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Thursday, December 02, 2004

Eliot Spitzer and appearances 

There is an interesting letter to the editor from a former insurance industry executive published in the November 29 issue of Business Insurance (OK, I know I'm a geek for reading letters to the editor of Business Insurance -- it was an accident, alright?). The author, one Tom Harvey, who is identified as the former CEO of an insurance brokerage firm, thinks that Spitzer needs to pay more attention to the appearance of impropriety:
Most of us associated with this industry are appalled by apparent bid rigging. But we view contingent commissions differently than Mr. Spitzer....

But without due process Mr. Spitzer has turned this industry on its head. There have been no court hearings, no testimony in front of appropriate agencies, yet market values of public brokers have plummeted, and thousands will likely lose their jobs. All due to the "appearance of impropriety."

Speaking of "appearances," how about Mr. Spitzer's tennis pal, campaign contributor and former boss securing a 19% sweeter, all-cash deal for his company from Marsh & McLennan Cos. Inc., after Mr. Spitzer hit Marsh with a tsunami of subpoenas. Then, Mr. Spitzer's tennis buddy ends up as CEO after Mr. Spitzer says he "can't deal" with the current Marsh CEO. Later, Mr. Spitzer says it's OK for his tennis pal, now Marsh's CEO, to pay any potential fines from their contingent commissions, which Mr. Spitzer earlier alleged were ill gotten. Isn't this like the DA indicting someone for burglary and saying they can use the proceeds to cover any fines? Yeah, "appearances" do matter, Eliot, and this does not look good.

These are interesting allegations. I hunted around a bit to see if anything along these lines had been published in the mainstream media, and couldn't find a thing. Anybody have anything to add?

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