By Daniel Trotta and Robert Campbell
NEW YORK (Reuters) - New York Gov. Eliot Spitzer, theone-time "Sheriff" of Wall Street who campaigned on a promiseto clean up state politics, was embroiled in a sex scandal onMonday that threatened to force his resignation.
A New York Times report linked him to a $1,000 (498pound)-an-hour prostitute, saying he was caught on a federalwiretap at least six times on February 12 and 13 arranging tomeet with her at a Washington hotel last month.
The Times said he was the man described in court papers asClient 9 who patronized the Emperors Club, which federalinvestigators allege was a prostitution ring whose mostexpensive professionals charged more than $5,500 an hour.
Spitzer, a married 48-year-old Democrat who investigatedprostitution as New York's attorney general, apologized forwhat he described as "private matter" but said nothing aboutresigning. State Republicans called for him to step down.
The state capital, Albany, was rife with speculation aboutwhen Spitzer would resign and whether he would be charged witha crime. Prosecutors rarely bring charges against clients ofprostitutes in such cases.
"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," the father ofthree daughters told reporters in New York City with his wife,Silda Wall Spitzer, at his side.
"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."
The news rocked Wall Street, where power brokers resentedSpitzer's high-profile inquiries into financial cases when hewas New York state's chief prosecutor.
"Get ready for a schadenfreude festival on Wall Street,"said Barry Ritholtz, director of equity research at Fusion IQ.
It also sent shock waves through the Democratic Party.Spitzer has been described a rising star in the party and ispledged to support presidential candidate Sen. Hillary Clintonof New York as a superdelegate at the Democratic Partyconvention in August that will choose the party's nominee forthe November election.
As state attorney general before being elected governor in2006, Spitzer built his reputation going after white-collarcrime on Wall Street. As governor, he vowed to clean up statepolitics.
'CRUSADER OF THE YEAR'
Time Magazine named him "Crusader of the Year" in 2002after his landmark settlement with 10 of the country's largestsecurities firms over charges of misleading investors.
The New York Times, citing an administration official,reported that Spitzer had told his top administration officialshe had been involved in a prostitution ring that federalauthorities had been investigating.
The Emperors Club Web site once described it as a providerof "beautiful, sensual and discreet escorts."
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 "Kristen," a prostitute whocharged $1,000 an hour, on February 13 in room 871 of aWashington hotel and paid $4,300 for services rendered and as adown payment for future engagements, according to the courtdocuments.
They describe six telephone calls between Client 9 and oneof the defendants that were intercepted by wiretaps on February12 and 13.
Kristen was described by a defendant as an American,petite, very pretty brunette weighing 105 pounds (48 kg).
Among the charges brought against four defendants last weekin the case was transporting women across state lines forprostitution purposes, a violation of a federal law.
ABC News reported on its Web site that the probe of theprostitution ring was triggered when a bank told the InternalRevenue Service about suspicious money transfers by Spitzer.
ABC quoted an unidentified Justice Department official assaying Spitzer could be prosecuted under an obscure financialstatute.
Julian Zelizer, politics and history professor at PrincetonUniversity, said the case was a blow to the Democratic Party.
"He was a rising star. Before he became governor he wasseen as a potential president," Zelizer said. "Whenever youlose a rising star, it's a little demoralizing."
