New York Drops Probe of Former Merrill Exec

New York Atty. Gen. Eliot Spitzer said Monday that he had ended his inquiry into whether a former Merrill Lynch & Co. executive mounted a covert media campaign to discredit him.

Spitzer had explored whether Thomas H. Patrick, ousted as Merrill’s executive vice chairman last week, tried to finance a cable television program intended to denigrate Spitzer and his crackdown on stock analysts.

Merrill didn’t provide Spitzer with complete details of the alleged incident, and some of the specifics of Patrick’s actions “are still kind of sketchy,” said Darren Dopp, a Spitzer spokesman.

Nevertheless, Dopp said, Spitzer was satisfied that the company had put a halt to any improper activities once it learned of them.

“Whatever inappropriate behavior might have existed was addressed by the company,” Dopp said, “and at this point we consider the matter closed.”

Spitzer told E. Stanley O’Neal, Merrill’s chief executive, of the end of the inquiry during a telephone call Monday. O’Neal had offered to go to Spitzer’s office to discuss the matter, but Spitzer called O’Neal to tell him that wouldn’t be necessary, Dopp said.

A Merrill spokesman declined to comment. The company has said it didn’t try to finance an effort to discredit Spitzer.

Merrill itself had investigated its second-highest-ranking executive earlier this year for possibly trying to retaliate against Spitzer, who had spearheaded a government crackdown on stock analysts.

That in-house probe, by New York law firm Fried, Frank, Harris, Shriver & Jacobson, looked into whether Patrick funneled money through a Merrill consultant to fund a TV documentary that would disparage Spitzer.

The investigation centered on whether a $75,000 payment late last year from Merrill consultant Rick Kash to TV journalist Bill Kurtis was given to fund a possible show attacking Spitzer.

Kash, founder of the Cambridge Group, a Chicago-based management-consulting firm, is a longtime Merrill consultant. In 2002, Merrill agreed to pay Cambridge about $800,000 for consulting work, sources said.

The Merrill probe found that Patrick engaged in activities that were “not appropriate” but that he did nothing “illegal or unethical,” a source said last week. A TV show criticizing Spitzer apparently never was produced.

After the probe, Patrick was reprimanded, stripped of some management duties and told to cease the activities, sources said.

Patrick declined to comment Monday.

Kurtis, who hosts the weekly “American Justice” program on the A&E; cable network, said he met with Merrill executives in November to discuss a possible documentary on whether Spitzer had overstepped his bounds by investigating analysts. But Kurtis said money wasn’t discussed during the meeting and he never received any payment from Merrill.

He and Kash maintained that the $75,000 payment to Kurtis had nothing to do with Merrill or Spitzer, but was to fund a video project that Kurtis pitched to the Chicago Symphony Orchestra.

The symphony turned down the project early last year. Kurtis said there recently have been renewed discussions, but a symphony spokeswoman described them as informal.

“I’m pleased to hear of the attorney general’s decision,” Kurtis said. “Maybe we can return to the documentary at a later date.”

Kash declined to comment.

Patrick was ousted by O’Neal last week after lobbying to have a close associate named as company president, sources said. Patrick’s role in the alleged effort to discredit Spitzer was an underlying factor in his ouster, a source said.