his downfall will be caused by something as trivial as visiting call girls (though obviously not trivial to poor Mrs. Spitzer) after the carnage he has caused to American business.
A fascinating examination of Spitzer's record can be found here. It's a long piece but well worth the read.
"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 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 this purpose is New York's 1921 Martin Act. 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 at Spitzer has employed for these purposes is New York's 1921 Martin Act."
By using this intrusive Act, Spitzer has been able to go after and beat the Wall Street Research industry (targetting Merrill in particular), the Insurance industry (targetting Marsh) and finally, the Mutual Fund industry. On the back of these mighty scalps and his 'champion of the people' approach, he was voted Governor of New York in January 2007.
This is how he and his team work,
1. 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.
2. 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.
3. 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.
4. 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.
5. Play the Good Cop. Offer a lenient penalty in exchange for the right to dictate corporate policy.
6. 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.
7. 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.
A wonderful conclusion to finish ;
"Spitzer's master premise is Jacobinism, the notion that the liberty of human beings must be curbed by government virtue-crats acting in the name of morality. Despite all we have learned from public-choice theory, Spitzer truly believes that power-seekers like himself will create more ethical arrangements than will people who are acting in their own self-interest and who are curbed only by laws against force and fraud. As he asserted last year, since market capitalism is not "perfection itself," government must "put the brakes" on free markets, in order to "maintain a just and equitable society." The historical record of those Robespierres who begin by complaining that the free actions of human beings are not perfect, and who go on to "perfect" them through the coercive instruments of government, is not an encouraging one."