Below The Beltway

Though we didn’t get the rumored resignation last night, the political firestorm over New York Governor Elliot Spitzer’s involvement in a prostitution ring is pretty much all that people are talking about this morning, and new details are starting to come out.

Over at ABC News, Brian Ross reveals that what turned out to be a prostitution investigation started out as suspected bribery:

The federal investigation of a New York prostitution ring was triggered by Gov. Eliot Spitzer’s suspicious money transfers, initially leading agents to believe Spitzer was hiding bribes, according to federal officials.

It was only months later that the IRS and the FBI determined that Spitzer wasn’t hiding bribes but payments to a company called QAT, what prosecutors say is a prostitution operation operating under the name of the Emperors Club.

As recently as this past Valentine’s Day, Feb. 13, Spitzer, who officials say is identified in a federal complaint as “Client 9,” arranged for a prostitute “Kristen” to meet him in Washington, D.C.

Clearly, though, that encounter at The Mayflower Hotel wasn’t the first time that Spitzer met a girl from the Emperor’s Club.

William Rashbaum at The New York Times has further details of how all this started:

The rendezvous that established Gov. Eliot Spitzer’s involvement with high-priced prostitutes occurred last month in one of Washington’s grandest hotels, but the criminal investigation that discovered the tryst began last year in a nondescript office building opposite a Dunkin’ Donuts on Long Island, according to law enforcement officials.

There, in the Hauppauge offices of the Internal Revenue Service, investigators conducting a routine examination of suspicious financial transactions reported to them by banks found several unusual movements of cash involving the governor of New York, several officials said.

The investigators working out of the three-story office building, which faces Veterans Highway, typically review such reports, the officials said. But this was not typical: transactions by a governor who appeared to be trying to conceal the source, destination or purpose of the movement of thousands of dollars in cash, said the officials, who spoke on condition of anonymity.

The money ended up in the bank accounts of what appeared to be shell companies, corporations that essentially had no real business.

No real business, it seems, except to hide the fact that the money being transferred was in exchange for prostitution:

It was after 9 on the night before Valentine’s Day when she finally arrived, a young brunette named Kristen. She was 5-foot-5, 105 pounds. Pretty and petite.

This was at the Mayflower, one of Washington’s choicer hotels. Her client for the evening, a return customer, had booked Room 871. The money he had promised to pay would cover all expenses: the room, the minibar, room service should they order it, the train ticket that had brought her from New York and, naturally, her time.

A 47-page affidavit from an F.B.I. agent investigating a prostitution ring described the man at the hotel as “Client 9” and included considerable detail about him, the prostitute and his payment methods. But a law enforcement official and another person briefed on the case have identified Client 9 as Eliot Spitzer, the governor of New York.

And, finally, as the story broke the shockwaves that continue to reverberate started:

The idea that Gov. Eliot Spitzer — the square-jawed crusader who promised to bring ethics to Albany, the former prosecutor who chased corruption on Wall Street so ferociously that people nicknamed him Eliot Ness — was somehow involved in a prostitution scandal was too much. New Yorkers who thought they had heard everything were, for a change, dumbfounded.

They had trouble folding their minds around what law enforcement officials said was contained in a federal affidavit — that Mr. Spitzer, identified only as “Client 9,” had arranged for a high-priced prostitute to meet him in Washington on the night before Valentine’s Day.

In political circles in Albany, on trading floors on Wall Street, they struggled to put their reaction into words. They said things like, “You’re not going to believe this,” and “stunning allegations” and, over and over, “unbelievable.”

And they said a governor who, only a year ago, had been quoted calling himself “the steamroller” — but with a vulgar flourish — had steamrolled his own career.

Not quite believing the soap opera that was unfolding around them on Monday, legislators in Albany spent the day punching their BlackBerries and jabbering on their cellphones. It was a government-stopping meltdown—“like Pompeii,” one state official said.

The steamroller has indeed started and it’s hard to see how Spitzer can realistically survive what can only be termed a political and personal disaster.