Elliot Spitzer

Listening to the news this morning, it seems that Elliot Spitzer’s resignation is imminent as a result of his being identified as a client of a high priced escort service.

I really don’t want to gloat at his misfortune, but it’s difficult to resist. Spitzer portrayed him self as a crusading reformer, but I have always seen him as a bully. As New York Attorney General, Spitzer made his name prosecuting (some would say persecuting) white-collar criminals and Wall Street firms. Now, I have no issue whatsoever with people that have broken the law being prosecuted. But Spitzer made a practice of threatening to indict Wall Street firms with flimsy evidence or legal theories and forcing settlements. Some firms who felt confident they would win at trial, settled because the indictment itself carried the death penalty. The problem is that an indicted individual or firm is barred from trading by SEC rules. Sol Wachtler, former New York Chief Judge, once famously said that “a prosecutor could indict a ham sandwich.” That’s because a grand jury only hears the prosecutor’s case, can consider hearsay evidence, and only needs to find probable cause that a person is guilty of a crime to return an indictment.

Spitzer came to office threatening Assembly Republican leader James Tedesco and warning him that [Spitzer] “was a f**cking steamroller.” Spitzer took office and feuded with Republican State Senate leader Joe Bruno. He then used the State Police to try to investigate Bruno and drive him from office. That was the scandal that should have forced Spitzer to resign. Ironically, if Spitzer, as expected resigns this week, Bruno would rise to become Lt. Governor.

Spitzer patronizing an escort service would primarily be a personal matter, except of course that doing so is illegal. Personally, I believe prostitution should be legal. But it’s not and Spitzer is charged with enforcing the law. He is potentially facing federal charges because by “inducing” a prostitute to travel from New York to Washington D.C. (crossing state lines) he may have violated the Mann Act. Now I believe that the Mann Act was aimed primarily at pimps, not Johns. But Spitzer fits within the letter of the law. Perhaps he could beat it at trial, but of course an indictment alone could end his political career. I don’t feel like gloating anymore. But there are a number of people on Wall Street that feel Christmas has come early.