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CAT Tracks for December 9, 2008 IL GOVERNOR ARRESTED BY FEDS

Illinois governor taken into custody

(CNN) -- Illinois Gov. Rod Blagojevich is in federal custody on corruption charges, a law enforcement official said Tuesday.

Blagojevich and his chief of staff, John Harris, are charged with conspiracy to commit mail and wire fraud and solicitation of bribery, according to a statement from the U.S. Attorney's office for the Northern District of Illinois.

Both men are expected in U.S. District Court in Chicago later Tuesday.

A news conference is expected at noon ET.

Federal prosecutors say Blagojevich, Harris and others conspired to gain financial benefits in appointing President-elect Barack Obama's Senate replacement, according to the statement.

"The breadth of corruption laid out in these charges is staggering," U.S. Attorney Patrick Fitzgerald said in a statement. "They allege that Blagojevich put a 'for sale' sign on the naming of a United States Senator; involved himself personally in pay-to-play schemes with the urgency of a salesman meeting his annual sales target; and corruptly used his office in an effort to trample editorial voices of criticism."

According to the statement, Blagojevich is alleged to have discussed obtaining:

• a substantial salary for himself at either a non-profit foundation or an organization affiliated with labor unions;

• a spot for his wife on paid corporate boards, where he speculated she might garner as much as $150,000 a year;

• promises of campaign funds -- including cash up front;

• a Cabinet post or ambassadorship for himself.

Several Illinois Democrats -- including Rep. Jesse Jackson Jr. and Iraq war veteran Tammy Duckworth, a former congressional candidate who now serves in Blagojevich's administration -- have been mentioned as possible Senate replacements for Obama.

From the Washington Post Web site...

FBI Arrests Illinois Governor Rod Blagojevich

By Carrie Johnson and Peter Slevin
Washington Post Staff Writers Tuesday, December 9, 2008; 12:21 PM

FBI agents this morning arrested Illinois Gov. Rod R. Blagojevich (D) and his chief of staff on conspiracy and bribery charges, including allegations that the governor was seeking to benefit financially from his appointment of a successor to the U.S. Senate seat that was vacated by President-elect Barack Obama.

The arrest of Blagojevich, 51, and his top aide, John Harris, 46, capped a lengthy investigation into public corruption at the highest levels of state government.

The two men will appear in a federal courthouse in Chicago at 1:30 p.m. Central time before U.S. Magistrate Judge Nan Nolan in the Dirksen Federal Courthouse. U.S. Attorney Patrick J. Fitzgerald and FBI Special Agent in Charge Robert D. Grant held a news conference at 11 a.m. in Chicago to provide details on the case.

"This is a sad day for government. It's a very sad day for Illinois government," Fitzgerald said at the news conference. "Governor Blagojevich has taken us to a new low . . . he attempted to sell the Senate seat, the Senate seat he had the sole right to appoint to replace President-elect Obama . . . The conduct would make Lincoln roll over in his grave."

The arrests, which authorities say occurred "without incident," follow news reports that a well-connected lobbyist turned FBI informant had taped the governor saying that he might "get some [money] up front, maybe" from an unnamed candidate to fill the Senate seat Obama had held since 2004.

Under law, the governor has sole authority to fill a Senate vacancy. If Blagojevich were to resign or be forced to leave office, that responsibility would fall to Illinois Lt. Gov. Pat Quinn (D), who would replace him as governor.

The alleged attempt to profit from the "sale" of the Senate seat is the most explosive accusation. But Blagojevich is also accused of demanding campaign contributions from organizations whose projects were receiving state money, and of threatening to withhold state assistance for a land-use project involving the Chicago Tribune in an effort to pressure the newspaper to fire editorial writers who had been critical of him.

In a Nov. 3 call intercepted by the FBI, Blagojevich told an ally that if he could not get a financial windfall in exchange for appointing someone to the Senate job, "then I just might take it," according to a lengthy FBI affidavit attached to the criminal complaint. Later that day, speaking to an unnamed adviser, Blagojevich said: "I'm going to keep this Senate option for me a real possibility, you know, and therefore I can drive a hard bargain."

He added later that the seat "is a [expletive] valuable thing, you just don't give it away for nothing."

The day after the election, the governor repeated the sentiment. "I've got this thing and it's [expletive] golden, and uh, uh, I'm just not giving it up for [expletive] nothing," he said, according to the court papers.

Later the governor, Harris and others discussed a deal with regard to the Senate appointment that appeared to involve the Service Employees International Union, based in Washington, and that seemingly would attempt to involve Obama as well.

"Harris said they could work out a deal with the union and the President-elect where SEIU could help the President-elect with Blagojevich's appointment . . . while Blagojevich would obtain a position as the National Director of the Change to Win campaign and SEIU would get something favorable from the President-elect in the future," the court papers said.

Blagojevich was also captured discussing whether he could obtain a cabinet position in the Obama administration, such as Secretary of Health and Human Services or the Department of Energy, or various ambassadorships. In a conversation with Harris on Election Day, Blagojevich analogized his situation to that of a sports agent shopping a potential free agent to the highest bidder. The next day, Harris allegedly suggested to Blagojevich that the President-elect could make him the head of a private foundation.

Aides to Obama said he had no immediate comment on Blagojevich's arrest or the allegations against the governor.

While the allegations against the Illinois governor include conversations that appear to describe his desire for a deal involving Obama, the document offers no evidence of any contact between Blagojevich or his aides and Obama or his aides. There is nothing in the papers filed by the U.S. attorney that indicate that prosecutors believe Obama or his staff were involved in, or even knew about, Blagojevich's conversations. And there is nothing that would indicate that Fitzgerald is investigating the president-elect or his staff.

"The complaint makes no allegations about the President-elect whatsoever," Fitzgerald said in the news conference.

As late as last Friday, the same day the Chicago Tribune reported that the governor had been secretly taped by the FBI, Blagojevich and three others allegedly discussed whether to move money out of his campaign pot to avoid a government asset freeze, and whether the governor should prepay some of the funds to a criminal defense lawyer, prosecutors said.

"The breadth of corruption laid out in these charges is staggering," Fitzgerald said in a prepared statement. "They allege that Blagojevich put a 'for sale' sign on the naming of a United States Senator; involved himself personally in pay to play schemes . . . and corruptly used his office in an effort to trample editorial voices of criticism."

Both Blagojevich and Harris face two criminal charges. The first, conspiracy to commit wire and mail fraud, carries a maximum 20-year prison term. The second, solicitation of bribery, carries a maximum of 10 years in prison.

Authorities have spent years investigating a variety of public corruption schemes in the state, including kickbacks and influence peddling, in a probe dubbed Operation Board Games. Federal agents this morning also executed search warrants at the Thompson Center office of the deputy governor and at the offices of the Friends of Blagojevich, a political fundraising group.

The allegations against Blagojevich date to his arrival at the governor's office in 2002. Since that time federal prosecutors have won convictions against money men with ties to the governor, including longtime Democratic fundraiser Antoin Rezko.

Blagojevich has steadfastly denied wrongdoing.

But the criminal complaint unsealed this morning cites more recent allegations that developed since October, when the governor allegedly colluded with a fundraiser to stockpile as much cash as possible before a new Illinois ethics law would take effect and limit his ability to solicit campaign funds from entities that have contracts with the state.

The FBI won court permission to intercept Blagojevich's conversations at his personal office and a conference room at his fundraising operation Oct. 21. Authorities eventually got approval to wiretap one of the governor's home telephone lines, according to the government news release.

The criminal complaint also features allegations that Blagojevich and Harris leaned on the city's flagship newspaper, the Chicago Tribune, to fire editorial writers who had called for the governor's impeachment in exchange for state financial aid.

"Our recommendation is fire all those [expletive] people, get 'em the [expletive] out of there and get us some editorial support," Blagojevich allegedly said in a Nov. 4 phone call tapped by the FBI.

The Tribune filed for Chapter 11 bankruptcy protection Monday, and it is attempting to sell key assets including the city's beloved Major League Baseball team, the Chicago Cubs. Tribune leaders had sought state help in the financing of the ivy-covered Wrigley Field, which could have helped the company avoid $100 million in capital gains taxes, prosecutors said.

An intermediary for the governor eventually approached a Tribune financial adviser with the message, the court papers said. In conversations captured by the government, Harris later reported to the governor that Tribune owner Sam Zell "is very sensitive to the issue." Harris also said that, according to the unnamed financial adviser, the Tribune company's corporate reorganization would mean budget cuts and "reading between the lines, he's going after that section."

Blagojevich, a member of Congress from Chicago, was elected governor in 2002 on an anti-corruption platform. He followed Republican George Ryan, who now sits in federal prison, convicted by Fitzgerald's office on influence peddling charges.

"Many, including myself, thought that the recent conviction of a former governor would usher in a new era of honesty and reform in Illinois politics," FBI special agent in charge Grant said. "Clearly the charges announced today reveal that the office of the Governor has become nothing more than a vehicle for self enrichment . . . taking Illinois politics to a new low."

Recently, allies of Ryan asked President George W. Bush to commute the former governor's prison term because of his wife's poor health and his record of service to the state.

Once Blagojevich ascended to the governor's mansion, political contributors moved quickly to profit from their ties to him, according to testimony in the Rezko trial. The goal was to shake down individuals and businesses seeking to do business with the state of Illinois, including hospitals and pension funds.

"You stick with us, and you'll do very well for yourself," Blagojevich reputedly told Stuart Levine, the primary witness for the prosecution in the Rezko trial, soon after Blagojevich took office in 2003. The conversation took place aboard a plane chartered by Levine, a wealthy patron who pleaded guilty and testified for the government, to take Blagojevich on a fundraising trip to New York.

Rezko is awaiting sentencing, following his post-trial decision to share information with prosecutors.

Slevin reported from Chicago. Staff writers Michael D. Shear and Chris Cillizza contributed to this report.