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March 11, 2008

The Spitzer Lesson

Spitzer 031108 The mainstream media and the blogosphere have been buzzing over the past 24 hours regarding the fall from grace of New York's governor and former Lord of Regulation, Eliot Spitzer. As noted in this previous post, there is an under-appreciated human element in such dubious criminal problems as Spitzer fell into. So, I have a great deal of compassion for the members of Spitzer's family, although Spitzer's many victims would certainly attest that he showed none for them. Larry Ribstein has related and typically insightful thoughts regarding why the revelers in Spitzer's fate should be concerned about the way in which he was brought down.

But I hope that the most important lesson that Spitzer's political career teaches us is not lost amidst the glare of a tawdry sex scandal. As with Rudy Giuliani before him, Spitzer rose to political power through the misuse of the state's overwhelming prosecutorial power to regulate business interests. In so doing, Spitzer manipulated an all-too-accommodating mainstream media, which never misses an opportunity to take down an easy target such as a wealthy businessperson. Spitzer is now learning that the same media dynamic applies to powerful politicians, as well.

However, as noted earlier here, where was the mainstream media's scrutiny when Spitzer was destroying wealth, jobs and careers while threatening to go Arthur Andersen on American Insurance Group and other companies? Where was the healthy skepticism of the unrestrained use of the state's prosecutorial power to regulate business where business had no available regulatory procedure with which to contest Spitzer's actions? As Dealbreaker's John Carney noted at the time of that earlier post:

Why didn’t [the mainstream media covering Spitzer's investigation of Grasso] reveal the slimy tactics of the Spitzer squad? We suspect part of the problem was the fear of being “cut off” of access. Reporters compete for scoops, and often those scoops depend on sources who will leak information to them. In the NYSE case, reporters assigned to the story were largely at the mercy of the investigators, who could cut-off uncooperative reporters, leaving them without copy to bring to their editors while their competitors filed stories with the newest dirt. They probably felt—not unrealistically—that their very jobs were on the line.

This reveals an unfortunate state of affairs. Playing bugle boy while government officials call the tunes from behind a veil of anonymity is not investigative journalism—it’s hardly journalism at all. It’s closer to propaganda. It would have been far better had the journalists turned their backs on the Spitzer squad, or even revealed these tactics to the public. Sure they may have lost some “good” stories but they could have painted a truer picture of what was going on. But that’s probably too much to hope for.

And, as noted here, the same prosecution manipulation of the mainstream media contributed to the utter lack of balance in the media's reporting on the Enron criminal prosecutions.

Alas, change does not come easily to the mainstream media. Late last week, this post reported on developments that could well expose an egregious abuse of prosecutorial power in connection with the prosecution for former Enron CEO, Jeff Skilling. Why has no mainstream media outlet intervened in that case and demanded that the information about potentially serious governmental misconduct be made public?

The Spitzer lesson is not easily embraced.

Update: Following on the theme of this post, the W$J's Kimberly Strassel reviews the mainstream media's complicity in portraying Spitzer as something that he is not, and Charlie Gasporino -- who wrote the book about Spitzer that foreshadowed these issues -- comments along the same lines here.

Posted by Tom at March 11, 2008 7:20 AM |

Comments

One other lesson from the Spitzer case: don't mess with incredibly rich men. What was the role of Ken Langone, Home Depot magnate, former head of the NYSE, and defender of NYSE's Richard Grasso, in the Spitz fritz? Langone made no secret of his desire to bury Spitzer over the past few years.

Why would investigators become interested a money movements of less than $10,000 in Spitzer's accounts? Alan Dershowitz asks that.

Langone bragged about Spitzer's fall:
http://blogs.marketwatch.com/greenberg/2008/03/what-role-did-langone-play-in-spitzers-fall/


While is it is true Spitzer gave his enemies a smoking gun, it is also true that the circumstances of the Client #9's downfall was a pretty good hack job. Perhaps what goes around, comes around?

Summary:
http://www.timesonline.co.uk/tol/news/world/us_and_americas/us_elections/article3559410.ece

Posted by: GRG51 Author Profile Page at March 16, 2008 9:41 AM

Tom K. --

Apparently John Kroger is running for Attorney General of Oregon: http://www.johnkroger.com/.
As you recall, Kroger was the Enron Task Force prosecutor who brought the original Enron Broadband indictment (of which there have now been eight superseding versions). After delivering the indictment, Kroger left the Task Force so that he never actually had to face at trial any of the people he indicted. It is telling that the article linked to his site compares (in glowing terms) Kroger to Eliot Spitzer. I would say that I agree that the two men seem to be cut from the same cloth!

Posted by: Evan Author Profile Page at March 17, 2008 12:36 PM

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