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New York's Top Lawyer Champions Enforcement

Published Wednesday, October 26, 2005 in the Star Tribune.

By Mike Meyers

Americans repeatedly have been told that players in a free-market economy can prosper as long as government stays off their backs. But when government remains on the sidelines, the game too often gets dirty.

That was the message of New York Attorney General Eliot Spitzer, who defended his vigorous enforcement of the rules of commerce in a speech Tuesday at the University of St. Thomas Law School in Minneapolis.

"We're living in a world where the actual shrinkage of government is a given as a good thing," Spitzer said. He offered a long list of examples -- from air-pollution law violations to Wall Street chicanery -- to suggest that that assumption often is wrong.

"Only government can enforce the rule of integrity, transparency and fair dealing that is so essential to the operation of the marketplace," said Spitzer, who recently announced his candidacy for New York governor.

He began his remarks by noting that he was called "the most dangerous politician in America" by the National Review, a conservative magazine.

Spitzer's term as attorney general has proved hazardous to the careers of more than a few corporate executives. He has brought charges on a range of violations, including breaking clean-air laws, violating securities statutes and overcharging mutual-fund customers millions of dollars. Among the major figures who have found themselves in Spitzer's sights: insurance magnate Hank Greenberg, former New York Stock Exchange Chairman Richard Grasso and Wall Street brokerage giant Merrill Lynch.

Spitzer's audience Tuesday had more than a passing interest in the intersection of ethics and the law. About 280 Twin Cities lawyers and business officials attended by invitation of St. Thomas, the University of Minnesota's Humphrey Institute and the Center for Ethical Business Cultures.

Beginning in the go-go economy of the 1980s, Spitzer said, some executives went from bending the rules of legal transactions to breaking them with impunity -- often as the Securities and Exchange Commission, the Federal Communications Commission, the Environmental Protection Agency and other regulators looked the other way.

When regulators became lax about enforcing commercial and environmental laws, moral relativism became rampant in corporate boardrooms, in Spitzer's view.

In one case, lawyers for a company being investigated by Spitzer didn't bother to contest facts that suggested they were violating the law. Instead, he said, the lawyers said the company's competitors were violating the same laws -- only more flagrantly. He didn't name the company.

"Lawyers said, 'You're right in your allegations, but we're not as bad as our competitors,' " Spitzer said. "This was meant to be a justification."

Spitzer showed a glimpse of glee in suggesting that conservatives not long ago pushed for "neo-federalism" -- increasing the power of states at the expense of the federal government. But when Spitzer went after violations of securities laws and "payola" involving radio stations being paid off to play certain recordings, some conservatives cried foul. Spitzer said suddenly the federal government, not the states, was promoted as the cop on the commercial fairness beat.

"When the federal agencies fail to do their jobs, somebody has to step in," Spitzer said.

© Copyright 2005 Star Tribune. All rights reserved.

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