Eliot Spitzer Comeback: Why Wall Street Should Be Very Afraid
Former New York Governor Spitzer, who stepped down in 2008 after a humiliating prostitution scandal, announced Monday that he is ready to return to the political scene as New York City comptroller. Prior to serving as governor from January 2007 until his resignation in March 2008, Spitzer served as New York State Attorney General. Spitzer told the New York Times on Sunday that he hopes city voters are able to look past his prostitution scandal and "give him a second chance" — a plea that sounds all too familiar to New Yorkers only six weeks after former Congressman Anthony Weiner asked the public for forgiveness as he prepared to enter the race for New York City mayor.
While serving as attorney general and subsequently as governor of New York, Spitzer earned the nickname "Sheriff of Wall Street" after battling major Wall Street names like AIG and NYSE. As NYC comptroller, Spitzer would be in charge of managing over $140 billion in city pension funds and already has plans to exercise his power, if elected as comptroller, by using the pension funds' shareholder stakes to force changes in how corporations operate. For example, he believes a corporation should not allow its CEO to also serve as its board chairman, and vice versa. Spitzer would also be in the prime position to audit city agencies' dealings with financial organizations and raise a ruckus in the media if he believes the taxpayer is getting an unfair deal. This means that Spitzer could pressure Wall Street money managers into accepting his reforms by refusing to let them continue business dealings with the city of New York if they refuse to do abide by his rules.
This sounds like a huge threat to New York financial institutions, and certainly could turn out to be one, but Spitzer may already be up against enough roadblocks that financial institutions can sit back and let nature take its course. Aside from the obvious scandal issue that Spitzer somehow has already presumed to be a non-issue in his running, Spitzer is also up against a very strong Democratic candidate, Scott Stringer, who had already raised over $3.5 million and spent about $566,000 toward his campaign before Spitzer even entered the race.
While it is still too early to tell whether Spitzer's new contender status in the New York comptroller race poses a legitimate threat to financial institutions, his entrance back into the political scene has sparked enough discussion and concern among politicians and voters alike that it doesn't seem so absurd to believe that his bite might just be worse than his bark, and when that becomes clear, Wall Street better be ready to fight back.