Monday, July 08, 2013 8:22:13 PM
Wall Street braces for Comptroller Eliot Spitzer
As comptroller, Spitzer could exercise influence over financial institutions. | AP Photo
By MJ LEE | 7/8/13 6:56 PM EDT
When Eliot Spitzer resigned as New York governor amid a humiliating prostitution scandal, no one cheered louder than Wall Street.
More than five years later, the industry’s outspoken antagonist is attempting to make a political comeback – one that could cause serious headaches for bankers and across corporate boardrooms.
Spitzer, 54, is vying to be the next New York City comptroller. The job carries far less public prominence than governor or attorney general, the post from which Spitzer earned the nickname “Sheriff of Wall Street” for his battles with American International Group and the New York Stock Exchange, among others.
(PHOTOS: Eliot Spitzer's career)
http://www.politico.com/gallery/2013/07/eliot-spitzers-career/001152-016270.html
But it would provide Spitzer with enough power to get back in the face of corporate America and the finance industry.
As comptroller he could play the role of activist investor while managing the city’s almost $140 billion in pension funds, pressure money managers to accept reforms if they want to do business with New York and audit city agencies’ various dealings with financial companies and make headlines if he thinks the taxpayer is getting a raw deal.
“Any time you are exerting influence on where to place well over a hundred billion dollars in assets, you have power and influence,” said Jon Lukomnik, a former deputy comptroller for New York City who is now a managing partner of Sinclair Capital.
(Also on POLITICO: Spitzer explains his return)
http://www.politico.com/story/2013/07/eliot-spitzer-new-york-city-comptroller-election-93811.html
Since his surprise announcement via an interview with the New York Times Sunday evening, Spitzer, who left office in March 2008 shortly after details of his involvement in a high-end prostitution ring became public, has made clear that he would use the city’s shareholder position to be a watchdog of corporate America.
In an interview on the Brian Lehrer Show on Monday, Spitzer offered several examples of corporate principles he would advocate as comptroller.
http://www.wnyc.org/shows/bl/2013/jul/08/eliot-spitzer-candidate-comptroller/
At the top of the list: Separating the roles of CEO and board chairman at large corporations.
The issue gained attention earlier this year when some investors unsuccessfully sought to have JPMorgan Chase CEO Jamie Dimon give up his chairman’s role following the bank’s “London Whale” trading debacle, which resulted in billions of dollars in losses.
(Also on POLITICO: Spitzer launches political comeback)
http://www.politico.com/story/2013/07/eliot-spitzer-political-comeback-93804.html
“The argument is that Jamie Dimon is a good CEO therefore we don’t want to separate,” Spitzer said. “Look, George Washington was a great president — we did not eliminate checks and balances even though we thought he was a great president.”
Spitzer added, “Structural checks on decision-making are important in corporate governance as well as in the Democratic arena.”
John Liu, the current comptroller, was active in the push for Dimon to give up some of his powers, but given Spitzer’s history and reputation, the ex-governor could give the issue of corporate governance added heat and attention.
As comptroller, Spitzer could also exercise influence over financial institutions that do business with the city to manage its public pension funds.
For example, Spitzer would be in a position to insert conditions into contracts with money managers – so long as the boards of the city’s public pension funds go along with the idea.
“It has powers to regulate how the financial services industry intersects with the city in many ways,” said Elizabeth Holtzamn, who was the city’s comptroller from 1990 to 1993 and has endorsed Manhattan Borough President Scott Stringer in the comptroller’s race. “You might say the condition for doing business with the city, we want to see X, Y and Z.”
Of course, if Spitzer or any other comptroller takes too tough a line, financial institutions could decide dealing with the city is more trouble than it’s worth, whether it is managing pension funds or helping it sell bonds. But that would mean turning their back on lucrative business opportunities.
The financial services industry, which had lashed out at Spitzer during his tenure as attorney general for launching lawsuits they said were meant to gain politically favorable headlines, reacted to the ex-governor’s attempt to jump back into politics with exasperation and disdain.
“He’s had these legendary duels and battles with a number of people in the sector,” said one industry official who asked to speak anonymously. “Should he be elected, you’ll just have another official who’s antagonistic towards the sector in a position of authority.”
Tony Fratto, a former White House and Treasury official in the George W. Bush administration who is now a partner at Hamilton Place Strategies, dismissed Spitzer’s request for the public’s forgiveness as an attempt to feed his own ego.
“The credibility of that position [New York City comptroller] is diminished by him being in the job,” Fratto said. “The way Eliot Spitzer dealt with issues in overseeing the financial sector had to do with publicity more than anything else. So when people say his name, it’s usually preceded by a four-letter word.”
Spitzer seemed ready for the onslaught of harsh criticism headed his way, saying on Monday: “This is not a process for the faint of heart.”
http://www.politico.com/story/2013/07/wall-street-braces-for-comptroller-eliot-spitzer-93849.html
As comptroller, Spitzer could exercise influence over financial institutions. | AP Photo
By MJ LEE | 7/8/13 6:56 PM EDT
When Eliot Spitzer resigned as New York governor amid a humiliating prostitution scandal, no one cheered louder than Wall Street.
More than five years later, the industry’s outspoken antagonist is attempting to make a political comeback – one that could cause serious headaches for bankers and across corporate boardrooms.
Spitzer, 54, is vying to be the next New York City comptroller. The job carries far less public prominence than governor or attorney general, the post from which Spitzer earned the nickname “Sheriff of Wall Street” for his battles with American International Group and the New York Stock Exchange, among others.
(PHOTOS: Eliot Spitzer's career)
http://www.politico.com/gallery/2013/07/eliot-spitzers-career/001152-016270.html
But it would provide Spitzer with enough power to get back in the face of corporate America and the finance industry.
As comptroller he could play the role of activist investor while managing the city’s almost $140 billion in pension funds, pressure money managers to accept reforms if they want to do business with New York and audit city agencies’ various dealings with financial companies and make headlines if he thinks the taxpayer is getting a raw deal.
“Any time you are exerting influence on where to place well over a hundred billion dollars in assets, you have power and influence,” said Jon Lukomnik, a former deputy comptroller for New York City who is now a managing partner of Sinclair Capital.
(Also on POLITICO: Spitzer explains his return)
http://www.politico.com/story/2013/07/eliot-spitzer-new-york-city-comptroller-election-93811.html
Since his surprise announcement via an interview with the New York Times Sunday evening, Spitzer, who left office in March 2008 shortly after details of his involvement in a high-end prostitution ring became public, has made clear that he would use the city’s shareholder position to be a watchdog of corporate America.
In an interview on the Brian Lehrer Show on Monday, Spitzer offered several examples of corporate principles he would advocate as comptroller.
http://www.wnyc.org/shows/bl/2013/jul/08/eliot-spitzer-candidate-comptroller/
At the top of the list: Separating the roles of CEO and board chairman at large corporations.
The issue gained attention earlier this year when some investors unsuccessfully sought to have JPMorgan Chase CEO Jamie Dimon give up his chairman’s role following the bank’s “London Whale” trading debacle, which resulted in billions of dollars in losses.
(Also on POLITICO: Spitzer launches political comeback)
http://www.politico.com/story/2013/07/eliot-spitzer-political-comeback-93804.html
“The argument is that Jamie Dimon is a good CEO therefore we don’t want to separate,” Spitzer said. “Look, George Washington was a great president — we did not eliminate checks and balances even though we thought he was a great president.”
Spitzer added, “Structural checks on decision-making are important in corporate governance as well as in the Democratic arena.”
John Liu, the current comptroller, was active in the push for Dimon to give up some of his powers, but given Spitzer’s history and reputation, the ex-governor could give the issue of corporate governance added heat and attention.
As comptroller, Spitzer could also exercise influence over financial institutions that do business with the city to manage its public pension funds.
For example, Spitzer would be in a position to insert conditions into contracts with money managers – so long as the boards of the city’s public pension funds go along with the idea.
“It has powers to regulate how the financial services industry intersects with the city in many ways,” said Elizabeth Holtzamn, who was the city’s comptroller from 1990 to 1993 and has endorsed Manhattan Borough President Scott Stringer in the comptroller’s race. “You might say the condition for doing business with the city, we want to see X, Y and Z.”
Of course, if Spitzer or any other comptroller takes too tough a line, financial institutions could decide dealing with the city is more trouble than it’s worth, whether it is managing pension funds or helping it sell bonds. But that would mean turning their back on lucrative business opportunities.
The financial services industry, which had lashed out at Spitzer during his tenure as attorney general for launching lawsuits they said were meant to gain politically favorable headlines, reacted to the ex-governor’s attempt to jump back into politics with exasperation and disdain.
“He’s had these legendary duels and battles with a number of people in the sector,” said one industry official who asked to speak anonymously. “Should he be elected, you’ll just have another official who’s antagonistic towards the sector in a position of authority.”
Tony Fratto, a former White House and Treasury official in the George W. Bush administration who is now a partner at Hamilton Place Strategies, dismissed Spitzer’s request for the public’s forgiveness as an attempt to feed his own ego.
“The credibility of that position [New York City comptroller] is diminished by him being in the job,” Fratto said. “The way Eliot Spitzer dealt with issues in overseeing the financial sector had to do with publicity more than anything else. So when people say his name, it’s usually preceded by a four-letter word.”
Spitzer seemed ready for the onslaught of harsh criticism headed his way, saying on Monday: “This is not a process for the faint of heart.”
http://www.politico.com/story/2013/07/wall-street-braces-for-comptroller-eliot-spitzer-93849.html
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