10:30 A.M. EDT 
MODERATOR: I want to thank you all for coming today for our briefing with our Attorney General Eliot Spitzer. I want to first thank the Attorney General for coming back again. This is his second time at the Foreign Press Center and we appreciate and enjoy every time that you come here. He is someone who does not need an introduction. So we'll get started. And I'd like to turn it over to the Attorney General Eliot Spitzer.
MR. SPITZER: Thank you. Thank you so much for the invitation. It was a pleasure. I guess I was here back in the late 2002. So it's roughly a year and a half later. And I would gather that the interest, since it seems to correlate with the cases we make in the financial sector, is predicated upon some curiosity about what we have been doing in the financial cases, those calls we'd get at the press office directly from you.
So I will swing back to those in a moment or two. But I wanted to do, first, is to sort of speak in slightly more theoretical way about the cases we've been making because when I sit down with journalists, whether it's from local papers or national papers or the international papers, what I always try to do is explain why we are doing what we're doing and put it into a context to make it more readily understandable and to put it into a framework that I think will also give, not only journalists, but also the business community some understanding about why we are acting as we are in various sectors.
There is a linkage among them, there is a rationale and a logic, I hope, that people will understand -- agree or disagree, I'll leave to others, of course -- but a logic to what we are doing. And the logic is, essentially, that for markets to function -- and we are driven by a deep belief that the market is what needs to function -- for markets to function there needs to be transparency, there needs to be integrity, there needs to be respect for a fiduciary duty that drives the dynamic among private individuals who participate in the marketplace.
Every one of the cases that we have made of significance are the ones that you are probably aware of over the last few years, comes back to that fundamental premise, which is that we are trying to correct a market failure that has prevented people in the marketplace from interacting with adequate information, based upon a relationship of trust, with adequate transparency, and at the end of the day what we are hoping to create, what we are hoping will result from what we've done is a marketplace that works better.
It is not a marketplace where there is government relations for the sake of regulations. It is not a market where governments supplant market determinations. It is not an effort to eliminate risks, just the opposite. It is an effort to re-permit the market to be as vital and dynamic as it can be and should be, but that will only work if there is adequate information flow.
And to hearken back to the first cases that, I think, drew any significant amount of attention which were the cases relating to research on Wall Street which began probably at least in April of '02, and were the reason that I was here in the latter part of '02, when there was a fair bit of curiosity about what we were doing with the investment banks and research on the street, which, of course, was that critical intercession between most investors and the capital markets.
There is an article that just came out -- I hate to be here and cite one magazine or one newspaper in front of all of the others, but I apologize for doing it, just as I do it -- but BusinessWeek, either this week or online, I haven't even seen the hard copy, has an article in which they concluded that, you know what, the research settlements are working.
The quality of research is better. The effort to remove research from the pressures of investment banking are succeeded. And as cumbersome, and I would be the first to admit it, some of the rules in the, sort of, process that was put in place may have appeared cumbersome, but the effort was driven by a theory that was correct and, indeed, the result appears to have been affirmative.
So if that was the first foray, examining this intersection between research, investment banking, how most people who are investing in the capital markets are getting information about what they're doing, the subsequent forays have been driven by the same underlying premise.
The mutual fund cases, obviously, have been at the epicenter of a fair bit of discussion over the last -- going on a year now, I guess. They broke into the public arena last September 3rd, right after Labor Day, when we announced the settlement with Canary and the subsequent litany of prosecutions and investigations, many of which have been resolved.
And just to give you -- I've lost track, frankly. Somebody knows how many actual investigations there are and how many settlements there are, but I do know we're at about $2.4 billion that has been returned to investors or that will be returned to investors pursuant to the settlements. And this really just the beginning of the process, so clearly we're talking about a very significant sum of money that will go back to investors because of the breakdown in the mutual fund sector.
Parenthetically, just in today's papers, you'll see the information that came out about another major mutual fund family that is under investigation for alleged improprieties, the curiosity there being that one of the senior executives at that company was, in fact, the head of ICI, which was the voice of the mutual fund industry, the industry that was for years professing its innocence.
I mean, it's hard to think back to mutual fund industry meetings where they did not say, "Look how good we are, we are pure as the driven snow." Unlike all the other actors out there with respect to whom scandal seemed to be enveloping their behavior, the mutual fund sector was claiming to be pure. I mean, one of the things I've learned over the years is anybody who repeats too often how pure they are, take a hard look and there's probably something there. But anyway, that's an issue for another day.
But nonetheless, what was going on in the mutual fund industry was just a classic breakdown of fiduciary obligations. Those who were responsible for safeguarding the hard-earned money of mutual fund investors, and what is, I think, so special about the mutual fund sector to most of us is that it is the reservoir of capital primarily of Middle America, those who save their $50 a week and invest it on a sequential, careful basis. This is not the zillionaires who go into hedge funds, who are the private clients of the major investment houses. Mutual funds represent the reservoir of capital of those who really are trying to move up the social ladder and succeed in our nation in the traditional, old-fashioned way.
And so when you see those who are overseeing the mutual fund reservoir of capital willingly diluting the return to those to whom they owe a fiduciary duty by permitting the timing and the late trading sometimes but not always in return for an inducement for sticky assets or the other inducements that were offered to them, something is fundamentally amiss.
Now, in the mutual fund sector, as in so many of the other stories that we've seen over the last few years in the corporate world, what broke down was board participation. If you had to say what is the unifying theme across all the corporate scandals over the last number of years, it is board failure.
In the mutual fund context, I think the board failure is that much more acute because the boards in the mutual funds often were nothing more than extensions of the management companies. And I won't get into the arcane legal structure, but the management companies too often controlled the boards and therefore the boards that were supposed to speak for the investors were all to willing to cede power to the management company that was raking fees out of the corpus of the funds.
I'm getting too technical, but nonetheless when we were looking at the mutual fund sector and when we -- I will tell you that when we first got -- if you want a heroine, if you want somebody to say, aha, good person -- Noreen Harrington, who was the whistleblower who came into our office, about a year ago right now, it was June of last year. She walked into my office, not my personal office, into the AG's office, and said, "I have a story to tell you."
And what she laid out in front of us was the series of violations and games that were being played by the mutual funds, and even though she had every indicia of credibility -- and you're journalists, every day you're trying to pass judgment upon the credibility of individuals, and hopefully we all get better at it as time goes by. She had every indication of credibility. None of us could believe what she was saying because it was so horrendous. It was so outrageous, the degree of violation of duty that she was describing to us. Everything she said has turned out to be true. Every last fact about the behavior in the mutual fund sector.
So, clearly, that scandal erupted publicly last September 3rd and has percolated through. In fact, I think we're on the declining piece of the bell curve with respect to the mutual fund scandals just because we have played through most of the violations. We have seen most of the types of fraud that were being committed. We are now at the stage, thankfully, where we're grasping for answers.
How do we reconstruct the industry that is vital? And every nation has an equivalent of the mutual fund sector, or at least I'm led to believe that's the case. How do we make sure that there is the confidence and the credibility in that sector so that investors will continue to pour capital into the capital markets, which is, of course, what we want them to do? But we want them to do it in an environment where they feel trust and confidence.
So that is -- you know, we can talk for hours, at least I can talk for hours -- I won't bore you -- about the mutual fund scandals, what the remedies should be and why we are negotiating with the boards to try to do what they should do in terms of fees and to reconstitute the boards properly and put some real market pressures in that environment.
Now let me mention another case briefly that I know has interested some of the foreign press, in particular, because -- and this is not why we brought the company -- brought the case but it happens to relate to a foreign company, which is the Glaxo issue with respect to pharmaceuticals. The issue there, again, comes back to the overarching theme and logic that I articulated just a couple minutes ago, which is disclosure and information flow into the marketplace sufficient to permit people to make wise decisions.
The issue of disclosure as it relates to pharmaceutical products has crystallized in the past number of weeks, partly, I think, because of the case we brought, but also because of what the AMA has articulated in terms of its theory of disclosure. Some of the medical journals, likewise, have articulated a theory of disclosure. What it comes down to is this. And let me suggest that there is an overarching contract, not a formal legal contract, but sort of a societal contract that has been entered into with the pharmaceutical companies and the deal is as follows.
We applaud -- and I say this very sincerely because there are some who vilify the companies and just want to say they're bad and evil. That's wrong. It's foolishness, in my mind. These are wonderful companies that have added tremendous creativity, insight, generated wonder drugs, have solved some of the most -- provided solutions to some of the most horrific medical problems out there. They've done amazing things and I really believe that and have enormous respect for what they have added in terms of the intellectual capital that they have contributed to medical advancement.
In return for our giving them certain tax advantages, but most importantly, in return for our giving them patent rights, monopoly power to market their products for a significant period of time after they've generated this creative intellectual property, we expect them to do several things: 1) permit competition to exist once the patent has expired, often through generics that are permitted into the marketplace; 2) to price their drugs fairly, which means in accordance with the statutory structure that exists; and 3) to give meaningful and fair disclosure to doctors and patients so that doctors and patients will understand what the pharmaceuticals do and don't do.
We have made cases with respect to each one of those three aspects of the contract that I referred to. There are a litany of cases -- is/are a litany, whatever -- of cases relating to generic access in the marketplace. I won't bore you with them now, but there are a series of such cases that have been very successful where companies have tried improperly to keep generics out. And we say, look, that's not the deal; you have a patent right, but it expires and now you must permit competition.
You must price fairly. We have AWP, the Average Wholesale Price, litigation in a number of other areas where we are saying, guys, you have to comply with the statute. You know, your internal rate of return is very healthy. I think everybody can agree on that. Whatever the number may be company by company, they're doing fine because, by and large, they comply with this contract that we have negotiated with them. But play ball the way the rules are articulated.
When it comes to disclosure -- and I don't mean to pick on Glaxo and I really don't want to sort of speak ill of them at any length -- but I think the problem with Paxil was that there are commentaries about Paxil and what they had distributed to their sales force and to doctors was commentary that said Paxil is safe and efficacious for adolescent use.
Now, the problem is that just isn't the case. Of the three studies that they had done, and there were two follow-on studies as well, so whether you view it as a total of three or five, only one had suggested that it was effective for adolescents. The others suggested that the placebo was, indeed, just as good. And some of the additional studies suggested that there was a very severe -- or let me now qualify -- that there was a risk that was created of suicidal conduct, however one defines that.
Now, I'm a lawyer. You know, I took biology back in ninth grade. Nobody would ever want to ask me, "Should we take this drug or that drug?" None of this has to do with lawyers or governments supplanting a doctor's determination about what medication is good, bad or indifferent. This is a question of ensuring disclosure to doctors so that they can then make informed decisions. And that is why what we said to Glaxo was if you're going to be making these claims about the effectiveness of Paxil, then the obligation is to permit complete disclosure or provide adequate access to the array of clinical tests that you have done so that objective individuals can make their own determinations about the effectiveness of the drug.
And to their credit, although, look, the CEO of the company, when we first filed the case said, not fair, you're holding us to a different standard, which really isn't true. We are holding them simply to the same broad standard that we hold every company to. But let's face it, even if we were holding them to a different standard, frankly, I think that would have been justified because we're dealing with pharmaceuticals, we're dealing with the safety of our kids, we're dealing with an arena, healthcare, where the first maxim is, "Do no harm," where disclosure is at a premium. So even though we weren't, I think we could.
But nonetheless, Glaxo, to its credit, has since posted on its website the clinical tests that we were seeking to have disclosed. We did not disclose them because it wasn't -- I didn't think it was our job to disclose what they view as propriety information. It was our job to say we think you should disclose it, and if a court had ever heard ordered it that would have been an appropriate remedy, but it was not up to me simply to demand it of them. Nonetheless, they have posted the information on their website and those who have looked at the information have determined that, yes, our analysis was correct, the other tests did not support the claims they were making about the effectiveness of Paxil.
Now, where does all this take us? Because, again, I could talk about that case for longer than you want to sit and politely listen, or impolitely listen, but where it takes us, I think, is to a growing consensus that information relating to clinical tests that are done on human subjects should be released into the medical community so that doctors, scientists can begin to make informed determinations about the effectiveness of the drugs that are out there. As I said, the AMA has articulated that view. My office, we are going to continue to push for that as a resolution of not only the Paxil case, but other cases that may emerge. I think that others are speaking with a similar objective in mind.
And, you know, just I'll give you your shot of questions in 30 seconds. This is an area where I would hope fervently that we could see leadership out of Washington because the question that I am asked the most frequently is, okay, fine, Spitzer, we agree with you, you're right about research, mutual funds, Paxil, whatever, you know, the environmentalists or whatever the case may be. But why are you doing it? And that's a fair question.
And the answer that I give is always, well, if Washington were doing it, we wouldn't, we wouldn't need to. But if there is a void in the regulatory apparatus in Washington such that there are lapses or failures to address structural problems of this nature in Washington, then given the jurisdiction that my office has we will use that jurisdiction to try to confront these problems.
So same, whether it's Paxil, mutual funds, research, we will continue to be active, but I would prefer to see the FDA or HHS -- I would love it if Secretary Thompson stood up tomorrow and said, you know what, we're going to have a plan within 30 days to deal with the release of clinical tests because it's something where there's an emerging consensus and it's an issue that deserves to be addressed. Somebody should do it. And I hope they do. If they don't, we will continue to push, but I hope they do because that would be -- provide a structure that would permit better resolution.
Anyway, well, let me stop there. I could talk -- questions on whether, you know, I will be hesitant to talk too much about the case with respect to the stock exchange and Mr. Grasso just because it's -- you know, I've sort of been trying to not say too much about it.
But, anyway, yes, sir.
QUESTION: Abderrahim Foukara from Al-Jazeera Television.
Mr. Spitzer, a couple of questions: When we take a look at economies around the world, it seems that a certain amount of crime, financial scandal, corruption, black marketeering is almost endemic to those economies, and they seem to, in fact, sometimes inject new life into those economies.
In the case of New York, what -- to what extent does your office take it as an article of faith that those things do exist and that they can be healthy?
MR. SPITZER: I think some of what you said has a kernel of some truth to it, which is that there is, you know, in any economic structure going to be some degree of gamesmanship and impropriety. The job of individuals who are in my position or in any government or law enforcement position is to try to, obviously, root out that corruption.
And that's what we do. And it is cyclical. It ebbs and flows with moments. There is some correlation, obviously, between bubbles and impropriety, and even the advent of new technologies that generate enormous capital flows to some sectors and overindulgence in certain areas.
But I would certainly not agree with your, what I gather, was also part of your question which is that that impropriety is healthy. I don't think it's healthy. I don't think it helps in anyway. In fact, I would argue that what -- one of the real downsides to the bubble, the internet bubble, was the tremendous misallocation of capital.
In other words, I think an economist could say because there was this enormous successive enthusiasm which was often generated by fraud, capital that flowed into a sector generating overcapacity and then a collapse that capital was not available for other sectors -- I don't know -- whatever sector it may be, and whether it was steel, autos, or airlines, who knows, that had to compete for that capital and couldn't do so because they were not being supported by fraudulent assertions of viability in return.
So I certainly don't agree that the illegality of healthy or helpful, in any respect. Is there always going to be some degree of it? Of course. That's why when people say to me, have you rooted out the problem? Is it done? Of course not.
There is going to be a continuation of some impropriety, and there will be periods 20 years from now, 30 years from now, where we have another crisis of accountability for different reasons, different motivations, perhaps, but it will be a recurring theme. That's why somebody will be in my job 20 years from now and will bring the same cases and have to answer the same questions.
QUESTION: If I may take you on a tangent, it's about the Olympics. Obviously, New York has made a bid to actually host the Olympics 2012. Given what happened in Salt Lake City, the allegations about embezzlement and corruption and all that may/may not be true, is that a concern for you in the case of New York?
MR. SPITZER: I would love to see New York get the Olympics in 2012, of course. I think everybody who lives here would love to see it. It would showcase what I think is, you know, certainly one of the greatest cities in the world and the most vital cities. It would lead to some healthy investment and some great capital infrastructure.
I think the other concerns are really incidental -- obviously, serious problems. I'm not suggesting what went on in Salt Lake City, if it happened, is not to be looked at very, very seriously, but I think in terms of thinking about the Olympics that that is not where we begin the analysis. I think there is, as in so many things, always room for some impropriety. When you have an effort of that magnitude, you think about it, you address it, but I think it would be great for New York if the Olympics were here, and hopefully we'll win. But that's, I guess, for later, next year, some time in July of next year they'll make that determination.
Yes, sir. And then I'll -- okay -- we'll go from left to right. I'll get there in a minute. Yes, sir.
QUESTION: Yes, Haim Hendwerker, from the Israeli newspaper, Haaretz. Are you satisfied today with the separation between research and investment banking on Wall Street? And the second question is about the small investor. Do you think that today that small investors can trust the system, put his money in a mutual fund, another way on the investment and feel comfortable that today everything is better than it used to be two or three years ago?
MR. SPITZER: I don't want to make sweeping declarations, everything is better today than it was two or three years ago. I think we've made enormous -- I do think we've made real progress. You invoke the word "trust," obviously, and what was the phrase in international relations, "trust but verify?"
I say to investors all the time, it's your money, don't forget that. And therefore, when somebody is saying to you, I will invest your money for you, don't forget that they're trying to make their fees, their profit-sharing, however they structure it, because it's your capital and they're trying to take what otherwise might be yours, so be demanding, make sure you ask all the inquiring, tough questions about their fee structure, conflicts of interest, what the quality of the research is, what their performance has been, how they verify their performance and they are not overrun by conflicts of interests.
We've made real progress taking a hard look at the conflicts that, I think, were woven into the fabric of the financial system a number of years ago, partly because we have seen increasing financial concentration domestically with the repeal of Glass-Steagall, larger and larger financial institutions that are working through how they have many business lines, but disaggregate the conflicts and tensions that necessarily exist when all of that exist under one roof.
There are answers that are possible. I'm not saying that they can't be done, but it's tough. It's a management issue that the firms are looking at, working at, trying to do better. The cases over the last number of years have highlighted the problems that emerge when you have all of these pieces under one roof. And so, yes, we've made real progress. It doesn't mean that there still won't be problems out there that continue to emerge.
We have some interesting investigations still ongoing, and so we're making progress. Research has gotten better. The separation of some of these business lines has led to real progress in the market, but investors should still bring a wariness that doesn't keep them out of the market but makes them ask the hard questions before they give anybody the right to invest their money for them.
Yes, sir.
QUESTION: My name is Viktor Frolke. I'm with NRC Handelsblad from the Netherlands. I have three questions.
MODERATOR: Well, ask him about one of your questions.
QUESTION: Well, my major question, my main question is -- well, it's a two-part question. Who brought the Paxil case to your attention? And do you have any intention to look at other European companies doing business here?
MR. SPITZER: You know, Paxil came to our attention because there was -- I think this is right -- I mean, frankly, I should know the answer because you guys always like to know how we first heard about things. I'm more concerned with whether the complaint is correct and appropriate, as a matter of law, than where the first tip came from.
I think there was a fair bit of chatter out there in the press, in the academic literature, about Paxil's use and the very significant off-label use of Paxil for adolescents, and the whole realm of anti-depressant drugs and the intersection between anti-depressants, adolescents and, you know, sort of dangerous suicidal conduct has generated enough attention, so we began to look at it.
And one of the things we then did was just get from the company, we can do it by subpoena, get the clinical testing data, have experts look at it, and then examine the disclosures they have made, and then ask the very simple question: are their disclosures fair, adequate, reasonable?
And so that is the process we go through. Precisely what the first moment was that drew it to our attention, I don't know. But I think it was because of a fair bit of discussion out there in the academic literature and the more public press, as well, about anti-depressants and adolescents. That is my best recollection.
Now in terms of European companies, we don't -- I don't think of companies as being New York companies, non-New York, European, Asian. We just don't look at it that way. We look at problems in the market because -- and I don't want to sound too much like a classic New Yorker -- but because this is New York, frankly, I'm glad to say virtually every company is here, doing business here.
We encourage that. That also means that if they're here doing things that are improper, we may or may not get wind of it. And so, you know, Glaxo's participation in the marketplace here brought it to our attention. It's not because it was a European company or anything else. It just happened to fall out that way. So, we -- but, you know, if it happens that other companies are swept into things we're looking at, the fact that they're European is not irrelevant, but it's not something that we really pay attention to.
Yes, ma'am, you, with the scarf. Yeah.
QUESTION: Isabel Lafont with Expansíon daily paper.
Mr. Spitzer, when you announced the settlement with the Wall Street firms -- forgetting their conflict of their interest -- you said you were ready to go further up in the chain of command in the Washington firms. Are you still proceeding in that direction? And do you think there can be a real change in Wall Street with no CEO assuming responsibility for what happened?
MR. SPITZER: That's a good question. Well, I guess we'll find out. And I don't mean to say that to in any way be dismissive or flip, just the opposite. I think that what we are talking about implicit in your question is, I take it to mean, can the cultural shift in some of these companies really occur without leadership change, or at a minimum, with minimum, without the leaders of the companies internalizing and demonstrating a real dedication to different behavior patterns?
And when I say I think we'll find out, I think it's because we will be able look at the behavior of the companies a couple of years from now and determine whether or not, even in the absence of CEOs individually standing up and saying, "blame me," have we succeeded in changing the way they operate?
I think we're making real progress. People say all of the time, are there good folks out there? And I may get into a little trouble by saying this, but, yeah, I point to Chuck Prince, now the head of Citi, who -- with whom I negotiated a fair bit of the global deal, understands the issues, is tending to them, trying to confront them, manage a sprawling, enormous business enterprise that has many potential conflicts woven into it but do it the right way.
I have absolute confidence that Chuck is doing what can be done to get it right -- Hank Paulson, likewise, at Goldman. These are very smart, good people who are trying to get it right. So I think the answer to your question is, yes, it can happen. Will it happen? We'll have to wait and see.
Does that mean that as we find recurring problems, there will be a greater demand to push responsibility up the chain? I think that would be an appropriate response in my part.
And so, if we were to see what, I guess we could refer to as recidivism at some of these firms, I might -- it would certainly be appropriate for me to say, hey, fellows, you didn't learn, therefore, the responsibility now will be pushed a little farther up the corporate chain. But I think the answer is it's possible and we have to wait to see if it works.
Yes, ma'am.
QUESTION: Monica Coronati from Expansíon TV, Spain.
I know, Mr. Spitzer, you don't want to talk too much about it. It's Mr. Grasso's case. But as a lawyer, maybe you might be able to answer my doubts or question. The fact that Mr. Grasso has filed to move the case to federal court, what does it imply: it makes any difference, it's more favorable to him, and why?
MR. SPITZER: Well, I always hesitate to speak about the motive of other parties because I don't know. And so, I don't want -- I can't answer why they did it. It doesn't make a difference to us. We will file in a matter of weeks, just we're preparing our papers, a motion to remand the case back to state court for the simple reason this is a state case predicated upon an interpretation of state law, as it relates to a New York State not-for-profit, and therefore we think a state judge should make those determinations.
And I don't like to predict the outcome. The federal judge, Judge Jerry Lynch, will determine whether or not the remand motion should be granted. So I'm not going to speak out of court. It will be his domain. Assuming we win the motion, we'll be back in state court and I think our factual record is overwhelming, and I've said that since day one. We have an enormously powerful case and we will win. If that case stays in federal court, we have an enormously powerful factual record and we will win.
So, I'm ready to fight this case, litigate this case. I spent many months trying to settle it, not because I was hesitant to litigate the case, just because, as with all cases, you try to settle cases where you think it is good structurally, good for the parties. It would have been wonderful if we had been able to do that. Didn't work out. So now we're doing what lawyers do, and hopefully we'll have a more rapid resolution than Charles Dickens in some of his great books. But, you know, we'll do what lawyers do and we'll fight it aggressively.
Yes, in the back.
QUESTION: Pamela Peeters, Argus Magazine. My question to you is that your lawsuits against Midwest and Mid-Atlantic has helped to reduce air pollution, so to underline your point of the importance of gathering of information, but also transparency, will, of course, have an impact on the health of current and future generations and economic and political decisions are based upon that.
What do you think of the large overhead costs that not-for-profit or Ivy League colleges are taking out of donations to foster research, scientific research, and what information gap is still holding the United States back to sign the Kyoto Protocol?
MR. SPITZER: Well, all right. I had to jump through several hoops to get to the end there, but I think I've followed you. I obviously agree that our litigations with respect to the nitrous oxide and sulfur dioxide emissions from Midwest plants are important. They've been very successful and we have succeeded, most importantly, in my view, last December 24 when we got the D.C. Circuit to stay the EPA regs that I think were contrary to the Clean Air Act and the D.C. Circuit agreed with us. So we are going to continue to push to enforce the Clean Air Act and ensure that there is meaningful environmental enforcement.
The more research in that area, the better. Issues of global warming continue to be pursued in the scientific community. Again, I'm not a scientist. My sense of the literature is that there is an overarching consensus that there is a very real problem that has to be addressed in control of emissions. I would like to see that consensus reflected in a different set of policies in terms of energy, conservation, et cetera.
But, again, I'm the New York State AG. I'm not the one who makes determinations about signing on to Kyoto or other policy areas, but I think that there is a need for continuing research and discussion. Hopefully, it would reflect itself in policies that are closer to what I think would be healthy not only for New York State residents but domestically here in the U.S. and, likewise, overseas and then we have had some interaction with our good friends to the north in Canada with respect to emissions, both where we've worked together and been slightly at odds about emissions in New York plants, Canadian plants.
But pollution does not respect boundaries, and just as the pollution from Ohio wafts into New York, and therefore I will be aggressive in trying to protect New York State residents, likewise internationally the pollution flows up into the environment and therefore we all -- we have to deal with this at an international level. And, again, it's not my determination about Kyoto but I think there's much that we could do that would help in that regard.
Yes, ma'am, in the back.
QUESTION: Lys Baudu from La Tribune. This is a French business daily. You just said a minute earlier another guy will have my job in 20 years' time.
MR. SPITZER: Right.
QUESTION: What kind of job do you see yourself having in 20 years' time? In other words, could you elaborate on your political ambitions and could you respond to an accusation that was made by Dick Grasso saying that you could have indicted more people in his case but you did not because you needed the Democrats' support?
MR. SPITZER: Right, right. Sure, first, the 20 years is easy. I mean, if you said two or three years, that maybe is more problematic. Twenty years is easy. I want to be working on my tennis game. It's suffered and my backhand used to be a lot better than it is today, and that's my primary ambition for 20 years from now.
Let me say this about what Mr. Grasso has said. And, you know, I have refrained from making ad hominine comments, accusations about motive or anything else. I think it's not my responsibility, it's not proper necessarily. He's dead wrong. Could not be more wrong in what he said. We drew a boundary line which distinguished between those who misled other members of the board, and those individuals who affirmatively misled other members of the board were charged civilly, versus those who received bad information and made perhaps improper or unwise decisions. They deserve to be challenged for the lack of aggressive questioning but do not deserve to be charged and held liable where they were relying upon misinformation and bad information flow to the board.
That is the boundary line. I articulated it on day one, had absolutely nothing to do with ulterior motives and he has been trying to spin this myth since day one, and the fact is that in the op-eds that he and his codefendant, Ken Langone, have written they were long on ad hominine attacks and very, very short on facts and law. And I think it's worth observing that, you know, if you put on one side all the adjectives they've used to describe me and the other side all the facts that they've put to justify their behavior, you'd be like this. And, you know, so be it. But that's -- again, I'm not complaining. I'm just observing. I like battles and so we'll wade into it.
And we are very, very comfortable that we have handled this properly. You know, they never mention the fact that, you know, the others whom we chose not to charge in the case were the CEOs of all the major investment banks and I don't think anybody has been saying that they're my strongest political supporters. So it's not as though I was protecting the CEOs of the major Wall Street firms, from whom I don't get and don't expect to get holiday cards. So, you know, this is a -- the theory is foolishness.
Okay, two more questions and then, unfortunately, I have to -- okay, one.
QUESTION: Elena Molinari with the Italian newspaper Avvenire about Parmalat.
MR. SPITZER: Yeah.
QUESTION: What kind of problems do you think this scandal, the Parmalat scandal, highlights about Italian environment, both in enforcement and regulatory systems? And what kind of lesson do you think Italian authorities should learn from it?
MR. SPITZER: I have no idea. (Laughter.) How's that for an easy answer? I don't know anything about the Italian regulatory structure or, really, that much about the Parmalat case. I will tell you, very frankly, I was thrilled when the case broke open for the simple reason that it was -- you know, I hope this doesn't sound too parochial -- but I was thrilled to see that there were, in fact, overseas companies that were doing the same sorts of things and so that I was no longer going to need the question, "Gee, why is it just U.S. companies that are doing this?" I can now point and say, "Hey, Parmalat." You know, this is not a U.S. issue. This is a global issue. It's a business structural issue that we all have to think about and be careful to think about.
My only intersection with Parmalat is that I opened my refrigerator door the day after the company -- the headlines were there -- and, you know, it said on the milk container that I was beginning to pour for my daughter's Parmalat. So I guess I'm a customer. That's the only intersection I have with Parmalat in any way, shape or form.
All right, one more question. Yes, sir.
QUESTION: Jens Korte from New York German Press. How do you work it out budget-wise? I mean, you explained a couple of topics you're on right now. So how endless is your budget and did you get a rise of your budget when your cases are successful for your budget-wising?
MR. SPITZER: The short answer is, no, we don't, and I'm glad we don't. I don't think the government offices should run on a contingency fee basis or somehow be bounty hunters that, gee, we just brought in this much money. But we have absolutely no impact on my budget.
Now, some of the fines go back to New York State, but it has zero impact on the budget of the New York State Attorney Generals Office. We have 600 lawyers total, of whom only about 150 do affirmative litigation in the environmental, labor, civil rights, environmental, securities cases. Only 15, 1-5, handle the Wall Street-type cases that we handle.
Now, you're going to say, "How can you do all that with 15 lawyers?" We work hard. I like to think they're smart. We pick the right cases. And what we do is bring the cases that demonstrate structural problems and we then move on. We do not have the capacity to stay and make every last research analyst case, every last mutual fund case. We try to shine a light on a problem and then others who have greater staffing, such as the SEC, that has vastly greater resources than do I certainly in the securities area, they will continue to make these cases, as they should.
And so my mission and the way I've defined it for the office is to find problems that deserve to be revealed, highlighted, and then we move on to the next issue.
QUESTION: (Inaudible.)
MR. SPITZER: All right, just because we're in New York so being aggressive pays off. Yes, ma'am. (Laughter.)
QUESTION: Okay, good morning. Elizabeth Mora, El Tiempo. New York is the second home to the rest of the world. Does your office have one special unit to protect the immigrants, especially when they are buying homes or when they go to see the doctor, when they have these kind of fraud?
MR. SPITZER: Actually, I'm glad you asked that question. I do not have a special immigrant unit, but what I do have and the cases that we have brought that, frankly, I'm proudest of, that I get the greatest emotional pleasure from, relate to our protection of low-wage immigrant workers. Because, as I -- like we have said, New York is the second home to the world. It is an immigrant city. And the workers who are here, many of the workers here whose documented status may or may not be somewhat ambiguous are easy prey for employers who wish to pay them less than the minimum wage. And a special mission of the Labor Bureau -- I do have a labor bureau -- has been to pursue and protect workers, many of whom are immigrants who have been taken advantage of by employers, whether it has been the deliverymen in the supermarkets here in the city, workers in the garment sector, workers in the greengrocery sector, the day laborers out in Nassau and Suffolk.
And we have recovered millions and millions of dollars for them, dollars that pale by comparison to the much vaster numbers we've recovered in the mutual fund context but perhaps are more important to me emotionally because the dollars that go back to these workers are hugely important to their capacity to put clothing -- to buy clothing for their kids, put food on the table or buy a first house. So we have made that a special effort.
Thank you all so much. I appreciate it.
