Spitzer Denies Report of Plan to Cede Probes to Feds; Vows New Action in Early Part of New Year

Despite reports suggesting otherwise, there was no Christmas present for the business targets of New York Attorney General Eliot Spitzer after all.

Spitzer, criticizing a New York Times story of Dec. 25, affirmed that he has no intention of ceding his insurance industry investigation or any of his other industry probes to federal authorities.

The New York Times in its front page story suggested that Spitzer was “ready to cede those investigations” to the federal government. However, in a statement the following day, Spitzer denied this, calling the notion “absurd.”

The headline on the Times article said Spitzer would “yield inquiries” to the federal government. The newspaper ran a corrected story the next day.

Spitzer did acknowledge that he believes the Securities and Exchange Commission was being more active in its regulation but that did not mean his office is turning over its investigations.

“This was not and is not an indication that the attorney general’s office will be any less vigilant in enforcing the law and protecting consumers,” the statement said. “It merely cites the re-emergence of certain federal regulators as a more aggressive force in confronting corporate wrongdoing.”

In fact, rather than withdrawing from investigations, Spitzer indicated he will announce other developments within the next few weeks.

“The office has many active investigations that will be pursued as aggressively as ever. Several significant developments will occur early in the New Year that will again demonstrate that this office is a national leader in protecting the interests of investors and consumers,” he stated.

In his statement, Spitzer said that the article “suggests that the attorney general has somehow altered his views on the role of his office in confronting corporate fraud. This is simply not true.”

Spitzer recently announced his candidacy for governor of New York.

Spitzer has pursued investigations of the brokerage firm Merrill Lynch, insurance broker Marsh & McLennan, and former New York Stock Exchange chairman Richard A. Grasso.

Spitzer’s complete statement follows:

STATEMENT BY THE OFFICE OF NEW YORK ATTORNEY GENERAL ELIOT SPITZER

A story in the New York Times today indicating that Attorney General Spitzer will “cede investigations to federal authorities” is wrong. Mr. Spitzer never said this, and the notion that he would do so is absurd.

This story badly mischaracterizes recent comments by Mr. Spitzer on the relationship between state and federal regulators. It suggests that the attorney general has somehow altered his views on the role of his office in confronting corporate fraud. This is simply not true.

In response to reporters’ questions about enforcement actions in the New Year, Mr. Spitzer noted that federal authorities, specifically the SEC, have become much more active, and, as a result, it would be less likely that states would have to take the lead or act alone in confronting new problems. He noted this as a positive development.

This was not and is not an indication that the attorney general’s office will be any less vigilant in enforcing the law and protecting consumers. It merely cites the reemergence of certain federal regulators as a more aggressive force in confronting corporate wrongdoing.

Mr. Spitzer’s comments should not be viewed as an indication that the attorney general’s office will withdraw from any area where it is now involved or turn ongoing cases over to federal authorities. To the contrary, Mr. Spitzer believes that with the possible exception of the SEC, the current administration in Washington is not as aggressive as it should be in protecting consumers and the environment. That is why the attorney general always reserves the right to act aggressively and independently to protect the interests of New Yorkers. That is what he has done for the last six years and that is what he will continue to do.

It is very unfortunate that the reporter mistook a general observation from the attorney general about developments over the past year and portrayed it as some kind of political move. The attorney general is confident that the coming weeks will thoroughly dispute this notion. The office has many active investigations that will be pursued as aggressively as ever. Several significant developments will occur early in the New Year that will again demonstrate that this office is a national leader in protecting the interests of investors and consumers.