U.S. Chamber of Commerce President Tom Donohue Wednesday harshly attacked New York Attorney General Eliot Spitzer, saying he had exceeded his authority and trampled on individual rights in his efforts to clean up financial malfeasance.
Spitzer, a crusading prosecutor and Democrat who recently announced plans to run for New York governor, has ruffled feathers in the business community with his reform efforts.
"He is the investigator, the prosecutor, the judge, the jury and the executioner," Donohue said of Spitzer. "It is the most egregious and unacceptable form of intimidation that we have seen in this country in modern times."
Donohue spoke to reporters at an annual event at which the business group's leaders discuss their agenda for the year.
The New York attorney general has, among other things, tackled improper trading in mutual fund shares and helped forge a $1.4 billion settlement with Wall Street banks over fraudulent stock research.
Spitzer's office had no immediate comment on Donohue's remarks.
Donohue said he was also concerned with some practices at the Justice Department and the Securities and Exchange Commission.
Some officials, he said, had taken their authority "well beyond" what was intended by the 2002 Sarbanes-Oxley Act passed by Congress to crack down on corporate corruption in the wake of many boardroom scandals.
"We will continue to contest the SEC's regulatory overreach in comments, in testimony, in courts of law and in the court of public opinion," he said.
The Chamber of Commerce sued the SEC in September, questioning its authority to impose a new rule requiring more independence among mutual fund directors.
This spring, Donohue said, the Chamber of Commerce plans to release a major study that will document what he described as the "unintended and unjustified" costs of complying with the Sarbanes-Oxley law.
But Donohue made his strongest attack on Spitzer, accusing him of going into company offices and demanding that officials pay fines and get rid of certain personnel, or face the prospect of the company being indicted and forced out of business.
He said Spitzer was among some prosecutors and attorneys general "who seem bent on criminalizing honest mistakes and legitimate accounting differences".
"By forcing some companies and individuals into settlements without the due process protections guaranteed in the Constitution, these powerful officials have inexcusably trampled on their rights," Donohue said.
Spitzer, a Harvard University-educated lawyer, first won state office in 1998 on promises of cleaning up political corruption but has focused on financial misdeeds.
He filed suit against former New York Stock Exchange head Richard Grasso over his executive compensation. Most recently, he took on the insurance industry, accusing Marsh & McLennan, the world's largest insurance broker, and other companies of rigging prices and taking kickbacks.
Some critics complain Spitzer tars entire industries when only a few members are at fault, while others say he builds such public cases against companies that they feel coerced to settle rather than fight the charges.
