"There are only two ways of telling the complete truth—anonymously and posthumously."Thomas Sowell

Tuesday, December 07, 2004

Eliot Spitzer: Power Corrupts

UCLA law professor Stephen Bainbridge is nearly as critical of New York attorney general Eliot Spitzer as I am, as can be seen by typing “Spitzer” in the search box on his excellent blog, http://www.professorbainbridge.com. Steve recently uncovered the following gem about New York prosecutor Eliot Spitzer at yet another interesting blog, http://tigerhawk.blogspot.com.

There is an interesting letter to the editor from a former insurance industry executive published in the November 29 issue of Business Insurance (OK, I know I'm a geek for reading letters to the editor of Business Insurance -- it was an accident, alright?). The author, one Tom Harvey, who is identified as the former CEO of an insurance brokerage firm, thinks that Spitzer needs to pay more attention to the appearance of impropriety:

“Most of us associated with this industry are appalled by apparent bid rigging. But we view contingent commissions differently than Mr. Spitzer....

But without due process Mr. Spitzer has turned this industry on its head. There have been no court hearings, no testimony in front of appropriate agencies, yet market values of public brokers have plummeted, and thousands will likely lose their jobs. All due to the ‘appearance of impropriety.’

Speaking of ‘appearances,’ how about Mr. Spitzer's tennis pal, campaign contributor and former boss securing a 19% sweeter, all-cash deal for his company from Marsh & McLennan Cos. Inc., after Mr. Spitzer hit Marsh with a tsunami of subpoenas. Then, Mr. Spitzer's tennis buddy ends up as CEO after Mr. Spitzer says he "can't deal" with the current Marsh CEO. Later, Mr. Spitzer says it's OK for his tennis pal, now Marsh's CEO, to pay any potential fines from their contingent commissions, which Mr. Spitzer earlier alleged were ill gotten. Isn't this like the DA indicting someone for burglary and saying they can use the proceeds to cover any fines? Yeah, ‘appearances’ do matter, Eliot, and this does not look good.”

By contrast, Peter Elkind’s article about Spitzer the “crusader” was typical of the way the mainstream media argues that Spitzer’s ends justify any means:
“Why, critics ask, should the attorney general of New York State be allowed to interfere in longstanding insurance practices (or to use earlier examples, demand lower mutual fund fees, or change the structure of Wall Street research, or force drug companies to open up their clinical trials to public scrutiny)? If you define his mission traditionally, perhaps he should not. After the Marsh suit was filed, the Wall Street Journal editorial page pronounced itself troubled "about a public official unilaterally deciding that an industry's business model must change" and harrumphed that Spitzer "increasingly views himself as all three branches of government-- legislator, regulator, and judge." But as Spitzer pursues his prey, there's a rough-justice quality about what he accomplishes . . . and the businesses he targets are in no position to argue. It's indisputable that his method works.”

Such “rough justice” -- replacing the rule of law with trial by press release -- raises a vital question. How does Mr. Elkind’s rationale for Spitzer’s method differ from the infamous claim (http://www.snopes.com/history/govern/trains.htm) that Benito Mussolini’s rough justice was likewise acceptable because he made the trains run on time?

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