New Spitzer Book Shows
Corporations in His Sights

The Wall Street Journal
By Andrew Grossman
July 14, 2013

A new book by Eliot Spitzer provides the clearest window yet into how, if elected, the former governor would use the office of city comptroller to fight for changes to corporate governance.

The book, titled “Protecting Capitalism Case By Case,” suggests that Mr. Spitzer would use the city’s $140 billion in pension funds, which the comptroller runs along with independent trustees, to try to force changes at companies on issues ranging from executive pay and the makeup of corporate boards to bank lending practices. Mr. Spitzer jumped into the comptroller’s race last Sunday and faces Manhattan Borough President Scott Stringer in the Sept. 10 Democratic primary. [EXPAND Read more]

Mr. Spitzer writes that most large shareholders have been too passive, relying on regulators to fix what he calls “broken corporations” when exercising ownership rights would be a more powerful tool. Corporate boards have ceded too much power to CEOs over issues such as pay, Mr. Spitzer writes.

People in jobs like New York City comptroller, Mr. Spitzer writes, could force that to change. “State and city comptrollers and treasurers have an enormous opportunity to determine how the share we own through the pension funds they control are used to control the companies we invest in,” Mr. Spitzer writes.

Aides to city Comptroller John Liu, a Democratic mayoral candidate, didn’t respond to a request for comment. Dani Lever, a spokeswoman for former Comptroller Bill Thompson, also a mayoral candidate, said Mr. Thompson forced large companies “to revise anti-discrimination policies to include sexual orientation and gender identity and drawing the connection between profitability and environmentally sound business practices.”

The book is mostly about policy, not personal history, and focuses on Mr. Spitzer’s eight years as state attorney general. It describes some of his best-known cases and lays out what he says is wrong with American capitalism and how to fix it.

The book wasn’t written to provide the basis for a political comeback, Mr. Spitzer said in an interview. Rather, he said, it was while writing the book this winter and spring at his Fifth Avenue office and upstate Columbia County farm that he decided he wanted to run for office again.

“I said, ‘You know what? Maybe you really, if you believe this, should try to assume a position where you can do this,'” Mr. Spitzer said.

The book had been set for release this week, but it has been available online in recent days. Mr. Spitzer eschewed traditional publishers, saying he felt the book was relevant now and he didn’t want to wait months for it to be released. Instead, it is being put out by electronic publisher RosettaBooks.

New York City’s pension funds are already some of the most frequent filers of shareholder initiatives. Mr. Liu has pushed companies to make changes in areas like compensation practices and supplier safety.

Mr. Stringer would have similar goals, spokeswoman Audrey Gelman said. She referred to efforts undertaken by the pension funds in recent years, while Mr. Stringer served as a trustee on the board of the New York City Employee Retirement System.

“Dozens of Fortune 500 companies have taken meaningful steps to align executive pay with long-term performance, enhance director accountability, promote workplace diversity, promote transparency and sustainability, and disclose corporate political spending,” she said.

“Protecting Capitalism” doesn’t mention Mr. Spitzer’s plans to run for office. It only touches on his time as governor—”that’s a separate book,” Mr. Spitzer said—and contains two references to the prostitution scandal that led to his resignation. In the book’s fifth paragraph, Mr. Spitzer writes that like the mythological figure Icarus, “so too did my life crash back from the heights to which I had ascended.”

Throughout the 172-page volume, Mr. Spitzer argues that he had been ahead of the curve as attorney general, prosecuting corrupt executives and rot in the financial system and corporate governance that would ultimately contribute to the 2008 financial crisis.

Others have accused him of being an overzealous prosecutor who pushed flimsy cases that nonetheless forced headline-generating settlements. One of his targets, Maurice “Hank” Greenberg, whom Mr. Spitzer helped force out as American International Group Inc. chairman and CEO, has filed a lawsuit against the former governor, alleging defamation. Mr. Spitzer denies the claims.

In the book, Mr. Spitzer defends his policing of Wall Street and corporate America. “It is better to go down fighting than not to fight at all,” he writes in a list of 10 “rules for life.”

His last rule seems to reveal a bit about his mindset as his improbable attempt to return to public life after scandal gets under way. He writes that it’s better to be Tigger, the hyperactive tiger of “Winnie the Pooh,” than to be Eeyore, the mopey donkey.

“Even on the darkest day,” he writes, “it is better to have a spring in one’s step, and a sense of adventure in one’s mind, than to be overcome by the gloom and darkness of cynicism and doubt.” [/EXPAND]