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January 30, 2004
New York Attorney General Plans to Seize Postal Service Will Allege Unused Stamps Are Securties and Require Regulation Relying on an obscure New York law, Eliot Spitzer, the state's crusading attorney general, is preparing to sue the U.S. Postal Service for securities fraud and take control of the nation's troubled postal system. The lawsuit, which Spitzer could file in state courts as early as today, will allege that the Postal Service engages in securities fraud whenever it sells stamps to customers who don't immediately use the stamps. The unused stamps, forgotten in countless desk drawers, become de facto securities similar to stocks and bonds, and thus are subject to regulation by Spitzer's office. Spitzer's lawsuit is expected to contend that the Postal Service commits securities fraud when it fails to inform customers that they are purchasing securities when they ask for stamps at the local Post Office counter. The suit will also contend that the Postal Service violates the New York law because it fails to pay interest on a customer's investment in the unused stamps and fails to disclose that the unused stamps will steadily lose value because of inflation. Spitzer, a Democrat, has gained considerable notoriety in the last two years by dusting off various New York statutes and using them to go after big Wall Street financial firms, forcing significant reform regarding how investors are treated. The Attorney General's hardball tactics have led to accusations of political grandstanding. His critics say he's merely seeking to raise his profile with the public in anticipation of a run for governor of New York state in 2006. There have even been whispers of Spitzer for President in 2008, and the run at the Postal Service might be the first salvo in seeking recognition beyond New York's borders. The New York law Spitzer is using was enacted in 1815 when James Madison was president. If securities fraud is found to exist, Spitzer will be able to not only take over Postal Service operations in New York state, but in all other states as well under the States Rights Reciprocity Principle, upheld by the Supreme Court in an 1846 case involving runaway slaves. "I was startled when I first heard about this possible litigation, but now that I've looked into it, I'm increasingly convinced Eliot may have some traction here," said Hector Martinez Gonzalez, a professor of law and legal historian at New York University's law school. "I think his ability to actually take control of the Postal Service could turn on the Reciprocity Principle. The Supreme Court's decision in 1846 left several legal doors open which have never been tested in light of the Emancipation Proclamation." Jane Wurlitzer, a Brooklyn political activist who runs the EliotNow! Internet Web site, cheered Spitzer's latest legal move. "This is great. It moves him squarely onto the national political stage. Eliot Spitzer and Hillary Clinton in 2008. I can't wait. The only question is which one runs for president and which one for vice president." In Washington, a senior staff member for the House Intergovernmental Affairs Committee was also enthusiastic. "I can't imagine anyone in Congress opposing Spitzer if he wants to take over the Postal Service. Congress has been trying to get rid of it for years," he said. Copyright William Stockton & Smithtown Creek Productions |
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