ALBANY - New York lawmakers elected Assemblyman Thomas DiNapoli on Wednesday to be state comptroller, rejecting three finalists picked by a special panel of former comptrollers and dealing a political setback to Gov. Eliot Spitzer.

“We have just witnessed an insiders' game of self-dealing that unfortunately confirms every New Yorker's worst fears and image of all that goes on in the Legislature of this state,” Spitzer said. “Today's decision is a stark reminder of all that is wrong with our Legislature and its leadership.”

Spitzer pushed for involving the former comptrollers to help ensure the next comptroller had sufficient experience and integrity to replace Alan Hevesi, who was re-elected in November only to resign in December after pleading guilty to using state workers to drive and run errands for his wife.

Last month, Wall Street financier Bill Mulrow, New York City financial officer Martha Stark and Nassau County Comptroller Howard Weitzman were named finalists for the job by the three former state and New York City comptrollers chosen by Spitzer, a Democrat, and legislative leaders.

The choices of the former comptrollers stung Democrats in the Assembly majority who wanted an assemblyman to get the job. They said the process for picking the comptroller was flawed and that they were justified in defying Spitzer and picking someone not on the list of finalists.

Several expressed anger that Spitzer tried to influence the selection process. State law requires any opening in the offices of attorney general or comptroller to be filled by election in a joint session of the 212-member Legislature.

DiNapoli beat out Stark, the only one of the three finalists considered by lawmakers, in a 150-56 vote. Stark had the support of Democrats in the Senate as well as a several Republican lawmakers.

DiNapoli earned praise from both Democratic and Republican lawmakers for his demeanor and fairness in working with both sides of the aisle on various issues. Both Assembly Speaker Sheldon Silver and Republican Senate Majority Leader Joseph Bruno gave DiNapoli their support.

“Everybody who spoke talked about Tom's integrity, Tom's intelligence and Tom's ability,” Silver said. “That's what we need in the comptroller - integrity, intelligence and ability. That's what Tom DiNapoli represents and that's why he got the overwhelming majority of the vote.”

DiNapoli, sworn in immediately after the vote, comes to the $151,500-a-year job with 20 years of experience at the Capitol, but little financial experience. He last served as the chairman of the Assembly's Environmental Conservation Committee and previously headed committees overseeing local governments, consumer affairs and ethics.

Before joining the Legislature he worked for New York Telephone Co. and AT&T in various management positions, rising to oversee an office of more than 100 employees.

The comptroller serves as the state's chief financial officer, auditing government operations and managing a $150 billion pension fund. The office's 2,400 employees carry out a variety of duties, including financial audits of state agencies and public benefit corporations, managing the state's assets, issuing general obligation debt bonds to pay for projects and reviewing state contracts, payrolls and payments before they are issued.

“We are talking about an obligation to protect and safeguard the hard-earned dollars of New Yorkers, yet the Legislature let politics and cronyism overwhelm sound judgment at the worst possible moment,” Spitzer said.

DiNapoli had argued his knowledge of state government and his experience as a member of the Assembly's Ways and Means Committee, which helps craft state budgets, gave him the credentials to do the job. His term lasts until the end of 2010.

DiNapoli said he was a supporter of Spitzer and hoped to work with him in reforming the state's finances. He said he had a “cordial” conversation with the governor after the vote.

“I'm very enthusiastic about Eliot Spitzer's agenda,” he said. “We need to move forward. We have a lot of work to do ... I don't intend to be anybody's lapdog. I'm going to be a watchdog.”

Silver said he would continue to work on ethics, lobbying and campaign finance reform as well as changes to the process of drawing legislative districts, issues championed by Spitzer.

“We fully expect that agreements can be reached and legislation enacted on these and other important issues,” Silver said in a statement.

Spitzer wasn't so sure, saying Wednesday was a “turning point” in which lawmakers “returned to the cocoon of the Albany status quo that has driven their behavior for too long.”

“That is why campaign finance and basic redistricting legislation are simply not within our grasp,” he said.