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NY Gov. Spitzer Apologizes But Does Not Resign

Gov. Eliot Spitzer, accused in news reports of being involved in a prostitution ring, apologized to his family and the public on Monday at a hastily called news conference. He did not elaborate on the story.

New York State Gov. Eliot Spitzer is joined by his wife Silda as he makes a statement to reporters during a news conference Monday, March 10, 2008 in New York. Spitzer has apologized to his family and the public, but did not elaborate on a bombshell report that he was involved in a prostitution ring. (AP Photo/Mary Altaffer)
Mary Altaffer
New York State Gov. Eliot Spitzer is joined by his wife Silda as he makes a statement to reporters during a news conference Monday, March 10, 2008 in New York. Spitzer has apologized to his family and the public, but did not elaborate on a bombshell report that he was involved in a prostitution ring. (AP Photo/Mary Altaffer)

Spitzer stood next to his stone-faced wife and bit his lips, telling reporters: "I have acted in a way that violates my obligations to my family."

"I have disappointed and failed to live up to the standard I expected of myself," he said. "I must now dedicate some time to regain the trust of my family."

As he walked out, reporters shouted: "Will you resign?" He did not answer.

The New York Democrat's involvement in the ring was caught on a federal wiretap as part of an investigation opened in recent months, according to a law enforcement official who spoke to The Associated Press on condition of anonymity because of the ongoing inquiry.

Four people allegedly connected to the ring, identified in court papers as the Emperors Club VIP, were arrested last week. (Related Story). The ring arranged connections between wealthy men and more than 50 prostitutes in New York, Washington, Los Angeles, Miami, London and Paris, prosecutors said.

CNBC confirmed that Spitzer is the client referred to as "client-9" in a complaint unsealed in federal court in Manhattan (click here for PDF of the document) that charges several people with organizing and managing the prostitution ring. Client-9 paid to bring the prostitute named "Kristen" from New York to Washington for a four-hour tryst at a hotel on Feb. 13.

The court papers gave this account of the encounter: A defendant, Temeka Rachelle Lewis, confirmed that Client 9 would be "paying for everything -- train tickets, cab fare from the hotel and back, mini bar or room service, travel time, and hotel."

The client paid $4,300 in cash to the service, with some being used for the encounter and the rest apparently to be used for credit. When discussing how the payments would be arranged, Client 9 told Lewis: "Yup, same as in the past, no question about it," suggesting it was a routine exchange.

The prostitute, who authorities described as a "petite, pretty brunette, 5-feet-5 inches, and 105 pounds," met the client in Room 871 at about 10 p.m.

In a conversation with the booking agent, Kristen said that she liked the client and that she did not think he was difficult.

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 Web site of the Emperors Club VIP displays photographs of scantily clad women with their faces hidden. It also shows hourly rates depending on whether the prostitutes were rated with one diamond, the lowest ranking, or seven diamonds, the highest. The most highly ranked prostitutes cost $5,500 an hour, prosecutors said.

(See CNBC footage of Spitzer's statement at left.)

Mr. Spitzer appeared on CNBC at 7 a.m. the next morning following the Feb. 13 meeting. (See the video of his appearance here). Later in the morning, he testified before a Congressional committee.

Spitzer has not been charged, and prosecutors did not comment on the case. 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.

Sources told CNBC that Spitzer does not plan to resign until he manages to organize a plea deal that will allow him to avoid prosecution under the Mann Act.

'Crusader of the Year' Faces Tough Accusations

The scandal was first reported on The New York Times' Web site.

Spitzer spoke about an hour and a half later. Stunned lawmakers gathered around televisions at the state Capitol in Albany to watch, and a media mob gathered outside the office of Democratic Lt. Gov. David Paterson, who would become governor if Spitzer were to resign. It took opponents only minutes to call for his resignation.

"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, 48, built his political reputation on rooting 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 term as governor has been marred by 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 were accused of misusing state police to compile travel records to embarrass Senate Republican leader Joseph Bruno.

Bruno wouldn't comment when asked what Spitzer should do.

"I feel very badly for the governor's wife, for his children," Bruno said. "The important thing for the people of New York state is that people in office do the right thing."

Spitzer, who has three teenage daughters, 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.

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