Wall Street 'Sheriff' Tarnishes His Star

After rising to prominence and power by cracking down on white-collar crimes and creating a holier-than-thou public persona, New York Gov. Eliot Spitzer appears finally to be hoisted by his own petard.

Spitzer, whose work as the state's top prosecutor earned him the reputation as the "Sheriff of Wall Street," was reduced to apologizing to his family and the public Monday after media reports identified him as a client of a high-priced prostitution ring being probed by federal authorities.

Spitzer is accused of arranging to meet a prostitute from the New York-based Emperors Club VIP during a trip to Washington, D.C., in mid-February.

"I have disappointed and failed to live up to the standard I expected of myself," Spitzer said at a brief press conference in New York, in which he did not directly address the allegations. "I must now dedicate some time to regain the trust of my family."

Spitzer'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. The news of Spitzer's involvement in the sex ring had first been broken by The New York Times.

A call to Spitzer's office was not immediately returned.

While Spitzer may be able to reconcile the prostitution issue with his family, keeping his job and avoiding criminal prosecution seems much more unlikely since he's racked up a raft of enemies on Wall Street and in Albany.

Spitzer's ruthless pursuit of investment banks and Wall Street execs such as Richard Grasso, former chairman and CEO of the predecessor to Big Board operator NYSE Euronext(NYX Quote), former American International Group(AIG Quote) CEO Maurice Greenberg and ex-Citigroup(C Quote) chief Sandy Weill earned him headlines and political stature, but plenty of antipathy.

As governor, he applied a similar zeal in passing legislation against human trafficking and prostitution. Just last June, the New York Democrat signed into state law measures intended to put teeth into penalties against human trafficking and to provide assistance to victims of such crimes.

"Human trafficking is modern day slavery and among the most repugnant crimes," the governor said in June, when he signed the law he called one of the strongest in the country. "Today we have given law enforcement the ability to adequately prosecute perpetrators, and have provided meaningful assistance for the unfortunate victims of these egregious crimes. Today's signing also demonstrates what we can accomplish in Albany when we work together for the public good."

Spitzer's alleged involvement in prostitution is a violation of the Mann Act, which makes human trafficking and prostitution across state lines a federal crime, according to a complaint filed by Manhattan U.S. Attorney Michael Garcia. Spitzer, who has not yet been charged with any wrongdoing, is said to be working out an agreement that would him free him from prosecution under the 1910 law, according to a CNBC report.

The passage of the law was a moment of rare bipartisan cooperation for Spitzer, who has clashed with state Republicans from the moment he took office. "Unfortunately, this law is needed to combat this sick practice that exists in the shadows and dark corners of certain places," Assembly Minority Leader James Tedisco said. "Those who participate need to be severely punished and those victimized need to be protected and rehabilitated. This law helps."

Just months earlier, Tedisco was the object of Spitzer's wrath when the Republican called the then newly installed governor to complain that he had been cut out of negotiations for a state ethics law. "Listen, I'm a f***ing steamroller, and I'll roll over you and anybody else," Spitzer frothed, according to a Jan. 31, 2007, article in the New York Post , just weeks after Spitzer was inaugurated to his first term as governor.