Schumer Decision Clears Way For Spitzer N.Y. Run

Under an agreement reached between Sen. Schumer and incoming Senate Minority Leader Harry Reid, D-Nev., Mr. Schumer will head up the Democratic Senatorial Campaign Committee through the midterm elections of 2006. Sen. Reid also gave Mr. Schumer a seat on the powerful Senate Finance Committee, apparently in exchange for Mr. Schumer's commitment to stay in Washington through the 2006 elections.

Sen. Schumer, a consummate fundraiser who secured more money than any other senator for his re-election campaign this year, agreed to the deal after Sen. Reid said he would allow him to retain his seats and seniority on the equally important Banking and Judiciary Committees.

The arrangement removes a potential major contender in the New York Democratic gubernatorial primary, which New York Attorney Gen. Elliot Spitzer is expected to enter. The Democratic primary victor in 2006 will face Republican Gov. George Pataki.

Joel Wood, senior vice president, government affairs, at the Council of Insurance Agents and Brokers in Washington, D.C., said the decision benefits the insurance industry and the state of New York. "His [Schumer's] clout will only be increased," Mr. Wood said. "He has been a good friend of the New York insurance industry."

But the decision may add impetus to Mr. Spitzer's high profile investigation of the insurance industry, which has put him in the spotlight after he filed civil suits alleging brokers and insurers victimized customers by inflating prices and rigging bids.

The expanding investigation into all types of insurance, property/casualty, life, health and group insurance, has lately seen his staff combing the records of annuity underwriters to determine consumers they service are being short-changed by practices in that industry.

The Securities and Exchange Commission has already launched a probe of Hartford Life dealing with its policies in purchasing mutual funds that underlie variable annuity products prompted by a probe launched several years ago by Mr. Spitzer.

A measure of the clout Sen. Schumer would have brought as a gubernatorial candidate is reflected in the fact that in winning reelection this November he garnered 71 percent of the vote, a New York record in a Senate race.

Sen. Schumer, reportedly had been considering a run for governor out of frustration over the losses Democrats suffered in the last election, and a concern he would not be in a position to exercise power in Washington, D.C. for a number of years.