Spitzer's Shame Deficit

Disgraced ex-New York governor Eliot Spitzer's certainly made his fair share of mistakes in life. Yet I only seem to recall him apologizing for one. The others he'll never apologize for, seeing as he views them as his greatest accomplishments (namely, turning New York's attorney general's office into the official micro-manager of the global financial industry -- never mind the billions in market capitalization destroyed as a result).

Writing today in Salon.com, the recently fired CNN host is now calling on Attorney General Holder to take out Rupert Murdoch:

The Murdoch empire is falling apart—criminal behavior and disregard for basic ethics having permeated its highest ranks. News Corp. executives' claims of a full and thorough investigation and that there were only a few bad apples have been exposed as feeble and false. The pseudo-investigations conducted by Scotland Yard are likewise proving to be corrupt and unreliable. Meanwhile, Prime Minister David Cameron's government is running for cover, but it cannot escape the untoward relationship that it had with Murdoch.

So how does all this concern Americans? First, it is hard to believe that the misbehavior in Murdoch's media empire stopped at the water's edge. Given the frequency with which he shuttled his senior executives and editors across the various oceans—Pacific as well as Atlantic—it is unlikely that the shoddy ethics were limited to Great Britain.

Much more importantly, the facts already pretty well established in Britain indicate violations of American law, in particular a law called the Foreign Corrupt Practices Act. The Justice Department has been going out of its way to undertake FCPA prosecutions and investigations in recent years, and the News Corp. case presents a pretty simple test for Attorney General Eric Holder: If the department fails to open an immediate investigation into News Corp.'s violations of the FCPA, there will have been a major breach of enforcement at Justice. Having failed to pursue Wall Street with any apparent vigor, this is an opportunity for the Justice Department to show it can flex its muscles at the right moment.

Are you man enough, Eric? Spitzer may as well call him a pussy, punch him in the face, and launch the investigation himself. That is his style, after all.

Only Spitzer could suggest an attorney general engage in blatant prosecutorial overreach while feigning devotion to the cause of justice. As everyone in New York is well aware, The Post -- one of Rupert Murdoch's prized holdings -- savages Spitzer with regularity and evident delight. Smelling blood in the water, Spitzer wants revenge. Using the Foreign Corrupt Practices Act in a way so utterly unrelated to its original purpose recalls Spitzer's serial abuse of New York's Martin Act. Many years ago, AIG's founder and then-CEO Hank Greenberg audaciously spoke out against Spitzer's politicization of NY's AG office. Spitzer responded by using his beloved Martin Act to force AIG to depose its leader, thereby initiating the company's lengthy, expensive, and widely destructive downfall. The re-insurance industry may have been destroyed in the process, but at least Eliot got his guy.

Speaking of serial abuse, if Salon's going to permit Spitzer to publish on its site, the least it can do is impose a quota on the word "should" -- perhaps one of the most obnoxious words in the English language. Example:

If DoJ does investigate and if a court were to find News Corp. liable, the penalties should extend beyond the traditional monetary fine. News Corp. should also have its FCC licenses revoked. Licensure and relicensure by the FCC require that the licensee abide by the law and serve the public interest. News Corp. appears to have blatantly violated this basic standard. Its licenses should be pulled.

There are many things Eric Holder SHOULD do. Listening to Eliot Spitzer is not one of them.

What, Were You Expecting Me To Gloat?

The FunkyPundit's got too much class for that.

Gullible Is Written on the Executive Chamber Ceiling

Governor Spitzer falls victim to a hoax.

(via the Daily Politics)

Spitzer vs. the Little Guy

In 2005, The New York Times ran an in-depth series on Medicaid fraud in New York. By the paper's estimate, New York was annually losing upward of $18 billion on fraud, waste, and abuse. This put attention on then-Attorney General Eliot Spitzer, whose office was responsible for overseeing the system. His Democratic opponent for governor, Thomas Suozzi, accused the AG of neglecting state interests, focusing too much on high-profile cases.

Spitzer said Medicaid was receiving his investigators' attention, announcing as an example litigation against a Park Slope dentist. The suit alleged that Leonard Morse had bilked more than $1 million from New York. But as The Post reports today:

The charges collapsed at trial after reams of records were ruled inadmissible.

In the end, prosecutors asked Justice John Walsh to consider charges that Morse stole just $3,000. The judge found the dentist not guilty on that charge.

But today, Morse's patients are long gone -- scared off, he says, by the barrage of press releases calling their dentist a thief.

Claiming to having lost his client base, Morse is now suing Spitzer for $75 million.

"I think I want beyond money," said Morse. "I want justice. I want my good name back. I want all those thousands of patients back who I treated for 30 years. I want all my friends and neighbors and relatives to see that I didn't do anything. I became a political pawn."

Spitzer's suit was curiously timed in that its evidence was an audit performed in 2002. Last year I wrote about another instance where AG investigators uncovered small-time villains at the perfect moment; three small-time gas station were sued for alleged price gouging -- just as soaring prices filled headlines and airwaves. Because the piece is no longer available online, I'm reprinting it below:

SPITZER'S TWISTED GAS CRUSADE -- June 5, 2006

WHAT does Eliot Spitzer have against small New York businesses?

Asking that question are three gas station operators whom the attorney general is suing for "price gouging" in the aftermath of Hurricane Katrina.

In the midst of the late '70s oil panic, the Legislature made it a crime to "sell or offer to sell any [vital goods and services] for an amount which represents an unconscionably excessive price." When gasoline prices spiked in Katrina's wake, Spitzer invoked the statute against stations across the state.

Last September, the AG's office subpoenaed sales information from dozens of gas stations across the state, subsequently offering settlements to those it determined had gouged. Most chose to pay a fine rather than fight. But three refused; Spitzer is now pursuing civil cases against all three.

"[Spitzer's] ruined my reputation in [Oswego County] forever," fumes Joe Wiedenbeck Jr., who owned the Penn-Can Truck Stop Mobil in Center Square (Oswego County) at the time of the alleged gouging (he's since sold his business and retired to Florida). "We were in business for 31 years; we donated to every cause in the area.

"Why is he coming after me?" asks Danny Cianciulli, owner and manager of My Service Center in New Rochelle -- who says that his station lost money in the post-Katrina weeks, and on the year. In fact, he put up $50,000 of his savings just to keep the station afloat.

"Price gouging?" asks Cianciulli. "I haven't taken a vacation since 1985. I work from 7 a.m. until 7 p.m., six days a week. . . . It's my obligation to sell as low as I can. When gas prices go up, I lose money. If people think they're being mistreated, they go elsewhere."

Joe Alonzo, a partner at Wever Petroleum, which runs the Schaghticoke Mobil station in Rensselaer County, points out that at the time referenced in Spitzer's suit, he was charging 10 cents a gallon less than the nearest other station.

Cianculli says he sets his price by maintaining a 10-cent margin over whatever Exxon currently charges him for gas.

Wiedenbeck says he always set his price by adding a cent to whatever Wal-Mart and Fast Track were charging. After Katrina, "the supplier was changing his prices two to three times a day," he explains. "You have to be able to afford the next shipment of gasoline, because you have to pay for it before you receive it."

Spitzer says the stations did wrong by raising their prices on gasoline that they'd already bought at a lower price. "If they had gas in the ground, that they paid a specific price for, their costs did not go up, nor is it an acceptable excuse to raise their price," argues Paul Larrabee, a spokesman for the attorney general. Adjusting prices to changing costs, says Larrabe, "is not a defense under the [price gouging] statute."

But that's how small service stations do business, the defendants argue.

"We would have been out of gas if we sold by prices set in the past," said Adam Peska, an attorney for My Service Station. "Besides, whatever [short-term] profits he made were immediately eaten up by the next shipments."

Jim Calvin, president of the New York Association of Convenience Stores, an industry group, says, "There's a longstanding established practice of pricing motor fuel at replacement cost."

He compares it to real estate: If I bought a house four years ago for $100,000, he asks, and I sell it for $100,000 when prices have doubled, "how would I afford my next house in the new real-estate market?"

But the defense attorneys have a better reason for confidence: The statute's simply too unclear. It fails to define the "gross disparity" in prices that it says constitutes gouging. The standard is so vague that someone who wants to obey the law can't know how to obey.

Even Spitzer implicitly concedes this point: He has asked the Legislature to amend the price-gouging law so that prosecution would be more practical.

So why did he bring up these cases in the first place? He insists he's just fighting for the public good. Indeed, he brings the issue up on the campaign trail -- bragging that he's the nation's toughest state attorney general in fighting gas-price-gouging. (In fact, a new Federal Trade Commission study shows that Georgia's AG beat him, having settled with 64 gas stations, to Spitzer's 18 total.)

The defendants see politics in the timing. All three refused to pay the fine demanded in Spitzer's initial letter, instead submitting the requested documentation on their post-Katrina pricing. When they heard nothing more, they assumed Spitzer had decided to drop a weak case.

Then gas prices hit the news again in April -- and so did another Spitzer press offensive, announcing the three prosecutions. In fact, the defendants first heard of the suits from the media.

Spitzer's people managed to alert the press in time for the papers of Friday, April 21 -- but failed to serve any of the paperwork on the operators until the next Monday or Tuesday. ("We attempted to serve these stations prior to the public release of this information," insists a Spitzer spokesman.)

If politics is Spitzer's motive here, he's safe even if the cases eventually get thrown out of court: The proceedings likely won't wrap up before Election Day.

Meanwhile, he can keep on alleging that these small-time gas operators that struggle to stay in business have intentionally ripped off consumers -- a telling presumption for their aspiring governor.

UPDATE: The Morse complaint is here.

Spitzer News Wrap

• Despite calling only months ago for a "new humility" in politics, The New York Times says Spitzer has gone "on the attack once again."


• Officials at the Board of Elections worry Spitzer's drivers' licenses-for-illegals plan could lead to widespread voter fraud, The New York Post reports.

• New York Democrats are worried Spitzer could harm other Democrats at the ballot box -- even threatening the presidential chances of Sen. Hillary Clinton, The Post reports.
  

• "Gov. Spitzer touted support yesterday from terror expert Richard Clarke for his plan to issue illegal immigrants driver's licenses -- but critics promptly revealed the former federal official had raised concerns about the idea just months ago," The Post reports.

• "Critics of Gov. Spitzer's plan to let illegal aliens get drivers' licenses tore into the administration yesterday for backing off a policy they say would have made it tougher for illegals to unlawfully register to vote,"The Post reports:

  Social Security numbers cannot be required to get motor-voter registration forms from the Department of Motor Vehicles, the administration now says, marking a policy shift reported yesterday by The Post.

• The Spitzer administration, which has pledged "full cooperation" with investigations into the dirty-tricks scandal, has "officially notified the Senate Investigations Committee that [it] will fight subpoenas issued to Spitzer's top aides seeking documents over an alleged plot to smear Senate Republican Leader Joseph Bruno," The Press & Sun Bulletin reports.

• "Illegal immigrants in New York who don't drive but nevertheless want official state identification will be eligible to receive nondriver IDs under Governor Spitzer's new policy," The New York Sun reports:

  The contentious debate over Mr. Spitzer's immigration policy has focused on his recent decision to grant driver's licenses to state residents without regard to their legal status.
  
  Republican lawmakers hostile to the governor's policy are now trying to draw attention to the fact that undocumented New Yorkers, many of whom don't own a car or drive to work, can apply for nondriver photo identification cards, which serve the same identification purposes as driver's licenses. Lawmakers argue that granting nondriver IDs to illegal immigrants undercuts one of the main arguments Mr. Spitzer has articulated in defense of the policy.

• The Sun also reports that "city immigrants are wary of governor's plan on IDs."

This Probably Won't Go Anywhere ...

But it says quite a lot that after only 10 months in office, New York assemblymen are talking about orchestrating a recall effort to oust Governor Spitzer from office.

In other Spitzer news ...

-- A new Siena poll finds that fully 22 percent of New Yorkers support Spitzer's plan to furnish illegal immigrants with drivers' licenses.

-- "Gov. Spitzer has lined up a Manhattan lawyer - at taxpayer expense - to help him quash subpoenas sent to his office by a GOP-controlled panel investigating the Troopergate scandal," The Daily News reports.

-- After Democratic Assembly Minority Leader confessed to being in on a plot with Spitzer to sic the IRS on Republican Senate Majority Speaker Joe Bruno, Spitzer "angrily called Smith and 'questioned his ability to remain as the minority leader,'" Fred Dicker reports today in The Post.

-- Dicker also reports today that "even Democrats fear 'dirty tricks' from Spitzer.

-- Spitzer's most powerful political ally, Assembly Leader Shelly Silver, is asking the governor to call off the attack dogs after it was reported last week he was behind in the IRS plot against Bruno.

-- The Post editorializes today that Spitzer's plan to cure upstate New York's economic maladies will only make things worse.

-- And, finally, The New York Sun's Albany reporter, Jacob Gersham, imagines himself inside the mind of our beleaguered governor:

I was once Wall Street's top cop, the "enforcer," the "crusader of the year." Now, I'm taking orders from Sheldon Silver. My most powerful political ally is an obscure comptroller. And I'm insulted on a daily basis by a discredited, retired boxer named Joe Bruno.

Spitzer: I Don't Need the Legislature

Via Newsday:

ALBANY -- Frustrated by a legislative session that left many key issues hanging, Gov. Eliot Spitzer said Tuesday that he could govern without lawmakers.

Downplaying the importance of passing laws, the freshman governor said he favored regulatory changes and executive orders to run the state -- neither of which require prior approval by the legislature.

Albany Reform Update

"Gov. Spitzer may replace MTA Chairman Peter Kalikow with another real estate mogul -- a financial backer of Democrats who once headed the nonprofit Citizens Budget Commission," The Daily News reports.

Dale Hemmerdinger is a leading candidate for the position, sources said. [...]

Hemmerdinger is the president of Atco Properties and Management, which owns and manages more than 2 million square feet of residential, commercial, industrial and retail space.

While he was chairman of the Citizens Budget Commission the group made recommendations on how to balance the MTA's budget, including higher fares for riders and more tolls and fees for motorists.

Hemmerdinger's wife has given $40,000 to Spitzer campaign committees since 2000, and the governor's wife hosted a Democratic Party fund-raiser at the Hemmerdingers' Central Park South penthouse in May.

An editorial in yesterday's New York Post weighs in on other Spitzer reforms underway:

Does Gov. Spitzer want to clean up Albany's well-earned reputation for political sleaze -- or just mock efforts to do that, including his own?

New Yorkers may find out later this year -- when the powers-that-be move to overhaul thoroughbred-horse racing in New York, perhaps selecting an operator for a slot-machine megaplex at Aqueduct and expanded gambling operations at Belmont.

The clear front-runner for the mechanical-gambling franchise appeared last week to be a company called Excelsior Racing Associates -- whose main investors include one Richard Fields -- a, let's say, generous donor to the gov.

Fields contributed some $200,000 to Spitzer's 2006 campaign through his various limited-liability companies -- the same kind of donations the gov says he wants to end through campaign-finance reforms, but which he continues to accept.

According to a report in yesterday's Albany Times Union, NYRA's directors have already agreed to a Spitzer plan where Excelsior "would get the rights to operate a video lottery terminal casino now earmarked for Belmont Park."

The Post editorial also touched on Spitzer's campaign-finance reform push:

Consider: The gov demands the elimination of LLC donations, which are exempt from the $5,000 donation cap on other corporations - and from which he personally benefited during his campaign (see above).

Meanwhile, he had his wife hosted a cocktail party at which the state Democratic Party eagerly accepted LLC donations of up to $94,200.

Earlier, Spitzer solicited re-election campaign funds from "bundlers" - megabucks put together by individual fund-raisers - with goals of up to $1 million.

In return, the bundlers get private access to the governor, including quarterly meetings with Spitzer and periodic conference-call updates from him and his staff.

The New York Sun's Jacob Gershman has more on this here.

Finally

DemocraticGovernors.org: "NY -Gov. Eliot Spitzer has announced an executive order establishing an ongoing task force of high level state officials to advance programs and policies to benefit children."

Spitzer Endorses Religious Freedom

"Governor Eliot Spitzer introduced legislation Monday that would help protect religious freedom in New York," the Poughkeepsie Journal reports.

The proposed Religious Freedom Restoration Act, modeled after federal legislation, would ensure that state and local laws accommodate important religious practices.

Under the proposed act, all statutes, regulations or other government actions that “substantially burden” religious exercise must be justified by a compelling government interest.

The standard set by his proposed bill was applied nationwide until 1990, noted Spitzer in a press release. At that time the Supreme Court issued a decision indicating that a lower standard should apply.

Since then, federal government and other states such as Conn., R.I., and Fla. adopted statutes reinstating the higher standard in an effort to protect religious liberty.

One wonders whether protected religious practices will include distributing pamphlets at abortion clinics.

Spitzer Nominates McCall to SUNY board

Story here. Let's just hope he's not heading up SUNY's compensation committee.

Don't You Know Who I Am?

All anyone needs to know about Gov. Eliot Spitzer ... in a single anecdote:

Sanjaya Malakar, the shy, slender, 17-year-old "American Idol" reject, was at his table when a tall, middle-aged man stopped by to ask for an autograph. The boy's hosts, from People magazine, tried to shoo him away.

"We are trying to let him eat," they explained.

The man protested: "But I'm the governor of New York."

And so Eliot Spitzer got his autograph.

He's just like us -- only better.

Spitzer's "Loopholes"

New York's Business Council calls out Governor Eliot Spitzer and The New York Times for their continued use of the phrase "closing loopholes" when they're actually describing tax hikes:

The New York Times continues its policy of referring to Governor Spitzer's business-tax proposals as efforts to close "loopholes," thus buying into one side's arguments in the debate over tax policy. Our Webster's defines "loophole" as: "an ambiguity or omission in the text through which the intent of a statute, contract, or obligation may be evaded." Most of the proposed tax changes in the Executive Budget affect provisions that previous governors and legislators wrote purposefully into the law, and that employers in New York are using exactly as intended. Senate Majority Leader Bruno, Assembly Minority Leader Tedisco, The Business Council and others have pointed these things out repeatedly. Senator Bruno even quoted from a Business Council brochure on the subject during Tuesday's leaders meeting: "These are no mere 'loophole' closings.'" The Times apparently hasn't noticed -- or maybe its reporters just disagree.

Earlier: Read His Lips
Related:
Albany Formula of 3 Men in a Room Expands to 6, With One at Odds with the Rest [NYT]
Bottle Bill Revenue a Bone of Contention [Middletown Times-Herald Record]

Read His Lips

"Oh, there's one thing we're not going to raise: your taxes. You can take that to the bank." -- Eliot Spitzer, campaign commercial, Fall 2006

"New Bottle Bill Taxes Industry in Quest for Cash" -- headline, Syracuse Post-Standard, March 20, 2007

Classic Spitzer!

After a period of relative calm, The Post's State Editor Fred Dicker reports today that the storm clouds have returned:

ALBANY - Gov. Spitzer viciously berated a state lawmaker, saying, "I am a f - - - ing steamroller" who will crush the assemblyman and anyone else who stands in his way, The Post has learned.

Sources told The Post yesterday that an enraged Spitzer bitterly denounced Assembly Minority Leader James Tedisco last week after the Schenectady-based Republican called to complain that he had been cut out of negotiations on a just-announced proposed new state ethics law.

"Listen, I'm a f - - - ing steamroller, and I'll roll over you and anybody else," Democrat Spitzer angrily yelled at Tedisco - who was driving in his car and speaking on a cellphone, sources familiar with the conversation said.

Spitzer then boasted about his political strength, saying, "I've done more in three weeks than any governor has done in the history of the state," the sources said.

Tedisco later said, "He [Spitzer] has a different side to him than a lot of people realize.

"I think at some point he is going to lose it," Tedisco added.

Turns out, Spitzer isn't just ill-tempered, he's unoriginal. Anyone remember James Taylor's "Steamroller," particularly the live version off his "Greatest Hits" album?

Well I'm a steamroller baby
I wanna roll all over you
Yes I'm a steamroller for your love, babe
I'd like nothing better than to roll all over you
I'm gonna inject your soul with some sweet rock & roll
And shoot you full of rythm and blues

Well I'm a cement mixer baby
A churnin' urn of burnin' funk (Yes!)
I'm a cement mixer for you baby
A churnin' urn of burnin' funk
Got down right now baby
Well I'ma demolition derby babe
A hefty hunk of steamin' junk
Mr. McD got the blues for you and me

(Solo break)

Well I'm a napalm bomb for you baby
Stone guaranteed to blow your mind
I'm a napalm bomb for you babe got to tell you one more time
To sit down, stand up, go home, back to LA
Stone guaranteed to blow your mind momma, yeah
And if I can't have your love for my own to take me home
And keep me warm there won't be nothing left behind (Oh!)
Broken heart, broken heart, oh
I just don't seem to cut loose
This here low down
No where
Half life
Freeze dried
Fat fried
Chicken chokin', mother f*cking pain
Oh, roll on over
I got those steamroller blues

Bonus trivia: Which adult contemporary star sang at Spitzer's inauguration? Answer here. (Thanks to my colleague Robert George for the reminder.)