“It’s hard to believe, but this all could lead to impeachment…”

So says a high-level political appointee in the administration of Eliot Spitzer, Governor of the State of New York.   Most observers consider impeachment a long shot, but there’s more to come in this latest man-bites-dog ethical reversal featuring the man who came the poster boy for ethics in business.

It was only a few years ago that Eliot Spitzer struck fear in corporate boardrooms.  He was everywhere. He attacked the self-serving practices of investment bankers on Wall Street, he forced Maurice Greenberg from the top job at AIG and he challenged New York Stock Exchange President Richard Grasso over compensation – some of the highest-profile investigations of corporate ethics in decades.  Largely as a result it all, Spitzer got himself elected New York’s Governor in a landslide election last November.

But these days, Spitzer is scrambling as the result of investigations into his staff’s attempts to discredit the Republican leader of the state Senate, Joseph L. Bruno.  According to a scathing report by N.Y. Attorney General Andrew Cuomo [1], Spitzer’s staff misused state police to collect information about Bruno.   The New York Times reports [2] that there are now no less than four separate inquiries into the behavior of Spitzer’s staff.

While there are no indications (yet) that a law has been broken, New York pols are chuckling over the fact that two of Spitzer’s top staffers refused to make statements under oath.   And Spitzer, known for being a micro-manager, maintains that in this case he wasn’t aware of what his staff was up to.

The investigations will go on for some time, sucking political good will from Spitzer’s fledgling administration.

It doesn’t help that in his first seven months as Governor, Spitzer has continued with the bulldozer-like techniques he employed as Attorney General.  He’s made few friends in the state capitol.

It all goes to show how quickly ethical trains can run off the tracks, even when seemingly competent and honest executives are in charge.  Stay tuned.  Instinct

says there’s much more to come.