The crusader

THE anchor on New York 1, the city’s 24-hour Time Warner cable news station, launched a recent round-table discussion about Eliot Spitzer with the phrase “when he becomes governor,” inadvertently stating the obvious five months before the election.

In a year when Sen. Hillary Rodham Clinton, former Mayor Rudolph W. Giuliani and outgoing Gov. George E. Pataki are widely assumed to be New York entries in the 2008 presidential race, Spitzer, New York’s 47-year-old attorney general, is primed to take over the most reliable big Democratic state, with an eye on 2012 and beyond.

In “Spoiling for a Fight: The Rise of Eliot Spitzer,” Washington Post reporter Brooke A. Masters, who covered the prosecutor’s seven-year war on Wall Street, allows a confident Spitzer to compare himself to one New York governor who became president, Theodore Roosevelt, and the last one nominated for the job, Thomas E. Dewey. In three conversations with Masters spanning two years, Spitzer each time drew parallels between himself and Justice Louis D. Brandeis, who was dubbed “the People’s Lawyer” for cases he litigated a century ago on his way to the U.S. Supreme Court. It’s a title Spitzer lays claim to now.

Although this detailed and searching account of Spitzer’s career leaves him somewhat short of the Roosevelt-Dewey-Brandeis standards, it nonetheless reveals a principled, skilled and decisive prosecutor, who crafted cases to change market practices rather than to gather big-name scalps. Spitzer is so hands-on, by Masters’ account, that he personally delivers a lawsuit deadline threat to a group of the nation’s top investment bankers, then works the office fax machine deep into the night, collecting their fear-driven settlement offers.

Masters manages the juggling act of rewarding a biographical subject who turned over his private Rolodex to her -- Spitzer’s father, mother, brother, wife and lifelong friends serve up the stuff of legend -- with letting his critics offer their own, often telling, accounts. The critics get a fraction of the space given to Spitzer partisans, but that’s mostly because the book details one gripping case narrative after another, with Spitzer’s heroics appearing as prolonged saga and the negatives bringing up the rear as end-of-chapter commentary.

The broad outlines of Spitzer’s battles with mutual funds, insurance giants, the New York Stock Exchange and the compromised world of stock analysts are well known, but Masters turns each into a short story, packed with moral tension and complexity. Just when you think she’s portraying Spitzer as a bully, she reminds you just how powerful were the corporate forces he was taking on, casting him more as public protector than publicity-hungry predator.

Though the book is a balanced rave, Masters pays only passing attention to Spitzer’s triumphs beyond her financial beat. His championing of kitchen workers and black victims of Giuliani-era stop-and-frisk practices and his warning of the dangers to children who take antidepressants get none of the pulsating narrative of the Wall Street cases.

His documented prosecutorial shortcomings are also understated. Spitzer, charged with rooting out Medicaid fraud and overseeing a unit created under state law to do so, has to share responsibility with Pataki for what the New York Times estimates is a multibillion-dollar sinkhole of virtually unchecked malfeasance. Not only does Masters not mention Spitzer’s failure to take on Medicaid fraud, she closes her book with scenes from the upstate announcement of Spitzer’s gubernatorial campaign last December, when he talked about taking “the drive for reform” he’d “unleashed on Wall Street” and training it on Albany. She never asks why he’s done none of that in his two terms as attorney general.

Masters also devotes three paragraphs to how Spitzer became attorney general -- borrowing a total of $12 million for his 1994 losing campaign and his 1998 victory in ways that even she says “skirted” state law. Because Spitzer lacked the income to repay the bank loans he steered into his campaign kitty, the funds were widely seen as an extra-legal gift from his multimillionaire father, the kingpin of a real estate empire, even by newspapers that endorsed Spitzer. (Masters tells the seemingly related tale of a Monopoly loss that a tearful 7-year-old Spitzer suffered when he landed on a property loaded with houses and couldn’t pay the rent. Papa Bernard told him: “You’re going to learn what happens when you borrow and you don’t repay.”) Actually, Spitzer took 10 years to repay his 1994 campaign loans, which his father had covered with the bank, but he did so only after a newspaper raised questions about it.

Masters fails to note that his 1994 opponent, then the Republican incumbent Dennis Vacco, charged that one of Spitzer’s circuitous campaign financing methods, involving the use of a condo as collateral, was a violation of the Martin Act, the same obscure state law that Spitzer subsequently used as his chief weapon against Wall Street. Although this may seem like ancient history to a beat reporter covering current Spitzer controversies, the path to power is usually pivotal for a biographer.

In fact, with as much family access as Masters had, we learn next to nothing about his wife and three children, who apparently take a backseat to the office fax, or how the Spitzer family fortune was made and how he evolved into such a tenacious litigator beyond his parents’ penchant for organized and intense intellectual jousting over dinner. It might be of interest to New York Democrats that young Eliot’s favorite debate positions were a defense of the death penalty and a critique of rent control.

The most intriguing of the high-profile cases Masters does recount are Spitzer’s battles with insurance giants Marsh & McLennan Cos. and Aon Corp., both of which tried to soften up Spitzer by recruiting two of his closest friends, Mike Cherkasky and Lloyd Constantine. Marsh & McLennan promoted Cherkasky all the way to the top, elevating him from a minor new corporate player to chief executive in a transparent attempt to get Spitzer to go easy. Cherkasky had been Spitzer’s boss and mentor in the Manhattan district attorney’s office years earlier. When Spitzer nonetheless forced Cherkasky to agree to pay an $850-million settlement, Cherkasky’s wife laughed in her husband’s face: “Thank God he’s a friend of yours.”

Aon retained Constantine, Spitzer’s former law partner and chair of his attorney general transition team. But the company still “capitulated,” as Masters puts it, agreeing to a $190-million settlement despite Spitzer’s decision to make public a complaint spelling out personal allegations against the executive who hired Constantine.

Masters also reveals Spitzer’s unusual efforts to get Marsh & McLennan to dump its chief, demanding that the company “get me a CEO who understands what needs to be done.” Spitzer virtually installed Cherkasky, who went from telling his Marsh & McLennan bosses “I don’t do Spitzer” to leading the negotiations with his protege. Citing critics who called Spitzer’s actions corporate blackmail, Masters leaves no doubt that the handpicking of his negotiating counterpart was an extraordinary use of prosecutorial leverage. Just as biting is Masters’ lone quote from Jacob Zamansky, the arbitration lawyer who helped launch Spitzer’s Wall Street cases. Describing how Merrill Lynch stock analysts were handled at the start of the probe, he tells Masters: “The record doesn’t match the headlines. The big guys can buy their way out with him.”

In fact, Masters proves that Spitzer has been more interested in forcing “the big guys” to clean up their act than in putting them away. And, in case after case, that’s what he did. In a single year, for example, about 1,000 mutual funds cut their management fees instead of hiking them, and Masters cites an industry source who attributes the reversal to Spitzer. That’s just one example of what the crusading prosecutor has done for millions of investors.

If the list of Spitzer’s public successes is enough to quiet the eminently fair Masters’ qualms about his often questionable tactics, it might be enough for results-obsessed readers as well. If the polls are right, he also has passed muster with two of every three New York voters.