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Editor’s Note: There was celebration on some corners of Wall Street when New York Gov. Eliot Spitzer was forced to resign because of a scandal involving his use of prostitutes.

The scandal removed one of the most effective critics of Wall Street abuses and, indirectly, discredited the idea of government regulation of the financial industry, a dangerous turn for the world’s economy, as Michael Winship notes in this guest essay:

I attended a screening this week of Alex Gibney’s new documentary, Client 9. It’s the story of the rise and fall of New York State Gov. Eliot Spitzer, brought down by imperial hubris and a reckless penchant for ladies of the evening.

Gibney, an Oscar-winning filmmaker, creates a fascinating narrative. Both he and Spitzer readily concede that it was the former governor who did himself in; he haplessly provided the guns and ammo that polished himself off.

But there is a compelling case made suggesting that there were plenty of enemies, both in politics and business, with a motive to see him destroyed, plus the wherewithal and contacts to help grease the skids.

After all, it was Spitzer who, as state attorney general and self-appointed “Sheriff of Wall Street,” went after corruption and greed in the finance industry, exposing investment bank stock inflation, securities fraud, predatory lending practices, exorbitant executive compensation and illegal late trading and market timing perpetrated by hedge funds and mutual fund companies.

Some of these practices were, of course, major factors in the calamitous financial follies of 2008.

One of Spitzer’s targets was Maurice “Hank” Greenberg, former chair and chief executive officer of the gigantic insurance company AIG. He was forced to resign by the AIG board in March 2005 after Spitzer charged Greenberg and the company with manipulative behaviors in violation of insurance and securities laws.

Ultimately, criminal charges were dropped but when AIG collapsed during the ’08 meltdown, ultimately receiving the largest of the Federal bailouts -- 182 billion taxpayer dollars – Greenberg said he was “bewildered” that things could have gone so wrong.

In Client 9, I was struck by a statement attributed to Greenberg, who in his AIG heyday supposedly was fond of joking, “All I ask for is an unfair advantage.”
Just three days before the screening, The New York Times had reported that one of the largest donors to a foundation run by the U.S. Chamber of Commerce is a charity run by Greenberg.

According to the Times, “The charity has made loans and grants [to the chamber’s foundation] totaling $18 million since 2003. U.S. Chamber Watch, a union-backed group, filed a complaint with the Internal Revenue Service last month asserting that the chamber foundation violated tax laws by funneling the money into a chamber ‘tort reform’ campaign favored by AIG and Mr. Greenberg. The chamber denied any wrongdoing.

“The complaint, which the chamber calls entirely unfounded, raises the question of how the chamber picks its campaigns, and whether it accepts donations that are intended to be spent on specific issues or political races.”

Other major contributors of at least $17 million to the foundation between 2004 and 2008 include Goldman Sachs, the investment company Edward Jones, Alpha Technologies, Chevron Texaco and Aegon, a Netherlands-based, multinational insurance company “which has American subsidiaries and whose former chief executive, Donald J. Shepard, served for a time as chairman of the U.S. Chamber of Commerce’s board.”

Almost all of these donations would have remained anonymous, as allowed by law, if not for some intensive digging by the Times into corporate foundation tax filingsand other public records as part of a larger investigation into how the U.S. Chamber of Commerce “has increasingly relied on a relatively small collection of big corporate donors to finance much of its legislative and political agenda.

“The chamber makes no apologies for its policy of not identifying its donors. It has vigorously opposed legislation in Congress that would require groups like it to identify their biggest contributors when they spend money on campaign ads.”

Times investigative reporters Eric Lipton, Mike McIntire and Don Van Natta Jr. write that “the chamber has had little trouble finding American companies eager to enlist it, anonymously, to fight their political battles and pay handsomely for its help. …

“While the chamber boasts of representing more than three million businesses, and having approximately 300,000 members, nearly half of its $140 million in contributions in 2008 came from just 45 donors. Many of those large donations coincided with lobbying or political campaigns that potentially affected the donors.”      

All they ask for is an unfair advantage. Open any newspaper, magazine or political Web site and the coverage of corporate campaign largesse, much of it anonymous, bedazzles the mind.

There’s $75 million from the chamber, plus another $50 million or more in undisclosed donations to major conservative organizations -- as reported by the nonpartisan Sunlight Foundation -- that include the American Action Network, Karl Rove’s Crossroads GPS, the American Future Fund and the 60 Plus Association.

The progressive Campaign for America’s Future reports that “Americans for Prosperity brags that they’ll spend at least $45 million on the 2010 elections, while FreedomWorks plans to throw in another $10 million.”

Both organizations, backed by right-wing billionaire David Koch, are major funders of “all things Tea Party.”

And get this – 23 companies that received a billion dollars or more in taxpayer bailout money donated $1.4 million to candidates in September – most of it to Republicans, although, as The Washington Post reports, “the TARP program was approved primarily with Democratic support. President Obama expanded it to cover GM and other automakers.” 

Yes, organized labor is throwing millions at the elections, too, but we know where that money is coming from – union dues (and in the interest of full disclosure, I’m president of a small AFL-CIO affiliated union, but one that neither contributes to nor endorses candidates).

When all is said and done, the Post reported Tuesday, using data from the Federal Election Commission and the watchdog Public Campaign Action Fund, outside interest groups could spend $400 million or more by Election Day.

What’s more, “House and Senate candidates have already shattered fundraising record for a midterm election and are on their way to surpassing $2 billion in spending for the first time... To put it another way: That's the equivalent of about $4 million for every congressional seat up for grabs this year.”

All the big donors ask for is an unfair advantage. You may recall the story, usually attributed to George Bernard Shaw, of how he propositioned a fellow dinner guest, asking if she would sleep with him for a million pounds. 

She agreed, and then Shaw asked if she would do the same for ten shillings. “What do you take me for?” she angrily replied. “A prostitute?”

“We’ve established the principle,” Shaw rejoined. “Now we’re just haggling over the price.”

With this election, Congress may establish once and for all that Shaw’s is the only principle left that it still embraces, as long as the price is right. 

By the way, Alex Gibney’s Client 9: The Rise and Fall of Eliot Spitzer opens in New York Nov. 5 and across the country on Nov. 12. Keep an eye out for it at a theater near you, as they say, or even on a TV near you – many cable systems are offering it on demand. 

Michael Winship is senior writer at Public Affairs Television in New York City.

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