A woman accused of running a high-priced Washington escort service apologized yesterday to a former top State Department official outed as a customer but said the testimony of prominent clients would prove her business was legal.

Media and Beltway insiders have been anxious to see whose names would be tied to the voluminous call records that Deborah Jeane Palfrey kept while running the business for more than a decade. Palfrey maintained the list of numbers but not names, according to one of her lawyers.

"She never kept a black book. She kept telephone records," said Montgomery Blair Sibley, an attorney who represents Palfrey in civil matters.

Randall Tobias, head of the Bush administration's foreign aid programs, abruptly resigned Friday, the day ABC reported that Tobias had used Palfrey's escort firm, Pamela Martin & Associates. Tobias told the network he received only services that were legal, such as massages.

Palfrey - who turned over her phone records to ABC before a judge's order barring her from releasing them took effect - said she felt bad for Tobias and his family. But she said she planned to subpoena him and said the revelation showed the logic of her plan to identify former clients and compel them to testify that the women she sent to their homes and hotels did not have sex with them.

"My hope that defense witnesses could be found by combing through the information indeed is being realized," Palfrey said in a prepared statement after appearing in federal court.

Tobias did not return calls seeking comment.

Palfrey did not take questions yesterday. She told ABC for a segment to air Friday on 20/20 that she would not hesitate to drag prominent customers through the mud to clear her own name.

"I'm sure as heck not going to be going to federal prison for one day, let alone four to eight years, because I'm shy about bringing in the deputy secretary of whatever," she said, according to the network's website.

Tobias is the second person to be publicly labeled a customer. In court papers, Palfrey listed Harlan Ullman, a military strategist who authored the combat strategy known as "shock and awe," as a client. Ullman has said the accusation is not worthy of a response.

Prosecutors have accused Palfrey of seeking to intimidate witnesses by outing some prominent ones, even though they might not be called to testify.

Palfrey has described her business as a "legal, high-end erotic fantasy service." Prosecutors say she knew that her escorts were having sex with clients and that she generated more than $2 million in revenue over 13 years, with more than 130 women employed at various times to serve thousands of clients at $200 to $300 a session.

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By MATTHEW BARAKAT

The Associated Press