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Eliot Spitzer's next crusade
He's taken on Wall Street, insurance brokers and the mutual fund industry. Now for the big time.
November 22, 2005: 6:00 PM EST
By Peter Elkind, FORTUNE senior writer
New York AG Eliot Spitzer has been called anti-business, but handlers say that won't hurt him in the campaign.
New York AG Eliot Spitzer has been called anti-business, but handlers say that won't hurt him in the campaign.
'You have the only hard copy'
Read the text of the memo that made Spitzer's blood boil. Citigroup memo on stock ratings
'It’s one smart one and one dumb one.'
Read an interview with William Weld, the early favorite to emerge as Spitzer’s opponent in the election next fall, from FORTUNE.

NEW YORK (FORTUNE) - New York attorney general Eliot Spitzer is cranking up his campaign for governor, as attention starts to focus on a man who might one day emerge as a presidential contender.

Spitzer recently begun unveiling a string of endorsements from labor leaders and African-American ministers -- several of whom had previously backed Republican George Pataki, New York's retiring three-term governor. It's all part of Spitzer's efforts to build an aura of inevitability about his candidacy in the November 2006 election -- an aura that is enhanced by his huge lead in early polls, a fractured state Republican party, and a campaign war chest that he's building toward $20 million.

During seven years as attorney general, Spitzer -- a policy wonk by nature -- has not only made national headlines, with his crusades against fraud involving Wall Street research, mutual funds, and insurance, but has evolved as a politician.

"Spitzer doesn't make the same mistake twice," says veteran New York media consultant Hank Sheinkopf, who did Spitzer's ads for his first two campaigns. In 1994, when he ran and lost for attorney general, says Sheinkopf, Spitzer was "kind of callow." But during his 1998 campaign, when he squeaked into office, edging a Republican incumbent, says Sheinkopf, "Spitzer became a pol."

Spitzer's high-profile cases as AG have made him a national political force -- at 46, arguably the single most powerful public official outside Washington. In the process Spitzer has created a new model for attorneys general across the country and become one of the few true hopes of the Democratic Party.

His political handlers like to talk about the "Spitzer Grand Unified Field Theory," which posits that their man is unlike every other nationally known Democrat in one key respect: Voters think he is tough -- a Giuliani-style leader in Democrat's clothes, an alpha male willing and able to rattle the biggest, toughest CEOs.

Bank of America chief Ken Lewis visited Spitzer just as his institution was getting embroiled in the recent mutual fund scandals. "It was one of the most unpleasant meetings I've ever been through," Lewis said later. "It was a tongue-lashing, a total whipping."

Spitzer's public attacks on hype-peddling Wall Street analysts, shady mutual fund late-traders and bid-rigging insurance brokers have led to a chorus of accusation that he is anti-business -- an extrajudicial meddler who is damaging the free-market system. Such criticism actually helps Spitzer more than it hurts him: it inoculates him against the fatal Democratic flaw of being "too soft."

Unlike most Democrats, he is more popular with men than women. His approval ratings (above 60 percent) are almost as high among Republicans as Democrats, and he polls almost as well in conservative upstate as in liberal New York City.

"He's a Manhattan Upper East Side Jewish guy who commands fabulous numbers upstate," says Jef Pollock, Spitzer's pollster. "That in itself makes him incredibly unusual. Voters believe Eliot has been on their side."

For his next act, Spitzer wants to do as New York governor what he did as New York attorney general: attack big problems that seem beyond the reach of the office. At the very least, his ambition is to transform the moribund government of New York, the world's 11th-largest economy.

But he's thinking beyond that. He wants to make the state a showcase for the virtues of activist government -- a stark alternative to the prevailing ideology in Washington. This would place him at the very fault line of American politics, a point man in his party's crusade to reclaim power.

Of course, he still has to win the election, which is a year away. On Election 2005, he was visibly chomping at the bit to launch his campaign, after holding back while voter attention was focused on this year's races. "I'll feel good tomorrow morning," he said. "I'll go from the on-deck circle to the batter's box."

The early polls, which can be misleading, show Spitzer thrashing all prospective Republican opponents. He leads former Massachusetts governor William Weld -- the choice of Republican leaders, but facing a bitter primary fight -- by 44 percentage points, according to the most recent Quinnipiac University poll.

The situation is so promising that Spitzer allows himself to wax enthusiastic about New York Democrats' prospects for 2006. "Hillary should win big next year," he says as his car heads back to New York City after the appearance at the Hilton. "As should our gubernatorial candidate -- unless I screw it up."

Winning the election may be the easy part. The transition from prosecutor to governor will require Spitzer to make far tougher choices and employ far subtler skills than issuing subpoenas and filing lawsuits. The New York governor's job has buried gifted politicians before -- think Mario Cuomo.

But if Spitzer succeeds? A few years ago Bernard Spitzer, Eliot's father, admitted to musing about spending the night in the Lincoln Bedroom. Asked if Eliot would like to be president, he replied: "It's his very nature."

But as Spitzer knows well, any future ambitions will depend on his ability to make the leap from prosecutor to chief state executive. "If I'm elected governor," he notes, "I start with a clean slate. And after three years as governor, no one will care about whether I was good, bad or mediocre as attorney general."

He will need to evolve into the ultimate insider, even after riding into office on a crusading image. He's eager to rack up an overwhelming victory next November to give himself a political mandate, in part by making his case that the state faces dire times. "Crisis is a terrible thing to waste," he says. "You take a crisis and use it to galvanize public sentiment."

He'll need that galvanized sentiment. Although New York governors have plenty of formal power, the state government is among the nation's most dysfunctional.

"You have a very stubborn and somewhat stagnant legislature that resolves things by splitting things down the middle," says Alan Ehrenhalt, executive editor of Governing magazine and an expert on state governments.

Could Eliot Spitzer change all that? "There's every reason to consider New York a quagmire, and there's every reason to think Eliot Spitzer is someone who knows how to work his way around problems," Ehrenhalt says. "Which one of those will be the stronger force, we can't tell yet. It'll be very interesting to watch."

Read the complete profile from FORTUNE.  Top of page

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