March 11, 2008 / 12:10 PM / 11 years ago

UPDATE 1-NY Gov. Spitzer under pressure to quit over sex case

(Adds tabloid headlines, origin of probe)

By Claudia Parsons

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.

“The stupendously deluded belief that the sitting Governor of New York could purchase the services of prostitutes was merely the last act of a man unable to admit either the existence of, or need for, limits,” the Journal wrote in an editorial about what it said was almost a Shakespearean fall.

“Governor Spitzer, who made his career by specializing in not just the prosecution, but the ruin, of other men, is himself almost certainly ruined,” the paper said.

The state capital, Albany, was rife with speculation about if, or more likely when, Spitzer would resign and whether he would be charged with any crime. Prosecutors rarely bring charges against clients of prostitutes in such cases.

In an online poll on the Daily News web site, 83 percent of respondents said Spitzer should resign.

At the heart of the scandal is a criminal complaint unveiled last week charging four people with running a multi-million-dollar prostitution ring dubbed The Emperors Club.

The New York Times said Spitzer was an individual identified as Client 9 in the court papers filed last week. Client 9 arranged to meet with “Kristen,” a prostitute who charged $1,000 an hour, on Feb. 13 in a Washington hotel and paid $4,300 for services rendered and as a down payment for future engagements, according to the court documents.

Among the charges brought against the four defendants last week was transporting women across state lines for prostitution purposes. It was not clear if a similar charge might be brought against Spitzer if it were proven he arranged for “Kristen” to travel from New York to Washington to have sex with him.

In an interview two years ago, Spitzer, then-attorney general, told ABC News he had some advice for people who break the law. “Never talk when you can nod, and never nod when you can wink, and never write an e-mail because it’s death. You’re giving prosecutors all the evidence we need,” he said. (Additional reporting by Daniel Trotta and Robert Campbell; editing by Stuart Grudgings and Bill Trott)

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