Joseph Nocera on the Grasso lawsuit

nocera.jpgYou have to hand it to New York Times business columnist Joseph Nocera — he has certainly come up with a reason that most folks would not have thought of for why New York Aspiring Governor Eliot Spitzer should drop his propaganda campaign, . . . er, I mean, excessive compensation lawsuit against former New York Stock Exchange chairman Richard Grasso and the former chairman of the NYSE board’s compensation committee, Kenneth Langone.
In this NY Times Select ($) column written in the form of a memo to Spitzer, Nocera starts off by snarking Clear Thinkers favorite Larry Ribstein for “gloating” over Spitzer’s decision earlier in the week to drop fraud and larceny charges against Paul Flynn, the former Canadian Imperial Bank of Commerce executive who Spitzer had accused of aiding hedge funds in improper mutual-fund trading. Then, without ever mentioning the substance of Professor Ribstein’s well-grounded criticism of Spitzer’s dubious regulatory tactics, Nocera proceeds to urge the Lord of Regulation to drop the Grasso lawsuit not because it lacks merit, but because the lawsuit will probably not lead to the type of salutory business reforms that earlier Spitzer lawsuits have prompted — “the Grasso suit doesn’t meet the lofty standard you’ve set for yourself.”
Are you kidding me? The phrase “lofty standard” being associated with Eliot Spitzer?

Does Nocera mean that lofty standard of indulging public envy and resentment of wealthy businesspeople by defaming Maurice “Hank” Greenberg (here and here)?
Or does he mean the lofty standard of criminalizing those who would take the risk of creating a market for home ownership for those who most need it?
Or is Nocera referring to that lofty standard of Spitzer creating employment opportunities for his chums?
Or maybe he means the lofty standard of Spitzer not coordinating his investigations with other agencies?
Or perhaps Nocera is contemplating the lofty standard of Spitzer interfering with the regulatory role of other governmental agencies (here and here and here)?
Or maybe he is simply referring to the lofty standard of Spitzer’s not insubstantial contribution to the drive of U.S. governmental officials to criminalize everything?

Nocera is right that Spitzer should drop the Grasso lawsuit, but for the wrong reason. Spitzer should drop it because it’s a cheap publicity stunt, which is hardly a “lofty standard.”
Update: Professor Bainbridge does an even better job than the examples above in fisking Spitzer’s “lofty principles.”

5 thoughts on “Joseph Nocera on the Grasso lawsuit

  1. Not to mention massive and often completely undeserved personal trauma, and sometimes worse, the folks subject to Spitzer’s publicity stunt and their families are subjected. Oh, I guess we’re not supposed to think about that given that these folks are often wealthy business people. Reminds me of a quote I’ve posted before by Paul Craig Roberts, a senior fellow at the Hoover Institution, former editor and columnist of the Wall Street Journal and former Business Week columnist, from his ìThe Causes of Wrongful Conviction,î The Independent Review, Vol. VII, No. 4 (Spring 2003). There, Mr. Roberts writes that the “older Marxist view that justice is a function of the size of the pocketbook ñ the rich get it and the poor donít ñ has no credibility in our time of asset freezes and prosecutors in search of high-profile cases. [Ö] It is easier to frame a white-collar defendant than to frame a poor member of a minority group. The common-law crimes associated with the poor ñ theft, assault, murder ñ are well defined. Frame-ups for such crimes require prosecutors to suborn perjury, suppress exculpatory evidence, and coerce false confessions. To frame a white-collar victim, a prosecutor need only interpret an arcane regulation differently or with a new slant.”

  2. I don’t know, Preston. At least in the Enron-related prosecutions, I’m seeing the prosecution suppressing exculpatory evidence and coercing false confessions, in addition to straining the application of criminal statutes.

  3. Spitzer’s payola settlement

    Joshua Wright, one of several guestbloggers holding forth at Larry Ribstein’s, argues that big record labels like Warner and Sony actually have reason to be glad that the New York attorney general is punishing them for participating in costly song-prom…

  4. Spitzer’s payola settlement

    Joshua Wright, one of several guestbloggers holding forth at Larry Ribstein’s, argues that big record labels like Warner and Sony actually have reason to be glad that the New York attorney general is punishing them for participating in costly song-prom…

  5. This statement is just silly:
    “It is easier to frame a white-collar defendant than to frame a poor member of a minority group. The common-law crimes associated with the poor ñ theft, assault, murder”
    First, today, there are really only two ways an innocent person can end up in prison. First, a mistaken identification. Second, one’s family or friends (which includes business cohorts) testifies against someone. (People who falsely confess have only themselves to blame)
    Both problems happen much more frequently to the poor than to the rich, the later being especially prevalent in drug conspiracy cases.

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