By Roger Stone

Bernie Madoff and Eliot Spitzer
Every time some misguided Manhattan liberal tries to convince me that Eliot Spitzer was a 'great' Attorney General, I point out that both the New York State pension scandal in which millions of dollars were paid to shady middlemen and the Madoff scandal in which Bernie stole hundreds of millions from New Yorkers, both happened under his nose while he was preoccupied with chasing bad guys on Wall Street most of whom were either acquitted on vindicated. Spitzer's overlooking of the Madoff scam requirespublic scrutiny. The Spitzer Family Trust invested heavily with Madoff. Until now it was assumed that Spitzer and his family lost theirmoney like hundreds of other bilked investors. In fact, I have learned that the Spitzer Family Foundation got 100% of its money back prior to Madoff being busted. What did Eliot know and when did he know it? The STONEzone has previously written about Spitzer's SOP in which he blackmailed companies into settling charges with his office lest he destroy the company's value through leaks and public statements. But what made Spitzer feared on Wall Street and across the State was his use of the Attorney General's office to torture targeted companies into bending to his will. Spitzer rarely went to trial, preferring to pressure his quarry into settlement through press releases and media leaks. As the former Chairman of the New York Stock Exchange (NYSE), Richard Grasso formalized a legal pay and retirement package with the non-profit worth upwards of $190 million. Spitzer quickly saw an opportunity: the public wouldn't like it, so he denounced Grasso's contract as a "gross abuse of power." At the peak of his popularity in 2004, Spitzer sued to block Grasso's retirement, naming both Grasso and Ken Langone, co-founder of Home Depot and an NYSE board member, as defendants. But Spitzer had one big problem: there was no law limiting private retirement agreements. Instead, as Attorney General, he claimed an inherent right to "act in the public interest" to protect the non-profit NYSE. Grasso and Langone fought back, the first and most formidable foes of Spitzer's war on Wall Street. As the two defendants gained ground in the one media skirmish after another, Spitzer raised the stakes to a personal level. Grasso was accused of a romantic relationship with his secretary and of fathering a child out of wedlock. All of the rumors came as media leaks, and many of them were traced back to the Attorney General's office. Shadowy media manipulation was just one of Spitzer's cynical tactics. He would sometimes blackmail companies under investigation, forcing them to hire his cronies into high-level positions before he would settle trumped up charges. In 2004, Spitzer accused Marsh & McLennan Cos. Inc. of accepting kickback payments in exchange for placing business with certain insurers. The Attorney General refused to settle the case unless the company promoted Michael Cherkaskyfrom the lowest level of Kroll Investigative services to be chief executive of the insurance giant and acquired Kroll for $1.8 billion. Kroll had a market cap of only $200 million at the time. When Marsh top brass objected to Cherkasky's lack of insurance experience and the inflated price of Kroll, they were told "no Cherkasky, no Kroll, no settlement." The forced promotion of a lackluster executive should have surprised no one, as Cherkaskyhad worked closely with Spitzer in the Manhattan District Attorney's office. The new CEO worked closely with his old friend to resolve the charges in a worst-case scenario: Marsh paid more than $800 million in fines and restitution and gave up a significant portion of company revenues. The Attorney General's office had hit a home run. Who got the finders fee on the sale of Kroll and Associates at a ridiculously inflated price, remains unknown. Eliot Spitzer used his office to line someone's pocket. That Spitzer's successor Governor David Paterson would later appoint Cherkasky to run the State's new Public Integrity Commission after Cherkaskyprofited handsomely for Spitzer's abuse of his office as Attorney General is the supreme irony. Once ensconced in this new position, Cherkasky has labored mightily to continue to cover up Spitzer's efforts to monitor the Commission's investigation into Troopergateand to cook the investigation's result. Cherkasky went so far as to rebuke the State Inspector General whose investigation proved that Spitzer and his Aides had done exactly that. Cherkasky was embattled from his first day as CEO of Marsh and quickly met the board's low expectations by managing the company into crisis. Wall Street analysts across the spectrum criticized Cherkasky relentlessly. He was finally forced out in February 2008 - comfortably, with $7.15 million in cash and hundreds of thousands of shares of Marsh stock. This is particularly ironic, since Spitzer had sued to force Grasso, a highly effective NYSE executive, to return his "unreasonably high" severance package. After four years of court battles, New York's top court ruled in June 2008 that the Attorney General had no jurisdiction to pursue the Grasso case. Spitzer's dubious lawsuit was tossed out, and Grasso got to keep his retirement. Spitzer's case against co-defendant Ken Langone was also dismissed, and by then the Governor was long gone. Cyrus Vance Jr. learned how toxic the Steamroller is politically this week when Manhattan Madam Kristen Davis said she might crash a fundraiser Spitzer was holding for Vance in the latter's bid to become Manhattan District Attorney. Davis wanted to ask Vance if he thought it was sexist that she had been prosecuted for procuring prostitutes while Spitzer utilized prostitute services, violated Federal money laundering laws and violated the Mann Act, all without prosecution. Vance's opponents quickly announced that neither of them would accept Spitzer's support under the circumstances.
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