While we will certainly give credit to Eliot "The Steamroller" Spitzer for taking on illicit trading and sales activities in the mutual fund industry while he was New York attorney general, we wondered why, when he was running for governor, he accepted hundreds of thousands of dollars from hedge funds, which, after all, were at the heart of the scandal. It's entirely possible some of the funds that showered Spitzer with money conducted market timing or late trading. That would make his acceptance of their contributions a serious conflict of interest and, possibly, a tacit agreement not to indict them.

Certainly, we thought, Spitzer isn't above reprisal.

Apparently not. With the chorus growing louder that Spitzer had to have been aware of his two aides' orders to state police to dredge up dirt on his archrival, senate majority leader Joseph Bruno, the political spying scandal engulfing his office is undoubtedly going to expand.

"How far up the chain of command did it go?" asked Sen. Dean Skelos (R-Rockville Centre), a member of the senate investigations committee. "How could he not know?"

Bruno, who was found to have used state aircraft to attend three major fundraisers, has also weighed in: "The air must be cleared and answers must be obtained to the serious questions raised by this situation," he said.

The brouhaha has filled many on Wall Street with glee. Practically every comment in response to a Wall Street Journal blog on the matter lambastes the governor. One poster, calling themselves "Billary Clinton," said: "Guess the misuse of the tools of power [is] tougher to get away with as governor than as prosecutor."

Another reader, "Roger Daltry," quipped: "Spitzer remains the biggest hypocrite in U.S. politics. New Yorkers who ignored his A.G. antics and destruction of constitutional rights should finally take notice that they elected a megalomaniac demagogue as their governor."

And another poster, "Observer," said: "Spitzer has done nothing except bully people. He used to get away with it as A.G., [but] he's finding it tougher as governor to do it against people used to mud slinging and bare-knuckled brawls."

Let's see if the mud-slingers gain steam on The Steamroller.

(c) 2007 Money Management Executive and SourceMedia, Inc. All Rights Reserved.

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