CEO magazine editor calls for Spitzer's resignation
By MICHAEL GORMLEY
Associated Press Writer
April 19, 2005, 5:33 PM EDT
ALBANY, N.Y. -- The editor of a magazine that serves chief executive officers has called for New York Attorney General Eliot Spitzer's resignation as he runs for governor.
Chief Executive magazine Editor-in-Chief Bill Holstein said Spitzer should resign because of appearances of conflicts of interest. Holstein said when Spitzer accepts money from corporations for his 2006 campaign the public won't know if he has agreed to avoid investigating the company.
"He hijacked the legal system," Holstein said in an interview Tuesday.
When Spitzer "started prosecuting excesses in the financial markets, he was tough-minded but fair. But over time, it has become less clear that he is pursuing justice," Holstein wrote in an opinion piece in Tuesday's Wall Street Journal.
"His treatment of (American International Group Inc.'s) Maurice R. Greenberg, coming on the heels of the forced ouster of Mr. Greenberg's son, Jeffrey, from Marsh & McLennan, is a case in point. Once again, Mr. Spitzer has charged in and discovered pattern of practices he doesn't like. He is applying a new set of values to reinsurance practices that had been in place for years," he wrote.
"As a business journalist, William J. Holstein should be a proponent of the highest standards of corporate ethics," said Spitzer spokesman Darren Dopp. "Instead, he is defending what appears to be clear misconduct by management and attacking those who are trying to stop it."
"Mr. Holstein apparently believes that AIG did nothing wrong, or if it did, it was because the rules weren't clear," Dopp said. "But the rules are very clear: It is wrong to rig bids, deceive customers, intentionally misstate earnings and mislead regulators and the public, and Mr. Holstein knows it."
Maurice Greenberg was named CEO of the Year in 2003 by Chief Executive magazine, which has a circulation of 42,000 limited to CEOs and other top corporate officers. It also holds round-table discussions.
At the heart of Spitzer's latest investigation AIG purchased reinsurance from General Reinsurance Corp. Investigators have said that AIG used the deals to pump up its reserves when markets were uneasy about the company's outstanding liabilities. AIG has acknowledged its accounting for the transaction was "improper."
Spitzer has made international headlines with his investigations of Wall Street conflicts of interest by stock analysts, mutual fund traders and insurance brokers. In most cases, the industries negotiated the reforms Spitzer sought as consumer protections.
Holstein, said Spitzer forced reforms to the industry, through publicity and threat of indictment, because he wanted his own higher standards. Now, Holstein said, Spitzer should adopt higher standards than other politicians.
"Mr. Spitzer has thus created a reasonable doubt about whether he is using the legal process for political gain," Holstein wrote. "Mr. Spitzer has a classic conflict of interest. The only way to resolve it is to resign as attorney general."
"Teddy Roosevelt ran for president as a trust buster," argued John C. Coffee, a securities law expert from Columbia Law School who has at times been critical of Spitzer. "I think politicians should run for office on their deeds."
"None of these cases (Spitzer) has brought have struck me as weak or equivocal," said Coffee. "Those all strike me as exactly the kind of disclosures that should be brought to the public."
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