Tuesday, August 23, 2011

A former Marsh & McLennan Cos. executive has hit former New York Governor Eliot Spitzer with a $60 million defamation lawsuit over an online magazine article regarding an insurance bid-rigging scandal.

William Gilman, a former Marsh managing director, filed a complaint last Friday in the U.S. District Court in Manhattan, over allegations Mr. Spitzer defamed him in a Slate article published a year ago. A copy of the complaint was made public on Monday.

Gilman, who had a final insurance fraud charge dismissed in January, said Spitzer acted with “actual malice” by suggesting that he was guilty of crimes of which he was never accused.

Although he wasn’t named in the article, Mr. Gilman complained that Spitzer defamed him by 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.”

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

In 2004 Mr. Spizter, then the state’s Attorney General, announced an investigation into the practices at Marsh & McLennan, particularly fees paid by insures to brokers who place business with them. Gilman, who worked for the company at the time, was charged in 2005 with 37 counts of insurance fraud. Gilman’s final charge was dropped last January.

“I haven’t seen the lawsuit and so will not comment on it,” said Spitzer. “The illegalities rampant at Marsh & McLennan leading to their fine of $850 million and the multiple judicial findings of illegality are clear from the public record.”

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