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Inside Eliot’s Army


David D. Brown IV, head of the Investment Protection Bureau.  

When Marsh & McLennan’s Rosoff appeared in Brown’s office, Brown showed him to a conference room where, he sometimes says, “we make them sweat.” Rosoff didn’t sweat. Rosoff knew Brown. He’d been a partner at Davis Polk & Wardwell when Brown was an associate there. Rosoff wondered why this had to be handled with a messy subpoena. Then he coolly assured Brown he was all over the situation. “There’s a Chinese wall,” he told Brown. “We make sure the brokers who place the insurance never know about the commissions [from insurers].” Rosoff suggested that though Marsh did indeed take the added money, there was no harm in it, since the customers were still getting the best deal.

“That turned out to be complete nonsense,” says Brown.

Seven months later, a fiery, fed-up Spitzer seemed ready to put Marsh & McLennan out of business.

“Eliot,” as Brown explains, “lends speed and violence to this process that you wouldn’t believe.”

Spitzer didn’t buy Rosoff’s declarations. They flew in the face of the facts and were “crumbling one by one,” says Spitzer. As he reflects on this, the famous Spitzer chin lurches forward, the bottom teeth advance. He is angry with an anger that accuses not only of bad judgments but, as defense attorneys complain, of moral transgressions.

Spitzer, impelled, it seems, by a sense of betrayal, decided that Rosoff and his boss, Marsh CEO Jeffrey Greenberg, one of the most powerful people in the insurance business, had to go. Spitzer didn’t tell many of even his closest circle about this decision. Most, when they learned, would be against it. “Nobody [in the office] wanted me to do it,” acknowledges Spitzer. It was an extraordinarily aggressive move. Who, after all, was Spitzer to impose personnel decisions on a public company? That’s for shareholders and the board of directors. In his office, Spitzer recalls, “It was another one of those moments where I took a deep breath and said, ‘We’ll see how this plays out.’ ”

He’d tell Marsh, “If your company wants a settlement that permits survival, a threshold demonstration of reform means transition to new leadership.” In legalistic talk of thresholds and transitions, Spitzer lent violence to the process. He demanded heads on a spike.

For a certain type of lawyer, there’s nothing better than to be a soldier in Eliot’s army. That wasn’t always the case. “Moribund” was how one described the office they inherited. Spitzer sought talented and, as he put it, “ideologically motivated” lawyers. “The recruiting effort was very hard,” says Spitzer. “I was trying to sell a product that was highly ambiguous to people who were highly skilled.” It seemed a measure of his desperation that Spitzer went so far as to apologize to one top prospect for a ten-year-old turf war he’d caused. Apologizing isn’t something he enjoys. “I’m never going to apologize to you again,” he added.

Soon Spitzer had assembled a small, highly skilled, extremely ambitious army—“a Delta Force,” Brown says—and one whose members sometimes, wackily, sound like Peace Corps volunteers. Says Brown, “Eliot has smart people thinking, in a predatory way, Where can we do good?

They quickly expanded the office’s scope, taking in areas everyone assumed to be the purview of others. Like insurance. There is a state insurance commission that by statute rides herd on the likes of Marsh & McLennan. “Supine,” says one of Spitzer’s lawyers. The state commission had looked at the Marsh matter a couple of years ago. As far as anyone knew, it was still looking.

Next, they reinvigorated moldy legal weapons, hundred-year-old statutes that gave them broad—in some cases, previously unimagined—legal powers.

David Brown is, in certain ways, typical of the Spitzer army. For almost two decades, he’d worked at the esteemed corporate law firm Davis Polk, then at Bankers Trust, and most recently at Goldman Sachs. When describing the satisfactions of their work, elite New York lawyers invariably refer to its intellectual challenges. They don’t need to mention the financial rewards, not inconsequential if, like Brown, you have four children to put through college. Brown often found the work intoxicating and earned close to $500,000 a year. He was also consumed. He checked his voice-mail every hour, and mostly played defense, careful not to do anything precipitous. “I was Mr. Extension and Delay,” says Brown.

None of which struck Brown, who’d helped run a prison legal-assistance project in law school, as particularly worthy. Upon graduation, he’d had a chance to be a public defender, but chose Davis Polk. “I could do this for a few years, then be free financially,” he’d thought. (Harvard Law classmate Spitzer worked at Paul, Weiss.)

“I was a corporate dweeb,” Brown concludes—a depressing thought. He found himself wondering how he’d grown so dedicated to the proposition that his children should lead upper-middle-class lives. “I had totally sold out,” thought Brown. Brown, five-eight, with light-brown hair and light-blue eyes, favors dark suits, billowy white shirts, rimless glasses, and, at Goldman, a classic comb-over—he could be a figure from the fifties. For years, he’d toyed with jumping ship, doing something that would, as he said, make a difference. “I was pining for it,” he says, “but I was afraid that I wouldn’t find it satisfying, and so I’d be poor and unhappy instead of rich and maybe unhappy.”

September 11, 2001, proved a turning point. “I could have died” was one thought. A year and a half later, Brown buzz-cut his hair and crisply walked, as he occasionally thought of it, to the other side. He joined Spitzer’s office, for $92,000 a year, an 80 percent pay cut. “Don’t you miss the money?” he asked his wife, an independent filmmaker, who assured him she didn’t.

Suddenly, in middle age, Brown felt newly consequential. “It’s extraordinary how much power is concentrated in Eliot and in me,” says Brown. To start, he had subpoena power. “All I have to do is type one up,” he says, which he’d quickly done for Marsh & McLennan, and the other large brokers, Aon and Willis.

In April, his team began interviewing personnel in Marsh’s global-brokerage unit, which administered the back-end commissions from insurance companies. He subpoenaed their e-mails. “E-mails are,” as one Spitzer prosecutor explained, “the functional equivalent of eavesdropping.”

Boxes of e-mails started coming his way, which provoked in Brown a virile new feeling. “This is the kind of thing you dream about doing as a lawyer,” he thought. “Finding the dirt.” He also thought, “I’m happy,” and seemed surprised.

Spitzer’s office terrorizes the defense bar,” says one defense attorney. For six years, Spitzer worked at the Manhattan district attorney’s office, and his inner circle is composed almost entirely of former criminal prosecutors—lawyers who’d pursued corrupt cops, mobsters, even terrorists. Their outlook set the tone in the office, which to attorneys defending corporations was not a felicitous turn of events. These lawyers hadn’t been in business. They “spouted strange, far-fetched theories,” says one attorney, characterized by “extreme thinking,” as if they thought the “unfathomably complicated insurance business” was a simple mob shakedown.

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