Eliot Spitzer is at it again

The noted (some would say infamous) Attorney General of New York is at it again:

See Bloomberg:

When Greenville County in South Carolina borrowed $800 million two years ago to expand its public schools, Marsh & McLennan Cos. provided three bidders to insure the bond sale.

Unbeknownst to the school system, two of the offers were genuine and the third was "wholly fictitious," according to a suit filed yesterday by New York Attorney General Eliot Spitzer. The winner, Zurich Financial Services AG, landed the job because Marsh expected the insurer to pay a lucrative fee.

The suit says Marsh, the world's No. 1 insurance broker, was so intent on winning fees it devised a phony bidding system to make customers believe insurers were competing for business. Spitzer's suit includes dozens of Marsh e-mails he calls "overwhelming evidence" that the winner was predetermined by Marsh.

"This is classic cartel behavior," Spitzer said after filing the suit and announcing the arrest of two American International Group Inc. executives who allegedly participated in Marsh's bid rigging. The executives pleaded guilty yesterday. He said the taint of corruption extends to "virtually every line of insurance."

As Ramesh Ponnuru detailed in his June 14th expose':

The list of targets Spitzer has gone after seems endless: gun makers, tobacco companies, Internet spammers, drug companies, Microsoft, brokerages, predatory lenders, mutual funds, power plants, the Bush administration, former New York Stock Exchange chairman Richard Grasso.

As his article sow is detail, almost every venture Spitzer attacks backfires or never comes to fruition. I guess its the means that count.

My financial advisor lauds Spitzer. And there are certainly some effective legitimate crimes he's brought to light. But the net effect of his efforts are seriously damaging.

So is the insurance industry next? What will be the effect that this will have?