Eliot Spitzer: Leadership Has No Sacred Cows


“Never write when you can talk. Never talk when you can nod. And never put anything in an e-mail.”Eliot Spitzer, (then) Attorney General, New York State.

This is what New York Governor Eliot Spitzer had to say in late 2005, the year before he became NY governor, when I asked him for a contribution to Business2.0 magazine’s annual My Golden Rule feature, a collection of “life lessons” from admirable leaders worldwide.

Spitzer’s contribution was popular with my B2.0 editors — playing, as it did, off the raft of corporate criminal trials taking place across the country at that time (Martha Stewart, Frank Quattrone, Tyco, Worldcom, Adelphia, Enron).

Now The New York Times has broken the story that Spitzer has been linked to a high-end prostitution ring. People were expecting a resignation yesterday, bringing to a cataclysmic end what was — only a few years ago — one of the most respected legal and political careers in the country. The great irony here: Spitzer was caught in the FBI’s dragnet thanks to some taped phone calls and a few unseemly text messages authored by, none-other-than.

Irony #2: it was suspicious money transfers that led Feds to the Sheriff they thought he was hiding bribes! Only later did they discover the money was his payments to something called the Empire Club.

As NY’s Attorney General, Spitzer rose to national fame between 1998 and 2006 for his take-no-prisoners ethics campaign to clean up Wall Street after the excesses of the dotcom boom.

It was Spitzer who, in 2002, broke the analyst-investment banker-racket that helped fuel the Internet IPO bubble, forcing a $1.4 billion settlement from a phalanx of banks including Bear Stearns, Credit Suisse First Boston, Goldman Sachs, J.P. Morgan Chase, Merrill Lynch, Morgan Stanley. He went after mutual fund brokers for market timing, NYSE chief Dick Grasso for “excessive” pay, and in 2005 he filed a civil fraud suit against AIG CEO Hank Greenberg when criminal charges wouldn’t stick. Spitzer does not believe in sacred cows.

For such feats Spitzer was dubbed the “Sheriff of Wall Street,” and became a thought-leader on ethics and good governance to business people, politicians and journalists who frequently sought his pithy commentary — of which there was plenty, until yesterday.

Here is a transcript of Gov. Spitzer’s “apology to the public,” delivered from his Manhattan office Monday. (We get it from Sewell Chan of the NYTimes):

Over the past nine years, eight as attorney general and one as governor, I’ve tried to uphold a vision of progressive politics that would rebuild New York and create opportunity for all. We vowed to bring real change to New York and that will continue. Today, I want to briefly address a private matter. I have acted in a way that violated the obligations to my family and that violates my — or any — sense of right and wrong. I apologize first, and most importantly, to my family. I apologize to the public, to whom I promised better. I do not believe that politics in the long run is about individuals. It is about ideas, the public good and doing what is best for the State of New York. But I have disappointed and failed to live up to the standard that I expected of myself. I must now dedicate some time to regain the trust of my family. I will not be taking questions. Thank you very much. I will report back to you in short order. Thank you very much.

There is so much irony in this downfall it exhausts even the most evil humor, dripping uncomfortably into tragedy. Did I mention that Spitzer prosecuted a prostitution ring in 2004?

Spitzer was unforgiving of those who transgressed, so this will get ugly. (Calls for his resignation are getting louder today.) At a FastCompany magazine event in Miami in 2003 he trumpeted the high value of pursuing criminal trials, rather than merely civil trials, for white collar wrongdoers:

“The only thing that forces [people] to change their bad behavior is shame, and by this I mean, the shame of a perp walk in front of the cameras….seeing their picture on the front page of the papers.”

Such a “corrective shaming” Spitzer is now experiencing for himself. “A private matter” he says? Not when you’re an elected official, it’s criminal behavior, and you’ve made your career off of prosecuting others for the same. Come on, this isn’t leadership. No sacred cows here, remember?

So take this as just one more cautionary tale: Power corrupts, absolutely. Do we really need to learn this over and over and over again?