NY Governor resigns amid sex scandal

Court documents in a federal investigation said a repeat customer identified only as "Client 9" paid $4,300 to a pretty and petite prostitute known as "Kristen." The Times, citing unnamed law enforcement sources, said Spitzer was Client 9.

The Times reported on its Web site on Wednesday that "Kristen" was a 22-year-old who had left home in New Jersey at 17, originally hoping for career as a rhythm and blues singer in New York. "I just don’t want to be thought of as a monster," the woman told the newspaper.

The Times said she had been born Ashley Youmans but now is known as Ashley Alexandra Dupre, and that she was expected to be a witness in the case against four people charged with operating a prostitution ring called the "Emperor’s Club V.I.P." It said she has not been charged.

New York City’s tabloids, citing unnamed sources, reported Spitzer spent up to $80,000 on prostitutes and investigators were examining whether he used any state money.

The man who once broke up prostitution rings as the state’s attorney general faces possible criminal charges related to his use of a prostitution service.

Amid speculation Spitzer was seeking to reach some kind of a deal to avoid or reduce any criminal liability, a federal prosecutor said on Wednesday no such pact had been reached.

’TAKE RESPONSIBILITY’

"Over the course of my public life I have insisted, I believe correctly, that people, regardless of their position or power, take responsibility for their conduct. I can and will ask no less of myself. For this reason I am resigning from the office of governor," Spitzer said in a grim-faced appearance at his New York City headquarters, with his wife at his side.

His disgrace was cheered by some financial power brokers who resented what they considered his self-righteous ways.

"Wall Street is enjoying he got his comeuppance," said Oppenheimer and Co. chief investment strategist Michael Metz.

As attorney general, Spitzer accused insurance companies of bid rigging, sued the former chief executive of the New York Stock Exchange, Richard Grasso, over his pay package, and hounded investment banks over misleading stock recommendations, leading to a $1.4 billion settlement with 10 of them.

Spitzer made no specific reference to the allegations surrounding him. He had also given no details when he apologized to his family and the public on Monday for what he called a "private matter."

Between the two appearances, he shuttered himself inside his New York City apartment as pressure grew for him to quit.

"He was an icon, a model of integrity, an enforcer of public and private morality, and then you’ve got this utter hypocrisy," said Douglas Muzzio, professor of political science at Baruch College in New York.

"You can’t help but be disillusioned."

Spitzer became governor with nearly 70 percent of the vote in November 2006 on pledges to clean up state politics. But 70 percent of New York voters wanted him to quit, according to a WNBC/Marist poll conducted on Tuesday.

His resignation helped resolve the political paralysis that gripped the state capital, Albany, over the past two days. Paterson will become New York’s first black governor and the first legally blind governor in U.S. history.

Although prostitution is illegal in most U.S. states, legal experts said Spitzer was unlikely to face charges as a client but could be legally vulnerable over payment methods.

The Times reported that federal authorities were first alerted to the case by a bank that reported its suspicions about the way Spitzer was transferring money.

(Additional reporting by Emily Chasan, Caroline Valetkevitch, Vivianne Rodriguez, Christine Kearney, Joan Gralla and Edith Honan; Editing by Patricia Zengerle)