If you listen closely, you should be able to hear the very beginning of a collective intake of breath as the industry wondersand even more to the point, starts to fearwhere the Spitzer-inspired investigations of life and health insurers may end up.
This fear would seem to be well-grounded since Spitzer has become the scourge of the financial services business, a veritable 21st century Savonarola.
Spitzer, of course, is Eliot Spitzer, New York State Attorney General, whose office has spurred investigations of the mutual fund industry and the compensation package of the former head of the New York Stock Exchange, among other things. More recently he went after big broker Marsh Inc. over contingent fees and bid-rigging in its role as a go-between for insurance companies and corporate insurance buyers.
Spitzer is a very busy man and it is widely assumed that he will be running for governor of New York state in 2006. If he keeps up this pace of investigational crusade (and its a good bet he will), by the time of his gubernatorial race his celebrity will be such that he will be known by only one nameSpitzerlike Cher or Sting or Madonna.
Whatever his ultimate ambitions may be, Spitzer is taking a very stiff broom to the financial services business. The man has no hesitation about playing hardball. Witness the way he got the Marsh board to force out Jeffrey Greenberg as chief executive with the threatimplied or otherwiseof bringing a criminal suit against the company unless Greenberg left.
It proves the old adage (OK, maybe not so old) that hardball gets headlines.
In the course of his many investigations, Spitzer has uncovered some extremely slimy dealings, but none more slimy than the rigged bids that are allegedly documented in e-mails of some Marsh employees. The language in these documents is so brazen and the attitude so arrogant that from a distance there is a great deal of vicarious satisfaction in seeing the malefactors brought down and brought to justice.
Unfortunately, many honest employees of Marsh are going to have to pick up the tab for the wrongdoing at the company. Indeed, this already has occurred in two ways that have become an achingly familiar pattern in American business in the last few years.