Ken Langone, outside his office on Park Avenue.   (Photo: Michael Edwards)

James Cayne, a stock-exchange board member and the CEO of Bear Stearns, was one of Grasso’s biggest supporters, but during his recent deposition with Spitzer, he conceded that he was “shocked” when he first discovered the size of the package in late 2002. Cayne told me that he called Langone to make sure the number was accurate, asking, “Where’s the decimal point?”

Langone told Cayne that he has no problem paying CEOs extraordinarily well, if their performance merits it. Langone sits on the boards of four companies, including the Home Depot, where chief executive Robert Nardelli is one of the highest-paid executives in corporate America. Based on Grasso’s record, Langone says he deserved treatment similar to a CEO of a public company. To me, he rattled off a series of statistics to prove this point, including what he believes is the most compelling: During Grasso’s tenure as NYSE chairman, the number of companies that paid fees to have their stocks listed and traded on the exchange grew dramatically. Cayne and the NYSE board ended up agreeing with Langone’s argument.

Langone’s choice to topple Spitzer is Thomas Suozzi, a rising star in the Democratic Party.

But when the news broke in spring 2003 about Grasso’s pay, few were willing to defend it publicly. In June, Langone left the compensation committee; before long, the SEC launched an investigation, the press jumped all over the story, and board members started backing away from Grasso. On September 17, he was ousted, and the following spring Spitzer filed suit in civil court seeking the return of the money. He cited Langone, as well, for deceiving fellow NYSE board members about the compensation, zeroing in on an $18 million chunk of it that Spitzer alleges was slipped in without the board’s full understanding. The many depositions taken over the past eighteen months have left Spitzer’s case full of holes, Langone’s supporters say. But the trial looms, and is now expected to start next summer, right in the thick of the governor’s race.

Langone hasn’t lost his thirst for deal-making. He remains an active investor, recently mounting a failed takeover of the New York Stock Exchange. “There’s a little Don Quixote in him,” says Terrence Cassidy, a friend for 30 years who now runs NWH Inc., a data-processing company. “He can be unbelievably impractical. But he also doesn’t have a private agenda, and when he thinks he’s doing something that is right, there’s no stopping him.”

When I spoke to Langone last week, he was preparing to give a speech, sponsored by the Cato Institute, titled “Justice or Political Ambition: The Case of Eliot Spitzer.” This was to be his opening salvo in what he refers to as “a holy war.” He planned to paint Spitzer as an enemy of business, accusing him of violating civil liberties and destroying thousands of jobs, all for headlines.

To follow up the speech, Langone says, he’s toying with two ideas. One is to create a political-action group and carpet-bomb Spitzer with issue ads that attack his record as attorney general. His media strategist, Jim McCarthy, says they’ve already drawn up one set of mock ads that highlight Spitzer’s investigation of insurance broker Marsh & McLennan, which left 5,500 employees jobless in the aftermath. The notion is to present them as the innocent victims of Spitzer’s vainglorious crusade.

Langone, however, says he’s leaning toward another plan—financing a candidate to face Spitzer in a Democratic primary. His choice: Nassau County Executive Tom Suozzi, a rising star in the state’s Democratic Party. This represents quite a break for Langone, a longtime Republican who has raised tens of millions of dollars for the likes of Rudy Giuliani, Bob Dole, and the senior George Bush. In the past, he’s also supported Bill Weld, the former governor of Massachusetts, who has since moved to New York and is mounting a Republican challenge to Spitzer. But Langone doesn’t seem to respect Weld, saying “he’s not appropriate for this job” and citing the fact that Weld “walked out as governor with three years left on his term” to become ambassador to Mexico. (Weld’s appointment ended up being blocked by the Senate.) A spokesman for Weld had no comment, other than to say that there were actually seventeen months remaining in his term when he left.

As a resident of Nassau County, Langone claims to be impressed with Suozzi’s record of saving the county from the brink of bankruptcy. More important, Langone thinks Suozzi can win. In recent weeks, Langone has been telling friends that he can raise $30 million for Suozzi if he chooses to take a stab at Spitzer, with much of the money coming from Wall Street executives who have been the target of the A.G.’s regulatory crackdown. “This man is going to be great, if he runs,” Langone says. “He’s smart, he’s ethical, and he’s got a great record.”