Eliot Spitzer Tells Fareed Zakaria: AIG Has Bigger Problems (VIDEO)

This Sunday, on Fareed Zakaria GPS, Zakaria's guest will be former New York Governor Eliot Spitzer. CNN previewed the piece in the Situation Room today, in which Zakaria and Spitzer discuss the presence of "hints of a looming disaster" when Spitzer had AIG under investigation "years ago as the New York State Attorney General":

ZAKARIA: So, do you think the problems that AIG got into later on stemmed from some of the same practices that you were trying to get at?

SPITZER: They stemmed from an effort at the very to to gin up returns whenever, wherever possible, and to push the boundaries in a way that would garner returns almost regardless of risk. Back then, I told people that AIG is at the center of the web. The financial tentacles of this company stretched to every major investment bank. The web between AIG and Goldman Sachs is something that should be pursued. And as I've written...

ZAKARIA: Meaning what? Meaning that a lot of the money that we the taxpayers have given to AIG has ended up being paid to Goldman Sachs.

SPITZER: Precisely.

ZAKARIA: And other companies.

SPITZER: The so-called counterparties to these very sophisticated financial transactions. When AIG initially received $80 billion, the decision that was the consequence of a very brief meeting of the President of the New York Fed, the Secretary of the Treasury, perhaps Chairman Bernanke, and arguably, some reports say, the chairman of Goldman Sachs. Eighty billion dollars, virtually all flowed out to counterparties - $12.9 billion dollars to Goldman Sachs. Why did that happen, what questions were asked, why did we need to pay one hundred cents on the dollar for those transactions if we had to pay anything, what would have happened to the financial system had it not been paid...these are the questions that should be pursued. The bonuses are a real issue. It touches us viscerally. But the real money, the real structural issue is the dynamic relationship between AIG and the counterparties.

ZAKARIA: You know that a number of people watching you are going to say, "Eliot Spitzer doesn't have credibility to talk about these issues" because of what happened over the last year with your own behavior. What would you say to them?

SPITZER: I would say to them that I never held myself out as being anything other than human. I have flaws as we all do, arguably. I failed in a very important way, with my personal life and I have paid a price for that, with my family and with my wonderfully, amazing, forgiving wife, and with my three daughters. And we'll rebuild those relationships and hopefully as time goes on. I also feel that to the extent that I am asked that I can contribute to a very important conversation that I will do that as well. That is our right, arguably our obligation to our citizens. I will do what I can, and with full awareness and heaviness of heart about what I did.

Watch:

In general, I think that people are really starting to wake up to Zakaria's qualities as the host of his eponymous show, and the refreshing seriousness of the topics he pursues. I noticed, this past Monday, a general uptick of Zakaria-centered praise. I'm guessing that many people tuned in to see John King's widely-panned interview with Dick Cheney and were entranced and relieved by the substance that followed later in the afternoon. At any rate, Spitzer's take on this matter will be an interesting one, and may give rise to the long-awaited "what if the Spitzer scandal never happened?" story I've been hoping that a reporter with the right pedigree might deliver.

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Comments

[avocats]

Spitzer was as much as "bulldog on reform" as he was a married man. All show, all ego. Hypocrite. Why would someone with Zakaria's credibility give him a platform? Besides, if Spitzer had the good back then, why did he do nothing?

[nivek]

Fareed Zakaria represents the last tangible shred of credibility on CNN. However, his questions about assigning blame for the credit crisis and market collapse missed their mark. When given the opportunity, Zakaria failed to probe Spitzer's close personal relationship with TV stock hustler Jim Cramer. No mention at all of illegal market manipulation, massive fraudulent short sales, Cramer's direct involvement or Spitzer's huge blind spot regarding blatant criminal activity on Wall Street.

[Owlygirl]

It was a surprisingly intelligent and helpful interview. I learned a lot from Spitzer, someone who obviously know a great deal about the machinations behind this mess. Now if only he could be trusted I think he'd be a real asset in the Obama admin. I really do.

[scitizen]

Great Interview with Fareed and Eliot Spitzer! I would like to see and hear more of former Govenor Spitzer's thoughts and comments. Indeed, I was truly dissappointed with his unfortunate situation. I trusted his efforts to unfold and reveal the financial "crimes" he was pursuing.

Also, I appreciate Fareed's insights and perspectives. His approach is refreshing and substantive in today's "tabloid" news world. (Which is becoming a bit of a burden and too reactionary). (I can only take so much "news volume" and H.L. Hughley.)

[Anonani]

Maybe he wasn't set up, and I don't think that he was, but what a waste of a public servant.

[cadawa]

Spitzer was hot on the trail of these toads when he was outed for hanky panky. It really makes you wonder if he wasn't set up.

[donorman]

pa-leeeze

[bebrave]

It's not that hard to figure out. Just look at the CNBC coverage the days leading up to Spitzer's resignation. It was well known in NY that Wall St. wanted to get rid of Spitzer. At the time it was said he was going after "good companies" (like Goldman). Wall St. gave 5 Billion dollars to Washington last year. Spitzer was seen as someone who wanted to impede their "growth" add it up

[Max01]

I agree with your comments, cadawa. One wonders why the Justice Dept was following and then broadcast Spitzer's banking activities (couple thousand $) with the prostitution ring - yet Senator Vitter's visits with the ladies weren't given the same treatment. Hustler Magazine broke the Vitter story after a reporter scanned the DC Madame's phone records.

[amygdalalama]

Spitzer could be very helpful in sorting this mess out, and it would give him a chance of redemption. Does anyone not find it odd that his was the ONLY name that was released on that client list? Do people really think he is the only politician in New York that visited a prostitute?

I would like to hear what he has to say, because he knows a lot about these companies. Let him help with the investigations. Bringing the financial crooks to justice will be far more beneficial to society than holding a grudge against a politician because he had a sexual lapse in judgment.

[donburnstein]

What's worse? Paying $5000 to a prostitute say as opposed to free sex with young intern or "forgetting to pay taxes" when one is apply for the job that oversees the IRS. I would argue that sex has very little to do with Spitzers role as Governor even though it shows a defect in someone that has been built up to be Ellitot Ness. Disappointing? Yes for some. Deal breaker? Only if he had been busting the chops of the most powerful people in the world.

Then it comes down to who has the most credibility in the financial issue. One who had busted the creeps or brought them to to the table to pay large fines for their behavior, forced some to resign as he pried open a door the Feds should have been walking through or a guy who sees nothing wrong with what they do and blindly hands them trillions who forgot to pay his taxes until the job of Treasury Sec came up.

[scitizen]

Ditto amygdalalama.

[hollybork]

It is excellent to hear from Eliot Spitzer. He has one great prosecutor's nose and instincts. He is right on about the scamming of the treasury by Goldman Sachs in the form of the "bailout" of AIG. Unbelievable! Paying 100 per cent of those bonds or warrants when they were not yet fully mature debts just smells bad. Something is not right in this whole deal. Thanks to Fareed Zacariah, who is a courageous and brilliant journalist, for doing an interview at this time with this person. It is terrific to hear from Spitzer.

[scitizen]

I agree hollybork.

[drummer4]

Who in the world would listen to Elliot Spitzer? This must be a joke? What a shameless loser!

[ruthinking]

Actually, NY is the loser; stuck with David Patterson. I am relieved that Elliot Spitzer is finding a forum for his views.

[Anonani]

Ummm...hmmm.

[klastos]

If you were to talk about moral issues then you'd be correct, but on financial issues Spitzer is a bulldog for reform. Same with John Edwards on poverty, I wouldn't want him talking about morals to me but as far as they go on those two issues their word is still valuable. It's unfortunate both men fell to weakness in their basic character as the democratic party lost two of their most valuable voices on important issues.(Edwards' transgressions are especially sickening to me personally).

[dugum]

Elliott Spitzer being a media correspondent and interviewer maybe a poor choice. When viewers see his interviews, they may be just seeing the scandalous, horny, and disgraced former NY Governor instead of the subject he's interviewing.

[bebrave]

Only Mrs. Spitzer or extremely ignorant people with no life of their own would care about what he does in his private life. He has a lot more to offer this country and I'd like to believe that behind the scenes he's helping AG Cuomo sort it all out.

[dugum]

Elliott Spitzer will always be condemned for his past action. He could do an interview with Pope Benedict 100 years from now, if the Pope is around, and Elliott Spitzer would still be "that horny cheating NY Governor. He was a public civil servant that had several weak moments of the flesh. Should this reflect on his successful track record forever?

His actions can never be condoned. Should he be condemned even if he may contribute to a constructive future? Is this balance?

[MintysMom]

My personal feeling is that every person has strengths and weaknesses. His weaknesses happen to be sexual. I won't pass judgment on him as a person. But it's sort of hard to separate his weaknesses when he is State Attorney General. The people who hate him and wanted to see him fail, but my guess is it would have caught up with him eventually. Were his enemies overzealous? You bet they were.

But his experience IS of value since we can assume he knows the subject better than most.

[MintysMom]

Not true that this was the first post-scandal interview. He was actually on Mark Green's program on AAR about 3 weeks ago. Green was even pointing out the fact that it was his first interview, and Spitzer said yes.

Just saying, for the record.

[MintysMom]

It's the headline on the Media page I am referring to.

[johnie2xs]

This was passed on to me, so I will pass it onto you.

http://www.gregpalast.com/elliot-spitzer-gets-nailed/

[hockeynut]

this guy was railroaded and if he was still Governor people would be going to jail by now!!

[whosyourdaddy]

He was railroaded? So, let me get this straight, it's OK to solicit prostitution but not OK for a gay senator to solicit sex?

[Dingoangst]

I agree with you on Zakaria he is very good at bringing proper seriousness to serious problems. Concerning Spitzer, I wish somehow we could separate people's sexual peccadilloes from their intelligence and ability to govern well. Spitzer would make a fine president, Gore would have won the presidency outright without Clinton's distractions, and Barney Frank would be Speaker of the House. Oh, and Larry Craig would be....er..uh....well, forget that one.