We give Loathsome Eliot Spitzer a hard time around here for the bully boy tactics both he and his staff reportedly practiced when he was New York's attorney general, tactics that he apparently kept practicing once elected governor. But it's worth remembering that Spitzer hardly invented the role of the aggressive prosecutor who builds his reputation by going after Wall Street and attacks his opponents with leaks to the press. Credit there probably belongs to Rudolph Giuliani. Yesterday the New York Times ran a healthy reminder of the Giuliani we knew before he became New York's mayor, and long before he became September 11ths mayor.
"Mr. Giuliani, who was 38 when he became United States attorney in 1983, threatened his targets with long prison sentences, and he infuriated judges with leaks of grand jury testimony to the press," Michael Powell writes. "His agents handcuffed Wall Street arbitrageurs before prosecutors investigated them. Apology was weakness; skeptics were 'jerks.'
Powell mentions the case of Princeton/Newport Partners, which was shut down in a raid by 50 armed marshals. They were charged with racketeering, a crime created to prosecute organized crime but which later became a regular feature of financial prosecutions thanks to the zealous creativity of prosecutors, including Giuliani, who realized that just because financiers weren't mobsters didn't mean they couldn't be treated as if they were. Although a federal appeals court later overturned the convictions, Princeton/Newport was ruined.
The prosecution of Michael Milken and the destruction of Drexel Lambert stand out in public memory but its worth remembering that Giuliani's career as a Wall Street foe hardly began or ended there. Executives from Kidder Peabody to those at Goldman Sachs were led out of their offices in handcuffs. There's a good case to be made that Giuliani's aggressiveness retarded financial innovation for years, as many were afraid that any unorthodox financial strategies or products might be deemed criminal by the US attorney's office.
“He was very creative about wielding power.” Those of the words one law professor uses to describe Giuliani, and we can't imagine a more fitting epitaph. Except that they were written too early, and Giuliani quite obviously has no intention of vanishing from the scene any time soon. We may yet have to write more about the way Giuliani wields power.
(More on this article from Tom Kirkendall and Larry Ribstein.)
Crime Buster With Eye on the Future [New York Times]
Posted by pierre, Dec 11, 2007 11:43AM
if ron paul was US attorney for the southern district we wouldn't have had this prosecutorial misconduct aka cleaning up of wall street