03/12/2008 11:45 AM ET
ALBANY, N.Y.- New York Gov. Eliot Spitzer said he would resign effective Monday after being linked to a prostitution ring.
Spitzer will be replaced by Lt. Gov. David Paterson, who will become New York's first black governor.
Pressure on Spitzer to resign over a call-girl scandal erupted Monday when allegations surfaced that Spitzer, a 48-year-old married man with three teenage daughters, spent thousands of dollars on a call girl named Kristen at a swanky Washington hotel on the night before Valentine's Day.
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.
Investigators said Tuesday he was clearly a repeat customer who spent tens of thousands of dollars - perhaps as much as $80,000 - with the high-priced prostitution service over an extended period of time.
On Monday, when the scandal broke, prosecutors said in court papers that the Democratic governor had been caught on a wiretap spending $4,300 with the Emperors Club VIP call-girl service, with some of the money going toward a night with a prostitute named Kristen, and the rest as credit toward future trysts. The papers also suggested that Spitzer had done this before.
Speaking on condition of anonymity, a law enforcement official said Tuesday that Spitzer, in fact, had spent tens of thousands of dollars with the Emperors Club. Another official said the amount could be as high as $80,000. But it was not clear over what period of time that was spent.
Still another law enforcement official said investigators found that during the tryst with Kristen on the night before Valentine's Day, Spitzer used two rooms at the Mayflower Hotel in Washington - one for himself, the other for the prostitute. Sometime around 10 p.m., Spitzer sneaked away from his security detail and made his way to the room where she was waiting, the official said.
CBS News has learned the investigation into Spitzer was sparked last summer by a Suspicious Activity Report filed by a financial institution.
Insiders on Tuesday said the governor was still trying to decide how to proceed. Options included quitting immediately, or waiting to use resignation as a bargaining chip with federal prosecutors to avoid indictment.
Still, Spitzer's many enemies from Albany and Wall Street were emboldened, and some of his friends went from shock to outrage.
"Particularly because of the reform platform on which he was elected governor, his ability to govern the state of New York and execute his duties as governor have been irreparably damaged," said Citizens Union, a good-government group that supported the crusading attorney general for governor in 2006 and provided critical support in his effort to reform Albany. "It is our strong belief that it is now impossible for him to fulfill his responsibilities as governor. Accordingly, Citizens Union urges him to resign as governor."
The governor has not been charged, and prosecutors would not comment on the case. The governor has retained a large New York City law firm. Michele Hirshman, Spitzer's former deputy attorney general, is representing the governor, said Madelaine Miller, spokeswoman for the Manhattan law firm of Paul, Weiss, Rifkind Wharton & Garrison. She would not comment further on Tuesday.
Assembly Republican leader James Tedisco warned that if Spitzer did not resign within 48 hours, he would call for impeachment. But any impeachment would have been a difficult road in the Democrat-controlled Assembly, where articles of impeachment would require a majority vote to go to a trial. A trial would have been decided by a combined vote of the full Senate, which has a slim GOP majority, and the Court of Appeals.
Tedisco was an early target of Spitzer's abrasive and uncompromising style in Albany. In a private call, an angry Spitzer once described himself to Tedisco as a "steamroller" - he attached a profanity for emphasis - and warned: "I'll roll over you and anybody else."
On Wall Street, where Spitzer built his reputation as a crusader against shady practices and overly generous compensation, cheers and laughter erupted Monday from the trading floor when news broke of his potential ruin.
Many in the financial industry had long complained that the man known as "Mr. Clean" and the "Sheriff of Wall Street" was a sanctimonious bully who was just trying to advance his political career. Many Wall Streeters were delighted to see him get his comeuppance.
"The irony and the hypocrisy is almost too good to be true," said Bryn Dolan, a fundraiser who works with many Wall Street employees. "If he had any shame, he would've already resigned."