What goes around comes around for Socks-on Spitzer

It appears that among the many celebrity victims of Wall Street fraudster Bernie Madoff is former New York Gov. Eliot Spitzer. Spitzer resigned earlier this year following revelations that he was using laundered funds to pay for his multiple socks-on inter-state sexual encounters with high-priced prostitutes in New York and Washington. Spitzer acknowledged recently that his family’s real estate firm had lost an unspecified amount of money as a result of investments with a Madoff subsidiary. The revelation came during a press bash thrown by Slate.com, the online news and commentary site that threw the disgraced Spitzer a lifeline back into the public policy arena via a regular column.

Since he seems determined to regain a place in the national spotlight, it is worth recalling that there were far more serious ethical issues surrounding Spitzer long before America learned of his rendezvous with Ashley Alexander Dupre at Washington, D.C.’s Mayflower Hotel. While he was New York Attorney General, Spitzer was responsible  for policing New York’s estimated 60,000 charities and nonprofits, including his family’s $26 million Spitzer Charitable Trust. Most of those assets were invested in hedge and equity funds whose executives made numerous campaign contributions to Spitzer, according to Matthew Vadum of the Capital Research Center. Spitzer did not recuse himself from investment decisions by the board of his family trust even though a state ethics panel had ruled that top state officials should not serve as directors or board members of regulated agencies.

And let us not forget the $42,555 Spitzer received in campaign contributions from lawyers with the now-disgraced Milberg Weiss law firm in his successful 2002 re-election as Attorney General. As first reported by The Examiner in 2007, among those donations were $10,000 from Mel Weiss and $10,000 from former managing partner David Bershad. Weiss is now serving a federal prison term – along with another former senior Milberg Wess partner, William Lerach – after confessing to participating in kickbacks totaling $11.7 million to plaintiffs in more than 150 securities class-action lawsuits brought by the firm in a conspiracy that began in 1981.

During his 2006 gubernatorial campaign, Spitzer said he held himself and his campaign to “a higher standard,” and claimed to have returned more than $124,000 donated by Milberg Weiss lawyers and associates. But when this newspaper asked about the 2002 campaign donations from Milberg Weiss partners, Spitzer’s spokesman refused to say if that dirty money was ever returned.