Could New York Attorney General Eliot Spitzer have made his first misstep in his crusade against the fund industry?

By now everyone suspects that he is going to run for governor in 2006. And, just about anyone who is anyone showed up to the $2 million fundraiser yesterday to help him jumpstart his campaign. But, Spitzer wouldn't confirm whether he was actually running.

In any case, by a few estimates, each table at the event donated some $50,000. Hochos in attendance included Miramax films chief Harvey Weinstein, Donald Trump, Cablevision CEO Jim Dolan, Yes Network's Leo Hindery, City Council speaker Peter Vallone and Councilman Bill DeBlasio.

Interestingly, hedge funds were among some of the Attorney General's biggest donors. James Chanos, president of the $1 billion hedge fund Kynikos Associates, Titan Advisors fund-of-funds chief George Fox and Jeff Berkowitz, manager for the hedge fund Cramer Berkowitz were all in attendance and made significant contributions. If Spitzer's ethics are questioned, is it appropriate for him to accept money from fund managers?

The New York Post also highlighted another potential problem for Spitzer: two of his fundraisers have criminal records.

According to the Post, Dean Vlassis and Charles Vinal helped to raise $40,000 for Spitzer. Vlassis, a longtime fund-raiser for Syracuse-area Democrats, pleaded guilty in 1978 to tax-evasion charges and spent two months in the Allenwood federal prison camp in Pennsylvania. Reports said that Vlassis failed to pay $245,000 in federal income taxes on his swimming-pool company.

Vinal was sentenced to a year in jail in 1975 after pleading guilty to a drug-possession charge.

Spitzer aides denied knowledge of Vlassis and Vinal's pasts.

Still, the event was full of well-wishers.

"He's not afraid to go after anyone or anything," Bill Mulrow, former democratic candidate for state comptroller and senior vice president at Gabelli Asset Management to the Post. " He brings sanity and legality to the table."  

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