Spitzer faces $60 million libel suit over Slate column

NEW YORK (Reuters) - Former New York Governor Eliot Spitzer was hit with a $60 million libel lawsuit by a former Marsh & McLennan Cos Inc executive over a column posted on Slate.com about an insurance bid-rigging scandal.

William Gilman, a former Marsh executive marketing director, said Spitzer acted with "actual malice" by suggesting in an August 22, 2010 column titled "They Still Don't Get It" that Gilman was guilty of crimes, after his conviction had been thrown out the prior month.

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

Gilman had worked at Marsh from 1976 to 2004 when Spitzer, then New York's attorney general, opened a probe into the company's practices -- including alleged kickbacks for steering of clients to favored insurers.

Slate.com is owned by Washington Post Co, and its parent Slate Group LLC is a defendant in the case.

Spitzer, in a phone interview, declined to comment. Rima Calderon, a Washington Post spokeswoman, declined to comment. The complaint was filed late Friday in the U.S. District Court in Manhattan. A copy was made public on Monday.

Eight insurance executives including Gilman were indicted in September 2005, eight months after Marsh, the largest U.S. insurance broker at the time, agreed to pay $850 million in a civil settlement with Spitzer.

Gilman was found guilty in February 2008 on a felony antitrust charge, but the presiding judge threw out that conviction in July 2010, citing new evidence.

That case was dismissed in January. The other indicted executives either were acquitted or had their cases dismissed. Twenty-one others pleaded guilty.

MEAT GRINDER

In his complaint, Gilman said Spitzer defamed him in writing, stating 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."

Gilman also said Spitzer defamed him in writing by stating that "many employees of Marsh" have been "convicted and sentenced to jail terms," when none had. Spitzer had written the column after a critical editorial shortly before in The Wall Street Journal.

"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," the complaint said.

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

"I don't know what possessed him to make the statements that he made," Gilman's lawyer Jeffrey Liddle said in an interview, referring to Spitzer. "My client has been through the meat grinder of press coverage for many years."

Last month, Time Warner Inc's CNN canceled Spitzer's low-rated television talk show "In the Arena," after less than one year on the air.

Spitzer resigned as New York's governor in March 2008 after a scandal in which it was revealed that he had hired a high-priced prostitute.

The case is Gilman v. Spitzer et al, U.S. District Court, Southern District of New York, No. 11-05843.

(Reporting by Jonathan Stempel; Editing by Gerald E. McCormick, Dave Zimmerman)