The news that Eliot Spitzer, the former New York state governor brought low by a prostitution scandal, will run for the office of New York City comptroller—essentially, municipal fiscal watchdog—was mostly greeted by titillation. If the city might wind up with a mayor known for tweeting lewd photos, why not a comptroller known as “client no. 9″?
While Spitzer faces tough competition for the job from Scott Stringer, the New York politician seen as the frontrunner, the ultimate winner could learn a lot from Spitzer’s time as the state’s attorney general, when he angered banks with an innovative and aggressive regulatory strategy. That seems to be Spitzer’s platform; as he told the New York Times, the office of comptroller “is ripe for greater and more exciting use of the office’s jurisdiction.” While some may hope that Spitzer will stick to cutting pensions and going after unions on behalf of city taxpayers, it’s clear he’s itching to go after Wall Street again, using the comptroller’s powers as the trustee of the $140 billion in the city’s five pension funds.
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Spitzer essentially wrote the blueprint for this one after the financial crisis hit pensions and investors of all sorts. He thinks comptrollers should band together the way state attorneys general do and force Wall Street banks to disclose more about their practices, and, more worryingly for the banks, stop spending shareholder money to influence politicians. A group of dedicated funds owning a significant share in major banks would have both the voting rights and standing to sue, and thus be able to force these issues.