The New York Times, Washington Post, Los Angeles Times, and the Wall Street Journal's world-wide newsbox all lead with the bombshell revelation that New York Gov. Eliot Spitzer was a repeat client of a prostitution ring. A federal wiretap caught Spitzer arranging to meet a New York prostitute in a Washington, D.C., hotel on Feb. 13. An hour after the NYT's Web site published a story that revealed Spitzer's involvement, the governor held a brief news conference. With his wife at his side, Spitzer apologized but didn't mention specifics. "I have disappointed and failed to live up to the standard I expected of myself," he said. Everyone mentions that a resignation is likely, and the WSJ says it could come as early as today.
USA Todaygives big play to the Spitzer story but devotes its traditional lead spot to a look at how more people are choosing to cash out their 401(k) retirement accounts to pay their bills. Instead of borrowing money from their retirement accounts, many are simply choosing to get all their money out, which implies lots of taxes and fees, mainly to prevent eviction or foreclosure. Several plan administrators say the number of "hardship withdrawals" increased at least 20 percent in January compared with the same month last year.
Last week, federal authorities announced they had broken up an international prostitution ring and arrested four people accused of running Emperors' Club VIP, which arranged encounters between wealthy clients and more than 50 prostitutes in several cities around the world for a fee that ranged from $1,000 to $5,500 an hour. The news received little attention until yesterday's revelation that a man identified as "Client-9" was Spitzer. According to documents, Spitzer talked to one of the people charged about arranging a meeting with a prostitute named Kristen.
Complicating matters for Spitzer is that the conversation seems to clearly suggest that it wasn't the first time Spitzer used the Emperors' Club VIP services. "Same as in the past, no question about it," is how Client 9 responded when he was asked about how he had sent the money for the encounter. The Post says Spitzer "expressed some evidence of familiarity" when he was told that "Kristen" would be the one to meet him because he responded by saying, "Great, okay, wonderful." Kristen spent about two hours with the governor at the Mayflower hotel and collected $4,300 from him, which included extra money (the LAT says about $1,600) as a deposit for future encounters. The WSJ and NYT report that Spitzer had registered under the name "George Fox," who, in reality, is a hedge-fund consultant and a longtime friend and supporter of the governor.
The day after the encounter, which most papers make sure to point out was Valentine's Day, Spitzer testified before Congress on the bond insurance industry. The WP says Spitzer was not "initially scheduled to appear at the hearing" and was only included after he called to insist on testifying.
The LAT, NYT, and USAT quote the most salacious details of the story, which came as part of a conversation that took place between Kristen and one of the company's booking agents after the encounter with Spitzer. Kristen reported that the encounter had gone well, and, in an apparent reference to Spitzer, the booker said she had heard he would sometimes ask women "to do things that, like, you might not think were safe."
"This is not even a nail in the coffin–this is a spike," a political science professor tells the WP."It would be difficult for him to govern. His moral authority is nonexistent."
Spitzer hasn't been charged with any crime, but if he does resign, it would mark a dramatic end for a politician who made a name for himself as New York's attorney general. He won huge praise, grabbed lots of headlines, and was nicknamed the "Sheriff of Wall Street" for the aggressive way he pursued high-profile cases against some of the most well-known names in the financial industry. Spitzer also broke up two prostitution rings in New York. The aggressive, and very public, manner in which he pursued Wall Street titans, often for practices that were considered routine, meant he had lots of enemies. Yesterday, many in the financial world could barely hide their glee that the man known as "Mr.Clean," who had vowed to bring high ethical standards to Albany, is now caught in this situation. "I'm sure everybody on Wall Street is happy," one man tells the WSJ.
The NYT, which had more than 25 reporters working on the Spitzer stories, fronts a separate piece that provides the most detailed account of how the investigation got started. Apparently, "prostitution … was the furthest thing from the minds of the investigators," who were looking at suspicious financial transactions that they thought might have involved bribery or something to do with campaign finance. The governor was moving large quantities of money that seemed to end in shell companies. The WSJ notes that a bank had filed "suspicious activity" reports about the governor out of concern that he was involved in "structuring," which is when financial transactions are kept under $10,000 to avoid federal reporting requirements. The NYT says that it was only after investigators realized that Spitzer was using the money to meet with prostitutes that they asked a judge to approve wiretaps on the phones of the suspected ringleaders.
In other news, the LAT and NYT are alone in fronting news out of Iraq, where five U.S. soldiers were killed by a suicide bomber in Baghdad. The LAT catches late-breaking word that three more soldiers were killed by a roadside bomb in Diyala province yesterday. The attack that killed the five soldiers in Baghdad was the deadliest single attack against U.S. forces since June, when the "surge" of troops was completed. The NYT notes that witness reports "suggest that the soldiers may have let down their guard because of the relative quiet of the last few months." There were at least three other suicide bombings across the country yesterday. The NYT says the attacks "underscored how fragile security in Iraq remains," while the LAT says that if violence continues increasing it would inevitably raise questions about plans to pull out most of the remaining "surge" forces.
USAT fronts, and everyone mentions, Sen. Barack Obama went on the attack yesterday and discounted any idea that he would be Sen. Hillary Clinton's running mate. Obama told supporters, "I don't want anybody here thinking that … maybe I can get both" and said that "they are trying to hookwink you," in a reference to how the subject of a "dream ticket" has been recently brought up by both Clinton and her husband. "I don't know how somebody who's in second place can offer the vice presidency to someone who's in first place," he said. Yesterday, Clinton said it was "premature to talk about whoever might be on the ticket."
While Clinton's recent "3 a.m. phone call" ad has been criticized by many who describe it as fear-mongering, Orlando Patterson was troubled by something else. Patterson writes in the NYT's op-ed page that the image of innocent children and a worried mother "brought to my mind scenes from the past." Patterson thinks that, particularly since it doesn't include images of black people and terrorism is never mentioned, "the danger implicit in the phone ad ... is that the person answering the phone might be a black man, someone who could not be trusted to protect us from this threat."