Mar 12, 2008 12:01 am US/Eastern
Sources: Spitzer Resignation Expected Today
Governor May Have Spent $80K In Alleged Transgressions
NEW YORK (CBS) ―
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New York Governor Eliot Spitzer holds a news conference in New York City with his wife Silda by his side March 10 2008 after it was announced that hs has been involved in a prostitution ring.
Timothy A. Clary/AFP/Getty Images
Gov. Eliot Spitzer is set to resign Wednesday, sources tell CBS station WCBS-TV, but insiders say he's going to use the resignation as a bargaining chip to cut a deal with federal prosecutors and he won't step down until that happens. The talks have been going on since Tuesday morning.
The governor's fate rests in the hands of two people: U.S. Attorney Michael Garcia and Michele Hirshman, the head of his legal defense team. The deal they cut will determine Spitzer's future.
Criminal law experts say Spitzer will definitely have to resign the governorship and that what's involved in the deal is key.
State Assemblyman James Tedisco, a Republican, told WCBS-TV that he spoke with Lt. Governor David Paterson Monday evening and that the two discussed Paterson taking on a new role of leadership, leading Tedisco to believe that action was "forthcoming."
Tedisco said if Spitzer does not resign according to a 48-hour deadline that's been imposed, state Republican leadership will call for impeachment proceedings to begin.
"I've asked him to resign," Tedisco said. "We'll give him 24 to 48 hours. I think that's plenty of time."
Spitzer, though, was clearly examining his legal options Monday night; a spokesman said the governor had retained the Manhattan law firm of Paul, Weiss, Rifkind Wharton & Garrison, one of the nation's biggest.
The news of Spitzer's alleged transgression set off one of the largest scandals in modern New York state political history.
With pressure mounting to resign, investigators said Tuesday Spitzer
was clearly a repeat customer who spent tens of thousands of dollars -- perhaps as much as $80,000 -- with the high-priced prostitution service over an extended period of time.
Spitzer and his family, meanwhile, remained secluded in their Fifth Avenue apartment, while Republicans began talking impeachment, and few if any fellow Democrats came forward to defend him. A death watch of sorts began at the state Capitol, where whispers of "What have you heard?" echoed through nearly every hallway of the ornate, 109-year-old building.
On Monday, when the scandal broke, prosecutors said in court papers that Spitzer had been caught on a wiretap spending $4,300 with the Emperors Club VIP call-girl service, with some of the money going toward a night with a prostitute named Kristen, and the rest as credit toward future trysts. The papers also suggested that Spitzer had done this before.
Speaking of condition of anonymity, a law enforcement official said Tuesday that Spitzer, in fact, had spent tens of thousands of dollars with the Emperors Club. Another official said the amount could be as high as $80,000. But it was not clear over what period of time that was spent.
During a news conference Monday afternoon, Spitzer, 48, apologized to his family and the public, but did not go as far as to explain why.
"I have acted in a way that violates my obligations to my family and violates my, or any, sense of right and wrong," he said in a brief statement. "I have disappointed and failed to live up to the standard I expected of myself.
"I must now dedicate some time to regain the trust of my family," he said alongside his wife, Silda Wall Spitzer, who was visibly upset as he spoke.
The couple has three daughters together.
The announcement not only shook up New York's political infrastructure, but political pundits who took to heart Spitzer's promise that he'd keep corruption and scandal out of Albany were stunned to learn of the news.
"Eliot Spitzer was supposed to be the guy that refurbished the Democratic party and cleaned up Albany, so this is much more shocking than it would be for any other incumbent," political consultant Norman Adler told WCBS-TV.
"I'm sure that more champagne is being filled in Albany today than in the last five years," he added.
Despite the expectations of a resignation, some experts say Spitzer should take the time to weigh his options before stepping down.
"This is one of the most intelligent, brightest elected officials in the region. You don't change governors of New York lightly, and I think it would be a mistake to act precipitously," political consultant Joseph Mercurio told WCBS-TV.
"I think first things first, he has to resolve his relationship with his wife. He has to look to his rabbi and make personal decisions first," Mercurio said. "It's really initially up to him before the rest of us react."
CBS News confirmed that Spitzer was caught on federal wiretap, and was identified as "Client 9."
Gov. Eliot Spitzer's role in the scandal grew out of a public corruption inquiry triggered by his movement of large amounts of cash from several bank accounts to one that operated by a call-girl ring, a law enforcement official said Tuesday.
Spitzer was the initial target of the investigation and was tracked using court-ordered wiretaps that appear to have recorded him arranging for a prostitute to meet him at a Washington hotel in mid-February, the official said.
The official spoke to The Associated Press condition of anonymity because of the sensitivity of the investigation.
The case started when banks noticed the frequent transfers from several accounts and filed suspicious activity reports with the Internal Revenue Service, the official said. The accounts were traced back to Spitzer, prompting public corruption investigators to open an inquiry.
Attorney General Michael Mukasey was made aware of the investigation because it involved a high-ranking political official.
The inquiry found that Spitzer was a repeat customer with the Emperors Club VIP, the official said.
The Feb. 13 tryst took place in the Mayflower hotel, where Spitzer rented a second room for the woman under another name. The law enforcement official said Spitzer had to sneak past his State Police detail to get to her room.
Two law enforcement officials say that safety considerations mentioned in the affidavit related to Spitzer's preference to not wear a condom and insistence by the prostitute named Kristen that he wear one.
Charges against Spitzer have not been decided and it depends mostly on "how aggressive the U.S. attorney wants to be," the law enforcement official said. Charges could including anything from Mann act violations to banking violations to possibly wire fraud.
Last week, the "Emporers Club VIP" was accused last week of offering prostitutes to wealthy clients, topping out at $5,500 an hour. Four people were arrested in the ring that was linked to cities in the U.S. as well as in Europe.
WCBS-TV has obtained a copy of the wiretap transcript which allegedly has Spitzer asking a man named "Lewis" about a prostitute.
Part of the transcript reads:
Lewis said that "Kristen" would go directly to room 871.
Client 9 asked Lewis to remind him what "Kristen" looked like and Lewis said that she was American, petite, very pretty brunette, 5 feet 5 inches, and 105 pounds.
Client 9 said that she should go straight to 871, and if for any reason it did not work out, she should call Lewis. According to the transcript, "Client 9" made it apparent to the service's agent that it wasn't the first time he'd used the service before. "Yup, same as in the past, no question about it," he said when referring to payment arrangements.
Later, the agent told "Kristen" that the client would "ask you to do things that, like, you might not think were safe -- you know -- I mean that ... very basic things. ... 'Kristen' responded: 'I have a way of dealing with that. ... I'd be like, listen dude, you really want the sex?' ... You know what I mean.'"
An official told the Associated Press that the New York governor met last month with at least one woman in a Washington hotel. The law enforcement official spoke on condition of anonymity because of the ongoing investigation.
The Web site of the Emperors Club VIP displays photographs of the prostitutes' bodies, with their faces hidden, along with hourly rates depending on whether the prostitutes were rated with various numbers of diamonds, with seven diamonds being the highest. The highest-ranked prostitutes cost $5,500 an hour, prosecutors said.
The case is being handled by prosecutors in the Public Corruption unit of U.S. Attorney Michael Garcia's office. Garcia spokeswoman Yusill Scribner said the office had no comment.
Spitzer has built his political legacy on stamping out corruption, including several headline-making battles with Wall Street while serving as attorney general. He stormed into the governor's office in 2006 with a historic share of the vote, vowing to continue his no-nonsense approach to fixing one of the nation's worst governments.
Time magazine had named him "Crusader of the Year" when he was attorney general and the tabloids proclaimed him "Eliot Ness."
But his stint as governor has been marred by several problems, including an unpopular plan to grant driver's licenses to illegal immigrants and a plot by his aides to smear Spitzer's main Republican nemesis.
Spitzer had been expected to testify to the state Public Integrity Commission he had created to answer for his role in the scandal, in which his aides are accused of misusing state police to compile travel records to embarrass Senate Republican leader Joseph Bruno.
Spitzer had served two terms as attorney general where he pursued criminal and civil cases and cracked down on misconduct and conflicts of interests on Wall Street and in corporate America. He had previously been a prosecutor in the Manhattan District Attorney's Office, handling organized crime and white-collar crime cases.
His cases as state attorney general included a few criminal prosecutions of prostitution rings and into tourism involving prostitutes.
In 2004, he was part of 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.
(© 2009 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)
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