As previously reported, we attended the Crain’s debate yesterday featuring the five Democratic candidates for NYS Attorney General (if you go to that post, clicking on any of the candidate’s names the first time they are mentioned will take you to their campaign web sites). Some of the issues discussed deserve further attention.
First, the dog that didn’t bite. In addition to having jurisdiction to regulate certain industries (such and coop and condo plans and charities) and to bring certain types of enforcement actions, the Attorney General is also head of the Law Department, providing the attorneys who defend state agencies in Court and who defends the constitutionality of state laws and actions. This is a major part of the office’s work, but it didn’t get a single mention from any candidate or from the reporters, possibly because the Attorney General has limited discretion on which cases to handle or what to do with them, and he rarely makes news in this capacity. However, the work done is critical to government’s functioning and the candidates ought to be talking about whether they think the quality of the lawyering could be improved. While the AG can’t make policy, like any lawyer he can advise his clients when to settle and when to fight, giving them standing, in the campaign at least, to talk publicly about whether they think any agency has been out of line.
Some of the discussion at the forum was whether Rockefeller Drug Laws reform is still an issue or whether it is just being used today as a political talking point. So too NYPD’s stop and frisk policies. All of the candidates supported the recent data base purge law although Kathleen Rice seemed least enthusiastic about it.
The most interesting insight into the candidates thinking process was a question about expanding the Martin Act. This is a powerful statue giving the Attorney General both criminal and civil jurisdiction over “deceptive trade practices.” Prior to Eliot Spitzer, it was used primarily to regulate condo and coop plans. His deputy, now candidate Eric Dinallo, dusted it off to go after Wall Street houses and others, greatly expanding Spitzer’s reach.
Eric Scheiderman and Richard Brodsky both support expanding the law to allow institutional investors to be able to sue under the law. They pointed to both Wall Street shenanigans as well as crooks like Bernie Madoff and felt that institutional investors like pension funds should not have to depend on government to go after wrongdoers. As legislators, they want to be proactive, so they propose passing a law.
Interestingly, both Sean Coffey and Eric Dinallo-who actually have direct experience with these large fraud cases-were opposed. Coffey has earned millions of dollars bringing claims under the federal securities laws and Dinallo, as noted above, drove the Spitzer use of the Martin Act. Their opposition stemmed from analysis as lawyers of the implications of such an expansion. Both felt that federal law and New York common law were strong enough tools. Coffey worried that court decisions in private cases could undercut the Attorney General’s position and Dinallo observed that the law imposes strict liability; intent to break the law is not required and such a statute could be unfairly deployed if allowed in private lawsuits. I thought their answers were thoughtful and sounded right to me. More important, I thought they approached it in a careful way that you would want an Attorney General to use. Ms. Rice basically ducked on the issue.