Pressure Grows for Spitzer to Resign

A top state Republican lawmaker said he would move to impeach Eliot Spitzer if the governor didn't resign soon over reports of his involvement in a prostitution ring.

In an interview with CNN, the state's Assembly Minority Leader James Tedisco said Mr. Spitzer has "breached his contract with the people of New York State, not only ethically but legally," and "has lost all the support" from the public and the leaders in Albany."

A person close to Mr. Spitzer said the governor was likely to step down, perhaps as early as today.

The resignation would effectively end Mr. Spitzer's political career just 16 months after he was elected New York's governor by a wide margin. "But first he's dealing with this personal tragedy at home," this person said.

Mr. Spitzer hired a prostitute in Washington on Feb. 13 and paid her $4,300, according to a federal complaint and two lawyers briefed on the case. The lawyers said Mr. Spitzer is one of the clients mentioned in a federal complaint unsealed last week charging four other people with managing an international prostitution ring. Still unclear is whether state or federal authorities will seek to prosecute him for his involvement.

Calls for Mr. Spitzer's resignation began immediately and intensified Tuesday with the New York Daily News, New York Post and Newsday all demanding that he step down.

"Hit the road, John ... and make it quick!" read the headline of the Daily News editorial, while the Post called him "NY's naked emperor."

Speaking on CNN, Mr. Tedisco said: "We have asked that the governor resign as soon as possible," adding that unless he quit within 24 to 48 hours, the Republicans would move forward with impeachment.

To get articles of impeachment to the floor, Mr. Tedisco would need support from the Democratic majority in the Assembly. If the measure passed there, it would still need at least two-thirds approval of the combined vote of the Republican-controlled Senate and the nine-member Court of Appeals to proceed to trial.

"We have to continue with governance here, and this is a total distraction," he said. "We have a budget we have to get in place within two weeks."

Mr. Tedisco said a resolution was being prepared, but added that they would give the governor time. "He may be making decisions or negotiations with the law enforcement officials in relationship to the legal aspects of this. I think we have to give at least some time to do that," Mr. Tedisco said.

If Mr. Spitzer resigns, the state constitution calls for the job to pass to his lieutenant governor and running mate, Lt. Gov. David A. Paterson, a legally blind former legislator. Mr. Paterson, who is as widely liked as Mr. Spitzer is controversial, would also become the state's first African-American governor.

Speaking to The New York Times, Mr. Paterson said he had not heard from the governor on Tuesday.

"The governor called me yesterday, he said he didn't resign for a number of reasons, and he didn't go into the reasons, and that's the last I've heard from him," he said, according to the newspaper. Asked whether preparations for a transition were under way, the lieutenant governor said: "No one has talked to me about his resignation and no one has talked to me about a transition."

As the news rocketed around trading desks and political offices yesterday, the 48-year-old governor made a brief appearance to apologize to his family and the public, without addressing specifics. "I have disappointed and failed to live up to the standard I expected of myself," he said, with his wife at his side. "I must now dedicate some time to regain the trust of my family."

It was an astounding fall for a man often mentioned as a future Democratic presidential contender. As New York's attorney general, he invoked moral absolutes as he pummeled Wall Street kingpins such as former American International Group Inc. Chief Executive Maurice "Hank" Greenberg.

In an advertisement during his gubernatorial campaign, Mr. Spitzer declared that as attorney general, "I had a simple rule. I never asked if a case was popular or unpopular. I never asked if it was big or small, hard or easy. I simply asked if it was right or wrong."

The description in the federal complaint of the activities of "Client-9" -- identified as Mr. Spitzer by the lawyers briefed on the case -- could hardly have offered a more jarring contrast to the governor's carefully crafted image.

Client-9 was captured on a wiretapped call telling an alleged prostitution ringleader that he would withdraw thousands of dollars from the bank to pay a call girl, according to the complaint. On the night of Feb. 13, the day before Valentine's Day, the woman went to a Washington hotel, identified as the Mayflower by a person familiar with the situation.

Fifth Avenue Address

Mr. Spitzer had registered under the name "George Fox," according to a person briefed on the situation, using his own Fifth Avenue Manhattan address. Mr. Fox, a hedge-fund consultant, is a longtime friend and supporter of the governor's. A person close to Mr. Spitzer said Mr. Fox had no involvement in the matter.

At around 9:30 p.m., the woman, who used the name Kristen, entered Room 871, as designated by the client, the complaint says. Shortly after midnight, Kristen reported to her boss that the appointment with Client-9 went well and she collected $4,300, partly as a deposit for future trysts, it says. "I'm here for a purpose. I know what my purpose is," it quotes Kristen as saying after the encounter.

Mr. Spitzer's opponents barely bothered to conceal their joy at his demise, saying the governor himself never showed sympathy for his targets.

Mr. Spitzer spent yesterday afternoon in his New York City apartment with his wife, daughters and other family members. His brother, Daniel Spitzer, a neurosurgeon, said: "If men never succumbed to the attractions of women, then the human species would have died out a long time ago."

The account of Client-9's appointment is part of a larger case that broke last week when federal prosecutors in Manhattan charged four people with organizing and managing an international prostitution ring, known as the Emperors Club VIP.

According to the complaint and the sworn statement, the Emperors Club arranged connections between wealthy male clients and more than 50 prostitutes in locations from New York and Washington to Paris and London. The club's Web site showed photographs of prostitutes' bodies, with their heads hidden, and ranked the women with a "diamond" system. Fees varied by rank, from $1,000 an hour to more than $5,500 an hour.

The Federal Bureau of Investigation's inquiry began in October 2007, when it was triggered at least in part by a bank that filed "suspicious activity" reports on the New York governor with the Treasury Department's Financial Crimes Enforcement Network, according to a federal law-enforcement official and a lawyer involved in the matter. Suspicious activity reports are filed with the Internal Revenue Service when banks detect something unusual either through their tellers or software, including transfers of large amounts of cash, unknown counterparties, or the use of known tax havens and money-laundering centers.

The bank was concerned that Mr. Spitzer might have been engaged in "structuring," a money-laundering technique in which transactions are kept beneath $10,000 to avoid federal reporting rules, the official said. There has been a massive federal crackdown on money laundering in the wake of the 9/11 terrorist attacks, and banks have been extremely diligent in filing such reports. Those reports often include details of transactions done by innocent people.

The suspicious transactions by Mr. Spitzer are a major part of the investigation, the federal official said, confirming a report by ABC News. It isn't clear if federal investigators were engaged in a crackdown on the prostitution ring when Mr. Spitzer entered their sights as an alleged client of the ring, or whether Mr. Spitzer's transactions helped trigger a probe of the prostitution operation.

Prosecutors handling the case also relied on information from a prostitute who worked for the ring, numerous telephone calls, text messages and emails that were intercepted through court-authorized wiretaps and search warrants, and an undercover agent who posed as a potential client, according to the FBI agent's affidavit.

Clinton Backer

Mr. Spitzer has been a strong backer of Hillary Clinton and was mentioned as a possible cabinet member if she were elected president. Sen. Clinton declined to comment on the scandal. "I obviously send my best wishes to the governor and his family," she told reporters during a campaign stop in Old Forge, Pa.

Mr. Spitzer, a Clinton supporter, is a superdelegate, but remains so only as long as he is governor, according to Democratic National Committee rules. If he quits, he would not be replaced as a superdelegate. Mr. Paterson would become governor and he already supports Mrs. Clinton, meaning the New York senator would lose one superdelegate.

Mr. Spitzer's downfall is the highest-profile Democratic scandal in several years, following a series of prominent Republican sex scandals.

In 2006, veteran Florida Republican Rep. Mark Foley was accused of sending sexually explicit messages to former and current House pages, a matter widely cited as one reason his party lost control of Congress later that year. Last year, Idaho Sen. Larry Craig, a Republican, pleaded guilty to a misdemeanor after his arrest in the Minneapolis airport men's room as part of an undercover sting.

Congressional Republicans immediately jumped on Mr. Spitzer's problems. The campaign arm of House Republicans issued news releases calling on New York Democratic congressmen to return donations from Mr. Spitzer.

Democrats said they didn't think the fallout from the Spitzer scandal would tarnish the reformer image the party has sought to build nationally as it attacks Republicans over allegations of corruption in government.

"I think we've learned from a number of these instances that people make a distinction between public corruption and personal failures," said Democratic pollster Mark Mellman. "If I understand the facts, this is a case of personal failure."

As a prosecutor, Mr. Spitzer didn't hesitate to bully his targets. In December 2005, John C. Whitehead, the former chairman of Goldman Sachs Group Inc., recounted a phone call he received from Mr. Spitzer in response to an opinion piece Mr. Whitehead had published in The Wall Street Journal. Mr. Whitehead quoted the future governor as saying, "I will be coming after you. You will pay the price." Mr. Spitzer denied that he threatened Mr. Whitehead, saying it was a misunderstanding.

Clash With Legislators

When he became governor, his hardball approach didn't play well. Mr. Spitzer clashed with state legislators who found his style overbearing, and he was accused of ethical lapses in connection with an alleged plot to smear his chief Republican rival in the legislature.

The day after Client-9's encounter with the prostitute, Mr. Spitzer appeared before lawmakers in Washington to discuss problems facing the bond-insurance industry.

Emperors Club's Web site, which has been taken down, listed reservation phone numbers for the service in New York, Los Angeles and Miami, as well as numbers for London, Paris and Switzerland.

Payment to Front Companies

According to the complaint, Emperors Club received proceeds through bank accounts of front companies called "QAT Consulting Group, Inc." and "QAT International, Inc." The complaint said Client-9 sent a payment to Emperors Club that was enclosed in a package.

Lawyers said customers of prostitutes are rarely charged, although they didn't rule it out in this case. A century-old law known as the Mann Act prohibits the movement of prostitutes -- or women intended to participate in "immoral" acts -- between states or from the U.S. to a foreign country. The prostitute who served Client-9 traveled to Washington from New York.

The case is being handled by public-corruption prosecutors in the U.S. attorney's office in Manhattan. A spokeswoman for the office declined to comment on possible charges against Mr. Spitzer.

Michael Bachner, a former prosecutor in the Manhattan district attorney's office, said: "The Mann Act really was designed more towards those who get someone to travel against their will....If Spitzer gets indicted, it would seem to me he would be indicted based on who he is rather than what he's done."

As for possible state charges, Mr. Bachner said, "customers are rarely prosecuted in the state," and charges that are brought are typically disposed of with a plea to disorderly conduct, "which is akin to a traffic ticket."

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