Knowing that he had followed up on a similar threat to Merrill Lynch, the banks caved. Spitzer announced the settlement two days later, on Dec. 20. The banks agreed to pay a total of about $1.4 billion in fines and other penalties. Spitzer is still working out the details of a separate case against five CEOs, calling on them to return profits made from stock offerings arranged by Salomon Smith Barney. On the basis of another roundup of e-mail, Spitzer says that Jack Grubman, then Salomon's chief telecommunications analyst, engaged with the executives in "spinning," a practice whereby a bank allocates hot, essentially risk-free shares in companies about to go public to CEOs of prospective clients. In return, the CEOs give the bank business, confident that, in turn, their own stocks will receive favorable ratings. It was from this e-mail that the public learned that rich investment bankers do favors to get their associates' kids into the right preschools.

Spitzer's case against wall street is as gutsy as his earlier pursuit of Mob interests in New York City. Everyone knew that organized crime controlled the trucking business in the city's garment center, but no one could figure out how to crack it or how to make the case. At the time Spitzer was the 33-year-old chief of the labor-racketeering unit at the Manhattan district attorney's office. A few attempts to wire undercover agents had failed, in part because the target—the notorious Gambino family—was wary of such tricks. So Spitzer came up with a high-risk plan to set up his own sweatshop. He brought in a state trooper to run it undercover, then hired 30 laborers who had no idea it was a front. The shop set up on Chrystie Street in the city's garment district, turning out shirts, pants and sweaters. But the sting took longer than anyone had anticipated. "Every two weeks Eliot would come in asking for more money," says Michael Cherkasky, who headed the investigation division (and is now president of risk-consulting firm Kroll Inc.). "We were actually stuck running a business—and losing money. I said, 'Eliot, you're becoming a shmatte salesman?'" But the shop manager eventually got close to the Gambinos, and officials were able to plant a bug in their office, in an elaborate ruse that involved picking locks, switching off alarms, disrupting utilities and distracting guards.

The wiretaps and other material produced evidence of a conspiracy in which a few families agreed to carve up the garment-industry trucking business among themselves. The trick was bringing a case. There was evidence of extortion, Spitzer recalls, but it was ambiguous, and cases like this had failed in the past. So he charged the Gambinos with something that could stick, an antitrust violation. Thomas and Joseph Gambino and two other defendants took the deal and avoided jail by pleading guilty, paying $12 million in fines and agreeing to stay out of the business. "It was imaginative and smart," says Cherkasky, who calls Spitzer one of the "best and brightest" lawyers he has worked with.

The Eliot Spitzer story begins on the Lower East Side of Manhattan, where both his parents grew up. His father Bernard was reared in a tenement with no heat, sharing a bathroom in the hall with the neighbors. Bernard, whose father had been an officer in the Austrian army, was intensely driven. He qualified for an elite school in the city and managed to graduate from City College at 18. A civil engineer by training, he went into real estate and made his fortune. He has constructed about a dozen properties in Manhattan, among them several high-end buildings on the edge of Central Park, including the Fifth Avenue tower in which Eliot now lives with his wife and three daughters. Spitzer's mother Anne grew up in modest circumstances. She became an academic and teaches literature at Marymount Manhattan College in New York.

The Spitzer home in suburban Riverdale was comfortable but not showy. Spitzer was a top student and athlete (he captained Mann's tennis team), though his parents never focused on that. They recall attending just one soccer game, the last of the season in his senior year, arriving just as Eliot was called for a penalty. "Free kick, they lost," his father says with a laugh. The parents concentrated on their children's intellectual side—in ways that made their friends snicker. One of the kids—Spitzer is the youngest of three—would be made responsible for leading a dinner discussion on a topic of the day. When they traveled, they would test the kids on what they were seeing. The Spitzers also attempted to impart a sense of compassion. "We tried to teach them that it isn't enough just to make your own pile," says Bernard.

Spitzer took it to heart. While still an undergraduate at Princeton, he took off for the South one summer to work at menial jobs. He hit the day-labor agencies at dawn and took whatever was available—stacking fiber-glass insulation at a warehouse, operating a jackhammer, cleaning up a sewage overflow at a hotel. He also worked that summer as a migrant laborer in upstate New York, side by side with Mexicans picking tomatoes. "I'd had a comfortable upbringing," says Spitzer, "so I wanted to experience harder work, to see the world from a different perspective."

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