Spitzer’s No McCarthy
New York Attorney General Eliot Spitzer is a lot of things. To his supporters, he is a hero–a crusader rounding up criminals who cheated the public. To his detractors in the insurance industry, he is a grandstander–a publicity hound and political opportunist looking to ride a tempest in a teapot to the governorship.
Whatever you think of him, Mr. Spitzer is no “terrorist,” and he certainly bears no resemblance to former U.S. senator and communist witch hunter Joseph McCarthy. Yet that is exactly what a prominent industry official charged in a verbal attack last week during a session on ethics at the American Association of Managing General Agents’ annual meeting.
The accuser was Ernst Csiszar, president of the Property Casualty Insurers Association of America, who switched in the blink of an eye last year from being the country’s most prominent regulator to heading one of the most powerful groups representing those he regulated.
Mr. Csiszar–who abruptly quit as both South Carolina’s insurance watchdog and top dog at the National Association of Insurance Commissioners to take over PCI–did cut Mr. Spitzer a tiny bit of slack. “The reality is that [Mr.] Spitzer did find practices in the industry that are deplorable,” he conceded, “but he has taken it further.”
Mr. Csiszar raised a valid criticism of Mr. Spitzer’s standard operating procedure. Mr. Spitzer loves to beat his targets into submission by hammering them in the press–a particularly effective technique with public companies whose stock can be buried with bad publicity. “This is corporate terrorism–using the threat of indictment. There is no due process and he is ravaging the industry,” he said, adding “this smacks of McCarthyism.”
This is where I must hop off the bash-Spitzer bandwagon.
First of all, no one should toss around the “T” word so cavalierly. Mr. Spitzer is no terrorist. He certainly isn’t killing anyone, and he’s not attacking innocent victims–given the number of guilty pleas and big-name resignations his probe has secured for shameless bid-rigging, incentive fee abuse and balance sheet manipulation. (Ironically, AIG’s former kingpin, Maurice Greenberg–forced to quit because of Mr. Spitzer’s probes–made the same insensitive mistake when he once derided trial lawyers as terrorists, for which I took him to task.)
In addition, I always cringe when someone plays the “McCarthy” card. For those of you with short memories or poor grasps of history, Sen. McCarthy’s claim to infamy was his penchant for slandering innocent people by falsely accusing them of being a communist–holding up what was probably an envelope full of blank paper as “evidence” of their “crimes.”
Mr. Spitzer’s envelope is quite full, thank you. Indeed, he has a paper trail of damning e-mails and memos demonstrating criminal behavior. He might be a bully (which prosecutor isn’t?), but he is not bluffing or lying. He caught the industry red-handed in outrageous criminal misdeeds.
Besides the obvious slander, what bothers me about this episode is how the industry still doesn’t get it. The public was blatantly defrauded by some of the biggest players in the business, and the reform effort is only beginning.
Demonizing Mr. Spitzer won’t solve anything. He didn’t rig any bids, steer any accounts to earn bonus fees, or cook any books. If he hadn’t come along, who knows how long the corruption would have continued? Mr. Spitzer is just doing his job. Insurers and brokers should concentrate on doing theirs–cleaning up their act and getting this nightmare behind them.
“Mr. Spitzer is just doing his job. Insurers and brokers should concentrate on doing theirs–cleaning up their act and getting this nightmare behind them.”