Spitzer resigns, but not in the clear

NEW YORK - Gov. Eliot Spitzer, a rising Democratic Party star who won election 16 months ago as a crusading reformer against corruption, announced his resignation yesterday after being ensnared in a federal investigation that exposed his double life as a client of high-priced prostitutes.

With his wife, Silda, at his side, Spitzer apologized for what he said were "my private failings" and said he was stepping down so as not to "disrupt the people's work." He said the resignation would take effect Monday, to give his successor, Lt. Gov. David Paterson, time for a smooth transition.

Spitzer's resignation still leaves him in legal limbo, with prosecutors having given no public signals on whether he will face prosecution.

Three top criminal defense attorneys who accompanied Spitzer to his Manhattan office, where he made his announcement, are trying to resolve his legal predicament with federal prosecutors.

Although Spitzer's legal troubles appear likely to drag on, there was a palpable sense of relief across the state that the sex scandal of the previous 48 hours was becoming his private legal matter, and that the state could return to its normal business.

Legislators of both parties rushed to praise Paterson, 53, who will become New York's first African American governor and the first chief executive of any state who is legally blind.

"When one door closes, another door opens up," said James Tedisco, a Republican state Assembly member, who had threatened to lead impeachment proceedings against Spitzer if he had tried to stay in his job. "We've gotten this distraction over with."

Spitzer's fall was all the more stunning since he had been elected in November 2006 with 69 percent of the vote, the most ever in a New York governor's race. Some had speculated he could become the country's first Jewish president.

But his life and career began unraveling last week, when federal agents, acting on wiretaps, broke up a high-price New Jersey-based prostitution ring called Emperors Club VIP and arrested four people.

The criminal complaint listed an anonymous "Client 9," who was heard calling the escort service to arrange for a call girl called "Kristen" to meet him for a Feb. 13 tryst at Washington's Mayflower Hotel. The New York Times later identified Kristen as a young woman named Ashley Alexandra Dupre.

The client allegedly paid $4,300 and the cost of her train ticket to Washington from New York for a two-hour session. Law-enforcement sources confirmed this week that Spitzer was "Client 9."

Sources familiar with the case said Spitzer was under investigation for possible violations of the Mann Act, which prohibits interstate travel for "the purpose of prostitution or debauchery" or other "immoral purposes."

He also could face conspiracy and money-laundering charges, the sources said. A more streamlined case could involve charges that Spitzer structured his payments to the escort service in a way that was designed to evade bank-reporting requirements.

Even if Spitzer avoids criminal charges, state legislators may still be looking into what they said were several unanswered questions and possible ethics violations. Those include whether he used public funds to travel out of the state for meetings with prostitutes under the guise of government business.

There also were questions about the identities of the other clients of the Emperors Club VIP. The criminal complaint unsealed last week referred to 10 clients, without naming them; only Spitzer was identified.

Spitzer's reputation during his years as New York attorney general - the office he held before being elected governor - was as an incorruptible "Mr. Clean.

He also was dubbed the "Sheriff of Wall Street" for his publicized crusades against white-collar crime and insider trading. He also led two high-profile prosecutions of prostitution rings.

With Spitzer's background in law enforcement, it was surprising to many that he was tripped up by engaging in suspicious financial transactions to allegedly pay the escort service. The transactions were reported to federal authorities by his bank.

See video

of Spitzer's resignation statement via http://go.philly.

com/spitzer

EndText

Eliot Spitzer probably doesn't need to get a day job

when he leaves the governor's office next week. The scion of a wealthy Manhattan real estate developer, Spitzer is a millionaire.

In 2006, he reported $1.9 million in income to the IRS, according to his last publicly available tax return.

Not including last year, his earnings have been

$14.9 million since 1998, and that total only hints at

his family's wealth. His father, Bernard Spitzer, is said

to be worth at least $500 million.

Spitzer's tax returns show that a majority of his income comes from rents collected on apartments and

shops owned by the family. As governor, he earned $179,000 a year.

After years of spending weekends in a modest, rented home in Colombia County, the Spitzers recently paid

$4 million to buy the entire 160-acre property.

The family's main residence continues to be a luxurious Fifth Avenue apartment in a tower built by his father in 1968. Spitzer lives there rent-free, courtesy of his father, who owns at least 10 such apartment towers.

- Associated Press

EndText