JIM LEHRER: Now, the storm surrounding Eliot Spitzer. Ray Suarez has the story.
RAY SUAREZ: As demands for his resignation mounted amid a sex scandal, New York Governor Eliot Spitzer kept a low profile for most of the day in his Fifth Avenue apartment.
At a hastily arranged press conference yesterday, Spitzer neither confirmed nor denied a New York Times report alleging his involvement in a prostitution ring.
GOV. ELIOT SPITZER (D), New York: I have acted in a way that violates my obligations to my family and that violates my or any sense of right and wrong. I apologize, first and most importantly, to my family. I apologize to the public, whom I promised better.
RAY SUAREZ: But according to anonymous law enforcement officials, the first-term governor, a Democrat, was caught on a federal wiretap arranging payments of more than $4,000 and travel for a high-priced prostitute who worked for the online escort service Emperors Club VIP. Spitzer communicated via cell phone calls and text messages.
The two allegedly met last month at a downtown Washington hotel, the night before Spitzer testified at a congressional hearing on the bond insurance crisis.
Sources familiar with the case said Spitzer, although not identified by name, appeared as “Client 9” in a 47-page affidavit unsealed last week. The governor first came under suspicion during routine inquiry by IRS agents who observed money being moved through shell companies tied to the escort service.
Spitzer has not been charged with nor has he admitted any crime. The Princeton- and Harvard-educated Spitzer made a name for himself while serving as New York’s attorney general.
Dubbed the “Sheriff of Wall Street,” he went after white-collar criminals and vowed to make them pay handsomely for their wrongdoings.
GOV. ELIOT SPITZER: The problem here has not been an absence of rules. The problem has been a failure of compliance. It is outright illegal conduct that was not caught, that should have been caught, and that is now being caught, and will be aggressively prosecuted.
RAY SUAREZ: The 48-year-old father of three teenage girls also oversaw prosecution of at least two prostitution rings. Spitzer gave this advice to law breakers during an ABC News interview two years ago.
GOV. ELIOT SPITZER: Never talk when you can nod and never nod when you can wink and never write an e-mail, because it’s death. You’re giving prosecutors all the evidence we need.
And if Albany will not bring back opportunity or responsibility or accountability…
RAY SUAREZ: After campaigning on a platform of ethical leadership, in 2006 Spitzer was elected governor with the largest majority in New York history. Today, the governor’s staff said Spitzer aides were holding transition meetings with members of Lieutenant Governor David Paterson’s staff.
Spitzer, can he remain Governor?
RAY SUAREZ: Here to bring us up-to-date on this story is Nicholas Confessore, who covers Albany for the New York Times, and Andrea Bernstein, New York Public Radio's political director.
Andrea, yesterday, Governor Spitzer closed his impromptu news conference by saying, "I'll report back to you in short order." Has he? Has any public statement of any kind come out of the governor or his office today?
ANDREA BERNSTEIN, Political Director, New York Public Radio: No, in fact it's been long order. It's been complete lockdown in the governor's office. They've had nothing to say.
And from all my reporting I did today, it seemed that only a very few aides were in on the governor's thinking. Some top governor's office staffers were not aware of what was going on.
And at about, I think, 4 o'clock, the New York Times reported there would be no resignation today. I asked the governor's communications director, Christine Anderson, if that was true. She said, "Nothing for you." And then, shortly before 5 o'clock, I got an email from her that said, "Nothing today."
That is all the communication that I've gotten from the governor's office. So whatever deliberations have been going on in his home, with his top aides, have been very, very closely held.
RAY SUAREZ: Well, Nick Confessore, prominent Republicans are saying, "You better resign or we'll try to impeach you." But what are prominent elected Democrats in New York saying? Is anyone saying anything publicly about whether the governor should stay or go?
NICHOLAS CONFESSORE, New York Times: As far as I can tell, the only prominent Democrat of any note who has said he should resign is an upstate congresswoman. Aside from that, you have a radio silence from almost everybody. All you hear right now are expressions of well wishes to his family and to the governor's wife.
But everybody is waiting to see what the governor will do himself before they come out with a position on impeachment or on him resigning.
RAY SUAREZ: Have you heard anything about people suggesting that he might be able to hang on?
NICHOLAS CONFESSORE: You know, this is a guy who was pretty tenacious when he was at the height of his power. And I do hear things about people saying, "Well, you shouldn't give up now." But it's hard to know whether this is a legal move on his part to give himself a bargaining chip to avoid prosecution for his alleged crime.
RAY SUAREZ: And, Andrea, has the governor retained counsel?
ANDREA BERNSTEIN: Yes, he's hired a very prominent New York law firm, Paul Weiss, and many other named partners, but it's a well-known law firm here and one of the best and the most expensive.
I think one thing that is noticeable is that, while Democrats have not publicly called for his resignation, not that many -- none that I know of have come forward and said in public statements that he should stick it out.
And, in fact, almost everybody that I've spoken to over the last two days doesn't see how he can stick it out, coming in as he had as such a crusader against wrongdoing, and then himself being caught in this wiretap, arranging a tryst with this very high-priced prostitute.
Origins of investigation
RAY SUAREZ: Nick, let's go back to the genesis of the investigation itself. What were investigators looking for, looking at, and how did they realize this may involve the governor of New York state?
NICHOLAS CONFESSORE: Well, in a certain sense, it appears that this was a prostitution investigation that was by accident. What we know is that, last year or as recently as last year, investigators with the IRS were looking into suspicious bank transactions involving the transfer of cash.
And somehow this led them onto cash payments involving the governor, according to our sources. At that point, the IRS sought out the help of the FBI and federal prosecutors, who have to sign off on any investigation of a high-level public official.
And at some point, it became clear that this was actually a prostitution case, instead of a political corruption case or some kind of a money-laundering or campaign-donation case.
What we know from our sources is that, last week, there was an affidavit unsealed in the arrest of four individuals associated with this prostitution ring. And there was a man known only as "Client 9" in these transcripts.
Sources of ours confirmed that "Client 9" was, in fact, Governor Eliot Spitzer.
RAY SUAREZ: And, Andrea, the entire press corps is using the terms "Client 9" and Governor Spitzer nearly interchangeably. Is the only source now the New York Times and is everybody hanging it on them?
ANDREA BERNSTEIN: No, the Associated Press has also reported that. And, certainly, no one from the governor's office is denying it.
While he didn't quite acknowledge yesterday that he had seen this prostitute, the governor's top aides told me that shortly before he made his public statement, the top aides were called into a room in Albany and told that the outlines of the story were accurate.
Implications under the law
RAY SUAREZ: The Associated Press just a short time ago, as we were beginning our conversation, reported that the governor had spent $80,000 on these transactions. This is a law enforcement official speaking on condition of anonymity, quoted by the A.P.
So this is a pattern of practice, rather than one or two incidents. Had this been hinted at in the original stories?
ANDREA BERNSTEIN: Yes, it was in the affidavit. The affidavit, in it, the governor was quoted as saying, "Did he leave a return address?" And he said, "Yep, just like the last time."
There was talk of whether he had a credit left over from the past, whether he could leave a deposit, because the whole affidavit was about -- or much of it was about problems getting the payment to the agency. And he was asked whether he could leave a deposit so he wouldn't have problems the next time.
So it's clear from the context of that, which is the sworn statement of a witness in a federal case, that this was not just a one-time occasion, even though the affidavit focused on this one tryst, February 13th.
RAY SUAREZ: Nick, if the narrative of the affidavit turns into criminal charges, what laws have been broken?
NICHOLAS CONFESSORE: Well, there is a question as to whether he's broken a law that involves -- called structuring, or the charge is called structuring. And that is when you structure a financial transaction to avoid triggering certain reporting requirements under federal law.
And the question is whether, if all these allegations are true, whether in the way that the governor allegedly dispersed payment to the prostitution ring, whether he violated this law.
Now, of course, prostitution is also a crime. What we know is that traditionally federal prosecutors do not prosecute cases of prostitution, but certainly that's a crime. And he could be open to charges, state charges on that crime, as well.
RAY SUAREZ: As we've mentioned, the assumption is that the governor is client number 9. Has any source for the Times reporting indicated that there's any interest in going after Clients 1 through 8?
NICHOLAS CONFESSORE: Well, of course, the big question really is, who were Clients 1 through 8 and are there Clients 10 through 11 through 100? Who knows?
At this point, we do not have any information on who those other clients could or might be. We're focusing on Client 9.
RAY SUAREZ: Andrea, for those who don't follow New York politics closely, perhaps you could tell us about Eliot Spitzer and how he made his name as a public servant.
GOV. ELIOT SPITZER: Yes, he first became elected to attorney general in 1998. His first couple of years were quiet.
But once Bush was elected to the White House and took a less aggressive approach on regulatory matters than the Clinton administration had, Eliot Spitzer stepped into what he saw as a breach and became extremely aggressive, particularly in Wall Street and in prosecuting what he saw as defrauding of investors.
He went after Wall Street; he went after hedge funds; he went after the insurance industry. He made some enemies. But in New York, Democrats and also Republicans loved him for this. He was elected with 70 percent of the vote, which was a very high vote count, considering the fact that a Republican had been in office for three terms before that.
So he was elected with a lot of goodwill. And the hope was that he was going to use these aggressive tactics to clean up Albany.
The problem for him is that he approached Albany without much finesse. He ruffled some feathers. And by the fall of 2007, his approval ratings had fallen down into the 30s.
RAY SUAREZ: And, Nick, he sometimes referred to himself as a steamroller. Has that kind of approach burned enough bridges that it results in very few people stepping forward to defend him today?
NICHOLAS CONFESSORE: Well, he's certainly had poor relations even among members of his own party. He had a big dispute with Democrats in the Assembly over the appointment of a new state comptroller last year.
I think he had gone a long way towards mending some of those bridges over the past couple of months, but there were not a lot of people who felt that they had a huge stake in his survival when a crime of this magnitude and of this salaciousness emerged.
It's hard to say, though, whether really anyone would be standing up for his right to stay in office if these charges are true. And, in fact, I think that if it turns out these charges are true and he publicly admits exactly what has happened, there would be extraordinary pressure from him or on him from within his own party to resign, especially if the Republicans, who've threatened impeachment, if they followed through on that, I'm not sure that Democrats in the State Senate and the State Assembly want to go on record opposing impeachment of a guy who has been arrested and charged with a crime of prostitution.
RAY SUAREZ: Nicholas Confessore of the New York Times, Andrea Bernstein of New York Public Radio, thank you both.
ANDREA BERNSTEIN: Thank you.
NICHOLAS CONFESSORE: Thank you.