The Fallout Of Blagoyevich's Indictment

Whatever you are told by the political pundits about today's stunning arrest of Illinois Gov. Rod Blagoyevich by FBI agents in Chicago on bribery and fraud charges, do not believe them when they tell you this is strictly an Illinois issue. It is not. It extends deep within the transition team of President-elect Barack Obama and, therefore, has national implications. Let's take a look at some salient facts.

• U.S. Attorney Patrick Fitzgerald has been investigating corruption in Chicago and Illinois state politics for eight years now. He has scored dozens of criminal convictions, including former Illinois Gov. George Ryan and top members of Chicago Mayor Richard Daley's administration. Although appointed by President Bush, Fitzgerald owes no allegiance to either political party and has demonstrated this time and time again, not hesitating to indict and convict former Vice Presidential Chief of Staff Scooter Libby.


• Fitzgerald has most recently been setting his sights on Gov. Blagoyevich's administration and the various pay-to-play schemes the governor's own father-in-law, Chicago Alderman Dick Mell, first disclosed publicly, prompting the federal investigation.


• The key player to date in Fitzgerald's efforts to get Blagoyevich is political fixer Tony Rezko. Fitzgerald won multiple felony count convictions against Rezko this summer. Prior to his conviction, Rezko wrote a letter to a federal judge complaining that Fitzgerald's office pressured him to tell bad things about both Blagoyevich and Obama. Rezko is awaiting sentencing early next year. The prosecutor's office obtained a delay in Rezko's initial sentencing hearing because he reportedly was cooperating with the office's ongoing investigations.


• Rezko's trial included a number of witnesses recounting all kinds of pay-to-play tales, including allegations that Rezko helped deliver bags of cash to pay contractors for extensive remodeling work being done on the governor's personal residence.


• In what Obama has since described as a "bone-headed" move, he took Rezko with him to tour the South Side mansion he eventually purchased at a time Rezko was under investigation by Fitzgerald's office. Rezko arranged for his wife, Rita, to purchase an adjacent lot for $625,000 from the sellers of Obama's house, who in turn knocked off $300,000 on the selling price of their house. A former appraiser for Mutual Bank, which loaned money on the deal, claims the lot price for the lot Rezko purchased was inflated. Kenneth Connor claims in a whistleblower lawsuit that he was fired by the bank after he complained about his appraisal being removed from the file for the lot before the bank turned the file over to the federal grand jury which subpoenaed the file. The appraiser says he has been interviewed by federal agents, who he says surmised that the purchase was structured to save Obama hundreds of thousands of dollars courtesy of Rezko's generosity. I spoke to Connor on the eve of this November's election about his allegations. He said the Chicago media wouldn't report on the story. Only the Washington Times picked up the story.


• Keep in mind that every time reporters questioned Blagoyevich about his ties to Rezko, he always reminded them that Obama's ties were just as close as his. Federal wire taps capture the governor referring to Obama as a "mother f_ _ _ er".


• The big news today centers on the information federal agents obtained about the governor's efforts to sell the Senate seat being vacated by Obama. Immediately, reporters wanted to know what Obama knew about these efforts. “I had no contact with the governor or his office and so I was not aware of what was happening, ” Obama told reporters today in Chicago. “It’s a sad day for Illinois. Beyond that, I don’t think it’s appropriate to comment.” That wasn't true, at least according to his closest political adviser David Axelrod. On November 23, Axelrod told a local Chicago FOX News affiliate that Obama had talked to the governor about his replacement. Obama's transition office is now saying that Axelrod misspoke.


• Upon learning today's news, Obama cancelled a previously-scheduled briefing with the FBI. It should be noted that Obama's transition office operates out of the same FBI office investigating Blagoyevich.


• The complaint issued by the U.S. Attorney's office today makes it clear that unnamed representatives of Obama were talking to the governor about the Senate seat; however, the complaint indicates that those same representatives weren't playing along with the governor's overtures. Fitzgerald himself says the government's complaint against Blagoyevich makes no allegation that Obama knew of the scheme. He did not say, however, that the government has no evidence of wrongdoing against Obama in general.


• If Obama didn't know, did Axelrod or someone else close to Obama know? A Chicago reporter is claiming this evening that Obama's Chief of Staff designate, U.S. Rep. Rahm Emanuel, tipped off federal investigators of the governor's efforts to sell the seat. If that is true, this could have long-term problems for Obama. Emanuel denies being the tipster. Axelrod has provided consulting work for the governor in the past. Emanuel succeeded Blagoyevich in Congress upon his election as governor.


• According to the wire tapped conversations of the governor, Obama wanted Valerie Jarrett to take his place in the Senate, who is described as Senate Candidate #1. Jarrett is a former top staffer of Mayor Richard Daley and has close personal and political ties to Obama. She profiteered, along with Rezko, on federally-subsidized housing projects in Chicago, which became slum-like after falling into disrepair.


• While Jarrett does not appear to have done anything improper, Senate Candidate #5 appears too willing to go along with the pay-to-play scheme, perhaps even offering something tangible to the governor up front. Speculation of Senate Candidate #5 is focused on U.S. Rep. Jesse Jackson, Jr., who has been openly campaigning for the seat. Circumstantially, a meeting between the governor and the prospective candidate identified in the federal complaint matches up with Jackson's recent meeting with the governor. The implications, if it is Jackson, cannot be understated. If someone close to Obama played a part in helping the feds ensnare Jackson with the governor, you can bet there will be a lot of consternation within Chicago's powerful South Side African-American community which went all out for Obama.


• Let's not forget that the governor's chief of staff, John Harris, was also charged today. Harris is a former right-hand guy for Mayor Daley. He could provide valuable information to the prosecutor's about corruption within Mayor Daley's administration, as well as the governor's. Harris is accused of doing the governor's dirty work in selling the Senate seat, a deal involving Tribune CEO Sam Zell and another deal for a Chicago hospital.


• On that deal with Zell, it is not clear whether Zell or other top financial executives of the Tribune Company may have been willing participants in a pay-to-play scheme, although the governor's demand that certain editorial staff be fired has not been carried out by Zell. According to reports, the governor believed he had a deal with Zell.


• Another point on the Tribune deal, keep an eye on former Illinois Gov. James Thompson. The Winston & Strawn managing partner chairs the Illinois Sports Facilities Authority and pushed a deal to have the state take over ownership of Wrigley Field. Thompson, also a former U.S. Attorney, is seen as a thorn in Fitzgerald's side. Thompson's choice for the U.S. Attorney job was passed over for Fitzgerald. Thompson played a key role in defending former Gov. George Ryan against charges brought by Fitzgerald and his office. Thompson, a Republican, has publicly defended Blagoyevich and his wife against charges of public corruption. Fitzgerald would probably like to nail Thompson as much as he wants to nail the governor.


• And lest we forget the pending case against Illinois power broker William Cellini, who has close ties to the current governor, former Governors Ryan and Thompson and virtually everyone else named above. His name appears prominently in the pay-to-play schemes discussed in the government's most recent complaint.


• The lucky man today may be Illinois' senior Senator Dick Durbin, who recently complained that the governor would not return calls he made attempting to discuss the Senate seat replacement. That luck is tainted, however, by his recent letter to President Bush urging the pardon of former Gov. Ryan, who is serving a 6 1/2-year sentence in the federal prison in Terre Haute.


• The bad news for Illinois: Blagoyevich says he won't resign. His attorney says he did nothing wrong. Illinois House Speaker Mike Madigan won't wait. He will initiate impeachment proceedings next week and seek legislative authority for a special election to pick Obama's replacement rather than the tainted governor. Lt. Gov. Pat Quinn is calling on the governor to resign. Here's the kicker. Quinn is a veteran of the administration of former Gov. Dan Walker where he was accused of being a ghost employee of the Illinois Commerce Commission. Walker, like three other recent governors, served time in prison.


• In summation, there are no surprises here. Obama helped elect Blagoyevich as governor. Blagoyevich helped elect him as senator. The two traded favors regularly. The intertwining relationships of all these characters is undeniable. This is the Chicago way. This is the change you're getting instead of the change you were promised. You can't say I didn't warn you. My hunch tells me that today's rapid developments are part of a concerted effort of the Obama folks to throw Blagoyevich under the bus before he beats them to the punch. Remember, there is no honor among thieves. The question is whether Fitzgerald decidess to "spare the country" and let Obama off the hook. There's no doubt he's got the goods on him, but will he do something about it?