Grasso Agonistes
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.

Attorney General Spitzer’s official government Web site is touting yesterday’s ruling in the Richard Grasso pay case as a victory, but Mr. Spitzer isn’t out of the woods yet. The judge ruled that Mr. Grasso will have to return an as-yet unspecified amount — Mr. Spitzer’s office estimates $100 million — he received as part of his pension and deferred-compensation contract during his tenure as chief executive of the New York Stock Exchange. But the judge’s decision on a tranche of pre-trial motions still forces Mr. Spitzer to go to trial on some of the most politically ticklish elements of his campaign against Mr. Grasso.
Sections of the 73-page decision are certainly bad news for Mr. Grasso, who has now seen many of his counterclaims against the exchange and individual members of its board dismissed. Gone are his claims of defamation against erstwhile colleagues he claimed had publicly smeared him after his departure from the Big Board, and gone are his claims to additional compensation. Gone also, unless Mr. Grasso appeals, are those portions of the retirement and deferred-compensation plans that the judge, Charles Ramos, concluded were not payback for the time Mr. Grasso spent at the exchange before his resignation cut short his tenure.
The bad news for Mr. Spitzer is that the judge ruled various other charges, particularly Mr. Spitzer’s allegations that Mr. Grasso deceived the exchange’s board of directors in respect of his compensation, will have to go to trial. Mr. Spitzer would have preferred for that not to happen. Quite apart from his anemic track record at trial, the attorney general will have to start ensnaring his political friends in this case if it moves forward. He will have to call his ally, H. Carl McCall, former Democratic state comptroller and NYSE board member, to the stand, for example. Mr. Spitzer will have either to paint Mr. McCall and other friendly board members as rubes or to concede that they knew what they were doing in respect of Mr. Grasso’s pay, an admission that would damage Mr. Spitzer’s case.
Which is a fitting dilemma. It’s been hard to shake the perception that Mr. Spitzer’s pursuit of Mr. Grasso, not to mention the former chairman of the exchange’s compensation committee, Kenneth Langone, was little else but political. Mr. Langone is a prominent supporter of Republicans, and Mr. Spitzer was said to have gloated about how he could use this case to “drive a stake through” Mr. Langone’s heart.Mr. Spitzer has been playing with fire by pursuing such a prosecution, and now he’s one step closer to getting burned.
Yesterday’s ruling will hang like a cloud over Mr. Grasso. He’s faced with the prospect of forfeiting some compensation that, although it may seem excessive to many eyes, was fairly negotiated and contractually due him. If there’s a silver lining for the beleaguered former executive, it’s this — Mr. Spitzer hasn’t won yet, not by a long shot. And the road forward could prove treacherous for the attorney general, too. No one expects it to get resolved before the election, but it will be hanging out there as Mr. Spitzer begins maneuvering for an office higher than the one to which he expects shortly to accede in Albany.