Thursday, March 19, 2009

Former Gov. Eliot Spitzer Slams AIG, Geithner and AG Cuomo

Former Gov. Eliot Spitzer this morning granted to WNYC"s Brian Lehrer what I believe was his first extended MSM interview since the prostitution scandal that forced him from office a year ago this week.
Spitzer did give an interview to Mark Green not too long ago, and has spoken to a few print reporters when he runs into them at events, but this is - I think - the first time he voluntarily has been questioned at length, although the topic was a safe one: The economic crisis.

During the 20 minutes he spoke to Spitzer, Lehrer only briefly - and a bit obliquely - brought up the subject of the Ashley Dupre fiasco, asking the ex-governor how it feels to be on the sidelines at a time when a company he once targeted, AIG, is once again in the crosshairs.

"I am obviously dispapointed in what led to that," Spitzer said. "I've apologized and in my view have acted in the past year the way I should have, which is to say I will remain quiet and others will step in and hopefully pursue these issues, whether it's the MTA refinancing or AIG investigations and continue to move forward."

I, like others, also am disappointed at what I have seen in terms of public policy in these domains and, as you've suggested, there was a number, there was a period when as attorney general of New York I was pursuing issues that nobody else wanted to pursue and we pursued AIG and Wall Street's structural failures in a way that others shied away from because it was politically unpalatable for them to address those issues.

"Now it is the flavor of the month; everybody is jumping up and down, serving subpoenas and beating their chest trying to be tougher than the next person and that's wonderful."
And who is it, exactly, who is bringing said subpoenas? That's right, Spitzer's successor in the AG's office, and a man who was once viewed as a potential primary threat to the erstwhile governor, Andrew Cuomo.
That wasn't the only subtle swipe Spitzer took at Cuomo.
He also said the whole bonus issue is more or less a red herring, saying every time the word "bonus" appears in a headline "somebody gets a subpoena two minutes later," adding: "To a certain extent, this is typical political screaming and shouting and missing the larger issue."
The larger issue, according to Spitzer, (as he also expressed in his latest Slate column) is the passing on of bailout cash by AIG to its counterparties - in other words, the very same financial institutions that have already received TARP funds.
In an aside, Spitzer told Lehrer that the Dick Grasso NYSE compensation case "should have been pursued." It was Cuomo who decided not to appeal the court's decision to side with Grasso back in July 2008.
Spitzer also teed off on Treasury Secretary Tim Geithner, saying he, his predecessor Hank Paulson, Goldman Sachs CEO Lloyd Blankfein, and Fed Chairman Ben Bernanke have to explain why they didn't get the right to exercise more control over the banks back when they negotiated the TARP deal.
And as for the Wall Street Journal, which blamed Spitzer for going after former AIG head Hank Greenberg, weakening the firm and, in the eyes of the paper's editorial board, laying the groundwork for its current troubles, the former governor said:
"You know , the Journal editorial page has been wrong on, I would say, just about every issue out there. I hope nobody relies upon them to make important life decisions."
"That's akin to blaming the doctor who discovers the cancer and saying: If you hadn't looked, it wouldn't have been there. When we looked at the books (of AIG), as I've told you, they were a mess, and the board of extremely wise individuals...looked at Hank Greenberg and said, 'No, this is not a way to run a company.'"


Anonymous said...


I must compliment you for a most comprehensive post on this issue. Your skills are only getting better and better as you cover the important politically intertwined economic mess this country is in. I like to point out that the definition of free enerprise does NOT mean that these have-mores and the have-mosts can enter and get the prize for free plus get a bonus on top of their already hyper-inflated salaries while the rest of us poor schmucks, compared to their pay scale, try to live within our means and be prudent and reasonable consumers and spenders to keep our families afloat. The original meaning of the word 'economy' in Greek has something to do with just that--running and maintaining a household on a daily basis and knowing the proper way to balance everything without needing a bailout to keep food on the table.
Signed: the first correct caller on your very first KAPA show "Late Night with Jeremy Blaber"--Paul W

Anonymous said...

Yeah, it would be nice if the world wasn't filled with retarded people. They discovered the way to cure/prevent lung cancer too, but it isn't politically palatable either.