“Eliot Spitzer Avoids Talk of Hookers in Harvard Ethics Speech”
There he was again, Eliot Spitzer—fierce and steely-eyed, unflappable, his double-barreled chin cocked and loaded. The ex-governor lectured at Harvard last week. He discussed ethics, and the media pounced on the incongruity.
With equal parts self-restraint and disbelief, The New York Times wrote, Spitzer Talks About, Well, Ethics. The New York Post ran more inflammatory headlines, like Ethics from Pig Man on Campus. And most members of the media, including The Boston Globe, acknowledged a double standard.
Indeed, the madam of the prostitution ring that was broken by the FBI sent a letter for the center’s director questioning how Spitzer could be welcomed, while she is serving five years of probation, cannot leave New York during that time, and must register as a sex offender “for pleading guilty to providing him with call-girls.’’
Kristen Davis, who writes a blog calling herself, “The Manhattan Madam,’’ said in the letter that, “I deplore hypocrisy and abhor public officials who use their power to commit and cover up their own crimes and to lie and deceive the same public they have promised to protect.’’
I’ve been fuming about Spitzer’s lecture ever since his appearance in Cambridge. I’m a graduate of Harvard College and Harvard Business School, love the university and hope we clobber Yale in this weekend’s football game. It bugs me, however, that my alma mater awarded Client Nine a bully pulpit to reinvent his image. With a lecture on ethics, no less.
During the 60s, Harvard students took to the streets over the Vietnam war. To this day stories circulate about Wigglesworth—either a dormitory overlooking Massachusetts Ave. or a stadium for watching campus unrest. It was impossible to study during those days of unbridled passion, so I’m told, as students rioted in the streets and tear gas wafted up into the rooms. Spitzer’s lecture isn’t Vietnam, but I can’t help but wonder:
Whatever happened to Harvard’s activists?
Don’t get me wrong. People makes mistakes, and everybody deserves a second chance. I admire how Henry Blodget blogs about Wall Street at The Business Insider. But he’s no longer a research analyst. Michael Milken is an all-star philanthropist. In 2004 Fortune Magazine called him The Man Who Changed Medicine. But Milken hasn’t sold a junk bond in years.
See where I’m going? Both men traded the scene of their crimes for new turf. Not so, the talented Mr. Spitzer—a human wrecking ball of reform, a guy who smashed anyone in his path. But as Spitzer sounded the clarion call for transparency, trousers akimbo, he deceived the voters of New York and the people closest to him.
You need to get out of the ethics business, Governor Spitzer.
I’ll be the first to agree that Wall Street needs more clarity. My novel, Top Producer, illustrates how financial services can spiral out of control given the industry’s shortcomings. The Governor also argued that market forces—the guiding hand of supply and demand—will not bring transparency to Wall Street. It’s a thoughtful observation worthy of debate.
That said, Spitzer suggested the government occupies some kind of moral high ground. He stated, “Only government can enforce rules relating to integrity and transparency in the marketplace.” He repeated two words over and over, “only government.”
I’m not buying it.
Forgive me here—we all put our pants on one leg at a time. We’re all human, subject to mistakes. That includes Uncle Sam, whose rap sheet dates back to 1776. The government’s track record for bad behavior is so long, so extensive, that Wikipedia categorizes the transgressions by decade and branch of government. There’s even a special section reserved for sex scandals.
What I fear most are the hidden agendas of our elected officials. I worry they will make bad decisions—chasing headlines and scrambling up the rungs of personal ambition—as they regulate Wall Street. An ongoing courtroom brawl between Spitzer and Hank Greenberg, ex-CEO of AIG, appears to be such a case:
Greenberg’s lawyers claim Spitzer used private e-mails to contact AIG insiders and to cajole the media into writing flattering stories about Spitzer’s political future. In one instance, court documents claim, an e-mail led Spitzer to boast to a Newsweek reporter that his “high-profile pursuit of Greenberg ‘metastasized’ his reputation” and helped him win the governor’s race.
I have no idea whether these allegation are true. But the fallout from Greenberg’s departure was a mess. Charlie Gasparino reports in his new book—The Sellout—that Greenberg’s successor allowed “AIG’s financial-products unit to double its bets on housing within a year.” Yikes. We all know about the sub-prime fiasco, and I would pose the following question:
Are taxpayers shouldering the cost of a crusader whose blind ambition undermined his judgment?
There’s an old expression on Wall Street, “You only have your reputation once.” I think the Governor should pay attention to the place he loves to vilify. Before Spitzer lectures America about ethics, before he hits the blogs and asks universities to perform mouth-to-mouth on his public image—I’d like to see him clean up the mess he left behind. Turning over those e-mails about Greenberg, if they exist, might be one place to start.
The New York Times describes my novels as “money porn,” “a red-hot franchise,” and “glittery thrillers about fiscal malfeasance.” Through fiction I explore the dark side of money and the motivations of those who have it, want more, and will steamroll anybody who gets in their way.
If you were at all concerned whether this post provides a balanced and constructive assessement of this potentially inflammatory topic, I would share that you really hit those marks. Meanhwile, you close by posing what appears to be a serious suggestion about “turning over those e-mails on Greenberg, if they exist” as a good place to start. As if that will ever happen….
Perhaps we need a discussion on whether an individual’s personal life and public role should be completely separate. Someone can made bad (horribly bad and illegal in the case of Spitzer) personal choices and still have reasonable things to say about complex public issues. Perhaps everyone should publish their worst personal mistake online and get it over with. I still hold to the quaint and anachronistic idea that one’s personal life should be one’s personal business and not be taken into consideration regarding one’s public statements. Obviously when one breaks the law, as did Spitzer, he should be punished at least as severely as did his “partner”, which clearly didn’t happen. But I don’t think that an arrogant and stupid personal mistake makes you unable to have good idea’s about other things. There are many arrogant people who make stupid personal mistakes who could contribute good ideas.
Mr. Vonegut’s post does not even begin to suggest that bad personal choices should preclude one from having ideas worthy to offer others. Meanwhile, the “you can’t make this up” oxymoronic aspect of Spitzer being given the opportunity to lecture those at Harvard on ETHICS suggests this whole episode would have been more logically presented as a Saturday Night Live skit.
I’m sure Spitzer has much wisdom to offer. That he would be given a platform to lecture on ethics is mind-numbing. My only conclusion for the motive: Harvard adminstrators must perceive that all publicity is good publicity.
TO’B, I totally like the idea of SNL. Standup comedy sounds like a good career shift.
Having listened to the video on the site, it is clear that what Spitzer is saying is that “…only government can ENFORCE (emphasis mine and I believe his as well)…” transparency regulations on Wall Street. This would appear to be a valid statement. I think the evidence of the last few years shows that “self-regulation” means no regulation at all. The major point that Spitzer seems to be making in this video is that Wall Street can’t police itself, someone else has to do it. One can agree or disagree on this point, I happen to agree. Ethics is a complex subject, and some would say that the concept of “business ethics” is itself oxymoronic, but at least we should try to exercise it. If the “invisible hand” holds a gun aimed at small investors who have been deliberately misinformed, then it no longer can to be invisible and must be brought to light. It’s hard to argue with transparency (to badly mix a metaphor, light doesn’t really help illuminate a transparent object, but you get the point). Whether Spitzer should be the one bringing this message is subject to differences of opinion, but the message should certainly be heard. I feel certain that Harvard administrators would have been equally damned if they blocked Spitzer’s talk as opposed to supporting it. They certainly achieved their goal if publicity was the goal, and if it helps the message be heard then perhaps it was worth it.
RG, you make valid points—especially about the importance of transparency. But I believe the messenger—given the hypocrisy described by Kristen Davis—taints the calls for reform, ethical behavior, and transparency. Not a good thing given the complexity of our capital market needs. And frankly, I can’t give the Governor a pass until he addresses the requests made by Greenberg’s lawyers (among other issues).
There’s another issue that bothers me about those two words, “only government.” The government rules unevenly. Big problem. Investment banks have hundreds of lawyers on staff just to comply with government regulations. By comparison, hedge funds have fewer restrictions. During this decade, we’ve seen smart people leave investment banks for hedge funds because 1) the money is better and 2) there are fewer regulations, especially on leverage which was the root of the 2008 crisis. I would argue, therefore, that government crusaders exacerbated the problem by hastening the exodus to Hedgistan, where it was possible to borrow to the gunwales before everything hit the fan. You know what I mean by “everything.”
Government and business need to construct a “fix” together. I’ve never been a fan of the Governor’s hammer approach.
Bill Hader has already done a great Spitzer exaggeration on SNL News in conjunction with Fred Arimsen’s reprise of his Governor Patterson imitation (it aired several weeks back).
What I’d like to know is who made the decision to invite Spitzer and what was the logic/process behind that decision. Also, I’d be curious to know how heavily Spitzer lobbied for this gig. As we all know from our days on Wall Street, some products are bought, while others are sold.
“Products” are a good analogy, JW. The other thing we know from our days on the Wall Street is that all financial products require sexy names, which lend themselves to acronyms. This in mind, I suggest we dub this one the “Spitzer Harvard Image Trade.” What do you think? Any other ideas out there?
There are so many issues embedded here.
1. Besides Spitzer’s poor “personal choices,” his crusade against Wall Street ensnared innocents and ruined people’s lives and livelihoods while he merrilly took the moral high road. Shame on him.
2. Only government? Puleeze. Financial institutions have made enormous strides at substantial costs to build compliance regimes to ensure ethical and legal behavior. Is the system perfect? Of course not. Is it much improved? Definitely.
Of course, there will always be a need for regulators to enforce rules and laws — the same need as there are for police. However, politicians are not the solution as the escalating costs of election make them beholden to (or at least mindul of) people or special interests.
3. While Spitzer may not be a good guy. our universities should remain a place for open dialogue and debate. If not there, then where? Should Spitzer be lecturing on ethics? Not in my opinion. Should Spitzer be lecturing on governmental versus self-regulation? I think this is sensible. So perhaps this discussion is one of semantics and promotion, rather than content.
MJ, I like the way you think but am less forgiving of Spitzer on your point 3. He says in the video, “Being wrong is not an offense. Lying is the offense.” This language is way too inflammatory to be swept under the cover of “semantics.”
While “governmental versus self regulation” sounds reasonable, the Governor speaks about government and business in terms of good versus evil. Luke Skywalker versus Darth Vader. That’s not right. And in my opinion, Harvard had no business awarding Spitzer a national stage to spit polish his image—especially when the stage turns an important discussion into a circus sideshow.
I also wonder if “personal choices” equal “private matter.” My recollection is that Spitzer prosecuted the call-girl industry in an aggressive manner. There is something fundamentally rotten about governing one way and choosing the opposite personal path. It reminds me of “let them eat cake.”