What Goes Around, Comes Around

I don't think I have ever been more shocked than I was to hear today that New York Gov. Eliot Spitzer--the former crusading attorney general who brought insurance giants Marsh and AIG to their knees, and toppled titans such as Maurice Greenberg--had been linked as a client to a prostitution ring. Where does the sullied white knight go from here?

Who would have guessed that a politician who has devoted his life to cleaning up corruption in so many industries--insurance prominent among them--would leave himself so vulnerable?

I am no judge of morality, but the problem here is that Gov. Spitzer always comes across so holier than thou, so self-righteous and so contemptuous of anyone who steps out of line legally, I don't think he has any choice but to resign.

Talk about being hoisted by your own petard! What chutzpah, to assume you could get away with this kind of misbehavior, and after prosecuting prostitution rings in his prior life!

It only goes to prove that what goes around, comes around!

The really weird thing is, as I've mentioned in this blog before, Eliot Spitzer has not turned out to be the "monster" (I use that term carefully, following the Obama campaign debacle last week) that many in the insurance industry expected, following his high-profile investigations into insurer bid-rigging, contingency fee abuse and account steering by brokers, as well as cooking of the books by AIG with the use of a bogus Gen Re finite reinsurance deal.

You couldn't have blamed insurers and brokers for anticipating a veritable Godzilla trampling through their industry, once Mr. Spitzer took the oath of office 15 months ago.

However, as it turned out, Gov. Spitzer appointed a very reasonable Eric Dinallo as insurance commissioner--someone who not only had worked under Mr. Spitzer in the past, but who most recently had been general counsel at insurance broker Willis, and was thus no stranger to--and certainly no enemy of--the business.

Over the course of his rocky administration, it has been pretty much smooth sailing under Gov. Spitzer for insurers. The governor pushed through long overdue workers' comp reform, launched a serious, ongoing effort to revamp the shattered medical malpractice market, helped settle longstanding disputes over Sept. 11 claims, and has done a good job managing the bond insurance crisis. (Ironically, the governor was in Washington to testify against federal regulation of bond insurers, when he allegedly had his infamous and perhaps politically fatal liaison.)

So, now what? Gov. Spitzer today gave a cursory statement that took all of 30 seconds to deliver. He did not admit any wrongdoing, other than to his family, but did not deny the story broken in today's New York Times.

One thing he certainly did not mention is whether he would resign. I would find it difficult for someone who has staked his entire political career on being Mr. Clean to ask people to overlook this transgression. He didn't take bribes or do inappropriate favors for major campaign contributors, and he did not steal from the public treasury.

However, if Gov. Spitzer did indeed engage in criminal behavior with hookers, he violated the public's trust in him. For that reason alone, he should step down. People will put up with a lot of personal failings, but most won't tolerate a hypocrite!

What do you folks think?