September 10, 2010 / 6:26 PM / in 7 years

Would-be Wall Street sheriffs strike cautious tone

5 Min Read

NEW YORK (Reuters) - All candidates vying to be the next so-called Sheriff of Wall Street say they will find the bad apples without overturning the applecart in the financial capital's fragile economic recovery.

In interviews, two of the candidates in the September 14 Democratic Party primary cited either boards of directors or credit ratings agencies or municipal finance as areas of focus should they be elected New York State Attorney General in the November 2 election.

Dan Donovan, the sole Republican Party candidate for the office made famous by the aggressive tactics of Eliot Spitzer, says he has no intention of "disturbing the garden" of Wall Street money, jobs and tax revenue vital to the economy of a state suffering from the effects of the recession.

"We want to encourage financial services to be here. A hedge fund is a computer that can go anywhere," Donovan, who will face one of five Democratic Party candidates, said in an interview with Reuters.

The 53-year-old career New York City prosecutor said he was "not looking to make headlines for myself at the expense of people who are in business."

The putative front-runner in the Democratic primary, Eric Schneiderman, fully embraces the nickname "Sheriff of Wall Street" unlike some of his opponents. The tag was applied to Spitzer during his 1999 through 2006 tenure and sometimes to the incumbent, Andrew Cuomo.

"It's something that is now part of the job description," state senator Schneiderman, who has the backing of the party establishment, said in an interview. "I am willing to take on anybody."

Spitzer turned the office into an aggressive enforcer in the financial industry in an era of low-key federal regulation.

He successfully ran for governor only to resign less than two years later in 2008 in a prostitution scandal. Cuomo, who succeeded Spitzer as attorney general, is this election year's frontrunner for governor.

Street Needs a Sheriff

Schneiderman, 55, said: "People who say we don't need the AG to be the Sheriff of Wall Street are dead wrong at a time where there is still a lot of turbulence in the markets."

He also said it was important to use judgment about the "inchoate anger coming from people on the left and on the right ... we have to get rid of this public sense that all the games are rigged. We have to enforce the law and show there is one set of rules for everyone."

The other Democrats in the race, county prosecutor Kathleen Rice, first-time political campaigner and trial lawyer Sean Coffey, former state insurance chief Eric Dinallo and state assemblyman Richard Brodsky, also take sober prosecutorial positions on policing Wall Street.

"I think it's important for the office to be known as 'the People's Attorney,'" Rice, 45, district attorney for suburban Nassau County on New York's Long Island, told Reuters. "I think that only calling it the 'Sheriff of Wall Street' is doing it a disservice to Main Street and the issues of everyday families that they deal with sitting at their kitchen table."

She acknowledged that in the wake of the financial crisis people may be angry with bankers and company executives and that there is a sense of "public officials and connected people, very often people with money who can buy their way out" of trouble.

Coffey said despite what he called the "re-engagement of federal officials" and new regulations for the financial industry under the Obama administration, the New York Attorney General is going to be highly relevant.

"I play with others but that doesn't mean I'm not tough," Coffey, 54, said in his interview.

Coffey said that if he is elected as the state's top prosecutor he "did not see a real need for trying to sift through what happened in the great recession."

Listing auditors, credit rating agencies, directors, lawyers and bankers, Coffey said he wanted to focus more on "third parties that the investing public relies on to ensure corporate management is playing by the rules."

Dinallo, 47, said he expected to be "fair and tough" if elected.

"Markets respond well to fair and tough measures against bad actors," he said.

Brodsky, 64, said it was "shameful" the way credit had been offered and extended to municipalities in the United States. Many of those municipalities are now overburdened with debt.

He said that for the purposes of credit, New York was "the country" and that "the next great frontier for the attorney general is going to be municipal finance."

Reporting by Grant McCool, Mark Egan, Daniel Trotta, Joan Gralla, Edith Honan and Basil Katz; Editing by Andrew Hay

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