Spitzer, scourge of Wall Street, plans to take on New York state

The political landscape of New York was jolted yesterday, not entirely unexpectedly, when the state's attorney general, Eliot Spitzer, a Democrat who has forged a strong reputation for nailing Wall Street firms for financial fraud and trickery, announced he plans to run in 2006 for state governor.

Mr Spitzer, 45, has fast been emerging as a star among Democrats when the party, stung by its disappointments this year, desperately needs new lustre. His declaration had been widely foretold and many political analysts give him a decent shot at winning the gubernatorial race.

The Harvard-educated lawyer, named by New York magazine as among the state's 50 sexiest men, is serving his second term as attorney general. Republicans, evidently fearful of his high-watt appeal, have frequently joked that the initials, AG, really stand for "aspiring governor".

Among those supporting his bid is the former governor, Mario Cuomo, who was dislodged by Republican George Pataki 10 years ago. Mr Pataki is in his third term and has not said if he will try for a fourth in 2006. Most observers think he is likely to run one more time for the office.

The announcement came just in time for a high-price political fund-raising lunch for Mr Spitzer in Manhattan tomorrow. Among the guests expected to attend is the star of the Bridget Jones movies, Renée Zellweger. The $1,000 (£514)-a-plate event should generate $2m for his campaign.

A poll by the Zogby organisation a week ago gave Mr Spitzer a narrow lead over Mr Pataki if the election was held today. Another survey, by Marist College, showed Mr Pataki with an approval rating of 41 per cent and Mr Spitzer with 57 per cent.

Mr Spitzer earned his tough reputation by taking on brokerage houses, mutual fund firms and, most recently, giant insurance companies on Wall Street and forcing them into paying multibillion-dollar settlements to overcome allegations of wrong-doing, Mr Spitzer has skilfully won grass-roots support and, above all, kept himself in the headlines.

The attorney general "would be the 900lb gorilla in the election," Douglas Muzzio, a political science professor at New York's Baruch College said. "He's got an extraordinarily powerful political narrative and he's smart. He's a tireless campaigner, he can raise the money and he's got a reputation."

Most recently, Mr Spitzer has sued the world's largest insurance company, Marsh & McClennan, for alleged bid-rigging and forced the resignation of its chief executive, Jeffrey Greenberg. The insurance investigation has now spread to several other states, including California.

Previous investigations by Mr Spitzer resulted in Wall Street's largest brokerage houses handing over $1.4bn to settle conflict-of-interest claims and agreeing to widespread reform of their practices, plus a $3bn settlement by mutual fund companies for improper trading. He made his gubernatorial ambitions known in interviews with reporters but declined to hold a news conference. "The state is at a point of crisis," the Democrat said. "We are bleeding jobs. We need reform in the process of government."

The path to the governor's office might have been far rougher if another New York heavyweight, the former mayor Rudy Giuliani, were to join the race. But Mr Giuliani, a Republican, has expressed no interest in the job.

Nor has the brightest of New York's political stars, Hillary Rodham Clinton. The state's junior US senator attracts speculation of another kind which has to do not with the governor's mansion in Albany but the White House in Washington.