As the war in Iraq winds down, attention must focus on the troubled economy and the widespread underlying corporate corruption that continues to become known. The exploding HealthSouth scandal shows how major fraud can lie hidden for many years.

The Bush administration deserves credit for putting new emphasis on accounting and securities fraud. The Justice Department and the FBI are moving into criminal investigations from the beginning instead of leaving early groundwork to the Securities and Exchange Commission. Still, nine months after President Bush ordered the formation of a federal task force to prosecute corporate fraud, no charges have been brought against the former heads of Enron and WorldCom, the first and among the worst cases in the current wave of corporate corruption.

Fortunately, another anti-corruption team is on the scene, unburdened by the old political and financial friendships that may cast suspicion on the determination of the administration’s efforts. Eliot Spitzer, the New York state attorney general, heads a team that is not only going after bad guys but is signaling the entire financial industry that it must clean up its act. The New Yorker magazine, in its April 7 issue, has provided a lengthy and enlightening account of how Mr. Spitzer got into the investigation of white-collar corruption and how his broader vision sees it as systemic rather than a case of a few bad apples.

It all started with a memo more than two years ago from Eric Dinallo, the head of the investor-protection bureau of the Attorney General’s Office, headed “Investigation of investment banking firm analysts.” What he proposed was expanding the bureau’s probes of minor individuals who pumped up penny stocks into a hard look at the self-serving “buy” recommendations by big Wall Street firms for stocks that were clearly tanking. Mr. Spitzer assigned a three-person team to the project. They focused on a hotshot analyst for Merrill Lynch, Henry Blodget, and demanded some 100,000 Merrill Lynch e-mails and other documents. They showed that Mr. Blodget had been plugging stocks that he privately called things like “dog,” “piece of junk,” “powder keg,” and “POS,” a scatological acronym that was one of his favorites. Other e-mails made it clear that Merrill Lynch was in on the fraud, paying Mr. Blodget $12 million in salary increases and bonuses for bringing in business by false recommendations while the market was slumping.

Mr. Spitzer considered a criminal indictment against Merrill Lynch but settled instead for an agreement that it publish its investment-banking relationships with any company whose stock it was touting. He also insisted on a fine of $100 million – big enough to wake them up and signal the entire industry, but not enough to bankrupt the firm. He didn’t want to put Merrill Lynch out of business for actions that had been common on Wall Street. He considered that it had been a mistake to drive Arthur Andersen and Drexel Burham Lambert into bankruptcy over fraudulent behavior they could have been corrected.

The story goes on with investigation of such familiar names as Solomon Smith Barney, WorldCom, Qwest, CityGroup, Jack Grubman and Sanford Weil. Mr. Spitzer’s investigators are now examining hedge funds and their influence on stock prices, as well as finance companies that lend to the poor at high rates of interest.

Some Democrats expect Mr. Spitzer to run for governor of New York in 2006. His record thus far shows political and publicity skills in addition to energy and vision. Other prosecutors have gone far in politics. Think of a couple of Republicans, former New York Mayor Rudolph Giuliani and Thomas E. Dewey, who ran against Franklin D. Roosevelt in 1944.