Spitzer faces $60 million libel suit over Slate column 22 Aug 11

Former New York governor Eliot Spitzer speaks at the Reuters Global Financial Regulation Summit 2010 in New York April 28, 2010.

By Jonathan Stempel

(Reuters) – Former New York Governor Eliot Spitzer was hit with a $60 million libel lawsuit by a former Marsh & McLennan Cos executive over a column posted on Slate.com concerning an insurance bid-rigging scandal.

William Gilman, a former Marsh executive marketing director, said Spitzer acted with “actual malice” by suggesting in an August 22, 2010 column titled “They Still Don’t Get It” that he was guilty of crimes, including crimes he was never accused of, after his conviction had been thrown out the prior month.

Slate.com is owned by Washington Post Co, and its parent Slate Group LLC is a defendant in the case.

Gilman filed his complaint late Friday in the U.S. District Court in Manhattan. A copy was made public on Monday.

Rima Calderon, a Washington Post spokeswoman, declined to comment. Spitzer and Gilman’s lawyer Jeffrey Liddle did not immediately respond to requests for comment.

Gilman had been among eight insurance executives indicted in September 2005 as Spitzer, then New York’s attorney general, probed the alleged steering of clients to favored insurers in exchange for kickbacks.

Marsh, the largest U.S. insurance broker at the time, agreed in January 2005 to pay $850 million in a civil settlement with Spitzer.

While Gilman was found guilty in February 2008 on a felony antitrust charge after a bench trial, the presiding judge threw out that conviction in July 2010, citing new evidence.

That case was dismissed in January. The other indicted executives either were acquitted or had their cases dismissed. Twenty-one others pleaded guilty.

“READILY IDENTIFIABLE”

In his complaint, Gilman said Spitzer defamed him in writing that “Marsh’s behavior was a blatant abuse of law and market power: price-fixing, bid-rigging and kickbacks all designed to harm their customers and the market while Marsh and its employees pocketed the increased fees and kickbacks.”

Gilman also said Spitzer defamed him in writing that “many employees of Marsh” have been “convicted and sentenced to jail terms,” when none had. Spitzer had written the column after a recent critical editorial in The Wall Street Journal.

“While Mr. Spitzer’s statements do not refer to Mr. Gilman by name,” the complaint said, “Mr. Gilman is readily identifiable as the subject of the defamatory comments.

“Mr. Spitzer was well aware of his own allegations as attorney general and the resolution of those allegations in favor of Mr. Gilman and yet, recklessly disregarded these facts,” it added.

Gilman is seeking at least $10 million of compensatory damages; $20 million of general damages, including damage to his reputation; and $30 million of punitive damages.

Last month, Time Warner Inc’s CNN canceled Spitzer’s low-rated television talk show “In the Arena,” after less than one year on the air.

Spitzer resigned as New York’s governor in March 2008 after being linked to a prostitution ring.

The case is Gilman v. Spitzer et al, U.S. District Court, Southern District of New York, No. 11-05843.