Spitzer's Spectacle

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With his impeccably pressed white shirts and wingtips, Spitzer would seem to be part of the Establishment, not its nemesis. But he has taken up crusades that are far removed from the usual concerns of a state attorney general, battling coal-burning power companies over acid rain, gun manufacturers over product liability, grocers for exploiting immigrant workers. Spitzer and the team of lawyers he recruited from the ranks of prestigious law firms and federal prosecutors' offices often work unorthodox legal strategies, dusting off little-used laws to help their cause. In the fight with Merrill, for example, New York relied on the Martin Act of 1921 for authority to pursue Merrill without having to prove the firm intended to dupe investors.

Spitzer is extending the probe. He has subpoenaed from Salomon Smith Barney and Morgan Stanley the annual self-evaluations, in which analysts justify their requests for bonuses. The statements could reveal that analysts' recommendations helped win investment-banking business, a potential conflict of interest. Says Spitzer: "It certainly will be instructive to see what they say about themselves." Count on some more Spitzer headlines before he's done.