# 10 WHAT ELIOT SPITZER TAUGHT HENRY McMASTER - AND US

Eliot Spitzer was a state attorney general who wanted to be governor. Henry McMaster was a state attorney general who wanted to be governor. That’s not so unusual.  It’s actually quite usual.  So usual that the joke in their national organization – NAAG – is that it should be called the National Association of Aspiring Governors. Not of attorneys general.

The week after James Brown died AG Spitzer became the Governor of New York.

Like McMaster, Spitzer had the duty as AG to enforce New York’s charitable and philanthropic organizations. Like McMaster, Spitzer served as AG while running for governor.

Spitzer’s office regulated a $26 million private foundation created by Spitzer’s parents with their money, the Spitzer Trust.  On August 10, 2008 Henry McMaster took over and began to regulate a private foundation created with James Brown’s money, the “I Feel Good” Trust. 

[McMaster actually proposed to put the “I Feel Good” Trust’s assets into another trust McMaster created and controlled through trustee Russell Bauknight - the Legacy Trust. The Legacy Trust, now controlled by AG Wilson, is currently suing to stop FOIA release of public documents in three separate FOIA lawsuits.]

In 2006 hundreds of thousands of dollars flowed into Spitzer’s campaign coffers from the heads of investment firms who were managing the Spitzer Trust’s assets. Opponents cried foul. They also claimed the Spitzer Trust was targeting areas where Eliot Spitzer needed votes for the Trust’s good works.

If AG Spitzer could reap $1 million in campaign contributions and create happy voters as a minority trustee of the $26 million Spitzer Trust,  just imagine what total control of  James Brown’s $80 million “I Feel Good” Trust  could do for AG McMaster!

But was it legal and ethical?  Or was there a conflict with the attorney general’s public duty to regulate a private foundation producing such good results for the AG’s campaign? 

Spitzer asked for an ethics opinion.  And got it:  NY Ethics Opinion 06-06.  Under the specific facts – and with the safeguards Spitzer had put in place – the opinion found Spitzer could serve on the Spitzer Trust’s board while serving as AG without violating ethics rules.

Here’s the difference between what Spitzer did and what McMaster would do in 2008:

      The Spitzer Trust was the Spitzer family’s money. The “I Feel Good” Trust was money McMaster got from Brown’s estate and trust by use of his public office.

  
            Spitzer had on file documents which provided for an outside Special AG to handle any enforcement of the Spitzer Trust.  McMaster controlled all enforcement of Brown’s “I Feel Good” Trust.

Spitzer, a minority vote on the Board, could not control the selection of investment managers.   McMaster had total control by an unfettered right to select, remove and replace the sole trustee.

      Spitzer had no control over placement of charitable grants. McMaster had absolute control.

But for the Supreme Court’s 2013 decision, nothing stood in the way of James Brown’s “I Feel Good” private foundation, after being taken over by the State, being turned into a political pocketbook for AGs – aspiring governors.

Next Post:  # 11 THE REAL HEIRS, THE COPYRIGHTS AND HYNIE