UPDATE 1-NY Gov. Spitzer under pressure to quit over sex case
(Adds tabloid headlines, origin of probe)
NEW YORK, March 11 (Reuters) - New York Gov. Eliot Spitzer faces pressure to resign on Tuesday as well as questions about whether he will be prosecuted for any crime after a report linked him to a high-class prostitution ring.
A New York Times report said the man who made his name fighting corruption hired a $1,000-an-hour prostitute and was caught on a federal wiretap at least six times on Feb. 12 and 13 arranging to meet with her at a Washington hotel.
Spitzer, a married 48-year-old Democrat who investigated prostitution as New York's attorney general, apologized for what he described as a "private matter" but said nothing about resigning. He neither confirmed nor denied the report.
State Republicans called for him to step down.
New York State Assembly Republican Minority Leader James Tedisco said on Monday night he had received a phone call from Lieutenant Governor David A. Paterson to discuss a possible transition of power if Spitzer resigns.
The New York Times, citing unnamed law enforcement officials, reported in Tuesday's editions the investigation began last year during an Internal Revenue Service review of suspicious financial transactions as reported to it by banks.
"The payments were made over a period of several months in a way that investigators believe was intended to conceal their purpose and source, which could amount to a crime called structuring," punishable by up to five years in prison, the Times reported.
New York City's tabloids seized on the opportunity to skewer the governor. The Daily News headline called Spitzer the "Pay for Luv Gov" and the New York Post, owned by Rupert Murdoch's News Corp NWSa.N, led with "HO NO!"
The Times said in an editorial Spitzer's insistence it was a "private matter" displayed arrogance.
"He did not just betray his family in a private matter," the newspaper said. "He betrayed the public and it is hard to see how he will recover from this mess and go on to lead the reformist agenda on which he was elected to office."
News of the scandal rocked Wall Street, where power brokers resented Spitzer's high-profile inquiries into financial cases when he was New York state's chief prosecutor.
Spitzer was elected governor with nearly 70 percent of the vote in late 2006 following a stint as state attorney general noted for high-profile investigations into Wall Street.
"SHAKESPEAREAN FALL"
The Wall Street Journal said Spitzer had shown his lack of restraint in overly aggressive tactics as attorney general, making "extraordinary threats" to entire firms and to those who criticized his pursuit of high-profile Wall Street figures. Continued...
