Lots Of Evidence, No Verdict


The Rise of Eliot Spitzer

By Brooke A. Masters

Times Books -- 353pp -- $26

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Editor's Review

Three Stars
Star Rating

The Good A well-reported look at New York AG Eliot Spitzer's controversial career.

The Bad Evenhanded to a fault, as the author fails to offer her own critique of Spitzer.

The Bottom Line Worthwhile for anyone seeking a full and balanced account.

In 2003, Stephen M. Cutler, then head of the U.S. Securities & Exchange Commission's Enforcement Div., offered an impromptu roast of New York Attorney General Eliot Spitzer at a function they both attended. Cutler quoted from an e-mail purportedly sent by Spitzer to heaven. "Dear God," it began, "It's my understanding that you are everywhere, including, apparently, the State of New York. As I read the Stamp Act of 1785, you are subject to regulation and taxation by the state of New York."

The quip, recounted in Spoiling for a Fight: The Rise of Eliot Spitzer by The Washington Post financial-markets reporter Brooke A. Masters, pokes fun at Spitzer's extraordinarily broad sense of his power as well as the sometimes obscure foundations on which he bases it.

There are many, including the targets of Spitzer prosecutions as well as fellow law enforcers, who have not been amused by the scope or style of his actions. While admirers consider him a populist crusader who stepped into a regulatory vacuum to uphold the rights of consumers and investors, critics cast him as an overzealous and self-aggrandizing bully who has usurped federal authority, trampled the rights of defendants, and pursued a personal agenda that is at odds with sound public policy.

Which view is more accurate? The question has gained urgency as Spitzer pursues the governorship of New York and may even harbor ambitions to higher office. Masters' book is a well-reported compendium of the high-profile probes that catapulted Spitzer onto the national stage, and it contains substantial input from allies and adversaries alike. Anyone seeking a balanced and full account of his tenure as AG will find it a worthwhile read. But those wanting help in forming an opinion of Spitzer will come away disappointed. The book's very evenhandedness is a problem because it allows readers of varying predilections to find support for their views. Masters also fails to draw her own conclusions about her subject, an unfortunate abdication of authorial prerogative.

Conservatives may be horrified to learn that Spitzerism is built in part on one of the cornerstones of their political philosophy: states' rights. "There has been this tremendous redistribution of legal power away from Washington...back to the states," Masters quotes Spitzer as telling a national meeting of the Federalist Society in 1999. "Attorneys general across the country can -- not only can, but must -- step forward into a void to ensure that the rule of law is enforced."

Spitzer eagerly charged into that void, filing cases and forging settlements in matters involving pollution by Midwest utilities, tainted research by Wall Street analysts, improper mutual fund trading, and rigged bidding in insurance. His targets have included Merrill Lynch (MER ), Citigroup (C ), and American International Group (AIG ), and he has tangled with the likes of former AIG Chairman Maurice R. "Hank" Greenberg and former New York Stock Exchange head Richard A. Grasso. For sweeping probes of the financial-services sector, the AG made aggressive use of New York's little-known 1921 Martin Act, which provides broad power to investigate and penalize financial fraud.

To his fans, Spitzer reformed corrupt institutions and industries that were being neglected by other regulators. Yet his frequent use of the media and such high-pressure tactics as threatening a company with criminal charges and forcing out top executives have led Spitzer's foes to tag him as a prosecutor run amok. Even allies have often found his manner needlessly fractious and acerbic. At one point, Spitzer said the SEC was so ineffective that he "wouldn't let them handle a house closing." Later he told Masters that "it was probably not the smartest thing to say." But, he added, revealingly, "it was fun."

His aggressive initiatives led to a rising chorus of criticism from business and the defense bar. "In the years right after the collapse of the 1990s technology bubble and the implosion of Enron and WorldCom," Masters writes, "Spitzer's penchant for revealing bad behavior and then demanding industry-wide change had won almost universal applause." But, she continues, "as the stock market began to recover and Spitzer's probes hit a wider range of targets, concern was growing" about his methods and his objectives.

Masters is largely content to leave it at that, serving up criticism made by others, along with rebuttals offered by Spitzer or his defenders, rather than offering her own critique. The result is a book that is highly informative but unlikely to change many minds.

By Michael Orey

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