Eliot Spitzer

Why Hasn’t He Resigned Yet?

The baffling refusal of Eliot Spitzer to resign after his dealings with a high-priced prostitution ring were exposed by the New York Times has some experts worried that Spitzer might be destroying documents or other evidence of wrong-doing. On Wall Street, where Spitzer once posed as town Sheriff, fired employees or those under investigation by authorities are often escorted immediately from the office. One reason for this is to prevent them from destroying emails or other electronic paper trails.
“I’m deeply troubled. They should have the FBI there right now to prevent Spitzer from deleting his hard-drives,” one private security expert told DealBreaker. (Perhaps in a display of the still-lingering fears of Spitzer’s famous vengefulness, no one would speak on the record for this item.)
Another security expert employed by a major Wall Street firm said the situation reminded him of Watergate, when Nixon administration officials considered destroying tapes that Congress had sought.
“These guys are desperate and have nothing to lose. It’s clear he needs to go and the only reason I can think of for delaying is to cover something up,” he said.
Of course, we have no idea if these fears are well-founded. Since yesterday’s announcement, Spitzer seems to have gone into hiding.

Oh, wait. Not all of Spitzer’s targets are keeping as quiet as Grasso, Blodget and Greenberg. Last night CNBC caught up with Ken Langone, a former director of the New York Stock Exchange, near the Tribeca Grill. He wasn’t exactly reserved about his feelings for the soon-to-be former New York governor.
“I had no doubt about his lack of character and integrity,” Langone said on a taped interview that was aired on Squawk Box this morning. “It would only be a matter of time. I didn’t think he would do it this soon or the way he did. But I know for sure he went to a post office and bought $2,800 worth of money orders to send to a hooker.”
Langone told CNBC that Spitzer was a hypocrite. “The number of people that he besmirched, the number of people whose reputations were earned that he soiled is horrible,” Langone said.
Ken Langone has long been one of the most well-connected men on Wall Street. He was forced to resign from the board of the NYSE when targeted by Spitzer, who was then investigating the pay package of NYSE chief executive Dick Grasso.

Believe us. We moved heaven and earth to try to get some on-the-record comments from the likes of Henry Blodget, Dick Grasso and Hank Greenberg. These guys are staying quiet, perhaps afraid they’ll jinx the best thing that has ever happened to them.

A handful of Spitzer’s former adversaries declined to comment on the stunning turn of events, first reported on the New York Times website, or they did not return requests for comment.
“It would be totally inappropriate for me to comment,” former New York Stock Exchange C.E.O. Grasso told Portfolio.com. Spitzer sued in 2004 to have Grasso return the bulk of his nearly $140 million pay package.
Former American International Group chairman and C.E.O. Hank Greenberg, who was forced to resign under pressure from Spitzer, was similarly tight-lipped.
“Mr. Greenberg will not be saying anything about this,” his spokesperson said.
Former Wall Street analyst Blodget, whom Spitzer targeted for sending private emails that conflicted with his public stock analysis, did not return requests for comment.

Wall Street on Spitzer [Portfolio.com]

Discovering that the exclusive international ring of prostitutes known as the “Emperor’s Club” charged up to $5,500 an hour for their services, New York governor Eliot Spitzer vowed to put an end to this price gouging practice.
Four people alleged to have run the “Emperor’s Club” were charged with conspiracy to violate federal prostitution statutes, while two of them were also charged with laundering more than $1 million in illegal proceeds.
“That kind of excessive compensation is simply outrageous. Prostitution is allegedly a victimless crime,” Spitzer said in a press conference that took place only in our imaginations. “But now we see that its customers can become its victims.”
Spitzer added it was especially shameful that one of the most trusted names in prostitution had engaged in this shocking betrayal and rank greed.

“I do not believe that politics in the long run is about individuals. It is about ideas, the public good and doing what is best for the State of New York.”
Eliot Spitzer, the gangly governor of the Empire State whom federal wire-taps allegedly caught arranging a tryst with a prostitute on the eve of Valentine’s Day, took the opportunity afforded him today by the sudden attention of the national media to deliver that short lecture on civics. Other men–even that subspecies known as politicians–might have been humbled by the circumstances, and perhaps even resigned from public office. But Spitzer is not like other men, he reminded us today.
There’s a certain poetic quality to this final act of Spitzer’s. His extraordinary popularity with members of the press (now presumably extinguished) was rooted in his willingness to leak, sotto voce, allegations of misconduct in the personal lives of the subjects of his investigations. The press loved the juicy headlines. His motivation was apparently to embarrass and intimidate the subjects of his investigations so that they would be forced to comply.
We admit to enjoying the spectacle of watching a man so given to the high moralistic tone brought low by such a misdeed. As one commenter on the New York Times wrote, he’s gone from Eliot Ness to Eliot Mess. But this is not just schadenfreude. There’s a matter of serious public concern beneath the cheers and smirks of those who won’t be sorry to see Spitzer fall from the bully pulpit. What the federal wiretap has uncovered is not just a sex scandal but a dark crack running through the character of New York’s governor. It’s as if we were Basil Hallward looking for the first time at the picture of Dorian Gray.
That a man so versed in the blackmail style of prosecution would so readily open himself up to that dark art is, at the very least, extraordinary. One would think that a man who deployed his aides to whisper about a corporate executive allegedly “banging” his assistant, would be wise enough to the ways of the world to avoid putting himself in a position where he could be blackmailed. That he lacked such wisdom–or ignored it–shows a reckless disregard for the responsibilities of the high office to which the people of New York elected him.
That reckless disregard is coupled in Spitzer’s character with a steadfast self-regard. Even in his brief apology, he focused mostly on how he had violated his own standards of conduct rather than those of the public’s mores and statutes. It is as if, in the kingdom of Spitzer, there is no crime worse than violating the standards of Spitzer.
Where did this sense of self-regard come from? Spitzer is the scion of a family made wealthy by real estate investments. He went to Horace Mann High School, graduated from Princeton and Harvard Law School. Like Barack Obama, he was an editor of the Harvard Law Review. Many others have emerged from similarly privileged backgrounds without experiencing the ego inflation that fueled Spitzer’s reckless self-regard. Even now, the origins of this deformation of characters remain illegible to the public.
If Spitzer were open to the standards set by those residing beyond the bounds of his own mind, he might take a page from one of the earliest targets of his crusade against Wall Street. In 2002, Spitzer went after Merrill Lynch’s investment banking and research practices. After he described Merrill’s conduct as “a shocking betrayal of trust by one of Wall Street’s most trusted names,” Merrill Lynch stock sank, and the company lost $5 billion in market value in a few days. Reading the writing on the wall, Merrill recognized that the good of its shareholders lay in a quick settlement rather than a protracted defense.
The writing is all over the wall, Mr. Governor. If you really want to do what is best for New York State, it might be time to start reading it.

Charlie Gasparino’s new book is called King of the Club—a reference to its ostensible subject, Dick Grasso, who oversaw the triumphant comeback of New York Stock Exchange in the challenging days following the September 11th attacks but quickly found himself forced out and under fire from New York State’s Attorney General, Eliot Spitzer.
But reading the book makes it increasingly obvious that Spitzer himself could be called King of the Club for the brutal ways he treated the subjects of his investigations. Yesterday Page Six detailed one example of how Spitzer’s team attempted to pursue allegations of an extra-marital affair, presumably to embarrass Grasso or lure him into a perjury trap if he denied the allegations. But Gasparino’s book reveals that it didn’t stop there—indeed, this seems to have become standard operating procedure for Spitzer’s club.
[More on Spitzer's smear machine after the jump.]

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We were startled when we learned over the summer that Eliot Spitzer—or, perhaps, one of his hand-picked deputies—was allegedly using the state police to gather information on his political opponents and then leaking it to the press. It seemed like a story out of an Eastern European totalitarian state—something that we only expected to hear about in a Tom Stoppard play and not the pages of the Wall Street Journal or the New York Post.
But we probably shouldn’t have been startled. It’s been obvious for years right there in Spitzer’s record over the years—hidden in plain sight, as it were. It was easy to become distracted by the deeds of—and the unsourced, anonymous smears against—the folks who Spitzer targeted. But now that the fires of the turn of the century have been extinguished, the smoke is finally clearing. And the guy who was fanning those flames is looking more and more tarnished.
[More after the jump.]

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