Commentary –by Susan Antilla

It's hard not to wonder how the Goldman Sachs Group Inc. drama would be panning out if Eliot Spitzer were still sheriff.

Don't get me wrong. The holier-than-thou, hooker-obsessed former New York governor is a hypocrite of the highest order — almost as bad as a securities firm that takes a bow for its "customers first" credo, and then bets against its customers. Not that it would ever happen, but I'm just saying.

In the disgrace that's passed for US securities regulation in recent decades, Spitzer, who terrified Wall Street as the New York attorney general who preached morals and lived impiety, has sadly been the best we've gotten.

I was reminded of his unmatched ability to force change on Wall Street while reading "Rough Justice," a just-released biography of Spitzer written by Peter Elkind, a reporter at Fortune magazine. Elkind, who had access to his hormonally cursed subject for the book, offers an account of Spitzer's journey from a loveless upbringing, to prosecutor, governor, and ultimately customer of Emperors Club VIP, a pricey escort service that furnished him with working girls including "Angelina" and the now-famous "Ashley Alexandra Dupre."

The book triggers the constant question, "How many truly awful people can you squeeze into one tawdry story?" There are details of the New York state "Troopergate" scandal. And there's lots of commentary on the energetic effort by Spitzer's enemies to get word out that he was sleeping around. Along with politics and revenge, "Rough Justice" also offers numerous reminders that Spitzer is the only guy who had the audacity to come face-to-face with pushback from finance's power structure, and keep charging forward anyway.

What might Spitzer be doing if he had clout right now?

He left a road map, and Elkind describes it as a three-step strategy that moves from investigating a stinky "but long accepted" practice, exposing one egregious violator, and then leveraging "the resulting uproar" to change the whole industry.

Most famously, Spitzer sent Merrill Lynch & Co. into a tailspin when he called a press conference April 8, 2002, on Merrill's customers-last approach to securities research — with no warning to Merrill that it was about to make the evening news. Elkind ticks off the classic brokerage firm defence that followed: The e-mails Spitzer released were taken out of context. Everyone's doing it, so why pick on us? And, by the way, the firm has powerful friends, so Spitzer had better watch out, one Merrill lawyer reportedly reminded the AG.

If any of this sounds familiar, that's because the flap about Goldman's treatment of its customers who traded in collateralised debt obligations has resulted in a similar combination of excuses and circumstances. E-mails out of context. Powerful friends. And, hey, we aren't even the biggest players in the CDO sandbox, so why pick on us?

While the brokerage firm response may be wholly predictable, the prosecutorial handling of headline-quality e-mail hasn't been. The SEC included a handful of damning Goldman e-mails in the lawsuit it filed April 16. Spitzer, never one for subtlety, would have attached a Word document big enough to fill an 18-wheeler. Still, Spitzer's case against Merrill started much the same as the SEC's against Goldman.

Merrill in April 2002: "There is no basis for the allegations made today by the New York attorney general. His conclusions are just plain wrong. We are outraged that we were not given the opportunity to contest these allegations in court." Merrill then hired former New York Mayor Rudolph Giuliani to help it with its legal battle.

Goldman in April 2010: "We are disappointed that the SEC would bring this action related to a single transaction in the face of an extensive record which establishes that the accusations are unfounded in law and fact." Goldman then hired former White House counsel Greg Craig to help it with its legal battle.

The SEC this time — don't faint — has done a couple of things right. It sued Goldman without engaging in the inane regulatory nicety of letting the firm know a suit was coming. It also included a handful of outrageous e-mails in the suit — another Spitzerism. Too bad it used that e-mail weapon timidly, though, which allowed room for Senator Carl Levin, the Michigan Democrat who chairs the Senate Permanent Subcommittee on Investigations, to make a splash April 24 with the release of a trove of ugly Goldman e-mail.

The agency also had the bad luck of pursuing one losing Spitzer strategy. The SEC has been the subject of a sex scandal of its own, with 17 unnamed high-level professionals caught obsessing over naughty.com and skankwire.com porn during work hours.

That was old news by last week, yet a flurry of fresh coverage ensued after Republican Senator Charles Grassley of Iowa released a memo recapping what had already been revealed in several years' worth of public reports by the SEC's inspector general. The memo's release was nicely timed to help the SEC do what it does best — look bad — just as Republicans sought to criticise the SEC's Goldman case.

Even when it comes to smut, the agency can't rise to Spitzer's standards.

My guess is that a Spitzer regime would by now have Goldman at the bargaining table, and that a well-attended press conference would have been called to announce the next set of conflicted, customer-wrecking brokerage firms to be probed. A schedule would be set up to release horrifying e-mail evidence from one firm, and another, and another. Then, bingo, a global settlement.

Spitzer liked to go after what Elkind calls "a corrupt ecosystem," which meant that even big-name figures like Jack Grubman played a secondary role to the goal of cleaning up a toxic strategy. Spitzer's playbook worked. His successors haven't even mastered the Cliff Notes.

Susan Antilla is a Bloomberg News columnist. The opinions expressed are her own.