On Wall Street, Eliot Spitzer needs no introduction. The New York Attorney General, who is visiting Ireland this weekend with his wife Silda and a group of New York lawyers and activists, tells the Irish Times what his rationale has been for being the Wall Street buster that he is.
Spitzer, who is described by Slate magazine as the most powerful politician outside of Washington, has made clear his desire to run for New York governor in 2006. "I want to fix what's broken," he says, adding that if he can do that in the financial sector, he can do it in government.
Over the years, Spitzer has received strong reactions from businessmen, politicians and the media for his uncanny ability to fish out even the most well-hidden perpetrators on Wall Street. In 2002, he found that Merrill Lynch had been selling dud stocks to investors. Then, in 2003, he charged several high-profile mutual fund companies with allowing investors to time the markets , forcing them to fork over more than $2.3 billion in restitution and penalties.
That was followed in January this year by bid-rigging allegations against insurance- brokerage firm Marsh and McLennan Cos., which established an $850 million fund to compensate affected clients.
For all his zealous efforts, Spitzer has acquired the reputation of being a tough cop, one who is out to terrorize Wall Street. But the 45-year-old regulator says he is merely a guardian of capitalism. "I'm trying to protect [capitalism] from manifestations of illegality that almost inevitably result when people have too much power and don't observe the fundamental rules of the marketplace," he says.
The government's role in keeping tabs on the market is important, Spitzer believes. "We set the parameters and the rules; the market then creates wealth, generates jobs, permits capital to flow into sectors where there would be job creation, wealth creation," he says.
Time and again, when he has meted out the harshest of punishments to the most flagrant crooks, he has only done so with the intention of promoting integrity in the marketplace, he says. "We are trying to say the market works efficiently and properly when there is integrity, when there is honesty and transparency."
Spitzer is not too impressed with how the Bush administration has reacted to inherent corruption in the marketplace. "[Only] when things reached a certain crescendo and crystallized in a particular way, they felt compelled to say 'Yes, we do have to do something to resuscitate confidence,'" he says.
He currently has his sights set on the insurance industry, where, he says, corruption is rampant. Still, he acknowledges that things have gotten better on Wall Street. "I think that the fact that we have studied the problem and shone a spotlight on it has forged a change in the marketplace. The investment banks are trying much harder to protect the integrity of the research they generate."