Eliot Spitzer finding less forgiveness on Wall Street
NEW YORK — Eliot Spitzer came to a gospel concert in Brooklyn in search of what he’s wanted for five long years.
As New Yorkers waited in line and lounged in camping chairs at a park before the show one recent evening, the disgraced former governor and attorney general, his white dress shirt sleeves rolled up, gripped hands and grinned. "Welcome back!" one woman shouted. "You were a great AG!" cooed another.
Spitzer's political revival has also taken him on a repentant sinner's path to houses of worship on New York City's fringes. He has staged an improbable bid for city comptroller on subway stops in the city's working-class outer boroughs as he hopes for political redemption a half decade after a prostitution scandal forced him from office.
While polls indicate the public is willing to give Spitzer a second chance, New York's elites are not so forgiving. The toppled "Wall Street sheriff" has been touting his past assaults on the financial industry, fueling worries in executive suites and boardrooms that a Spitzer comeback may spell trouble. His foes are hoping to tap Wall Street's simmering hatred and harness its most potent weapon - money - to thwart his return.
Spitzer is "running against Wall Street and away from his scandal and his past," said Costas Panagopoulos, a political science professor at Fordham University. In the financial industry, "the scars are deep enough and real enough that they may cause problems for his candidacy."
His sins haven't kept him from making inroads at churches in New York's outer boroughs. On one Sunday morning a few weeks ago, he stopped at no fewer than four churches in Brooklyn, then finished the day with a Stevie Wonder concert in Harlem. This month, a dozen preachers endorsed him.
But even as Spitzer tries to reboot his image as a defender of the little guy, voters keep getting reminders of his scandal as governor. Kristin Davis, the "Manhattan madam" who claimed to supply Spitzer with prostitutes and is also running for comptroller, has been accused by federal authorities of illegally dealing prescription drugs. Local tabloids still refer to him as the "love gov" and a "creep."
"I'm going to ask the public to make a judgment based on the entirety of my career and my record," Spitzer told the media horde trailing him at the gospel concert. "Some parts of it I'm not proud of and that's been very clear and that's why I resigned as governor. Other parts of it, I think I stood uniquely up for the public when others did not."
During his exile as a talk-show host and commentator, Spitzer did not lose his penchant for grabbing the limelight.
Few contenders for such a low-profile office could ever land in late-night TV guest chairs on both coasts. But in just a few weeks, Spitzer has crisscrossed the country for friendly banter with Jay Leno and Bill Maher in Los Angeles, and Jimmy Fallon and Stephen Colbert in New York.
His candidacy comes at an awkward time.
Other politicians who have succumbed to carnal temptations are also asking voters for another chance: In New York City, former congressman Anthony Weiner is trying to jump-start his career, hoping voters will move past lewd photos he sent to women on Twitter. In San Diego, Mayor Bob Filner is clinging to power despite a number of women alleging he made unwanted sexual advances toward them.
As Spitzer seeks his own forgiveness, a leading women's group has backed his opponent in the Democratic primary, Scott Stringer, Manhattan's borough president. Stringer has questioned whether someone "who engaged in illegal activity" should control pension funds. "Should you, by virtue of your colossal failure as governor, get another chance?" he asked at a recent debate.
A recent Quinnipiac University poll suggested voters may not care all that much. And clearly, Spitzer would rather talk about his regulatory bona fides. His campaign ads even tout the financial sector's antipathy.
"Maybe being hated by the Wall Street firms isn't such a terrible thing," he says in one TV spot.
As city comptroller, Spitzer would be less sheriff and more mall cop compared to his previous job as attorney general. Unlike the state's top law enforcement officer, the comptroller cannot threaten quarries with prosecution or fraud lawsuits under New York's expansive Martin Act. But as the city's chief auditor and guardian of its $140 billion pension fund, he could still rattle nerves in corporate boardrooms.
Spitzer's opponents have set out to raise $1 million to keep him from meddling. A newly formed political action committee called Forward NY has received "a lot of talk and interest" in donations, particularly from those in the financial industry, said Bradley Tusk, a fundraising operative running the effort.
"The business community in New York City has no love for Eliot Spitzer, and that's saying it politely," Tusk said.
Supporters credit Spitzer with transforming the state attorney general's office into a national regulatory force that wound up securing major Wall Street reforms. He led a sprawling investigation into mutual funds that were letting major professional investors buy in after the stock market closed for the rest of the public. Spitzer's probes also led to a landmark settlement with Wall Street investment banks to end conflicts of interest between their sales operations and supposedly independent analysts.
Stringer has more than quadrupled this year's donation haul since Spitzer hurled himself into the race July 8. Stringer has raked in about $420,000 since then, according to the most recent campaign disclosures. Records show Stringer's recent top donors come from an array of industries, including a handful of financial heavyweights. Philippe Dauman, president and chief executive of media giant Viacom, also donated to Stringer.
Some Wall Street insiders note campaign finance laws - as well as any financiers' hopes of getting a slice of the pension fund's business - could limit their ability to fight Spitzer's self-financed campaign.
Spitzer, for his part, said Wall Street shouldn't fret.
"I don't think anyone should ever be worried," Spitzer said in an interview. "My record as attorney general was to shed light on structural issues that were clearly there in our capital markets, to try to remedy them, to recognize that the long-term impact of these flaws, if we didn't recognize them, was going to be some sort of significant harm, and we've suffered through that."
Through shareholder initiatives, Spitzer has said he wants to take aim at how well companies manage risk, for example. He also doesn't think company CEOs should also be chairmen.
"This is not a political activism," he said. "This is a financial and management activism, which is where I think pension funds have failed to participate adequately."
Wall Streeters are divided on what Spitzer's return could mean - if he does get another shot.
"No one cares," said NYSE floor trader Jason Weisberg of Seaport Securities. "He's a footnote. He's a punch line."
Jack Grubman, a star tech analyst who was in then-Attorney General Spitzer's crosshairs, predicted Spitzer would find a way to overstep the comptroller's authority. Grubman was barred from the securities industry in 2003 and paid a $15 million settlement after a probe by Spitzer and other regulators, though he did not admit wrongdoing.
"He's going to be a pain the butt," said Grubman, who now heads his own advisory firm. "He'll be very annoying. He's going to be equally annoying to whoever's mayor - maybe even more annoying."
By Andrew Tangel
(c)2013 Los Angeles Times
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