Eliot Spitzer has already proven that he can turn a less-than-sexy political office into a national conversation. If he wins the race for New York City Comptroller, you can expect him to do it again.
It will be a new platform, but his foil will remain the same. As NYC Comptroller Eliot Spitzer would still direct his energies at reforming Wall Street politically and culturally.
Before entering and leaving the office of New York Governor, Spitzer was the state’s Attorney General. There he was known as ‘The Sheriff of Wall Street,’ and even after scandal banished him from public life, he has constantly carved out small spaces in the media where he can continue to rail against the industry’s transgressions or excess.
There was the time he got in a massive fight with Maria Bartiromo on live television for saying that former AIG exec Hank Greenberg should be accused of fraud. Bartiromo suggested he may be saying that because he had a personal vendetta against Greenberg, Spitzer countered her by saying that “facts are facts.”
And then there’s Spitzer’s reaction to a story about former Merrill Lynch CEO John Thain.
During the most terrifying days of the financial crisis, Thain and other bank CEOs were meeting with the President in Washington. According to former FDIC Chair Sheila Bair, Thain had the nerve to double-check that Wall Street compensation would not be touched, despite to the industry’s contribution to the disaster.
Here’s what Spitzer wrote about that in his Slate column:
The Thain vignette is so troubling because he did such harm and yet continued to feel so entitled, to express no sense of remorse, to not recognise that his stewardship had led to the troubles and that maybe there should be consequences. He and others on Wall Street personified the world of heads I win, tails you lose—or, put another way, of socializing risk while privatizing gains.
Have we learned any lessons? The critical point is this: We don’t resent success, we applaud it. We don’t begrudge others the earned fruits of their labour. But we do and should resent an attitude of entitlement without obligation. And that attitude is still pervasive on Wall Street.
Spitzer called this blog post (by the way), ‘The Grimmest Story You’ll Hear Today About Wall Street Pay’.
And what does the New York City Comptroller’s office know about Wall Street pay? The short answer to that is, as much as it possibly can. The State office releases an extensive annual report on Wall Street compensation, which details the importance of the industry to city and state revenue. In 2012, Wall Street tax revenue made up over 6% of all tax revenue for NYC, and 13.5% for New York State.
What that means is that the city’s current Comptroller, John Liu is expected to keep a sharp eye on how increasing tax revenue from Wall Street could (potentially) help fill city budget gaps. When NYC was running a $4 billion deficit in 2010, Liu was quite clear about that.
“We’re not at a point in time where it’s prudent to exclude any options,” Liu said, citing Paterson’s prediction of a $9 billion deficit for the state and Bloomberg’s $4 billion projected city budget gap… While taxing bonuses may prompt some employers to leave New York City, “so would decimating the police force by a quarter or 20 per cent, or even 10 per cent, which will make the city less livable,” said Liu, 43, a Democrat who took office in January. “We need to find a balance.”
With the right Mayor in place, a Comptroller Eliot Spitzer could potentially turn ideas like that into action.
Then there’s the $139.2 billion controlled by the five New York City pension funds to consider. In America’s new era of activist shareholders, it’s easy to envision a Comptroller’s Office getting more hands on with its investments, and the investors that make them.
Right now, for example, the NYC Comptroller’s office is suing BP for investment losses related to the Deep Water Horizon oil spill, and it has lead the push to get major Wall Street banks to clawback executive pay.
So there’s definitely some flexibility in this office.
In 2010, when Goldman’s stock plummeted 20% from April 16th to mid-May, New York City and State pension funds owned 1.86 million shares of Goldman stock, worth $269 million. City comptroller John Liu said his office was “monitoring this situation closely.”
It’s hard to imagine Spitzer, in that position, being as cool when asked for comment — and the Comptroller will always be asked for comment.
Spitzer knows all this. rumour had it that he was considering a run for the Comptroller’s Office at the end of 2009 (too soon, too soon). He sees it as a an undervalued space in the New York City political landscape — a mic that he can turn all the way on.
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