See also: Feds Say Secretary Of State Employees Accepted Money To Pass Unqualified Applicants

Boyland sought more than $250,000 in bribes in exchange for his promise to secure local development projects, authorities said yesterday.

The accusations come only weeks after Boyland was acquitted by a Manhattan federal jury this month in a crooked health-care kickback scheme.

In one exchange, recorded by an undercover fed posing as a developer, Boyland practically begs his new “partner” for a quarter-million dollars to help pay the lawyers defending him in the Manhattan case.

“I have legal fees for this thing,” Boyland tells the agent in a June 7 meeting. “I have to hire a good attorney.”

Read more at the New York Post.

Galleon Group founder Raj Rajaratnam also was fined $10 million and ordered to forfeit $53.8 million by U.S. District Judge Richard J. Holwell, who said he concluded that Rajaratnam made well over $50 million in profits from his illegal trades.

“His crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated,” Holwell said. “When the integrity of the marketplace is called into question, the public suffers.”

The sentence eclipsed by one year the prison term given to one of Rajaratnam’s co-defendants just weeks ago.

The Sri Lanka-born Rajaratnam, 54, was ordered to report to a yet-to-be-designated prison on Nov. 28. His lawyers asked that he be allowed to report to the medical facility at the Butner Federal Correctional Complex in North Carolina, where Bernard Madoff is serving his 150-year sentence after admitting to a multi-decade Ponzi scheme that cheated thousands of people out of billions of dollars.

The judge gave Rajaratnam leniency, citing his need for a kidney transplant and his advanced diabetes. And he credited Rajaratnam’s charitable work, which he called “the defendant’s responsiveness to and care for the less privileged.” The judge cited Rajaratnam’s work to help victims of the earthquake in Pakistan and Sept. 11, among others.

Asked if he wished to speak, Rajaratnam said only, “No thank you.” He has been a quiet presence at all his court proceedings, declining even to sit at the defense table during his trial. When he stepped off the elevator on the floor of his courtroom Thursday, he was carrying a water bottle and casually asked no one in particular: “Which way?”

The sentencing culminates a series of convictions and sentencings that followed the October 2009 announcement of Rajaratnam’s arrest. More than two dozen people were arrested; all were convicted. The other defendants got sentences ranging from a few months to 10 years. The probe touched off a related investigation of those on Wall Street who corrupt the research purpose of networking firms by letting unscrupulous public company employees spill secrets to hedge fund managers.

The case drew intense coverage in much the way the prosecutions of Michael Milken and Ivan Boesky had two decades before. Boesky was a stock speculator who pleaded guilty to charges and was released in 1990 after serving two years in prison. Milken was known as the junk bond king. He pleaded guilty to securities violations in 1989, served 22 months in prison and paid a $200 million fine.

The Rejaratnam probe relied heavily on the most extensive use of wiretaps ever for a white-collar case, capturing conversations in which Rajaratnam and his co-conspirators could be heard gleefully celebrating their inside information.

Assistant U.S. Attorney Reed Brodsky told Holwell before the sentence was announced that Rajaratnam made up to $75 million in illegal profits from insider trading he indulged in since at least the late 1990s as he led one of the world’s largest hedge funds. The government has said he switched so much money around within his multibillion dollar funds that the movement of price in individual stocks could be traced to his trading whims.

“Today you sentence a man who is the modern face of illegal insider trading,” Brodsky told Holwell. “He is arguably the most egregious insider trader to face sentencing in a courthouse in the United States.”

The prosecutor said Rajaratnam went about his crime in a “brazen, pervasive and egregious” manner, corrupting at least 20 fellow traders and at least 16 insiders with a lust for the millions of dollars that can flow to anyone who gets an edge in the securities markets. He said at least 19 public companies were victims of his crimes.

“The duration of his crimes was extraordinary,” Brodsky said.

Prosecutors had asked Holwell to send Rajaratnam to prison for at least 19 1/2 years for his May conviction on securities fraud charges. They said federal sentencing guidelines called for up to 24 1/2 years. A Probation Department report recommended a 15-year sentence.

The defense asked for leniency partly based on Rajaratnam’s “failing health” and his “unique constellation of ailments.”

Attorney Terence Lynam told Holwell that Rajaratnam should receive credit for his considerable charitable works and he urged compassion for his illnesses.

“Any lengthy term of imprisonment will surely shorten his life,” he said. “Based on the conduct for which he was convicted, he does not deserve to die in prison.”

Lawyers for the Sri Lanka native argued for 6 1/2 to 9 years. They said the illegal profits actually total around $7 million, when the trades at his Galleon Group are disregarded.

In a statement, U.S. Attorney Preet Bharara recalled telling an audience when he announced charges against Rajaratnam two years ago that the case was a wake-up call for Wall Street.

“We can only hope that this case will be the wake-up call we said it should be,” he said in the statement Thursday. “It is a sad conclusion to what once seemed to be a glittering story. … Privileged professionals do not get a free pass to pursue profit through corrupt means.”

In another statement, FBI Assistant Director-in-Charge Janice K. Fedarcyk said Rajaratnam was no different from so many others who claim “superior research and acumen” gave them superior results in the stock markets.

“In fact, as his trial determined, he relied on – indeed, actively cultivated – insider information. His considerable fortune was built on a clandestine network of corruption and concealment,” she said.

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Federal prosecutors accused Mr. Ciavarella and a second judge, Michael Conahan, of taking more than $2 million in bribes from Robert Mericle, the builder of the PA Child Care and Western PA Child Care detention centers, and of extorting hundreds of thousands of dollars from Robert Powell, the facilities’ co-owner. Mr. Ciavarella took the cash while filling the beds of the private lockups with children as young as 10, many of them first-time offenders. Mr. Conahan pleaded guilty and awaits sentencing.

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Detroit — Imprisoned former Mayor of Detroit, Kwame Kilpatrick, was indicted on federal corruption charges along with his father and three aides. Kilpatrick is charged with using the Mayor’s office as a criminal enterprise to make money for himself and his associates. The Detroit Free Press reports:

The 89-page indictment outlined four general areas of misconduct.

It said the defendants extorted money from municipal contractors, state and non-profit donors and engaged in bribery and extortion involving other public contracts and investments.

The indictment said that Ferguson kicked back at least $424,000 in cash and other items of value to the mayor and that Kilpatrick used more than $590,000 in cash derived from the conspiracy to pay his credit card bills, purchase cashier’s checks and clothing and repay loans.

Read The Whole Story

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The wife of Rep. John Conyers (D-Mich.) reported to a federal prison in West Virginia on Friday the 10th to begin a 37-month sentence on corruption charges.

Conyers pleaded guilty last year for taking bribes to influence a vote on a sludge disposal contract in Detroit. She has since attempted to withdraw her plea.

VIDEO:

Her husband, the chairman of the House Judiciary Committee, has dodged questions about his wife and her guilty plea.

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Read entire article at TheHill.com

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Longtime Dallas congresswoman Eddie Bernice Johnson has awarded thousands of dollars in college scholarships to four relatives and a top aide’s two children since 2005, using foundation funds set aside for black lawmakers’ causes.

The recipients were ineligible under anti-nepotism rules of the Congressional Black Caucus Foundation, which provided the money. And all of the awards violated a foundation requirement that scholarship winners live or study in a caucus member’s district.

Johnson, a Democrat, denied any favoritism when asked about the scholarships last week. Two days later, she acknowledged in a statement released by her office that she had violated the rules but said she had done so “unknowingly” and would work with the foundation to “rectify the financial situation.”

Initially, she said, “I recognized the names when I saw them. And I knew that they had a need just like any other kid that would apply for one.” Had there been more “very worthy applicants in my district,” she added, “then I probably wouldn’t have given it” to the relatives.

Her handling of the scholarships puts a rare spotlight on the program and how it is overseen. Caucus members have great leeway in how they pick winners and how aggressively they publicize the awards. Some lawmakers promote the program online, for instance, while Johnson does not.

Philanthropy experts said such lax oversight of scholarship money doesn’t match the standards for charities.

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The foundation – which is supported by private and corporate donations, not taxpayer money – provides $10,000 annually for each member of the Congressional Black Caucus to award in scholarships. Each gets to decide how many ways to split the money and whether to create a judging panel, choose personally or delegate the task.

Johnson, a former chairwoman of the caucus who has served on the board that oversees the foundation, said she wasn’t fully aware of the program rules and emphasized that she didn’t “personally benefit.”

In her interview with The Dallas Morning News, on Wednesday, Johnson said “hundreds of kids got scholarships since I have been here.” Her district covers much of southern Dallas County, including many of the area’s less affluent precincts.

“The most that any kid normally gets is from $1,000 to $1,200. … If it was a secret or if I was trying to hide it, I wouldn’t have done it,” she said.

The foundation’s general counsel, Amy Goldson, said Saturday that the scholarships Johnson awarded violated eligibility rules regarding relatives and residency and are “of great concern.”

The program “operates on an honor system,” so the foundation hadn’t known that money went to Johnson’s relatives, she said. But when a recipient fails to meet eligibility requirements or “misrepresents their eligibility, the scholarship funds must be returned.”

Further, Goldson said, the failure of a lawmaker or aides to follow eligibility rules “is a violation of the letter and spirit of [the Foundation's] requirements.”

“It is inappropriate for a lawmaker to certify the award of a scholarship to a relative in a situation where the lawmaker or their staff is involved in the selection of the recipient,” she said.

Read entire article at DallasNews.com

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DETROIT — A former Detroit city councilwoman was sentenced to more than three years in prison Wednesday for bribery after a federal judge refused to set aside her guilty plea during a stormy court hearing dominated by a dispute over evidence of other payoffs.

As guards cleared the packed courtroom, Monica Conyers yelled that she planned to appeal. The wife of U.S. Rep. John Conyers, D-Mich., wanted to withdraw her guilty plea, suggesting she was the victim of “badgering” last year when she admitted taking cash to support a Houston company’s sludge contract with the city.

RELATED: Conyers Apologizes To Detroit: “I Don’t Want To Go To Jail”

U.S. District Judge Avern Cohn, reviewing a transcript of the June hearing, said Conyers had denied any coercion and voluntarily pleaded guilty to conspiracy.

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Conyers, 45, is the biggest catch so far in the FBI’s wide-ranging investigation of corruption in Detroit city government. Nine people have pleaded guilty, including two former directors of the downtown convention center, and prosecutors have promised more charges are coming.

“Bribery is a betrayal of trust,” Cohn told Conyers after announcing a 37-month prison term for her “egregious” crime. She quit the council after pleading guilty in June.

Conyers’ plea deal was limited to taking bribes to support a contract with Synagro Technologies worth $47 million a year. But the recent trial of her former aide, Sam Riddle, exposed a series of alleged schemes involving others making payoffs to do business at city hall.

Prosecutors said Riddle and Conyers collected $69,500 by shaking people down and urged Cohn to consider the alleged crimes when sentencing her. Defense lawyer Steve Fishman firmly objected and demanded a separate hearing.

RELATED: John Conyers’ Wife Implicated In Detroit Bribery Scandal

Conyers declared, “I’m not going to jail for something I didn’t do.”

Cohn had handled the Riddle trial and said he agreed with prosecutors that the evidence was relevant. Considering it in the sentencing would have boosted Conyers’ guidelines and given the judge justification to send her to prison for as long as five years. But Cohn changed his mind — and she got a break.

“The sentence will be based solely on conviction,” Cohn said.

Earlier this year, jurors at the Riddle trial heard secretly taped phone calls in which he and Conyers discussed money, bank deposits and how to split cash.

In a November 2007 call, Conyers told Riddle, “You’d better get my loot.” On another call, businessman Rayford Jackson, who passed bribes to Conyers for her sludge vote, said, “You’re my girl. Don’t forget that.”

Conyers told the judge some taped conversations would exonerate her.

“They have taken tapes and used them out of context,” she said of the U.S. attorney’s office. “I will take the blame for things I did do.”

Fishman said news media had turned Conyers into a “human pinata for all that’s wrong in the city of Detroit.” He asked Cohn to keep her out of prison and urged him to consider factors filed in a sealed document. At one point, Conyers said she had been examined by a mental-health expert at the judge’s request.

“What about my children? … My children didn’t do anything to deserve this,” Conyers, who has two sons, told the judge.

She wants to appeal but her plea deal with prosecutors prevents her from objecting to a sentence of under five years.

Before the hearing, Conyers moved around the courtroom like a playful host, blowing kisses to supporters while wearing dark sunglasses. Her husband, who has an office in the courthouse, was not in the courtroom. Spokesman Jonathan Godfrey said he didn’t know his whereabouts.

Councilman Ken Cockrel, who clashed with Monica Conyers on the council, said there’s a lesson in her case.

“When you are elected to public office, you are elected to fulfill the public’s trust. You not only break that trust, but you put your career in peril,” he said.

From WashingtonTimes.com:

D.C. Council member Marion Barry, the Ward 8 Democrat who is a former mayor of Washington, violated city law by awarding a $15,000 contract to his then-girlfriend, according to findings in an independent investigation released Tuesday.

The seven-page summary by attorney Robert S. Bennett states Mr. Barry’s original proposal was for Donna Watts-Brighthaupt to write a proposal for a program titled “Emerging Leaders of Ward Eight.” When the city rejected the proposal because it appeared “political in nature,” the report states, Mr. Barry won approval for one on poverty, then had Ms. Brighthaupt work on the original proposal.

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In addition, the report says Mr. Barry, 73, on several occasions delivered checks to Ms. Brighthaupt, accompanied her to the bank to cash the checks and then made her give him some of the money.

Click here to read more.

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ALEXANDRIA, Va. – A former Louisiana congressman who famously hid $90,000 cash in his freezer was sentenced Friday to 13 years in prison for taking bribes, the longest term ever imposed on a congressman for bribery charges.

William Jefferson, a Democrat who represented parts of New Orleans for nearly 20 years, was convicted in August of taking roughly $500,000 in bribes and seeking millions more in exchange for using his influence to broker business deals in Africa.

The sentence, while severe, was still far less than what prosecutors had sought.

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Agents investigating the case found $90,000 wrapped in foil and hidden in boxes of frozen pie crusts in his freezer.

Prosecutors had asked a judge to follow federal guidelines and sentence him to at least 27 years, though the judge determined Friday that the sentencing guidelines should have been calculated at 22 years instead of 27. The defense asked for less than 10 years, arguing a stiffer sentence would be far longer than those imposed on congressmen convicted of similar crimes in recent years, none of whom was sentenced to more than a decade.

Former Rep. Randy “Duke” Cunningham, R-Calif., for example, was sentenced to more than eight years in prison after pleading guilty in 2005 to taking $2.4 million in bribes from defense contractors. Former Rep. Bob Ney, R-Ohio, was sentenced to 2 1/2 years in prison for taking bribes from lobbyist Jack Abramoff. Former Rep. James Traficant, D-Ohio, served a 7-year sentence after being convicted in a 2002 trial of bribery and racketeering.

Prosecutor Mark Lytle said that, had Jefferson’s schemes come to full fruition, he stood to reap hundreds of millions of dollars in 11 separate bribery schemes.

“His activity represented the most extensive and pervasive pattern of corruption in the history of Congress,” Lytle said.

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Jefferson’s lawyer, Robert Trout, said that while his client acknowledged a level of responsibility for his conduct, he also believed that he was operating within the law. And he urged the judge to consider the fact that Jefferson lifted himself up from poverty to become the first African-American to represent Louisiana in Congress since Reconstruction.

“He has led an extraordinary life,” Trout said.

U.S. District Judge T.S. Ellis III said he did take Jefferson’s life history into account but that public corruption must be dealt with severely.

“Public corruption is a cancer on the body politic,” said Ellis, who lamented that so many other congressmen have been convicted on similar charges. “There must be some sort of greed virus that attacks those in power.”

Jefferson said nothing in court after he was sentenced — Trout said he advised Jefferson not to speak because Jefferson is challenging his conviction in appellate court.

When sentenced, Jefferson showed no visible reaction to the verdict, nor did his wife and five adult daughters who attended the hearing.

Two of the jurors who convicted Jefferson attended the hearing as well, one of whom fought back tears throughout the three-hour hearing. Both declined comment.

Jefferson was allowed to remain free pending a hearing next week. Prosecutors want him to begin serving his sentence immediately, while the defense wants Jefferson to remain free while he appeals his conviction.

Jefferson was also ordered to forfeit roughly $470,000 in bribery proceeds — the government expects to seize Jefferson’s retirement savings and other assets to enforce the judgment. Jefferson, meanwhile, has filed for bankruptcy protection and his wife is claiming rights to some of those assets.

Because he was sentenced to more than 10 years, he needs a special waiver from the judge to be allowed to serve his time in a low-security prison camp. Ellis agreed to recommend a waiver, but it will be up to the Bureau of Prisons to decide where Jefferson serves his time.

Jefferson was convicted in August of 11 counts, including bribery and racketeering, and acquitted on five others, including the one most closely associated with the money in his freezer.

The investigation started in March 2005. In August of that year, FBI agents searched Jefferson’s Washington home and found the cash. Prosecutors said he had planned to use the money to pay a bribe to the then-vice president of Nigeria to secure a multimillion-dollar telecommunications deal there, an accusation Jefferson denied.

The money ended up in the freezer after a disgruntled businesswoman, Lori Mody, agreed to wear a wire after telling the FBI she had been cheated out of $3.5 million in deals brokered by Jefferson. The jury saw videotape of Mody handing over a suitcase filled with $100,000 cash outside an Arlington hotel. Most of that money was recovered from the freezer.

The defense argued that Jefferson was acting as a private business consultant in brokering the deals and his actions did not constitute bribery.

New Orleans voters had long been loyal to Jefferson, who in 1991 became Louisiana’s first African-American congressman since Reconstruction. He rose from the poverty of the Louisiana Delta parishes to prominence as a street-savvy political tactician.

He was re-elected in 2006 even after news of the bribery scandal broke but was indicted and then lost to Republican attorney Anh “Joseph” Cao this past December.

From the New York Times:

NAIROBI, Kenya — Secretary of State Hillary Rodham Clinton had two messages for Kenya on Wednesday: Trade is good. Impunity from prosecution is bad.

After addressing a major United States-Africa trade conference, Mrs. Clinton shifted her focus to a far touchier subject: Kenya’s volatile politics.

Despite strong pressure from its own citizens and Western donors, the Kenyan government has refused to set up a special tribunal to try the perpetrators of last year’s election-driven bloodshed, which killed more than 1,000 people.

Many people now fear that, as in the past, the Kenyan government will take no action.

“We are waiting, we are disappointed,” Mrs. Clinton told a news conference.

She reminded Kenyans of how the United States played a large role in brokering a peace treaty last year between Kenya’s warring political parties but said that “unfortunately, resolving that crisis has not yet translated into the kind of politic process the Kenyan people deserve.”

Click here to read more.

From clickondetroit.com:

Detroit City Council President Ken Cockrel Jr. sent a note to his colleagues at City Council detailing that $21,000 worth of equipment was missing from former council member Monica Conyers’ office.

The discovery was made during an audit of Conyers’ office after she resigned from her position on July 7 after pleading guilty to conspiracy to commit bribery. Cockrel listed 29 missing items including computers, printers, a camcorder, digital cameras and software.

Eight of the items that are missing are notebook computers, four of which are less than a year old and were shipped to her office 17 days before her resignation.

Purchase orders, invoices and other documents provided by the City Council Administration office reveal the total purchase price of these items was $21,300.

Click here to read more.

From NBC Washington:

Members of the Alpha Kappa Alpha sorority are attempting to fire their national president, Barbara McKinzie, after McKinzie allegedly used sorority money to commission a $900,000 “living legacy wax figure” of herself.

Sometimes, this stuff just writes itself.

Eight Alpha Kappa Alpha members filed a lawsuit in the D.C. Superior Court on June 20, reports Washington Business Journal.  The members want to fire their national leaders and order McKinzie to return funds stemming from alleged misuse of a corporate credit card; a $375,000 lump sum payment; and a $4,000 monthly stipend McKinzie is to be paid for four years after she leaves office.

Click here to read more.

A jury is scheduled to hear closing arguments Wednesday in the bribery trial of a former Louisiana congressman whose case gained notoriety after a search of his home turned up $90,000 cash hidden in a freezer.

William Jefferson, a Democrat who represented parts of New Orleans, is accused of receiving more than $400,000 in bribes and seeking millions more in exchange for using his influence to broker business deals in Africa.

If convicted on all 16 counts, which include money laundering and racketeering, Jefferson could face up to 235 years in prison.

The trial has dragged on for eight weeks. Jefferson’s attorneys argue that their client was essentially acting as a private business consultant and never violated bribery laws.

From Freep.com:

Detroit City Councilwoman and admitted felon Monica Conyers went on television Tuesday to talk about council endorsements, hopes of staying out of jail and her plans to write a tell-all book.

And toward the end of her hour-long live TV show, Conyers apologized.

“To all of the residents of the city of Detroit, if I disappointed you, I apologize,” she said.

Just before the 3:30 p.m. airing, Conyers raced to the Highland Park studios of WHPR-TV (Channel 33), and stepped out of the city-owned Ford Crown Victoria in a dress with a strand of pearls and a light-colored blazer.

It was her first time addressing the public since pleading guilty Friday to a bribery charge. She started the show by telling viewers she wouldn’t talk about the case.

“I don’t want to get my judge mad at me, and I don’t want to go to jail,” she explained.

Click here for the full story.

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From the New York Times:

CHICAGO — A transcript of a secretly recorded telephone call released on Tuesday revealed the degree to which Roland W. Burris aggressively and openly pursued an appointment to the United States Senate with those close to Gov. Rod R. Blagojevich of Illinois, who went on to appoint Mr. Burris last year before he was removed from the job.

Mr. Burris, who was appointed to succeed Barack Obama in the Senate, is now the subject of two investigations. In the call, he seemed almost in a crass negotiation with Mr. Blagojevich’s brother — also his chief fund-raiser — over how he could help the governor, win the appointment and not run into trouble over negative connotations that he might be trying to buy an appointment by fund-raising for him.

“If I do that, I guarantee you that that will get out, and people said, ‘Oh, Burris is doing a fund-raiser,’ and, and then Rod and I both going to catch hell,” Mr. Burris said in a phone call shortly after the presidential election that opened the Senate seat held by Mr. Obama. By the end of the call, Mr. Burris had promised to send a personal check within a month.

“God knows, No. 1, I want to help Rod,” he was recorded as saying. “No. 2, I also want to, you know, hope I get a consideration to get that appointment.”

At another point, Mr. Burris reminded the governor’s brother, “Tell Rod to keep me in mind for that seat, would you?”

Mr. Burris’s lawyer, Timothy Wright, said the call, captured as part of a larger federal investigation into Mr. Blagojevich, proves that Mr. Burris was not part of any “pay to play” efforts the former governor has been accused of in a federal indictment, including that he tried to sell the Senate appointment for money.

Click here for more.

From Nicholas D. Kristof at nytimes.com:

Jasmine Caldwell was 14 and selling sex on the streets when an opportunity arose to escape her pimp: an undercover policeman picked her up.

The cop could have rescued her from the pimp, who ran a string of 13 girls and took every cent they earned. If the cop had taken Jasmine to a shelter, she could have resumed her education and tried to put her life back in order.

Instead, the policeman showed her his handcuffs and threatened to send her to prison. Terrified, she cried and pleaded not to be jailed. Then, she said, he offered to release her in exchange for sex.

Click here for the rest.

“Everybody behaved appropriately,” declared Greg Craig, Obama’s incoming White House counsel and the person asked to conduct the internal inquiry into contacts between the transition team and Illinois Gov. Rod Blagojevich.

Prosecutors have said Obama is not implicated in the case against Blagojevich, accused of trying to sell Obama’s Senate seat to the highest bidder. But the corruption scandal has drained precious energy from Obama’s preparations to take over the White House.

In addition to the time Craig devoted to the internal review that Obama requested, the topic also has surfaced at news conferences intended to highlight key appointments and policy priorities. And Obama himself had to sit down last week in Chicago for an interview by federal investigators, Craig’s report revealed. Accompanying him was lawyer Robert Bauer, Obama spokesman Robert Gibbs said.

Federal investigators last week also interviewed two top Obama aides, incoming chief of staff Rahm Emanuel and senior adviser Valerie Jarrett. Though Craig completed his review more than a week ago, Obama delayed making it public until those interviews were finished and U.S. Attorney Patrick Fitzgerald gave his team the go-ahead to put it out.

The inquiry was released Tuesday in Washington while Obama was vacationing in Hawaii. Though Obama has taken questions on the matter on five occasions since Blagojevich’s Dec. 9 arrest, the president-elect did not make himself available Tuesday to talk about it.

Blagojevich is accused of trying to use his authority as governor to appoint Obama’s Senate replacement to get cash or a lucrative job for himself, starting days before Obama’s Nov. 4 election through Dec. 5. The governor has denied any criminal wrongdoing and has resisted multiple calls for his resignation, including from Obama.

Wiretapped conversations cited in the criminal complaint against Blagojevich were not available to the Obama lawyers who conducted the internal review.

The report states, as Obama has said, that the president-elect had no contact about the seat with the governor or his aides. Further, no one on Obama’s transition team discussed any deals or had any knowledge of deals, Craig’s report said.

Emanuel was the only Obama transition team member who discussed the Senate appointment with Blagojevich or his aides, and those conversations were “totally appropriate and acceptable,” Craig said.

Those with knowledge of the federal investigation have said that Emanuel is not a target in the case. There also is no indication that Jarrett ever was a target, a transition official said. Like Obama, both were accompanied by lawyers for their interviews with the prosecutor’s staff, Gibbs said.

Fitzgerald’s criminal complaint quotes the governor’s conversations with aides, including discussions about swapping the appointment if Obama provided a Cabinet post or an ambassadorship or helped raise millions for a private foundation Blagojevich could tap for personal use.

Obama’s report states that none of Blagojevich’s aides reached out to the president-elect’s staff. The report only notes that Obama friend Eric Whitaker was approached by one of Blagojevich’s top aides to learn “who, if anyone, had the authority to speak for the president-elect” about the Senate appointment.

Obama told Whitaker that “no one was authorized to speak for him” and that “he had no interest in dictating the result of the selection process,” according to the report.

Emanuel had “one or two telephone calls” with Blagojevich and four conversations with John Harris, the governor’s chief of staff, who later resigned after being charged in the federal case, the report says. Craig told reporters Emanuel said he couldn’t be sure it was only one call.

The report said Emanuel had recommended Jarrett for the Senate seat without Obama’s knowledge. Jarrett later accepted a job as a senior White House adviser.

Obama authorized Emanuel to pass on the names of four people he considered to be highly qualified to take over his seat: Illinois Comptroller Dan Hynes, Illinois Veterans’ Affairs Director Tammy Duckworth, Rep. Jan Schakowsky and Rep. Jesse Jackson Jr., the report said.

Others Obama considered to be qualified candidates, including Illinois Attorney General Lisa Madigan and Chicago Urban League Director Cheryle Jackson, were offered later, the report said.

“Mr. Harris did not make any effort to extract a personal benefit for the governor in any of these conversations,” the report said.

During Emanuel’s interview Saturday, federal authorities played for him a taped recording of at least one conversation he had with Blagojevich’s office, according to a transition official who spoke on condition of anonymity because the person was not authorized to discuss information not included in the report.

Emanuel left for a long-planned family vacation in Africa on Tuesday and was not available for comment. Harris’ lawyer, James Sotos, declined to comment.

Blagojevich attorney Edward M. Genson, who has said the prosecutor’s allegations are built on nothing beyond talk, said Obama’s report proves his point.

Obama’s report details a conversation about the appointment between Jarrett and Tom Balanoff, head of the Illinois chapter of the Service Employees International Union, in which Balanoff told her that Blagojevich had “raised with him” the idea of being appointed Health and Human Services secretary.

Balanoff informed Jarrett he had told Blagojevich it wouldn’t happen, and Jarrett agreed, discounting the notion as “ridiculous,” the report states.

However, there was never any suggestion in the conversation that Blagojevich was linking the Senate appointment to the possible Cabinet posting, the report states.

SEIU officials are referenced, but not named, in the FBI affidavit, and Balanoff is believed to be one of them.

Blagojevich mentioned in a Nov. 5 conversation taped by the FBI that he would take the HHS job or “various ambassadorships” in exchange for appointing Obama’s choice, according to an affidavit filed with the federal complaint. The affidavit states he discussed it again days later with an unnamed SEIU official, believed to be Balanoff.

The governor told advisers in a Nov. 10 discussion that “it was unlikely” Obama would give him the HHS appointment or an ambassadorship, and he discussed other favors he could seek, according to the complaint.

Obama’s report also addresses confusion over earlier statements by David Axelrod, a top adviser who had said at one point that Obama discussed the Senate appointment with Blagojevich. Axelrod had discussed potential recommendations for the Senate appointment with Obama and Emanuel, and “was under the impression” that it would be Obama who would offer those to Blagojevich.

“He later learned that it was Mr. Emanuel who conveyed those names,” the report states.

The report’s release, expected Tuesday, comes as Obama is vacationing in Hawaii. Obama said last week he wants to answer questions about conversations his aides had over filling his Senate seat because nothing inappropriate took place. But he kept the details private while the federal investigation continues.

“We have a report,” Obama spokeswoman Stephanie Cutter said Monday. “It’s been ready for release for a week. We’ve held off at the request of the U.S. Attorney’s office and that continues to be the case, though we expect to be able to release the report shortly.”

Aides said Obama had no plans to make a public statement on his internal report while in Hawaii. Last week Obama described the findings of the review as “thorough and comprehensive” and promised they would be made public this week.

Incoming White House chief of staff Rahm Emanuel contacted Blagojevich’s office about the appointment, according to a source close to the governor who requested anonymity because the person is not authorized to speak on the matter. Blagojevich believed Emanuel was advocating Obama friend Valerie Jarrett for the Senate seat so he would not have to compete with her for Obama’s attention in the White House, the source said.

The U.S. attorney’s office had been secretly recording Blagojevich’s calls since October. A federal complaint charging the governor with seeking cash and favors for Obama’s vacant Senate seat doesn’t cite conversations with Emanuel or others on the transition staff.

U.S. Attorney Patrick Fitzgerald in Chicago said when announcing the charges that Obama was not implicated in the case, and sources have said Emanuel is not a target of prosecutors.

An official familiar with Obama’s internal review said the president-elect’s team wrote its report without having access to transcripts of the FBI‘s taped conversations. The source spoke on condition of anonymity because this person was not authorized to discuss the review publicly.

Emanuel has refused to comment on his recent interaction with Blagojevich and his staff. Emanuel succeeded Blagojevich in his House seat in 2002, when Blagojevich became governor. Emanuel also served as an informal campaign adviser to the governor and has a mutual friend with Blagojevich who has become a key player in the criminal investigation.

The governor at times considered trying to exchange Obama’s Senate seat for a presidential appointment, a job for his wife, campaign contributions and donations to a nonprofit he hoped to create, according to the complaint.

Blagojevich expressed frustration in one conversation taped by the FBI that Obama and his advisers weren’t “willing to give me anything except appreciation. (Expletive) them,” the complaint quoted him as saying.

With Blagojevich saying he’s itching to talk, perhaps as early as Friday, Chicago attorney Ed Genson continued bashing what’s gotten his client in a legal bind: FBI wiretaps that prosecutors say catch Blagojevich scheming to deal President-elect Barack Obama‘s vacant Senate seat for campaign cash or a plum job.

Genson told an Illinois House panel considering whether to impeach Blagojevich that its consideration of the recorded excerpts he cast as meaningless “jabbering” was inappropriate, if not illegal. “I think you’re using evidence that was illegally obtained,” he said Thursday.

After the committee recessed its hearing until next week, Genson told reporters he planned to go after the taped conversations in court at some point.

Members of the House panel pledged Thursday to do nothing that would interfere with the investigation by U.S. Attorney Patrick Fitzgerald. If Fitzgerald asks lawmakers not to interview certain witnesses, the panelists will abide by that, they said.

“The fact that no one has denied that the governor has said those things (on tape) is relevant. That evidence already is on our record,” said state Rep. Lou Lang, a suburban Chicago Democrat.

While hopeful that Fitzgerald lets the panel “go in some directions” with some potential witnesses in the criminal case, “if he shuts us down completely, this committee will deal with it,” Lang said.

Blagojevich’s first substantial public comments — other than snippets shouted to reporters camped outside his Chicago home since his arrest last week — could come as early as Friday, Genson said. The attorney didn’t sound keen on the prospect.

“I’m a lawyer by trade — I don’t like my clients to talk to anybody,” he said.

Genson said he expected federal grand jurors to eventually indict his client, which would likely unseal many of the documents in support of the charges, perhaps marking the point where his legal attack may truly begin.

“I’m talking that within the next few months the air will clear a little bit and we’ll be able to get access to all the things that we need to get access to,” he said. “And I’ll be able to look at those things.”

The impeachment process appears certain to grind on until then, possibly into next year, with or without Fitzgerald’s help. Without it, the committee probably will emphasize some lower-profile allegations of misconduct against Blagojevich: defying the Legislature, failing to honor reporters’ Freedom of Information requests, and trading state jobs and contracts for campaign contributions.

On Wednesday, the Illinois Supreme Court rejected a request to declare him unfit to serve, and Genson made it clear that the governor is not going down without a fight.

Federal prosecutors’ case could be undermined — or at least greatly complicated — if Illinois lawmakers compel certain witnesses to testify. Following the Iran-Contra scandal of the 1980s, the convictions of Oliver North and John Poindexter were thrown out after the courts determined that the cases against them were built too much on testimony they gave to Congress under a promise of immunity.

The impeachment committee sent Fitzgerald a letter Thursday formally asking for information about people mentioned by pseudonyms in the criminal complaint, and requesting his guidance on who can be called to testify. Fitzgerald refused to comment.

When the panel returns Monday, its members hope to discuss any guidelines or restrictions Fitzgerald may place on them.

Committee chairwoman Barbara Flynn Currie, a Chicago Democrat like the governor, noted that even before Blagojevich’s arrest last week, some lawmakers were calling for his impeachment.

“We’ve got plenty of evidence out there of questionable activity on the part of the governor,” she said.

Besides the Senate-seat-for-sale allegations, the governor was accused of trying to strong-arm the Chicago Tribune into firing editorial writers who criticized him and pressuring a hospital executive for campaign donations.

Outraged lawmakers appointed a committee to investigate Blagojevich and issue a recommendation on whether he should be impeached.

Genson had no comment on what restrictions Fitzgerald should place on the committee. “They do what they got to do and I do what I’ve got to do, and then what happens is what we’ve got to do,” Genson said.

Unlike the U.S. Constitution, which allows impeachment in cases of “high crimes and misdemeanors,” the Illinois Constitution does not define an impeachable offense. No Illinois governor has ever been impeached, so lawmakers have little to go on.

Genson has complained about the lack of a clear standard and suggested he might raise the issue in court if the governor is impeached.

“I don’t know what the line is,” he told the committee. “The line should be based on evidence, should be based on due process, should be based on confrontation.”

Lawmakers Monday quickly shelved the idea of setting a special election where voters would fill the vacant Senate seat of President-elect Barack Obama — the seat the governor is accused of trying to sell before his arrest last week on federal corruption charges.

The Illinois House then voted 113-0 late Monday to create a bipartisan committee that will recommend whether Blagojevich should be impeached. The House reconvenes Tuesday.

“We ought to move as quickly as possible to correct our problems and to get ourselves on a track where we can do what we’re supposed to do for the people of Illinois,” said House Speaker Michael Madigan, a Chicago Democrat and former co-chairman of Blagojevich’s re-election campaign who has become one of the governor’s fiercest critics.

Senate Democrats dropped any discussion of a special election, for now leaving any decision about the Senate seat in Blagojevich’s hands.

Blagojevich, who has ignored strident calls to resign from Obama and virtually every lawmaker in the state, defiantly signed 11 bills into law Monday — including one mentioned in the 76-page FBI complaint against him. And he hired a bulldog defense attorney, Ed Genson, with a history of taking tough cases to trial.

Meanwhile, Obama’s team said an internal review showed that Obama’s staff “was not involved in inappropriate discussions” with Blagojevich over the Senate seat. Obama, at a news conference in downtown Chicago, said details of the review were being withheld at the request of prosecutors so more interviews could be conducted.

Controversy has swirled around Obama and his incoming White House chief of staff, Rep. Rahm Emanuel, following Blagojevich’s arrest. Critics want to know whether Emanuel had spoken with aides to the governor about the seat. Obama said the results of the investigation by his incoming White House counsel would be released “in due course.”

Blagojevich — arrested Dec. 9 after being under federal investigation for three years — appeared to be digging in for the legal and professional battles ahead.

“I think that the case that I’ve seen so far is significantly exaggerated,” said Genson, his new attorney. “It’s not what people think it is.”

At the Capitol, Madigan canceled plans to consider a special election to fill Obama’s seat, saying Democrats are split over the best way to fill the vacancy. The move sparked harsh criticism from Republicans.

“Why is it, when the whole world is watching, you can’t change your ways at least for one day and let democracy rule?” asked Rep. Ron Stephens, R-Greenville.

Madigan said the committee’s review will include the criminal charges against Blagojevich as well as a long list of other possible wrongdoing during his six years in office: abuse of power, taking action without legal authority, ignoring state laws and defying lawful requests for information from the General Assembly.

The committee may well work through the holiday season, but it’s not clear how long it will take to produce a recommendation. That depends partly on whether the governor’s legal team takes part by questioning witnesses and presenting evidence, which would significantly lengthen the process.

Blagojevich spokesman Lucio Guerrero said he didn’t know how Blagojevich will respond to the committee.

The state constitution gives lawmakers broad authority to impeach a governor. The House would decide whether to file charges against the governor, and the Senate would ultimately rule on them.

Madigan was careful not to call for Blagojevich’s resignation or say whether he thinks the governor should be impeached. Madigan said he would preside over any impeachment debate and so should stay neutral.

Madigan often has clashed with Blagojevich and said his staff has been studying impeachment for a year. His office produced a memo this summer outlining all the arguments legislative candidates could make in favor of impeachment.

House Minority Leader Tom Cross, R-Oswego, applauded Madigan’s handling of the impeachment committee but criticized him for postponing action on a special election, which Cross said would “begin the healing” in a state scarred by scandal.

Illinois Republicans are running television ads pressuring Democrats to approve a special election to replace Obama. If Blagojevich resigned, the power to appoint a new senator would go to Democratic Lt. Gov. Patrick Quinn.

Republicans are eager to create a special election, which would give them a shot at winning a Senate seat that had been in Democratic hands. They argue that neither Blagojevich nor Quinn, his running mate in two elections, should be allowed to pick the new senator.

Democrats are divided. Some say a special election would shield the next senator from any suggestion of corruption, but others argue it would take months and cost between $30 million and $50 million. Some also want to avoid any risk of an election loss.

Legislative leaders in the state capital moved forward Wednesday with several fronts to deal with Blagojevich, who returned to his office in downtown Chicago a day after he was arrested on charges that he put President-elect Barack Obama‘s U.S. Senate seat up for sale.

The first fallout from the scandal also emerged, with U.S. Rep. Jesse Jackson Jr. denying any misconduct while confirming that he is the Senate candidate mentioned in the federal charges as someone Blagojevich thought would pay money to be appointed to the seat. Jackson, the son of the Rev. Jesse Jackson, said he had been assured by prosecutors he was not a target of the investigation.

Blagojevich’s decision to show up for work like it was another day at the office angered much of the state’s political establishment, and Obama and U.S. Senate leaders demanded that he step down. The prospect that the second-term Democratic governor might still try to appoint someone to the Senate also loomed.

“He appears to listen to no one, and his conduct becomes more outrageous as time goes on,” said Steve Brown, spokesman for Illinois House Speaker Michael Madigan.

Legislative leaders planned a special session Monday to strip Blagojevich of his power to pick a new U.S. senator, putting the decision in the hands of Illinois voters instead. Lawmakers also prepared to discuss the possibility of impeachment, and the attorney general researched whether there is any way to declare Blagojevich unfit to hold office.

“I just don’t foresee him being the governor indefinitely with this cloud hanging over him,” Republican Sen. Christine Radogno said. “There is an awful lot of impetus to move him out of the way.”

Blagojevich’s lawyers have insisted he is innocent, and stressed that he still has important work to do for the state of Illinois.

Blagojevich spokesman Lucio Guerrero said some of the governor’s work Wednesday involved talking with staff about the budget and a short-term borrowing plan so the state can get its hands on $1.4 billion to pay some outstanding bills.

“At the end of the day, the top priority for our office is to serve the people, and we have not lost sight of that, nor will we lose sight of that,” said spokesman Kelley Quinn, calling it “business as usual” on Wednesday, the governor’s 52nd birthday.

A day earlier, FBI agents arrested Blagojevich at his home and took him away in handcuffs. Prosecutors released a thick document that included excerpts of wiretapped conversations in which the governor allegedly schemed to enrich himself by offering to sell Obama’s Senate seat for campaign cash or a lucrative job inside or outside government.

They also alleged he pressured the Tribune Co. to fire editorial writers at the Chicago Tribune after several negative editorials about Blagojevich.

Blagojevich is charged with conspiracy and solicitation to commit bribery, punishable by up to 20 years in prison and 10 years, respectively.

More than 24 hours after the arrest, Obama joined other prominent Democrats in calling for Blagojevich’s resignation. Such a move would make Lt. Gov. Patrick Quinn the governor, and he could appoint someone to the seat.

“The president-elect agrees with Lt. Gov. Quinn and many others that under the current circumstances it is difficult for the governor to effectively do his job and serve the people of Illinois,” Obama spokesman Robert Gibbs said.

Asked whether Obama supports a special election, Gibbs said Obama believes the Illinois General Assembly should consider how to fill the Senate seat and “put in place a process to select a new senator that will have the trust and confidence of the people of Illinois.”

Senate Democrats were more pointed in a letter to the governor: They “insist that you step down” and not name anyone to replace Obama. An appointment by a new governor would “be the most expeditious way for a new senator to be chosen and seated in a manner that would earn the confidence of the people of Illinois and all Americans,” wrote Majority Leader Harry Reid of Nevada and the party’s second-ranking leader, Sen. Richard Durbin of Illinois.

They suggested the Senate might reject anyone chosen by Blagojevich. The Constitution gives the Senate authority to refuse to allow a member to be sworn in.

It was unclear what incentive the governor had to give up his office.

A resignation might make him appear guilty. The office also gives him a certain amount of clout, which can help him raise money for his defense.

Radogno said it’s possible Blagojevich would use his resignation as a bargaining chip with prosecutors and agree to step down in exchange for leniency.

When Illinois lawmakers meet Monday, they’ll consider changing state election law to fill Senate vacancies by special election, rather than leaving the decision to the governor. But holding an election could take months and give Republicans a shot at capturing a seat now in Democratic hands.

Brown, the spokesman for the House speaker, noted that any change in the law would go to the governor’s desk, where Blagojevich could let it sit and still pick a senator.

“Despite our best efforts, the governor could play hide the ball. That is an inescapable reality,” Brown said. “I’m hoping that’s not the case.”

Brown said the speaker hasn’t ordered staff to begin researching impeachment but that individual legislators are doing so. The speaker’s office also compiled a memo earlier this year on arguments for impeaching the governor.

Meanwhile, Attorney General Lisa Madigan’s office said her staff is researching whether Illinois Supreme Court rules allow a challenge to Blagojevich’s fitness to hold office. That could pressure Blagojevich to step down.

Obama spokesman Robert Gibbs says the president-elect agrees with other prominent politicians that “under the current circumstances, it is difficult for the governor to effectively do his job and serve the people of Illinois.”

Blagojevich was arrested Tuesday, accused of scheming to enrich himself by selling Obama’s vacant Senate seat. The governor has authority to appoint the replacement. He denies any wrongdoing.

In response to questions from The Associated Press, Gibbs said Obama believes the Illinois legislature should consider a special election to fill the seat.

Gibbs says the hope is to put a process in place to select a new senator who’ll have the trust and confidence of the people of Illinois.

From Daniel Engber at Slate.com:

On Tuesday, Gov. Rod Blagojevich of Illinois was taken into federal custody on corruption charges, one of which entails attempting to sell President-elect Barack Obama’s Senate seat to the highest bidder. In 2006, Daniel Engber explained why politicians in the Land of Lincoln are so corrupt. The article is reprinted below.

Former Illinois Gov. George Ryan received a sentence of six and a half years in prison on Wednesday, after being convicted on charges of racketeering, mail fraud, filing false tax returns, and lying to investigators. The Chicago Sun-Times reports that in the last three decades, at least 79 local elected officials have been convicted of a crime, including three governors, one mayor, and a whopping 27 aldermen from the Windy City. What makes Chicago so corrupt?

Click here to find out.