Text size:

Spitzer's board seat in the clear

Ethics commission OKs attorney general's position with family's trust, but must avoid conflict of interest

BY MICHAEL ROTHFELD | Newsday Staff Writer

August 29, 2006

New York state Attorney General Eliot Spitzer is seen after a fundraiser at the Glen Oaks Country Club in Old Westbury. (Newsday / Karen Wiles Stabile / February 15, 2006)

The New York State Ethics Commission yesterday ruled that Attorney General Eliot Spitzer can remain on the board of a family charitable trust overseen by his agency, provided he follows strict rules to avoid a conflict of interest.

Spitzer, a Democrat who is the front-runner in the governor's race, was accused last month by his party rival, Nassau County Executive Thomas Suozzi, of violating state law by sitting on the trust's board. Civic leaders also urged Spitzer to seek the commission's advice.

Two of the five commissioners abstained from the decision: Carl Loewenson, who was appointed by Spitzer and donated $1,250 to his 2002 re-election, and Paul Shechtman, an appointee of Republican Gov. George Pataki who worked with Spitzer in Manhattan District Attorney Robert Morgenthau's office.

Suozzi, through a spokeswoman, criticized commissioner Robert J. Giuffra Jr. for not abstaining "despite having gone to Princeton with Eliot Spitzer, living two floors below Eliot Spitzer in a building constructed by Eliot Spitzer's father, and having contributed to Eliot Spitzer's re-election campaign." Giuffra gave Spitzer's 2002 campaign $1,500.

Walter Ayres, an Ethics Commission spokesman, said, "I think Mr. Giuffra let people know what the situation was. The commissioners agreed unanimously that he did not need to recuse himself."

Spitzer's office said he was pleased with the ruling.

Blair Horner, legislative director for the New York Public Interest Research Group, said it would have been better for Spitzer to get clearance before joining the board in 2001.

"If the state commission was more independent, that would be good," Horner added.

The trust, started by Spitzer's parents, gives millions of dollars to museums, health care institutions and other non-profit groups. It has also donated to groups led by Spitzer supporters, and invested money with hedge fund managers who have contributed to his campaigns, records show.

Spitzer has said he would be recused from his office's dealings with the trust. Spitzer deputy Richard Rifkin, in response to Suozzi and news reports, requested the commission's opinion on July 12. Suozzi filed a complaint the next day.

The commissioners, in a 17-page opinion, wrote that a conflict of interest is unlikely because the trust is not licensed by the attorney general's office; because it is also overseen by the U.S. Internal Revenue Service; it does not solicit public money, and Spitzer is one of four unpaid trustees. But the commission added, "there may be circumstances where a conflict may exist" in Spitzer's role.

The commission ruled that Spitzer cannot even be advised if the trust comes under review by his office. The opinion also said the office must refer matters to the IRS if "further action" is needed, and to the governor for a special prosecutor in the event of possible criminality.