By Daniel Trotta
NEW YORK (Reuters) - New York Gov. Eliot Spitzer, a WallStreet anti-corruption crusader who campaigned on a theme ofethical reform, apologized for a "private matter" on Monday butmade no reference to a New York Times report linking him to aprostitution ring.
Spitzer, a Democrat, said nothing about possibly resigning.Fox News television, citing unnamed sources, said beforeSpitzer spoke that the governor was expected to resign.
The leader of the minority Republicans in the stateassembly, James Tedisco, called for his resignation.
Spitzer, 48, was caught on a federal wiretap arranging tomeet with a prostitute at a Washington hotel last month, theTimes reported on its Web site.
"I have acted in a way that violated the obligations to myfamily and that violates my -- or any -- sense of right andwrong. I apologize first, and most importantly, to my family. Iapologize to the public whom I promised better," Spitzer told apacked room of reporters in New York City with his wife at hisside.
He has been married to Silda Wall Spitzer since 1987 andthey have three daughters.
"I am disappointed that I failed to live up to the standardthat I expect of myself. I must now dedicate some time toregain the trust of my family," Spitzer added.
He did not take questions from reporters and Spitzer'saides declined to comment further.
As New York's state attorney general before being electedgovernor in November 2006, Spitzer built his reputation goingafter white-collar crime on Wall Street. As governor, he vowedto clean up state politics.
He was nicknamed The Sheriff of Wall Street and in 2002,after his landmark settlement with 10 of the country's largestsecurities firms over charges of misleading investors, TimeMagazine named him "Crusader of the Year."
The New York Times, citing an administration official,reported that Spitzer had told his top administration officialshe had been involved in a prostitution ring.
Spitzer is pledged to support Democratic presidentialcandidate Sen. Hillary Clinton of New York as a superdelegateat the party's convention this summer.
Superdelegates at the convention are party activists whosupport candidates, in addition to delegates elected duringnominating contests around the states ahead of this November'spresidential election.
BLOW TO DEMOCRATS
Julian Zelizer, politics and history professor at PrincetonUniversity, said the case was a blow to Democrats beyond thestate of New York.
"He was a rising star. Before he became governor he wasseen as a potential president. ... Whenever you lose a risingstar, it's a little demoralizing, " Zelizer said.
Shares of bond insurers fell on the news. Spitzer has beena crucial figure in helping the insurers raise more capital andkeep their top credit ratings.
The bond insurers, which guarantee more than $2.4 trillionof debt against default, have been scrambling to get capital astheir expected payouts have been surging.
Spitzer is the individual identified as Client 9 in courtpapers that were filed last week when four people were chargedwith running a multimillion-dollar international prostitutionring, the Times reported, citing unidentified sources.
Client 9 arranged to meet with a prostitute on February 13in room 871 of the Mayflower Hotel in Washington, according tocourt papers.
New York law firm Paul, Weiss said it was representingSpitzer but had no comment. Spitzer previously worked for thatlaw firm.
Reaction to the news noted the contrast between theallegations and Spitzer's high ethical stances.
"Get ready for a schadenfreude festival on Wall Street,"said Barry Ritholtz, director of equity research at Fusion IQin New York.
(Additional reporting by Michelle Nichols, Robert Campbell,Joan Gralla, Gary Crosse and Ken Barry; Writing by DanielTrotta; Editing by Ellen Wulfhorst and Frances Kerry)
