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National Review Online

 

Saving Spitzer

March 11, 2008

By Walter Olson

So he didn’t quit. To judge from Eliot Spitzer’s press event Monday, at which he curtly apologized for falling short on a “private matter” and then said very little else before striding offstage, America’s most self-righteous elected official might even be thinking of trying to hold onto his office as governor of New York.

Of course it’s quite possible, as cable chatter had it, that Eliot Spitzer is just thinking like the seasoned lawyer he is, by avoiding unilateral concessions. If he faces prosecution over his role in the Emperors Club VIP scandal, his willingness to resign office might be a crucial prerequisite for a deal in which he would dodge serious penalties. Why give up that chip for free, just to save all sides the misery of a further protraction of his tenure in office?

If early reports are right, it’s not the Mann Act angle (arranging for the girl to cross state lines) that’s captured the attention of federal investigators so much as the money angle. In particular, the probers are said to be looking at what are known as “structuring” charges against Spitzer, based on the possibility that he subdivided or mislabeled cash transfers so as to evade bank reporting requirements or other scrutiny. Part of what makes these laws powerful is that prosecutors can obtain convictions without having to prove that illegal underlying transactions generated the money flow — though of course Spitzer can’t stake out even that ground for sympathy. Structuring offenses, which carry in this case a potential penalty of five years behind bars, are a relatively recent addition to the law, the main federal statute dating only to 1986. And — here’s the live-by-the-sword part — Congress enacted that law as part of the steady expansion of new powers accorded prosecutors to go after white-collar (as well as Drug War) defendants who it was feared would get off if prosecuted by traditional means. In other words, the structuring statute was part of the ever more ferocious treatment of business and economic offenses in American law that might be termed, after its best-known practitioner, Spitzerization.

That’s not the only irony that’s come back to haunt the guv. As prosecutor, part of Spitzer’s distinctively relentless style was to demand the decapitation of large organizations by the firing of their CEOs, even in the face of arguments that such steps presumptively punished the execs without a trial and might badly disrupt the enterprises they led. The arch example is Spitzer’s vendetta against Hank Greenberg of American International Group (AIG), without peer the most highly regarded executive in the insurance sector over the past half century. AIG, long known as three steps ahead of its industry and a huge asset to American business presence and prestige abroad, has now entered a tailspin without Greenberg, destroying billions and billions in value for shareholders and others, even as the charges against its former chieftain have mostly wilted on the vine. On a smaller but still significant scale, Spitzer forced Marsh, the biggest insurance broker, to oust its CEO, which it replaced with an old crony of Spitzer’s; that didn’t work out either, and further fortunes were lost.

Spitzer’s logic was that “imperial” CEOs — he did much to popularize the phrase — had come to feel they were above the law, and that all talk of forgiveness for momentary lapses in judgment, of deference to uniquely valuable skill sets, and even of basic old-fashioned due process for the accused, were but excuses proffered by these grasping moguls in hopes of holding onto their power and pelf indefinitely. One wonders whether Spitzer has come today to rethink those sentiments.

Original Source: http://article.nationalreview.com/?q=NzVjMjVjN2IzZjI4ZDRiMGQ1N2Y2YzAzMDBkNDFiZDc=

 

 
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