5 Min Read
NEW YORK (Reuters) - Former New York Governor Eliot Spitzer was hit with two libel lawsuits seeking $90 million by former Marsh & McLennan Cos executives over a column posted on Slate.com about an insurance bid-rigging scandal.
The lawsuits arose from Spitzer's August 22, 2010, column, "They Still Don't Get It," advocating prosecution of corporate wrongdoers and defending his own enforcement activity against Marsh and insurer American International Group Inc.
William Gilman, a former Marsh executive marketing director, and Edward McNenney, a former Marsh global placement director, contended that they were defamed by the column, which appeared thee months after a judge threw out their convictions on felony antitrust charges. Neither is named in the column.
Slate.com is owned by Washington Post Co, and its parent Slate Group LLC is a defendant in both cases.
Gilman filed his $60 million lawsuit in the U.S. District Court in Manhattan, while McNenney filed papers seeking $30 million with the New York State Supreme Court in Manhattan. Both cases were filed on Friday and made public on Monday.
Spitzer, in a phone interview, declined to comment after the first of the lawsuits, Gilman's, became public. Rima Calderon, a Washington Post spokeswoman, declined to comment.
Gilman had worked at Marsh for 28 years and McNenney for 14 years when Spitzer, then New York's attorney general, in 2004 opened a probe into the company's practices -- including alleged kickbacks for steering of clients to favored insurers.
Marsh, then the largest U.S. insurance broker, agreed in January 2005 to pay $850 million in a civil settlement with Spitzer, and eight insurance executives including Gilman and McNenney were indicted eight months later in the probe.
Both men were found guilty in February 2008, but the presiding judge threw out that conviction in July 2010, citing new evidence. That case was dismissed in January. The other indicted executives either were acquitted or had their cases dismissed. Twenty-one others pleaded guilty.
In his complaint, Gilman said Spitzer defamed him in writing, stating that "Marsh's behavior was a blatant abuse of law and market power: price-fixing, bid-rigging and kickbacks all designed to harm their customers and the market while Marsh and its employees pocketed the increased fees and kickbacks."
Gilman also said Spitzer defamed him in writing by stating that "many employees of Marsh" have been "convicted and sentenced to jail terms," when none had.
Spitzer had written the column shortly after an editorial critical of him in The Wall Street Journal.
"While Mr. Spitzer's statements do not refer to Mr. Gilman by name," Gilman's complaint said, "Mr. Gilman is readily identifiable as the subject of the defamatory comments."
"Mr. Spitzer was well aware of his own allegations as attorney general and the resolution of those allegations in favor of Mr. Gilman and yet, recklessly disregarded these facts," the complaint said.
Punitive damages account for half the amounts sought in each lawsuit. "I don't know what possessed him to make the statements that he made," Jeffrey Liddle, a lawyer for Gilman and McNenney, said in an interview, referring to Spitzer.
In June, Gilman and McNenney accused Marsh in a separate lawsuit of colluding with Spitzer to make them "scapegoats" and avert potential criminal charges against the company. That case seeks to recover unpaid compensation and other damages.
Last month, Time Warner Inc's CNN canceled Spitzer's low-rated television talk show "In the Arena," after less than one year on the air. [ID:nN1E7651A4] Spitzer resigned as New York's governor in March 2008 after a scandal in which it was revealed that he had hired a high-priced prostitute.
The cases are Gilman v. Spitzer et al, U.S. District Court, Southern District of New York, No. 11-05843; and McNenney v. Spitzer et al, New York State Supreme Court, New York County, No. 109628/2011. The earlier lawsuit is Gilman et al v. Marsh & McLennan Cos et al, U.S. District Court, Southern District of New York, No. 10-08158.
Reporting by Jonathan Stempel; Editing by Gerald E. McCormick, Dave Zimmerman and Matthew Lewis