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Awaiting Spitzer's Decision; Will Sex Scandal Cause Spitzer Major Legal Woes?; David Paterson Could be New York's First African- American Governor; Police Have Person of Interest for UNC Student Murder
Aired March 12, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: At the top this hour, a dramatic new development in the Eliot Spitzer sex scandal. Several news organizations say the embattled New York governor will resign, but that may not end his troubles. Investigators are focusing on his alleged money trail. It is littered with more than just tawdry details.
CNN's Kelli Arena has the latest.
(BEGIN VIDEOTAPE)
KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice-over): For a guy with as sharp a legal mind as Eliot Spitzer, the allegations against him are mind-boggling. Sources with knowledge of the investigation say to allegedly make payments to the prostitution ring, he started shifting around money among his bank accounts.
That's where he ran into trouble. The suspicious activity raised red flags at the bank, which filed a report with the IRS, which opened an investigation run out of this nondescript Long Island office.
The money allegedly ended up in shell accounts set up by the prostitution ring. If shuffling money is a legal red flag, sending money to shell companies is a five-alarm fire.
SCOTT MICHEL, TAX ATTORNEY: This was done to conceal the true nature of the prostitution operation that was going on. And if somebody transfers money into a fake company account, knowing that that is a fake account, that person can be engaged in a money laundering conspiracy.
ARENA: Sources say investigators are focused on where Spitzer got the money for the alleged sexual encounters. So far, there's no indication he used anyone's cash but his own. Investigators are also looking into what he may have done to conceal the movement and source of those funds and whether Spitzer engaged in a crime known as structuring.
ROSCOE HOWARD, FORMER U.S. ATTORNEY: The premise of structuring is that you're trying to take a large transaction, make it look like multiple smaller transactions that are unrelated.
ARENA (on-camera): Sources say Spitzer spent more than $15,000 for several encounters. That may be chump change for the wealthy governor, but probably hard to hide from his wife. Spitzer hasn't been charged with any crime and sources say he hasn't even formally been questioned, but it's expected that his high-priced legal team will soon meet with prosecutors to discuss any legal liability.
Kelli Arena, CNN, Washington.
(END OF VIDEOTAPE)
HARRIS: Indications growing stronger that New York Governor Eliot Spitzer will resign today at some point today, the exact timing not clear. You're looking now at his East Side apartment, east side Manhattan, Eliot Spitzer's apartment.
Again, several news organizations reporting that the New York governor will resign today. Again, the exact timing not clear. We are efforting all kinds of additional information on this story so that we may independently confirm it for ourselves here at CNN.
Of course, we are following each and every turn in the Eliot Spitzer sex scandal. Law, politics, and prostitution. Is justice blind? Is it starry eyed? An attorney joins us to look beyond the celebrity of the Eliot Spitzer case.
HEIDI COLLINS, CNN ANCHOR: A possible break in the murder of the student body president at the University of North Carolina in Chapel Hill. Police have arrested a man in Durham, North Carolina. The so- called person of interest was then handed over to police in neighboring Chapel Hill.
Twenty-two-year-old Eve Carson was found shot to death last week on a Chapel Hill road. Police released this surveillance photo of a man believed to be in Carson's car outside an ATM machine. A short time ago we talked to a reporter Adam Rhew of Chapel Hill radio station WCHL.
(BEGIN AUDIO CLIP)
VOICE OF ADAM RHEW, WCHL 1360 AM RADIO REPORTER: Right now, Tony, we have several sources including several law enforcement sources who have told us that an arrest was made in neighboring Durham, it's a community just about 10 miles down the road from Chapel Hill, an arrest made overnight in Durham, a suspect brought here from Durham to Chapel Hill early this morning for questioning by Chapel Hill authorities.
Police have not come out to tell us anything. We're sitting in front of the police department waiting for some official word. We do know from several law enforcement sources that this comes on the heels of a very strong lead that police were following yesterday.
(END AUDIO CLIP)
COLLINS: We quickly want to get to someone we have on the telephone who's going to try to provide a little bit more information for us on this story, Ann Forte of News 14 there in North Carolina. She's going to tell us a little bit more. Ann, if you can, bring us up to speed about this situation because obviously a lot of people very, very concerned about finding who may be responsible for Eve Carson's death.
VOICE OF ANN FORTE, NEWS 14 CAROLINA: Well, we have been able to confirm with the Orange County District Attorney that somebody is being questioned right now by Chapel Hill police officers in connection with Eve Carson's murder. Now, we understand this person was brought into custody in Durham this morning, neighboring town Durham, brought over here to the Chapel Hill Police Department. He was brought in, handcuffs on, surrounded by police officers wearing bulletproof vests.
Now, it has been one week since Eve Carson's body was found in a quiet neighborhood about a mile from UNC's Chapel Hill campus. She had been shot several times. Police had released several surveillance photos of a man they were calling a person of interest, but at this point, we cannot confirm if that person of interest is, in fact, the person being questioned by police right now.
COLLINS: Is it possible to confirm, though, some of these reports that we've been hearing here, that police were heavily armed as they went in and tried to get this person of interest?
FORTE: Yes. From what we understand, a S.W.A.T. team did apprehend this person or bring him into custody this morning, and when he was brought here to the Chapel Hill Police Department, the police officers surrounding him, dragging him in to this police department were wearing bulletproof vests.
COLLINS: OK. We certainly appreciate the very latest. We of course will be watching this story very closely as we believe we are getting a little closer here to finding out more about who this person of interest is and how they may or may not be connected to the murder of Eve Carson, UNC student. Thanks so much, Ann Forte from North Carolina.
HARRIS: Moving on from Mississippi, the Democratic candidates focusing on Pennsylvania after Barack Obama's Tuesday win.
CNN's Candy Crowley breaks down that vote.
(BEGIN VIDEOTAPE)
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT (voice-over): Two in a row for Barack Obama.
SEN. BARACK OBAMA, (D-IL) PRESIDENTIAL CANDIDATE: I'm grateful to the people of Mississippi for the wonderful support.
CROWLEY: Obama's win in the Mississippi primary came just three days after his victory in the Wyoming caucuses. It helped put his losses in Ohio and Texas in the rear-view mirror. More importantly, it pads his lead.
OBAMA: It's just another win in our column, and we are getting more delegates.
CROWLEY: Obama was the heavy favorite in pre-primary polls, but Democratic delegates are awarded proportionately, so Hillary Clinton campaigned to limit his take.
SEN. HILLARY CLINTON, (D-NY) PRESIDENTIAL CANDIDATE: I want people in Mississippi to know I'm in favor of you and I'm going to work for you, and I will be there for you.
CROWLEY: Still, she lost by 20 points in an electorate sharply divided along racial lines. Exit polls show African-Americans made up half of Mississippi's Democratic voters, and once again, Obama overwhelmingly won the black vote.
Clinton grabbed three-quarters of the white vote. She also got a lift from crossover Republicans who went for her three to one. But for the Clinton campaign, Mississippi was so yesterday. She congratulated him on his victory there, but Hillary Clinton is moving on to friendlier climbs.
CLINTON: I'm excited about the next six weeks, traveling around, going all over Philadelphia, going into the suburbs, going across this beautiful, beautiful commonwealth.
(END VIDEOTAPE)
COLLINS: Quickly getting some information here on the case of Eliot Spitzer, the governor of New York, and whether or not he will be resigning today. Jason Carroll is joining us in New York to tell us a little bit more.
All right, what's the word, do we have some final decisions on when this may happen here?
JASON CARROLL, CNN CORRESPONDENT: Here's what we're hearing, Heidi, that at this moment, Governor Spitzer is expected to make some sort of an announcement here in New York City at 11:30. Just a few moments ago, some reports coming in also that Governor Spitzer is expected to submit his resignation, and that is what we're hearing from several reports.
And again, we have also confirmed that Governor Spitzer is expected to speak at 11:30. We also heard that he has written up some sort of a formal announcement and that also he has spoken to his senior members of his staff, informed them of his expected resignation.
Once again, this all coming on the heels of this incredibly embarrassing revelation that Governor Spitzer was involved with this prostitution ring and that in his involvement, some of these details coming out that most recently, that he spent as much as $80,000 over a period of time on prostitutes. There have been many calls for his resignation, some coming from top Republicans, some coming from Democrats here in the state as well.
In fact, yesterday, one of the top Republicans here in the state of New York issued an ultimatum -- resign in 48 hours or we're going to start impeachment proceedings against you. Reports came out that Governor Spitzer was meeting with his advisers, meeting with his legal team, trying to work out some sort of a deal with prosecutors.
The best-case scenario in terms of a deal that he could work out would be obviously that he not face any prison or jail time for his involvement with this prostitution ring. Best-case scenario, he resigns in disgrace but does not face any jail time.
Still working on trying to get some more details on this. But the headline that we're hearing once again, Heidi, is that Governor Spitzer is expected to make some sort of an announcement at 11:30 here in New York City -- Heidi.
COLLINS: Obviously, Jason, this is a very fluid situation. We've been working on it for a couple days now to try and find out really what it's going to mean for the office of the governor and, obviously, for the people of New York. It is very possible, is it not, that if this announcement is made today, of a resignation, it may not happen immediately?
CARROLL: Perhaps not. But I can tell you what's also happening in New York City, a lot of people are having their eyes now on the state's lieutenant governor, David Paterson. He would be the person who would become governor. And so now, a lot of eyes are on him and his background and what he will be able to do.
From everything that we're hearing about Lieutenant Governor David Paterson, that he is a solid legislator, began his career back in 1985, representing Harlem in the state senate. Also in 2002, he became minority leader.
So, a lot of speculation about how effective he will be as a governor. Also can tell you, Heidi that he is going to have to hit the ground running because a budget is due. A budget is due shortly.
COLLINS: Right.
CARROLL: He really is going to have his work cut out for him.
COLLINS: I think that's what another leader was talking about yesterday when he said no matter what's happened here, something needs to take place, something that will be decisive because there is so much business at hand, talking about minority leader Tedisco.
CARROLL: Oh, without question. And, you know, once again, as we're being handed things here, you know, once again want to confirm that Spitzer will be speaking at his office at 11:30.
COLLINS: OK.
CARROLL: As you know, there have been many news reporters and news crews outside his apartment on the Upper East Side of Manhattan. He has been hold up there since -- and has not made any public statements ever since he made that very public statement on Monday where he apologized to his family, apologized to the public for being involved in this prostitution ring -- Heidi.
COLLINS: Quickly, Jason, just to clarify before we let you go here and remind people, we don't even know of any charges at this point or any -- when charges will be announced.
CARROLL: No, don't know about charges, don't know if any sort of deal was worked out, Heidi, but most legal experts that you talk to tell you that he's been using these final hours to try to negotiate some sort of a deal with prosecutors. And remember also, Heidi, that before he was governor, Lieutenant Governor Spitzer was the attorney general, a two-term attorney general here in the state of New York for eight years.
COLLINS: That's right.
CARROLL: So, if anyone knows how to negotiate a deal with prosecutors, it's going to be him.
COLLINS: He's a very steeled prosecutor indeed himself. CNN's Jason Carroll from our New York Bureau. Jason, thanks.
HARRIS: Steve Kornacki is on the line with us.
Steve, was with us yesterday in the NEWSROOM. He is with "The New York Observer" and Steve good to talk to you again. I want to ask you something. I want to take a little bit of time here and revisit some of the editorials.
You'll recall how scathing they were of the actions by New York's governor, Eliot Spitzer, "The New York Times" in its editorial saying he did not just betray his family in a private matter, he betrayed the public, and it is hard to see how he will recover from this mess and go on to lead the reformist agenda on which he was elected. Steve, you certainly thought this was a real possibility, didn't you?
VOICE OF STEVE KORNACKI, "THE NEW YORK OBSERVER": Sure. I mean, you kind of hit on the basic idea of what's driving the public outrage in this thing, which is the basic idea that, you know, Mr. law enforcement broke the law.
HARRIS: Yes.
KORNACKI: You know, the guy that would sort of hold and arrest those indiscretions in their face, rub them in their faces and profit politically by them is guilty of, you know, similar indiscretions himself. And a pattern of it, too.
I mean, there are stories that are coming out now, you know, only reinforce the idea. This wasn't a one time thing. This was six years worth of, you know, trysts. And, you know, also from a personal standpoint, you have to wonder can this guy -- how much of this does this guy want to take.
HARRIS: Yes.
KORNACKI: He said it was a personal mistake. He had a very limited statement, you know, two days ago, didn't write anything down, and now you're looking at this drip, drip, drip, the longer you stay out there. I don't think you know if persona he wanted it or for his family either.
HARRIS: You know it's interesting, I hesitated in suggesting that when you were with us yesterday you were absolutely certain that he would resign because I don't know that he could be absolutely certain at that time. What do you think ultimately led him to the decision?
I know there is a lot of conversation out there about negotiation for some kind of a deal, but ultimately, what do you think we will find out? We don't know yet, but what do you think we will ultimately learn was the reason he ultimately decided to step down?
KORNACKI: Everything we've heard, has said, and this may surprise people, that his wife was the driving influence on him not resigning right away. You know, when this story first broke, the instinct was to resign on the spot, and his wife said no, don't do anything in haste.
I think clearly if you look at the statement the other day, when he spoke for 60 seconds or whatever it was, you know, this was a guy who was thinking in terms of keeping all of the viable options on the table, including staying in office, trying to play the Clinton strategy of, you know, this is a personal matter, me and my family, and trying to ride the storm out that way. You know, the media firestorm erupted this making governing go forward impossible.
But it's a reality first of all that had the threat of impeachment from the Republicans in the election. Generally, the Republicans, especially in the assembly in New York, are a powerless lot. A impeachment that puts Democrats on the spot and they have to decide are you going to stand with Eliot Spitzer or not, and it's politically poisonous to stay with Eliot Spitzer.
The Democrats don't have a lot of affection for him up in Albany. The Republicans put that on the table, he was going to lose the Democrats, sort of like the Richard Nixon moment in 1974 when Barry Goldwater went up and said, hey listen, you know Mr. President, you're going to lose the Republicans if you go Florida. Eliot Spitzer was facing an impeachment deadline from the Republicans and it was serious. I think that pushed him along (INAUDIBLE).
HARRIS: Right, because what you're describing now is sort of a vice effect with Spitzer clearly in the middle of this thing. I'm always curious when you have situations like that where the facts seem to be pretty clear.
In political terms, you know, you've got a Democratic governor here. I'm always curious when Democrats don't step forward to make statements about this kind of behavior. What do you think took place here? Was this a situation where the Democrats were working behind the scenes, kind of the other side of that vice, pushing Eliot Spitzer in private to do what many consider the right thing here? KORNACKI: Some of them were almost public about it. If you looked at the statements, you know, the silence from some of these guys, what they weren't saying was deafening. There's a longtime rivalry in New York politics between Eliot Spitzer and Chuck Schumer.
Chuck Schumer is the senior senator, big powerful Democrat here and in Washington. A longtime rival between them. As soon as this broke the other day, Schumer issued a two- or- three-sentence statement in which he basically expressed some, you know, sympathy for the, you know, the family situation but offered no public political support, basically said that Spitzer's statement had been -- you know, had not gone nearly far enough in explaining this. That's a fellow Democrat, that's a powerful Democrat.
Then you look at all the Democrats in the Albany world, names that voters would know, names that voters wouldn't know, and all the people makes things happen in Albany and make things happen in New York state government. He had alienated almost all of them in his first year and a half.
The thing is, a year and a half ago, Eliot Spitzer got 70 percent of the vote. They were all with him because he was an overwhelming personality. The average voter saw him as, you've heard all the cliches, the sheriff of Wall Street, Mr. Clean, all that stuff. He had such a powerful image, the Democrats had no choice but to stick with him.
Because you're with him or you're against him, but he's winning. But you know what, after a year and a half of trying to impose his will on Albany and having it blow up in his face, his approval rating fell to 40 percent so these guys who didn't like him any way and were offended by him, certainly had a perfect reasoning not to be with him now.
HARRIS: Hey Steve, I'm just curious. Do you believe, and this seems a bit unseemly to me -- personally, no one cares what I think about it -- but the idea that the governor might have been using his office as kind of a bargaining chip to get terms of an arrangement of the deal.
Now, we learned yesterday that federal prosecutors can use the idea of a resignation, bring that to the table as part of a deal package, but it seems a bit unseemly at least to me that the governor with the facts as they appear to be would then be using his office as leverage. How does that feel to you, and do you think -- we don't know this yet -- do you think that kind of thing went on behind closed doors among attorneys?
KORNACKI: Yes. I think it's a huge reason, you know, why he would stick around for two days or whatever it was, is the idea that, hey, listen, this is nothing new. Prosecutors do this a lot.
HARRIS: You're right. You're right.
KORNACKI: With elected officials, they basically tell him, listen, the charges are lighter so they're reduced or they're non- existent if you step down.
HARRIS: Yes.
KORNACKI: And it's happened before. It happens in this case. I suppose it looks unseemly, but I think if we were listening in on the deals the prosecutors strike whether it's with elected officials or corporate leaders, whoever they're striking deals with, I think if we listened him we'd find a lot of stuff that seems unseemly.
HARRIS: Steve, appreciate your time.
KORNACKI: No problem.
HARRIS: Great analysis. Steve Kornacki is with "The New York Observer."
COLLINS: We are about an hour and 10 minutes away from the expected announcement from Governor Spitzer, 11:30 Eastern time. We of course are going to have this live for you. We are getting word that he will, indeed, announce a resignation.
Just not exactly sure when it would take effect. Maybe immediately. May not be until the end of the week, next week. Who knows. But we are trying to clarify all of that.
CNN's Jason Carroll has been working the story very hard and joins us now from our New York bureau with some more information.
Jason, what do we know now?
CARROLL: That's a good point that you raise, Heidi, not sure if he makes this announcement, when his resignation will be effective. Also want to point out just a few moments ago, I have here in my hand, this is from Governor Spitzer's press office, he has made it official that he will make an announcement at 11:30.
It simply says that he will be making a brief statement. That's it. Still don't know what he will say in this statement, but of course we've been looking at the video from the last time he made a statement, and that was on Monday. And I thought it would be good just to go over just a little bit of what he said on that day.
He said, "I have acted in a way that violated the obligations to my family, and that violate my or anyone's sense of right and wrong. I apologize first and most importantly to my family. I apologize to the public, whom I promised better." We know that the statement that he's going to be making at 11:30 will be brief. We don't know if it will be as brief as the one that he made on Monday.
But once again, as we said a little earlier, from all the reports that we're hearing, he is expected to announce his resignation at 11:30 that, again, according to reports that we are hearing. Unsure at this point when that resignation will take effect -- Heidi.
COLLINS: All right Jason. We know you're working your sources as well. Thanks so much. We'll come back to you if you should learn more. Appreciate it.
HARRIS: I'm always curious as to the rate of speed by which news travels. Mary Snow is at the state capitol in Albany.
Mary, I'm just sort of curious. Of course it has -- has the news reached Albany and has there been any reaction?
MARY SNOW, CNN CORRESPONDENT: Well, I'll tell you, Tony, more confusion than news. And in the halls of the capitol, you see lawmakers walking around on cell phones, asking reporters what are they hearing. A lot of rumors going around.
We expect to hear from the assembly speaker momentarily, and he can tell us what he knows. I just ran into the senate majority leader, Joseph Bruno, he is a Republican, really one of the big rivals of Eliot Spitzer. I asked him for more clarification. He said he's hearing a lot of things. He's expected to speak at 10:45 and tell us what he knows. But certainly --
HARRIS: Hey, Mary, Mary, hang on. Mary, I'm sorry. Hang on for just a second.
We've got some new developments now, and Jason Carroll has those for us -- Jason.
CARROLL: Yes, Tony. As these things go, they go very quickly.
HARRIS: Yes.
CARROLL: A source now close to Governor Spitzer tells CNN that he will, in fact, announce his resignation at 11:30. What is unknown at this point, Tony, is what sort of deal was worked out between Governor Spitzer's attorneys and state prosecutors, will he have to face possible jail time, will he plead guilty to charges of some sort of a misdemeanor.
Those are some of the details we don't know at this point, but we can say at this point it has been confirmed, a source close to Governor Spitzer says that at 11:30 he will, in fact, announce his resignation. Tony?
HARRIS: Very good, Jason.
All right, let's get back to Mary Snow now in Albany.
So Mary, when you talk to the assembly men and women there in Albany, you can now tell them that we have an 11:30 statement from the governor, and at that time the governor will announce his resignation. You were describing the scene there for us just a moment ago.
SNOW: Yes, because, you know, there is a transfer of power. This would mean that David Paterson of Harlem would now become the governor of New York. He is a Democrat. And Joseph Bruno, I was just saying I ran into him, he is now in line to become the lieutenant governor of New York. So, all of these final details being worked out. There are reporters staked outside of David Paterson's office. He has not been seen publicly so far this morning, and there is no word from his office, but we know behind the scenes over the past day, there was certainly a flurry of calls being made.
HARRIS: Yes.
SNOW: And as we know, both offices had been talking to each other, Paterson's office and Spitzer's office in terms of transition of power. So, exactly how this will take place, unclear right now, but certainly --
HARRIS: Yes, stay tuned. Mary, just sort of curious. This is a story that was percolating below the surface a bit starting on Friday past. It was developing over the weekend. It burst onto the scene on Monday.
And I'm just sort of curious, what has been the thinking of the folks there in Albany? Was it once these details of the story started to break, was it pretty much a foregone conclusion that Eliot Spitzer at some point would have to step down, or was there any thought that he could weather this?
SNOW: There was certain a feeling, Tony, that this was inevitable, that he was going to have to step down. And if you take a look at who spoke out over the past couple of days, we didn't really see a lot of Democrats coming out to defend Eliot Spitzer.
They're waiting to hear what he would say, but certainly behind the scenes. And so, the question really is when is he going to step down and not if, because they really did not feel that he could weather this.
You know, a lot of people point out that he has had a rocky short term so far. Joe Bruno, I just mentioned, there was a big dust-up with Joe Bruno over an investigation last year that is still being looked at. So, certainly I would say that people thought this was going to be the end.
HARRIS: And do you have this news? I just received it just a moment ago, Mary, that majority leader Bruno is going to hold a news conference as well? Is that information that you have?
SNOW: Yes. He's going to have that at 10:45. We expect to hear first from assembly speaker Sheldon Silver, a Democrat from New York, from New York City. We'll first hear from him, and then we will hear from Joe Bruno.
HARRIS: Oh, good. You need to stay close, Mary, because you know these players and you need to explain them not only to me but to the rest of the country as well as this drama continues to unfold for us. Mary Snow in Albany, Mary appreciate it. Thank you.
SNOW: Sure.
COLLINS: All right.
Quickly we want to talk a little bit more about this, because there are so many legal ramification, and some of it is pretty confusing, as we have been talking about this morning, the Eliot Spitzer sex scandal. Several news organizations say that the embattled New York governor will resign, including us here at CNN, as you just heard Jason Carroll report.
But that may not end his legal troubles as politics and the law collide. Here a look at the legalities, Paul Callan, he's an attorney and a former New York City prosecutor. So, some unique perspective coming our way from Paul.
All right, Paul, here's my question for you: If, in fact, he does announce his resignation today at 11:30 as expected and as reported here, this could take several days to actually go into effect -- why?
PAUL CALLAN, ATTORNEY: Are you talking about the legal deal that he makes with prosecutors or the resignation itself?
COLLINS: The actual resignation, and someone else, in this case Lieutenant Governor Paterson, taking over as the governor of New York.
CALLAN: Yes. You know, Paterson could be sworn in almost immediately after the resignation. That could happen very, very quickly. What's more interesting is how long will it take to complete negotiations for a resolution of his legal problems, and that could take a lengthy period of time.
I would be very surprised if he's got all of his ducks in a row and everything worked out on that right now, because when you think about it, he's facing possible prosecution under the man act. Now, that's a federal prosecution, which would be led by the U.S. attorney in New York. But he also has exposure as the customer of a prostitute in Washington, D.C. He could be prosecuted for a misdemeanor there.
COLLINS: Right.
CALLAN: He also could face disbarment proceedings with members of the bar in New York, and there are a variety of other investigations floating around involving money laundering and possible political corruption. So, there are a lot of things that have to be straightened out here, and I don't really think they're going to be straightened out before the end of the day today.
COLLINS: Yes. No, I think you're probably very right on that. But the question probably remains for everybody at home, you know, what sort of -- I mean, obviously he's trying to avoid prosecution. Any one of those things that you just mentioned. What sort of incentive do prosecutors have to make a deal with him?
CALLAN: Well, I think they have a strong incentive because, you know, when the smoke clears and all of the publicity dies down relating to this case, it's going to come down to a simple thing. Eliot Spitzer was the customer of a prostitution service. And that's really all that is involved in this case. Normally, when this sort of thing happens, it's rare for the customer or the john to be prosecuted. And his lawyers ultimately are going to be saying to federal prosecutors, why should he be treated any differently than any other citizen? He shouldn't be.
COLLINS: Some would say because he's the governor of New York and because he prosecuted prostitution and because he was attorney general. Some would say that would be a reason.
CALLAN: You have the arguments there. He's the chief legal law enforcement official of the state of New York, so maybe the law's got to come down a little bit harder on him. You know, I'm not advocating for him. I'm just telling you what his lawyers are saying.
And they're saying, hey, don't treat him any differently than any other john of a prostitute. He's been destroyed personally, he's been destroyed professionally, so he should walk away from this case. I don't know how prosecutors will handle it in the end. It is not unusual to use public office as a poker chip to trade for a resignation.
COLLINS: Right.
CALLAN: We saw Governor Jim McGreevey in New Jersey.
COLLINS: Absolutely.
CALLAN: He traded his office for a dismissal of federal charges. We've seen mayors, senators in other places traded as well. Ironically, we've seen Eliot Spitzer negotiate similar deals with corporate heads in investigations that he negotiated.
COLLINS: Yes, on the other side.
CALLAN: Yes, on the other side. So this sort of thing goes on. But, of course, the supreme irony here is here's Mr. Morality, Mr., you know, sort of moral rectitude and he's now looking for the same deal that he tried to negotiate with other people. It's a very ironic situation.
COLLINS: Yes. And back to the legal side of it, there are other reports out here that he may have engaged in this type of activity for many years. How does that make it worse for him in his case?
CALLAN: Well, I mean, each time he engages in the activity, there's a violation of the law. And obviously, his argument that everything should be dismissed as a tradeoff for giving up the governorship of New York becomes much weaker when there's eight years of violations. I mean, there are some press reports today, I don't know how reliable they are, that he may have spent as much as $80,000 on prostitution services through the years.
Now, that would constitute a lot of criminal activity over a lengthy period of time. So that certainly weakens his hand in negotiations with prosecutors. They may come back now in the end and say, hey, we may let you avoid jail time on this, but we're going to require some kind of a plea to a criminal charge, maybe a minor charge, maybe a misdemeanor charge, but they may have a strengthened hand because of his lengthy history of criminal activity.
COLLINS: Hey, Paul, before we let you go, let me just ask you on a personal note here, obviously, you are someone who is a member of the New York legal community, a former New York prosecutor yourself. How surprised were you when you heard this news?
CALLAN: I was absolutely stunned, as were every former prosecutor that I know. I mean, Eliot Spitzer had cultivated a reputation through the years as a man of impeccable integrity, as a man who could be trusted, who really had the people's best interests at heart.
And for him to take this kind of a fall I think everybody is shocked. But, you know, the other interesting thing I think about the fall of Eliot Spitzer, as I'm looking at what's going on in New York, it's his lack of friends and lack of support.
You know, there's nobody out there supporting this guy. So what he did in the end was he was a loner, he cultivated a large number of enemies, and I think in the end people are happy to see him fall. That's the sort of feeling I get from the legal community in New York.
COLLINS: We certainly appreciate your insights.
Paul Callan, former New York prosecutor. Thanks so much, Paul.
CALLAN: Thank you.
HARRIS: Boy, that was strong. The spotlight now turns to David Paterson, New York's lieutenant governor. Paterson will automatically become governor upon Spitzer's resignation. He will become New York's first African-American governor. Paterson is a 53-year-old Democrat from Harlem. He is legally blind and he is considered well respected by both the Democrats and Republicans.
Let's get the thoughts on this story from Joe Conason. He is with "The New York Observer."
Boy, as I guess you're beginning to pick up "The New York Observer" has done a lot of work on this story. We just had Steve Kornacki on the air just a couple of moments ago. And Joe, let me pick up on the point that Heidi was making just a moment ago.
Wow, how devastating a fall from grace for Eliot Spitzer. How surprised are you with the speed of this descent?
JOE CONASON, "THE NEW YORK OBSERVER": Well, I think once this news came out and the governor did not deny it, then things had to move pretty fast. I mean, he needed to -- as I wrote this morning, he needed to get out of office.
But the state of New York has to have a functioning government. We have a budget due and a lot of problems to deal with in the state. And, you know, he has become an obstacle rather than a...
HARRIS: Yes.
CONASON: ...useful person anymore. So, he has to go.
HARRIS: Hey, Joe, let me flush that out with you just a little bit. I understand that the idea of he has to go, but explain that to me. Break that down for me.
You know, you don't have to be squeaky clean to submit a budget to the general assembly and get work done on that. Some would say you don't have to be squeaky clean to get a lot of the people's work done in the state of New York. Why did this man have to step down?
CONASON: He has to be clean enough that everybody isn't thinking about kicking you out, rather than all the other business that needs to get done.
HARRIS: Right.
CONASON: I mean, frankly, you know, the Republicans in Albany don't have much power anymore. They have no power in the assembly and they have a one-vote majority in the Senate, that I think they'll probably lose pretty soon.
But once they announced that they were going to try to impeach the governor based on these alleged crimes, the Democrats really would have had to think about how to respond to that. And that would have -- it would have become the only business being done in Albany, was when was the governor going to go and under what circumstances?
HARRIS: Hey, Joe, give us a sense. I didn't get a chance to see your piece this morning, so you can fill me in on some of the things that you wrote about. And maybe I'm touching on one of those areas. No. Go ahead.
CONASON: No, I mean, look, I think for Democrats and especially for progressive Democrats, this is a really sad day. I don't know whether Eliot Spitzer has any friends, as Paul Callan seems to think he doesn't.
But there were certainly a lot of people in this state and across the country who at least at one time admired him and thought that he had a lot of potential as a political leader, who had taken on special interests, was not afraid to confront major corporations and others who he thought were acting against the public interest. And I think, you know, that was something refreshing for people in New York state.
HARRIS: Yes.
CONASON: Remember, it was not too long ago he won election with something like 70 percent of the vote in this state. So, from that point of view, over the past year, I think people have been increasingly disappointed in him, and now this is -- you know, this is worse than discipline.
HARRIS: Can David Paterson lead the state, the great state of New York?
CONASON: I think he can. It will be a very different type of leadership than Eliot Spitzer gave. I think David Paterson has a reputation as a conciliator, as somebody who gets along but somebody who's also very serious about the issues that are important to him. He is certainly every bit as much of a progressive as Eliot Spitzer was.
But somebody who wants to be liked, wants to make people like them -- like him and wants to convince people of his...
HARRIS: Yes.
CONASON: ...persuade them. And I think that may be what people actually want in Albany now.
HARRIS: You know, we often think of New Yorkers, and I guess we think of New York City, principally, when we make a statement like this. But we think of New Yorkers as being a lot that is able to sort of just roll on, oh what happens to this? That was yesterday's news, you know, we've got to get on with our lives here.
But you mentioned 2006 Spitzer wins with 70 percent of the vote. I'm wondering, does this feel like a real blow, in your estimation, for the people of the state of New York?
CONASON: I think people will feel sad about this. I think people admired Eliot Spitzer. They certainly admired his family. His wife was somebody who's very admired in New York, very active in charitable and public interest endeavors, Silda Wall Spitzer, and I think people feel very sad for them. I think, you know, New Yorkers I guess are stereotyped as kind of tough and pushing on.
HARRIS: Yes.
CONASON: But there's a heart of gold in New York, too, and I think people are sad for them. On the other hand, I think it's true that we will move on. And I think this is what succession is all about. And it's fortunate somebody like David Paterson is in the line of succession here.
HARRIS: Yes.
Joe Conason from the "The New York Observer" with us this morning. "The Observer" doing a lot of work as, well, all the papers in New York covering this story. Joe, appreciate it. Thanks for your time.
CONASON: Thanks very much.
COLLINS: Boy, a whole lot going on here today. We want to get you back to the story in North Carolina on that person of interest in the murder of UNC student Eve Carson. We are just now getting new pictures in from our affiliate there, WTVD.
There you see the person of interest. We do not have a name yet, but that is the person that apparently police went after overnight and raided a home there in Durham. We understand the way this will work is that police handed off that suspect to Chapel Hill police.
Again, this new video we just got in from our affiliate WTVD. Pictures of the person of interest. Looks like to me like he's not wanting to go with them very willingly.
HARRIS: It's insane.
COLLINS: But that is the video, again. There was an overnight raid in Durham, North Carolina, where they picked up this person of interest as they are still referring to him, as a person of interest, in the murder of Eve Carson.
I'm sure you remember, 22-years-old, she was found shot to death in the middle of a Chapel Hill road one week ago. So, again, there's new pictures coming in to us. Looks like a lot is happening on this story, as well. We will, of course, stay on top of that for you.
Meanwhile, back to the other story also making big news today, Governor Eliot Spitzer of New York expected to announce his resignation at 11:30 Eastern time today. We are also hearing that New York's majority leader, Joe Bruno, will be making an announcement of his own at 10:45.
To clear this all up for you, if this all happens the way that we are being told it will and the governor leaves, the now lieutenant governor, Dave Paterson, would take over as the governor of New York, and Joe Bruno would become lieutenant governor, acting lieutenant governor.
Jason Carroll is standing by now in our New York bureau with some more information on this story.
Jason, what have you learned?
CARROLL: Well, you know, Heidi, just to put this in perspective for those people who are unfamiliar with Governor Spitzer. This is such an incredibly disappointing and depressing day for the governor and his family.
You have to remember, this is the man -- he was the ethics guy. This was a man who had a reputation in the state of being on the up and up, bringing ethics back to politics. And for him to have to resign in disgrace in this way is quite frankly stunning.
Just to recap just a little bit of what happened here just over the past few days. Governor Spitzer admitted, in some ways, at least apologized to the public, apologized to his family after a report came out that he was involved with a prostitute, you know, in this affidavit, all of these sort of sordid details about Governor Spitzer. He was not named in this affidavit. He was simply known as "Client Number 9."
Apparently, this affidavit, he arranged to have a prostitute come from New York, meet him in Washington, D.C., on February 13th, and then, Heidi, even more details came out. One report indicating that he may have spent as much as $80,000 over a period of time on prostitutes. And as you can imagine, of course, all the calls started coming in for Governor Spitzer's resignation.
One call coming in from the state's top Republican, New York Senate minority leader set a 48-hour deadline yesterday, James Tedisco, saying that, look, this guy simply cannot be effective anymore. He simply has to go so the state can get on with his its business -- with its business.
And so, then we were just getting word that Governor Spitzer then spoke to his senior advisers, also speaking to his attorneys. We were hearing that his attorneys were trying to negotiate some sort of deal with prosecutors.
Ideally for Governor Spitzer, it would be best for him to be able to resign and not face any criminal charges or -- you know, that would be the best scenario for him. It is unclear at this point what sort of deal, if any deal, he was able to sort of broker with prosecutors. But what we do know at this point is that at 11:30, just about a little under an hour from now, he is expected to announce his resignation -- Heidi?
COLLINS: That's right. And Jason, if we back up just a little bit, can you tell us more about the investigation into Governor Spitzer? Because this didn't happen overnight.
CARROLL: No. No.
COLLINS: There had been an investigation going on at least since last summer.
CARROLL: Right, right. And actually, according to some of the notes that I have here, the investigation began back in October of 2007, wasn't initially looking at Governor Spitzer. It simply began...
COLLINS: Right.
CARROLL: ...as the IRS began investigating into a man suspected of money laundering. And that's how the whole thing sort of began and it's sort of snowballed from there, and Governor Spitzer's name became involved. And if you look at some of the other details of this, it's quite interesting because, of course, we're focusing in on the elements involving the prostitution, because, obviously, that's one of the key elements that was involved here.
But it sort of began innocently as some strange transfers were coming out of Governor Spitzer's bank accounts. It drew some red flags and then people started looking into that, sort of snowballed into this whole investigation. Once again, very sad day for Governor Spitzer and his family -- Heidi?
COLLINS: Yes, because -- of course, at first they thought there was some type of political corruption, if you will, and then learning more about, obviously, what we have found here, this alleged prostitution ring.
So, we will continue, obviously. This is the story today. Jason, we know you're working your sources hard. So let us know should you find out any more.
Again, awaiting this announcement coming from Governor Eliot Spitzer of New York at 11:30 Eastern time. We, of course, will have it for you live right here in the CNN NEWSROOM.
HARRIS: Todd Purdum is on the line with us right now. I apologize. Just trying to get the latest information and get the names of everyone who is participating and helping us sort of tell this story this morning.
Todd Purdum is on the line, and Todd attended -- actually attended Princeton with Eliot Spitzer, when, I believe, Eliot Spitzer was the president -- the student body president and Todd was the campus reporter at the newspaper.
Todd, is that correct?
VOICE OF TODD PURDUM, NATL. EDITOR, VANITY FAIR: I was actually a campus stringer for various newspapers including the "New York Times," where I later went to work.
HARRIS: OK.
PURDUM: Yes. That's right. And I've known Eliot a little bit for almost 30 years now.
HARRIS: Well, how would you describe your relationship? You're telling us you know him a little bit. Tell us about the Eliot Spitzer that you know.
PURDUM: Well, it's the same one everyone else knows. He's a hard-charging, incredibly bright, incredibly talented, very ambitious person. And when he was running the undergraduate student government in college, he was exactly the same type of personality that he was as attorney general and governor. And I saw him Saturday night in Washington at the Gridiron dinner and he seemed just the same as always.
HARRIS: Wait a minute. You saw him Saturday night?
PURDUM: Yes.
HARRIS: As this story was developing obviously.
PURDUM: We now know that it was.
HARRIS: Yes.
PURDUM: And we now know that he was aware of the investigation, he was aware, apparently, that he had been caught on a wiretap. He gave no sign of that as near as I could tell in a room full of Washington politicians and journalists here on Saturday night. He was in white tie like everyone else...
HARRIS: Yes.
PURDUM: ...and working the room.
HARRIS: Boy, I -- how stunned are you by these developments?
PURDUM: I think it's impossible not to be stunned. I mean, it's just not the kind of thing anyone would ever think of.
HARRIS: Yes. I'm wondering about -- did you see him? Did he ever express kind of his long-term aspirations? Was he clearly on the path that he had chosen for himself? And did he envision his self -- himself as being a possible presidential candidate at some point down the road?
PURDUM: I never had a talk with him about it, but I think any person who's the governor of New York...
HARRIS: Yes, yes, yes.
PURDUM: ...and as, you know, as talented as he is has to have had that thought cross his mind at some point. And certainly, people have said that, you know, that would have been a possibility. His first year as governor was incredibly rocky.
I'm not sure how great his prospects were, you know, even before this latest situation, but, yes, of course. I mean, I don't think you become the governor of a state that has sent a number of people to the White House, including both Roosevelts, without thinking of yourself as a potential president.
HARRIS: Let me be correct about this. You covered politics, is this correct, for "The New York Times" for a number of years?
PURDUM: Yes, I've spent most of my journalism...
HARRIS: OK.
PURDUM: ...career covering politics for "The New York Times" until two years ago when I joined "Vanity Fair" as the national editor.
HARRIS: Great. That helps me because we can broaden this out a little bit. Give me your thoughts on the ramifications for this in terms of New York politics, Democratic politics in New York state.
PURDUM: Well, it's a stunning development in terms of New York Democratic politics. I mean for one thing, it means David Paterson, former state senator, lieutenant governor, will become the first African-American governor of New York.
This will be the first succession to the governorship since Nelson Rockefeller resigned before the end of his term more than 30 years ago. This will mean that, you know, there will be a tremendous kind of shake-up in the entire New York political establishment and, you know, nothing like this has happened in a very long time.
HARRIS: Have you seen anything like this before in this regard, the idea that someone who is a top law enforcement official for the state, former attorney general of the state, who knows law from every angle, could actually be involved in something like this? I'm just, I guess I'm speaking to the disconnect between your responsibilities, your clear public and private responsibilities, and the action that you are involved in.
PURDUM: Well, the closest thing that I can think of is about 15 years ago. Chief Judge Sal Walker, who was the highest-ranking judge in New York State, was caught disguising his voice and threatening, you know, a former girlfriend...
HARRIS: Yes.
PURDUM: ...because of an affair gone bad. That's the only thing that comes to mind that's even close to this and, you know, it kind of pales compared to this.
HARRIS: Well, let me pick up on that. In that case in the wash, as it all turns out, was the former -- was the judge able to explain that kind of a disconnect? Did he see what he was doing as being illegal conduct?
PURDUM: You know, not at the time, I don't think, I mean it turns out that he was really under tremendous mental strain and had, you know, the equivalent of what in a less (INAUDIBLE) might have called a breakdown.
HARRIS: Yes.
PURDUM: And you know, I don't know what was going on in the current situation, but it can't be explained by any kind of typical, rational analysis. There has to be something pretty deep and probably pretty, you know, psychological about it.
HARRIS: OK. So, the Eliot Spitzer that you've been acquainted with through the years would clearly know that the activity that he is alleged to have been involved in, on the wiretaps reportedly as being involved with, he would be clearly aware that this is illegal activity, this being a man who has been at the forefront of busting prostitution rings in New York.
PURDUM: Well, sure. But, I mean, being intellectually aware of it...
HARRIS: Yes.
PURDUM: ....and sort of understanding how it fits in with what you're doing are two different things. And, you know, I haven't found anyone yet who can make sense of this. No one I know has a logical explanation for it.
HARRIS: David Paterson, what do you think? Will he be able to lead the state of New York? PURDUM: Well, it's an interesting question. I mean, he certainly never had a challenge like this at his doorstep.
HARRIS: Yes.
PURDUM: He comes from a very distinguished political family. His father before him was, you know, involved for decades in New York politics. So, in a way, he's bred to this task. We'll see.
HARRIS: OK. Todd, can I interrupt for just a second?
PURDUM: Sure.
HARRIS: Majority leader Bruno in Albany right now. He is speaking. The news conference we promised you.
Let's listen in.
(JOINED IN PROGRESS)
SEN. JOE BRUNO (R), N.Y. SENATE MAJ., LEADER: We in the Senate, especially the Republican majority, are committed to that goal and to deal not only with an orderly transition of government but to address our most pressing need, which is the economic, financial crisis before us today.
Today, this afternoon, the Senate will pass its budget that we believe addresses the economic crisis in a way that rejects new taxes and limits spending. The assembly is scheduled to pass its budget, and we are prepared to begin conference committees tomorrow and do the work we were all elected to do.
As for Eliot Spitzer, my heart goes out to his wife and to his family at this time. He must deal with his own problems in his own way. But it is now time for us and all New Yorkers to move forward.
QUESTION: Mr. Speaker, when Governor Paterson goes out of state, will you have the power to exert executive authority over the state of the New York?
BRUNO: The constitution of New York state indicates that the majority leader of the Senate assumes all the responsibilities and duties of the lieutenant governor. And that, by constitution, includes a vote on the floor of the Senate, and it also includes being in place if the governor is incapacitated or out of the state. And the constitution is very clear on that.
QUESTION: Working with Governor Paterson will be easier than working with Governor Spitzer?
BRUNO: I've had an excellent relationship with then Senator Paterson when he was minority leader. We partnered on a great number of things, and we have an excellent relationship. I've talked to him any number of times in these last couple of days and have indicated to him that we will partner and govern forward in behalf of our mutual constituents, the people of New York state. (CROSSTALK)
BRUNO: One at a time.
QUESTION: Senator, given what's happened with you and Governor Spitzer over the last 15 months, particularly the dirty tricks scandal, what's your thoughts about what has occurred in the last week and...
BRUNO: My thoughts are very sad for him, for his family, and you just hope and pray that he will go on with his life and take care of himself and his family and get the best result that they can get under these very, very difficult circumstances.
QUESTION: ...that he was trying to take you out and now he's the one who's gone?
BRUNO: There -- we're going to forward -- we're going forward on managing the affairs of the people of this state. And there is no pleasure in what is going on in this state in anybody's life, and there shouldn't be, because this is serious. We have a fiscal crisis before us, and our elected responsibility is to govern, and that's what we're going to focus on today and going forward.
(CROSSTALK)
QUESTION: ...share about David Paterson in terms of what kind of guy he is, what kind of relationship you've had with him, any personal details you can tell us that kind of illustrate what kind of individual he is?
BRUNO: We are going to partner with the lieutenant governor when he becomes governor to govern. And David has always been very open with me, very forthright. I have with him in the past. And since he's been lieutenant governor, we've been together any number of times. And I look forward to a positive, productive relationship as soon as possible.
QUESTION: The thing about the reports that Spitzer was trying to use resignation as a bargaining chip to avoid jail time. Do you think he should go to jail if he's indicted?
BRUNO: I'm going to stay focused on what we have to do this afternoon, and that's to pass a budget, and that budget is going to eliminate $1,7 million in taxes, in fee increases.
We're going to restore $350 million of the property tax cuts for seniors, middle and low income, that the governor took out of the budget, and we're going to be under him slightly in terms of spending. That's where I'm going to stay focused with my conference, and I want to thank my conference for their leadership in these very, very difficult times.
QUESTION: Senator Bruno, will you maintain your role as the duties as lieutenant governor and majority leader throughout the entire term, or will there be some transition at some point for a new lieutenant governor or a new majority leader?
BRUNO: No. The constitution is very clear, and our counselors can share the parts that are pertinent here. The governor, upon a resignation...
COLLINS: All right. We've been listening in to the comments as expected today from Joe Bruno, New York state's majority leader, who will essentially become lieutenant governor as he was explaining the New York state constitution and how it spells things out when this transition of power does take place.
We have a whole lot more coming up for you, so stick around, everybody. We're going to take a very quick break and we're back here in the CNN NEWSROOM in just a moment.
(COMMERCIAL BREAK)
HARRIS: What a morning in the CNN NEWSROOM.
Good morning, everyone. I'm Tony Harris.
COLLINS: Hi there, everybody. I'm Heidi Collins.
Developments keep coming in to the CNN NEWSROOM on Wednesday, the 12th day of March. Here's what's on the rundown.
New York governor Eliot Spitzer linked to a call girl operation. His resignation expected live this hour.
HARRIS: Lieutenant governor David Paterson set to take the oath, the first African-American to lead New York states.
COLLINS: The money trail leads to hotel room 871. Why Spitzer's legal problems may go way beyond prostitution. The governor checks out in the NEWSROOM.
Developments fast and furious this hour in the Eliot Spitzer sex scandal. A source close to the embattled New York governor confirms he will, indeed, announce his resignation later this hour. CNN, of course, a will be there live, and bring it to you immediately.
First, let's set the stage now. Jason Carroll is in New York, as is Wolf Blitzer, Mary Snow -- is that the state capital in Albany? -- and Attorney Paul Callan joins us with his legal insights.
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