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Spitzer apologizes to public, family; future uncertain
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The news comes after the first-term Democrat had pledged to bring ethics reform to New York's capital of Albany.
Spitzer has been New York's governor for little more than year, assuming office after spending eight years as the state's attorney general. During his time as the state's top law-enforcement official, he fashioned a reputation for taking on corruption in all places, particularly in the nation's financial markets.
One of Spitzer's more notable cases was taking on New York Stock Exchange Chairman Richard Grasso, alleging that Grasso received excessive compensation as the chairman of a nonprofit organization. Grasso in turn charged Spitzer with attacking him solely to boost his image in the press in advance of his gubernatorial effort. Grasso already had resigned before the Spitzer prosecution. The case remains in the courts.
Spitzer also sued a slew of major Wall Street brokerages, alleging they inflated stock prices and used brokerages to give biased investment advice.
News of Spitzer's apparent troubles did little to change an already down market on Wall Street.
"Everyone is watching television. If anything, it stopped the market from going down further," said Dave Rovelli, managing director of equity trading at Canaccord Adams.
one more update..
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NY governor linked to prostitution ring
AMY WESTFELDT, Associated Press Writer
http://news.yahoo.com/s/ap/20080310/ap_on_re_us/spitzer_prostitution
NEW YORK - Gov. Eliot Spitzer’s political career teetered on the brink of collapse Monday after the corruption-fighting politician once known as “Mr. Clean” was accused of paying for sex with a high-priced call girl. The scandal drew immediate calls for the Democrat to step down. At a news conference before about 100 reporters, a glassy-eyed Spitzer, his shellshocked wife at his side, apologized to his family and the people of New York.
But he gave no details of what he was sorry for, did not discuss his political future and ignored shouted questions about whether he would resign.
“I have disappointed and failed to live up to the standard I expected of myself,” said the 48-year-old father of three teenage girls. “I must now dedicate some time to regain the trust of my family.”
Spitzer was caught on a federal wiretap arranging to meet at a Washington hotel room with a prostitute from a call-girl business known as the Emperors Club VIP, according to a law enforcement official who spoke to The Associated Press on condition of anonymity because the investigation is still going on.
The governor has not been charged, and prosecutors would not comment on the case.
The scandal came 16 months after Spitzer stormed into the governor’s office with a historic margin of victory, vowing to root out corruption in New York government in the same way that he took on Wall Street executives with a vengeance while state attorney general.
But his first year in office was marred by turmoil, and the latest scandal raised questions about whether he would make it through a second year.
“He has to step down. No one will stand with him,” said Rep. Peter King, a Republican congressman from Long Island. “I never try to take advantage or gloat over a personal tragedy. However, this is different. This is a guy who is so self-righteous, and so unforgiving.”
Democratic Assemblyman John McEneny said: “I don’t think anyone remembers anything like this. The fact that the governor has a reputation as a reformer and there is a certain assumption as attorney general that you’re Caesar’s wife. It’s a different element than if you were an accountant.”
Democratic Lt. Gov. David Paterson would become New York’s first black governor if Spitzer were to resign.
The allegations were outlined in papers filed in federal court in New York. The governor, identified in the papers only as “Client 9,” met last month with a woman in a Washington hotel the day before Valentine’s Day, the law enforcement official said.
A defendant in the case, Temeka Rachelle Lewis, told a prostitute identified only as “Kristen” that she should take a train from New York to Washington for an encounter with Client No. 9 on the night of Feb. 13, according to a complaint. The defendant confirmed that the client would be “paying for everything — train tickets, cab fare from the hotel and back, mini bar or room service, travel time, and hotel.”
The prostitute, described in the complaint as a “petite, pretty brunette, 5-feet-5 inches, and 105 pounds,” met the client in Room 871 at about 10 p.m., according to the complaint. He paid $4,300 in cash, with some being used for the encounter and the rest apparently to be used for credit for future trysts, according to the papers.
When discussing how the payments would be arranged, Client 9 told Lewis: “Yup, same as in the past, no question about it” — suggesting Client 9 had done this before.
According to court papers, an Emperor’s Club agent was told by the prostitute that her evening with Client 9 went well. The agent said she had been told the client “would ask you to do things that ... you might not think were safe ... very basic things,” according to the papers, but that Kristen responded by saying, “I have a way of dealing with that ... I’d be, like, listen dude, you really want the sex?”
The prostitution ring arranged sex between wealthy men and more than 50 prostitutes in New York, Washington, Los Angeles, Miami, London and Paris, prosecutors said. Four people allegedly connected to the high-end ring were arrested last week.
The club’s Web site displays photographs of scantily clad women with their faces hidden. It also shows hourly rates depending on whether the prostitutes were rated from one diamond to seven diamonds. The highest-ranked prostitutes cost $5,500 an hour, prosecutors said.
The four defendants charged in the case last week were charged with violating the federal Mann Act, a 1910 law that outlaws traveling across state lines for prostitution.
“I have acted in a way that violates my obligations to my family and violates my, or any, sense of right and wrong,” Spitzer said at the news conference. “I apologize first and most importantly to my family. I apologize to the public, whom I promised better.”
The scandal was bad news not only for Spitzer but for the entire Democratic party in New York. Spitzer went into 2008 intent on taking back the state Senate from the Republicans.
“Today’s news that Eliot Spitzer was likely involved with a prostitution ring and his refusal to deny it leads to one inescapable conclusion: He has disgraced his office and the entire state of New York,” said Assembly Republican leader James Tedisco. “He should resign his office immediately.”
Spitzer clashed with Wall Street executives throughout his two terms as attorney general, launching several prosecutions that rocked major companies earlier this decade. Among other things, he uncovered crooked practices and self-dealing in the stock brokerage and insurance industries and in corporate board rooms, and went after former New York Stock Exchange chairman Richard Grasso over his $187.5 million compensation package, which Spitzer called unreasonable and unlawful.
He became known as the “Sheriff of Wall Street.” Time magazine named him “Crusader of the Year,” and the tabloids proclaimed him “Eliot Ness.” The square-jawed graduate of Princeton University and Harvard Law was sometimes mentioned as a potential candidate for president.
But his term as governor has been fraught with problems, including an unpopular plan to grant driver’s licenses to illegal immigrants and a plot by his aides to smear his main Republican nemesis.
Spitzer had been expected to testify to a state commission he had created to answer for his role in the scandal, in which his aides were accused of using the state police to compile travel records to embarrass Senate GOP leader Joseph Bruno.
His cases as attorney general included a few criminal prosecutions of prostitution rings and tourism involving prostitutes. In 2004, he took part in an investigation of an escort service in New York City that resulted in the arrest of 18 people on charges of promoting prostitution and related charges.