Blagojevich indicted on federal corruption charges

By MIKE ROBINSON Associated Press Writer

Apr 2, 2009, 10:45 PM EDT

CHICAGO (AP) --

Ousted Illinois Gov. Rod Blagojevich's plan to auction off President Barack Obama's vacant U.S. Senate seat marked the culmination of years of scheming for personal gain that included trying to extort a congressman and pressuring businesses to hire his wife, prosecutors alleged Thursday.

A sweeping 19-count federal indictment alleges that Blagojevich discussed with aides the possibility of getting a Cabinet post in the new president's administration, substantial fundraising assistance or a high-paying job in exchange for the Senate seat.

Obama's deputy press secretary, Josh Earnest, said the White House would not comment on the indictment, which does not allege any wrongdoing by Obama or his top aides.

Prosecutors also accused Blagojevich and members of his inner circle of plotting to line their pockets with millions of dollars in ill-gotten gains. They are accused of squeezing contractors, hospital owners and others seeking state business for kickbacks they planned to split after the governor left office.

"I'm saddened and hurt but I am not surprised by the indictment," Blagojevich, who was in Walt Disney World with his family, said in a statement. "I am innocent. I now will fight in the courts to clear my name."

The indictment alleges Blagojevich told an aide in 2006 that he wanted to stall a $2 million state grant to a school supported by a congressman until the lawmaker's brother held a political fundraiser for the governor.

Obama's chief of staff, Rahm Emanuel, was the congressman, attorneys familiar with the case said Thursday. The attorneys spoke on condition of anonymity because the congressman isn't named in the indictment and the information is secret grand jury material.

At the time, Emanuel represented the 5th District on Chicago's North Side. Some of the funds were later released, even though no fundraiser had been held.

The indictment also alleges that Blagojevich:

-Was involved in a corrupt scheme to get a massive kickback in exchange for the refinancing of billions of dollars in state pension funds.

-Told an aide he didn't want executives with two financial institutions getting further state business after he concluded they were not helping his wife get a high-paying job.

-Withheld state aid sought by the Tribune Co. unless the company fired unfriendly editorial writers at the Chicago Tribune.

Also, convicted fixer Tony Rezko paid Patti Blagojevich a $14,396 real estate commission "even though she had done no work" to earn it and later hired her at a salary of $12,000 a month plus another $40,000 fee, the indictment said.

Others charged were brother Robert Blagojevich; former chief of staff Alonzo Monk; one-time chief fundraiser Christopher G. Kelly; Springfield lobbyist-millionaire William F. Cellini; and another former chief of staff, John Harris. Prosecutors said Harris has agreed to cooperate.

Robert Blagojevich is chairman of the Friends of Rod Blagojevich campaign fund.

"We were hoping that it wouldn't happen but now we go to trial and win," said his attorney, Michael Ettinger.

Cellini attorney Dan Webb said his client never had a substantive conversation with Blagojevich, much less conspired with him. Messages were left for attorneys for Monk, Kelly and Harris.

Blagojevich faces 16 counts of wire fraud, racketeering and extortion conspiracy, attempted extortion and making false statements. Most of those charges carry a maximum sentence of 20 years in prison and a $250,000 fine.

Prosecutors said at least $188,370 belonging to Friends of Blagojevich is subject to forfeiture. If the money can't be found, Blagojevich might have to forfeit his Washington, D.C., apartment and Chicago home.

Blagojevich, 52, was arrested Dec. 9 on a criminal complaint and U.S. Attorney Patrick J. Fitzgerald had faced a Tuesday deadline to supplant it with an indictment handed up by a federal grand jury. The Democrat's arrest led to his political downfall: The Illinois House impeached him Jan. 9. The Senate convicted him and removed him from office Jan. 29.

Illinois lawmakers had considered stripping Blagojevich of his Senate-appointment powers after his arrest, but couldn't agree on legislation. Blagojevich shocked everyone by naming former Illinois Attorney General Roland Burris to the seat Dec. 30.

Burris has since come under fire for changing his story about the circumstances surrounding his appointment. He also acknowledged trying, unsuccessfully, to raise money for Blagojevich.

Burris would not comment on the indictment, spokesman Jim O'Connor said. Earlier in the day, Burris told reporters with The Hill as he came off the Senate floor that it "has nothing to do with me."

Blagojevich's administration has been under federal investigation for years and Kelly and Rezko already have been convicted of federal crimes and are awaiting sentencing.

Thursday's indictment said that in 2003 - the former governor's first year in office - Blagojevich, Monk, Kelly and Rezko agreed to direct big-money state business involved in refinancing billions of dollars in pension bonds as part of a deal with a lobbyist who promised a massive kickback in return. The lobbyist wasn't identified.

Rezko raised more than $1 million in campaign contributions for Blagojevich and also was a major Obama fundraiser.

Illinois residents said they were tired of the corruption.

"I'm so disgusted," said Linda Dowdy, a 59-year-old Belleville tavern manager who calls herself a hardcore Democrat. She lamented that even well-intentioned politicians don't last long in office.

"He may have every intention of going in and trying to change things and of making things better," she said. "But once he's in, he doesn't have any choice but to be as crooked as they are or he's not gonna stay in there."

---

Associated Press writers Tammy Webber and Michael Tarm in Chicago and David Mercer in Champaign contributed to this report.