Feds indict Blagojevich, 5 others on corruption charges

As Rod Blagojevich was railing against George Ryan and Illinois' "culture of corruption" in his 2002 bid for governor, he was secretly scheming with insiders to rob the state and split the profits once out of office, prosecutors say.

Blagojevich and the pals who helped him win "later implemented this agreement," alleges a sweeping indictment of the ex-governor and his inner circle released Thursday.

The grand jury indictment caps a federal investigation of Blagojevich that spans his entire six years in office, including two elections to the state's highest post in which the prolific fundraiser amassed the most campaign cash in state history.

Adding to a legacy in Illinois politics that has seen three previous governors - including Ryan - jailed for corruption, the 75-page report tracks alleged schemes starting with an extortion conspiracy focused on public pension money when he first took office and ending with a litany of deals last year to sell off a U.S. Senate appointment, a state grant to a children's hospital, tollway roadwork and help selling Wrigley Field.

And for the first time, prosecutors connect the dots between more than $54,000 in real estate commissions to Blagojevich's wife from convicted influence peddler Tony Rezko to the overall conspiracy to pad the ex-governor's wallet.

In all, prosecutors allege the governor's office was really a corrupt "enterprise."

"The primary purpose of the Blagojevich enterprise was to exercise and preserve power over the government of the state of Illinois for the financial and political benefit of the defendant, Rod Blagojevich. ... and for the financial benefit of his family members and associates," the indictment says.

Five insiders - including Blagojevich's brother, Robert - and the ousted governor face 19 criminal counts in the indictment. It charges Blagojevich with 16 criminal counts of racketeering conspiracy, extortion conspiracy, attempted extortion, wire fraud and making false statements to federal agents.

If convicted on all counts, the 52-year-old could face dozens of years in prison. He would join ex-Gov. George Ryan, who now sits in federal prison on a 61/2-year sentence for corruption.

Federal prosecutors are also going after Blagojevich's Chicago bungalow and his Washington, D.C., condo from the Democrat's years in the U.S. House.

Also charged are former chief of staff and lobbyist Lon Monk, Republican insider William Cellini, former chief of staff John Harris and former top fundraiser Chris Kelly, who has already pleaded guilty on tax fraud charges and faces additional bid rigging charges.

Since his arrest on corruption charges Dec. 9, Blagojevich has maintained his persona as a fighter for poor and working-class residents while being targeted by a cabal of unholy and powerful interests. He took his argument to the public in two national media blitzes even as lawmakers succeeded in forcing him from office through impeachment in late January.

On Thursday, Blagojevich was believed to be in Walt Disney World riding roller coasters with his family. He issued a statement saying he was "saddened and hurt but I'm not surprised."

"I now will fight in the courts to clear my name," the statement said. "I would ask the good people of Illinois to wait for the trial and afford me the presumption of innocence that they would give to all their friends and neighbors."

It could be a year or more before Blagojevich faces trial.

Meanwhile, it is clear the inner circle of co-conspirators prosecutors say Blagojevich counted on continues to disintegrate and turn on him.

His former chief of staff, John Harris, is now cooperating with authorities, prosecutors say. Harris was arrested with Blagojevich on Dec. 9.

Former top fundraiser Tony Rezko, who was convicted last summer in the pension scheme, is known to be cooperating with authorities.

Defense attorneys for most of the defendants didn't return calls seeking comment.

Cellini's attorney, Dan Webb, said "there is no justification whatsoever" for including his client in the Blagojevich indictment and said the veteran insider was not guilty of any wrongdoing.

Federal agents have been hounding Blagojevich since his election. They questioned him in 2005, and one of the criminal charges released Thursday stems from his statements then.

The indictment says Blagojevich claimed during that interview he didn't keep track of donors to his campaign fund. Prosecutors say that is a lie.

Actually, the indictment alleges, Illinois' governor was often juggling multiple extortion schemes at once and keeping close tabs on fundraising.

Wiretaps at his home and campaign office caught the governor scheming with top advisers to ensure he would extract some personal benefit from making an appointment to Barack Obama's vacant Senate seat, prosecutors have said. Several contenders were lobbying Blagojevich for the appointment.

Prosecutors say he was caught on tape trying to make deals for a lucrative job for his wife or a post-government job for himself in exchange for an appointment.

Apparently that wasn't the only time Blagojevich sought personal enrichment by trading on taxpayer dollars or official duties, prosecutors say.

The indictment alleges Rezko ensured Patti Blagojevich obtained $54,396 in real estate commissions "even though she had done little or no work to earn that commission."

It also says Rezko's real estate business also employed Patti Blagojevich at $12,000 a month.

Rezko arranged the payments to win over Blagojevich and exert influence over state business that could be used for extortion, including appointments to state boards, the indictment says.

Another new allegation to come forth is that Blagojevich held up a $2 million grant to a publicly supported school in exchange for fundraising help from an unnamed congressman pursuing the funds. A White House aide confirmed Thursday that the congressman was now-White House chief of staff Rahm Emanuel.

Much of the indictment reiterates charges already announced when Blagojevich was arrested on two criminal counts in December, including an allegation that he was extorting the CEO of a children's hospital for a hefty campaign donation in exchange for increased state funding.

The indictment also accuses Blagojevich of trying to arm-twist a highway contractor into giving him $500,000 in connection with a $1.8 billion Illinois State Toll Highway Authority building program to reserve carpool lanes.

Blagojevich told the contractor in advance about the construction plans last fall and asked for help raising campaign cash, prosecutors allege. He hinted he might later authorize another $6 billion in road improvements, they say.

"If they don't perform, (expletive) them," Blagojevich was taped saying to an adviser, according to the indictment.

After announcing the "green lanes" project in October, the governor called up the contractor to ask how the fundraising was going, prosecutors say.

Tollway officials say they weren't involved in campaign fundraising and had been working on the project for more than a year.

Blagojevich's wiretapped phone conversations, revealed in a criminal complaint that made up the basis for Blagojevich's December arrest, painted the picture of a governor paranoid about his family's own financial well-being.

But now Blagojevich is essentially out of a job as he writes a book about his career. His wife was fired from a position at a Chicago nonprofit agency after her husband's arrest.

Blagojevich will next appear in federal court for an arraignment on the new charges. That court date has not yet been scheduled.

Meanwhile, new Gov. Pat Quinn tried Thursday to reassure Illinoisans that he would finally right the ship.

"The people of Illinois," said the Chicago Democrat, "are entitled to an honest government that works for them 24 hours a day."

• Daily Herald staff writers Marni Pyke, John Patterson and Jamie Sotonoff contributed to this report.

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