The ‘Sheriff of Wall Street’ who exposed bankers’ lies

**Brooke Masters** (0:00)
He's done something unbelievably stupid. He starts taking out big bundles of cash from his bank account. This gets reported to the FBI, who then promptly set up a sting. They actually initially think, oh, maybe he's taking bribes. And so they set up a sting to figure out what's going on, and they discover he's going to the Emperor's Club.

**Gillian Tett** (0:18)
The Emperor's Club, what's that? Is that like all these New York clubs they have, like the Metropolitan Club or the Century Club?

**Brooke Masters** (0:24)
No, sadly for him, it was a high-class escort service.

**Gillian Tett** (0:28)
Oh dear.
Today on The Story of Money, the rise and fall of a man who made his name taking on America's biggest banks in the early 2000s and who transformed the way Wall Street was policed. He was a politician hailed as a future presidential contender, a moral crusader who promised to clean up investment banking's cultural greed. But also a man who, in a spectacular twist, was brought down by his own secret and somewhat sordid double life. I'm talking about Eliot Spitzer. As New York's Attorney General in the late 1990s and early 2000s, he transformed financial regulation, exposed conflicts of interest, and forced some of the most powerful financial institutions in the world to change their ways. In fact, his nickname was the Sheriff of Wall Street. And for a while, few people were more feared in American finance. Until it all came crashing down with a sex scandal.
So you might wonder, why would anyone want to talk about Eliot Spitzer today? Well, the reason is that, in spite of all his flaws, many of the problems he warned about back then have never gone away. In fact, some people might say we actually need another Eliot Spitzer right now, but without the scandal.
Now, Robin's away this week, but here to tell the Spitzer story is my FT colleague, Brooke Masters. Hello, Brooke. Great to have you here. So Brooke, your day job is at your US managing editor of the FT in America, a job I used to have myself some time ago. But tell us why you are so well placed to talk about Eliot Spitzer.

**Brooke Masters** (2:25)
Well, back in the early 2000s, I was covering Wall Street and white-collar crime in New York, and Eliot Spitzer was the biggest thing since life spread. I mean, he was dominating the news and he was enforcement back then. And I not only covered his cases, I got so interested in it, I wrote a book about it and called Spoiling for a Fight, which is a reference to how pugnacious he was.

**Gillian Tett** (2:49)
Well, Spoiling for a Fight is a great title and it also explains why we're talking about this right now because one of the questions is, do we need another big fight today? So welcome to The Story of Money from the Financial Times with me, Gillian Tett.
So we know how Eliot Spitzer's story ends. Plot twist, spoiler, in an embarrassing sex scandal. But when Spitzer's career first took off in the early 2000s, he was seen as a white knight and was very popular with the public. And taking on Wall Street, as he did later, requires a lot of guts. So Brooke, tell us where did Spitzer come from and why did he feel this burning need to go to war with Wall Street?

**Brooke Masters** (3:49)
Well, Eliot Spitzer is a classic New York privilege story. His dad was a very, very successful real estate developer. He built many of the big apartment buildings in Manhattan.
And the Spitzers raised their three kids to be highly competitive, highly combative and incredibly smart. Friends who used to come over for dinner said it was absolutely frightening to be at the dinner table with them. And so Eliot goes off and has a proper preppy education. He goes to Horace Mann, he goes to Princeton, he goes to Harvard Law School. He then takes an interesting side turn and starts working for the Manhattan District Attorney's Office. And this is the beginning of his crusade. And while he's there, he does a bunch of stuff, but the most interesting thing he does is he and a colleague convinced the Manhattan DA that they could get the mafia out of the garment district in New York. Now, the mafia has been there for decades, and they have this really clever idea where they set up their own little company that is making clothing.
And the Gambino family dominated trucking in the garment district. And so if you wanted to get your cloth in and your clothing out, you had to pay them. And so they set up their own little clothing company, and the Gambino's come knocking to demand their money. And of course, they have the whole place wired. They arrest the Gambino's, and they work out a deal with them, where the Gambino's agree to leave the garment district. And so the mafia's influence is pulled out of the garment district because of this clever idea Spitzer had.