“Many reporters built careers on the prosecutor’s leaks intended to bully innocent people” - Kimberly A. Strassel, Wall Street Journal opinion piece, Wednesday.

Ah yes, she must mean those innocents over at Marsh & McLennan who demanded kickbacks from insurers in return for commercial business. And those other innocents at Citigroup, Merrill Lynch, Goldman Sachs, J.P. Morgan Chase, Deutsche Bank, Bear Stearns, Credit Suisse—that is, all of Wall Street—which did, in fact, publish fraudulent research to hype their investment-banking customers at investors’ expense. Or maybe it was those innocents in the mortgage-lending industry, who sold exploding mortgage products to customers who patently couldn’t afford them. Or was it the innocent after-hours-trading mutual-fund executives who fleeced small investors to favor richer clients?

Or was it the Journal’s favorite martyred billionaire, Maurice Greenberg, who, in fact, did preside over the manipulation of earnings at American International Group, which wrote down $2.3 billion to correct the misstatements and paid a $1.6 billion fine because of them?

Right-wing commentators feel vindicated with the resignation of Eliot Spitzer. Strassel and others of her ideological persuasion believe that “most of Mr. Spitzer’s high-profile charges have gone up in smoke.” I’m sure they wish it were so.

Strassel’s colleague on the WSJ’s op-ed page, Daniel Henninger, tries to pile on this morning but forgets a few facts in decrying Spitzer’s supposedly most intemperate moment: the Sunday morning TV interview during the heat of the AIG probe—a moment rehashed ad nauseum among plutocrats and their press minions as evidence of prosecutorial excess.


Of the Greenberg case, Attorney General Spitzer once said: “The evidence is overwhelming that these were transactions created for the purpose of deceiving the market. We call that fraud. It is deceptive. It is wrong. It is illegal.” He said that on Sunday morning on ABC-TV. Then after saying this, he never brought criminal charges against Mr. Greenberg.

Henninger’s column is called “Wonderland,” and I think I know why. He missed the fact that only last month five people, including a former AIG executive, were convicted—that would be, criminally—of structuring fraudulent transactions to artificially inflate AIG’s reserves.

The case was brought not by Spitzer, by the way, but by federal prosecutors in Hartford, one of whom promised afterward to “work up the ladder” seeking more indictments.

Uh, oh.

And it was Greenberg, we should recall, who made the phone call that set this entire deal in motion. That may be why he was named during the trial as an unindicted co-conspirator.

And what, after all, did Spitzer say again that was so bad? “The evidence is overwhelming that these were transactions created for the purposes of deceiving the market. We call that fraud.”

Well, so did the jury, which returned guilty verdicts on all sixteen counts, so I guess the evidence was pretty overwhelming.

And this was Spitzer’s worst moment?

But, hey, if some business commentators want to apologize for, or “enable,” to use Strassel’s phrase, the worst American business practices —kickbacks, phony research, financial manipulation, after-hours cheating, and the mortgage-lending practices that landed the entire world economy in crisis—zeit gezunt.

But they can’t leave it there. Commentators, usually on the right, sometimes on the left, just can’t resist pressing their perceived advantage to attack the press, too.

Or as Strassel puts it in her piece this week, “Spitzer’s Media Enablers”:

Journalists have spent the past two days asking how a man of Mr. Spitzer’s stature would allow himself to get involved in a prostitution ring. The answer, in my mind, is clear. The former New York attorney general never believed normal rules applied to him, and his view was validated time and again by an adoring press. “You play hard, you play rough, and hopefully you don’t get caught,” said Mr. Spitzer two years ago. He never did get caught, because most reporters were his accomplices.

How long, one wonders, does the commentariat believe it can dine at this particular buffet?

Does anyone who does not make a living rooting around for press bias as if it were some kind of foul truffle notice the irony of commentators attacking the press using information they read in that morning’s newspaper?

Accomplices? Funny, but I didn’t see her byline on the tremendous, world-beating scoops—the ones pulled off by actual, non-commentating reporters, journalists who actually work for a living—that brought Spitzer down.

The press—and let’s face it, this has been The New York Times at its best—has done a spectacular job on this story. It is the press that blew Spitzer out of office like he was shot out of a cannon.

Was it the Times’s pro-Spitzer bias that led it to pursue this story—down to the interview with Spitzer’s prostitute’s mom—like a pack of ravenous wolves?

Journal editorialists, by the way, contributed exactly zero information to this story, just the usual pro-crook hot air.

Strassel, of course, isn’t referring to the journalists who brought Spitzer low, but to the other journalists, the lapdogs, who reported on his tenure as New York attorney general.

He knew, too, that as financial journalism has become more competitive, breaking news can make a career. He doled out scoops to favored reporters, who repaid him with allegiance. News organizations that dared to criticize him were cut off. After a time, few criticized anymore.

It should be noted that her colleagues at The Wall Street Journal, particularly Charlie Gasparino, now of CNBC, scored as many Spitzer scoops as anyone, if not more.

Of course, no names are named here.
See, that might lead to unpleasantness in line at the Au Bon Pain at the World Financial Center, where the Journal has its offices. Still, who are those favored reporters who “built their careers” on the wreckage of all those innocent lives?

These press-bashers never name names. Forbes’s publisher, Rich Karlgaad, pulled the same stunt a couple of week ago:

Journalism is populated by left-of-center people, many of whom are hostile to business.

Similarly, Strassel must scrape the published record to find evidence to support her thesis that the press ignored Spitzer’s supposed excesses.

She says, for instance, the press acted somehow improperly in reporting a tit-for-tat between Spitzer and John Whitehead, a respected Wall Street figure who published op-eds critical of Spitzer:

Within a few days, the press was reporting (unsourced, of course) that Mr. Whitehead had defended Mr. Greenberg a few weeks after a Greenberg charity had given $25 million to the World Trade Center Memorial Foundation—a group Mr. Whitehead chaired. So Mr. Whitehead’s on-the-record views were met with an unsourced smear implying bad faith. The press ran with it anyway.

So, the press ran with accurate information. Wow.

Here’s another supposed press atrocity that just doesn’t hold up.

New York Stock Exchange caretaker CEO John Reed suggested Mr. Spitzer hadn’t told the truth when he said that it was Mr. Reed who wanted him to investigate Mr. Grasso’s pay. The press never investigated.

Uh, what?

Did Spitzer have an effective news operation? Oh, yes. Were his complaints written like John Grisham novels, with the best and most incriminating e-mails quoted prominently, so that hurried reporters on deadline would see them? Yes. Were the e-mails then attached as exhibits, conveniently available to reporters in pdf format? Sure were. The fact is, he had a great press operation and was press savvy himself.

But all of that was secondary to the fact that his tenure as attorney general was simply one incredible story.

The only practitioner of supposed pro-Spitzer bias actually named in the Strassel piece is Brooke Masters, a reporter for the Financial Times, formerly of The Washington Post.

In an uncritical 2006 biography, then Washington Post reporter Brooke Masters compared the attorney general to no less than Teddy Roosevelt.

(Where, one wonders, would Strassel have stood had she been writing when the Rough Rider was fighting the Dick Grassos and Hank Greenbergs of his era to break up Standard Oil and pass the Clean Food and Drug Act? On TR’s side? I doubt it.)

I filled in on the Spitzer beat at The Washington Post while Masters was writing her biography, Spoiling for a Fight (you can find my sneaky pro-Spitzer pieces in the Post archives).

To call Masters’s book uncritical is just foolish. I notice Strassel doesn’t quote from it. But I will.

Here, for instance, is its account of Spitzer’s failed prosecution of Ted Sihpol, the Bank of America broker who successfully fought Spitzer’s criminal charges of improper after-hours trading for a rich client, Eddie Stern. The Sihpol case is used as Exhibit A among conservatives as an example of Spitzer’s excesses. How do I know that? Because Masters tells me so:

For Spitzer’s critics, the single most important example of the attorney general acting as an overzealous prosecutor came in the criminal case against Ted Sihpol… the first white-collar defendant to challenge Spitzer’s office directly. First arrested in 2003, he and his lawyers turned down a plea deal because Spitzer’s team refused to guarantee that Sihpol would not serve jail time. When the case went to trial in the spring of 2005, Spitzer’s prosecutors felt confident because they had tapes of Sihpol agreeing to place trades after the 4:00 p.m. close of the New York Stock Exchange and joking about tampering with time-stamps. But Sihpol’s lawyers, Evan Stewart and Paul Schechtman, turned the tables on them, arguing that the deadline for mutual fund grading wasn’t as clear as Spitzer claimed and that Sihpol was a mid-level fallguy who had been scapegoated. The jury agreed with the defense arguments, and interviews with jurors afterwards suggested that they were offended that Sihpol was on trial while his Bank of America bosses and Stern had walked away with their freedom and most of the profits….

Spitzer then compounded his image as a bully by threatening to retry Sihpol on the four counts for which the jury could not reach unanimity, even as his staff negotiated “no jail time” plea deals with two other defendants in the mutual fund scandal.

Etc. etc. So, this is not exactly Ten Days that Shook the World here. To cite the Masters’s book as an example of media bias is ridiculous.

I love the book, but it is down-the-middle to a fault, as many reviewers have found, including—surprise!—Strassel herself, who reviewed it for the Journal in July 2006.

Ms. Masters’s book offers detailed accounts of the kinds of painful encounters that have earned Mr. Spitzer a reputation as the nation’s most powerful state attorney general. Landing in the middle of his bid for the New York governorship, “Spoiling for a Fight” is rich with anecdotes about Mr. Spitzer’s bullying tactics.

Not that “Spoiling for a Fight” amounts to a briefing book for Mr. Spitzer’s opponents on the campaign trail. Ms. Masters, a Washington Post writer, is hardly immune to the general press-corps impulse to admire Mr. Spitzer; she happily elevates him to the pantheon of great “progressives,” a la Teddy Roosevelt and Louis Brandeis. Yet Ms. Masters has at least attempted to be even-handed, tracking down many of Mr. Spitzer’s foes for their version of events. That alone is a step forward and provides some striking evidence for those who would burst the Spitzer bubble.

And:

The portrait of Mr. Spitzer that emerges from “Spoiling for a Fight,” whether intended by Ms. Masters or not, confirms what some observers have long perceived: Much of this legal strongarming was driven by what can only be described as Mr. Spitzer’s egomania and serial disregard for due process.

Lacking a pro-Spitzer media stooge for this week’s column, Strassel must make do with Masters.

Instead, remarkably, they* continue to defend him. Ms. Masters, his biographer, was on CNN the day Mr. Spitzer’s prostitution news broke, reassuring viewers that the governor really was a “lovely” guy.

I can’t find the transcript to that particular interview, but here’s a bit from another CNN interview with Masters that day, via TVeyes.com (subscription required; the transcript is very rough). Masters is talking about the Spitzer marriage:

I would have said they were a happy couple. They are well-matched and both very bright and clearly have the same views on how to raise children, and she is better or the moderate him and judging people, and he is a charge ahead, I am right, tough guy which is of course why he is in trouble for hypocrisy and she has been the gentler more empathetic one. He genuinely seems to like her, and this is a guy whose desk is littered with photos of the kids and wife and talked about her a lot. She would come up and the—she and the kids would come up (garble). It is hard to know what is going.

Some defense. It’s just typical reporter comment, isn’t it?

Is the press perfect? No.

But it covered Spitzer’s rise, and then it covered his fall.

The problem with Strassel’s piece is that there is no evidence to support her charges. Somehow, that sounds familiar.


*Guess who?

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Dean Starkman Dean Starkman runs The Audit, CJR's business section, and is the author of The Watchdog That Didn't Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.