WITH JORDANNA THIGPEN
Photo by Jack
The greatest attorney general
you've never heard of
By Jordanna Thigpen
May 12, 2006
How important is the role of State Attorney General? That depends
on who's been elected and, apparently, where. It is time for the
California AG to rise to the occasion as other AGs have.
Attorney General Eliot Spitzer (D-NY) was in town recently. He
is running for Governor of New York and has served as Attorney
General of New York since 1998. He'll be President one day very
One of the defining themes of his tenure as Attorney General
has been a vigorous prosecution of antitrust violations. He has
methodically gone after the securities and entertainment industries.
He has announced that the insurance industry will be a focus for
the rest of the year.
Recently, he has focused on the relationship between insurance
companies and unions. Apparently ING is paying $3m a year to a
teacher's union for what are essentially goody bag marketing privileges
to members. Mr. Spitzer has investigated both sides - and the
union is close to reaching a settlement with his office, even
though no lawsuit has been filed.
How is it that Mr. Spitzer can go straight for the financial
jugular? In part, because of New York's Martin Act. Enacted in
1921 to combat financial fraud, the Martin Act grants broad subpoena
powers to the prosecutors. Those called in for questioning pursuant
to a Martin Act investigation do not have a right to counsel,
and are not protected against self-incrimination. Ex parte
injunctive relief is available and does not require a likelihood
of success on the merits. Unlimited pre-filing administrative
discovery is available. If the Martin Act were a weapon, it would
be a carbon steel katana: light, flexible, and beautifully effective
in the right hands. No other State has a comparable ability.
Even the SEC can't reach as far - and in fact, under new leadership,
has been having its own little winter of discontent regarding
the Martin Act. The brass at the SEC is beginning to regard Mr.
Spitzer's post-Enron revival of the seldom-used law as a potential
preemption issue. It's no surprise that would be the case. The
mere whisper of a Martin Act investigation has sent stocks plummeting,
and the top out of sights are beginning to get annoyed.
I know it's not fair to compare California AGs to Mr. Spitzer.
But the most newsworthy act recently performed by our own outgoing
Bill Lockyer was to negotiate a settlement regarding movie theaters.
Now, I love independent theater. In fact, I fought Walgreen's
to save Cinema 21 from demolition in the merchant corridor where
my businesses are located. And I'm glad that AMC won't - for now
- control 77% of the movie theaters in San Francisco, thanks to
the Sundance purchase of the Kabuki.
But it seems to me that here in California, we have some higher
priorities. For example, every day our society curls up on the
couch for Big Pharma Gone Wild, but no one will discuss
drug prices as major parts of the health care crisis. It's clear
that the process by which drugs are sold to doctors is unethical.
(Really, it's only a small step removed from the heroin deals
some of us watch every day in the TL.) Mr. Lockyer - or better
yet, Jerry Brown or Rocky Delgadillo - could launch an investigation
into these practices and perhaps come out with a decision that
would protect doctors and patients alike from the predatory practices
of drug companies.
Whether Jerry Brown or Rocky Delgadillo gets the Democratic nomination
on June 6, 2006, it does not matter unless either one actually
intends to put some teeth into the office of the AG. Mr. Spitzer
has equalized the playing field for entire industries. Consumers
in New York have not lived in fear with Mr. Spitzer as the Chief
Prosecutor for their State. The settlements have brought in revenue
for the State, but most importantly, have forced these industries
to change their practices. Mr. Spitzer's work has been transformational.
California deserves the same: an AG who cares enough to do his
District 6 resident Jordanna Thigpen is an attorney, small
business owner and President of the San Francisco Small Business
Commission. You can usually find her at work and she doesn't get
to Ocean Beach often enough. Email Jordanna at email@example.com.