Washington Times – Daschle gave speech on tax cheats

Oh the irony… Prosecute Daschle to the extent of the law just as he advocated… Let him be one of the people…

Go to the source to hear the clip…

If Tom Daschle had his way, Tom Daschle would be prosecuted to the fullest extent of the law for failing to pay his taxes.

At least according to the old Tom Daschle, who gave an impassioned speech on the Senate floor about the scourge of tax scofflaws.

“Make no mistake, tax cheaters cheat us all, and the IRS should enforce our laws to the letter,” the former Senate Majority Leader said in 1998 during a debate on a bill reforming the Internal Revenue Service.

The blogosphere went wild after Mr. Daschle’s Tuesday withdrawal from his nomination to be Secretary of the Health and Human Services Department. Discovered in the blitz was a campaign ad from 1986, when the former South Dakota Democrat was running for election. Click here to see the ad.

Then-Rep. Daschle is shown driving a beat-up, old 1971 Pontiac in Washington as a narrator talks of his humble needs. “Among Washington’s BMWs and limos, is this: Since 1971, the old Pontiac has served its owner well. Sure it’s rusted, and it burns a little oil,” the narrator says. “But after 15 years and 238,000 miles, Tom Daschle still drives his old car to work every day. Maybe he’s sentimental — or just cheap. Whatever the case, isn’t it too bad the rest of Washington doesn’t understand that a penny saved . . . is a penny earned.”

Mr. Daschle was the third high-profile nominee by President Obama to bow out, after belatedly paying nearly $140,000 in penalties and interest for a chauffeured limousine provided by a wealthy Democratic donor. He said he assumed he was getting a free ride and simply didn’t know that the limo should have been considered “imputed income.” On Tuesday, performance officer nominee Nancy Killefer also dropped out because she, too, had tax problems. Mr. Obama initially had tapped Bill Richardson to be Commerce secretary, but the New Mexico governor withdrew amid a grand jury investigation into a state contract awarded to his political donors.

Treasury Secretary Tim Geithner slipped through Senate hearings before Mr. Obama took the oath of office, despite having failed to pay $34,000.

Mr. Daschle, who emerged ashen-faced from a Senate hearing room Monday night after a closed-door grilling by Finance Committee members about the unpaid taxes, was said to still hold popularity among his former colleagues. But some vowed to question him hard over the scandal, and others still held old grudges.

Some senators remember 2001, when Mr. Daschle, then the Senate Democratic leader, helped torpedo President Bush’s choice to head the Labor Department, Linda Chavez. The Hispanic woman admitted housing an illegal immigrant and giving her money, which was more than Mr. Daschle could bear. “The labor secretary ought to set the example,” he said.

Mr. Obama was reportedly furious over the continuing stream of nominees who failed to pay their taxes. In a series of mea culpas on TV, he said he had “screwed up” and “messed up.” “This is a self-induced injury that I’m angry about, and we’re going to make sure we get it fixed,” Mr. Obama said. “We can’t afford glitches, because right now, what I should be spending time talking to you about is how we’re going to put 3 [million] to 4 million people back to work.”

via Washington Times – Daschle gave speech on tax cheats .

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Daschle Crawls Under The Bus With Killefer

And Gibbs ends by saying there is nothing wrong with the vetting process… These choices are being made knowing the problems these people have, it would only be a problem if these problems were discovered outside of the vetting process only… The problem is the choice of who is being looked at to start with…

As of yesterday Obama was 110% behind Daschle… Today Nancy Killefer got exposed and dropped out… Now Daschle the same day… Obama’s trial and error management is just that… Now that the public is pissed, Daschle is forced to drop out too, the politcal ash is starting to settle…

Too bad Republicans and the people did not put that much pressure on the Timothy Geithner nomination…

Change You Can Believe In! 

CNN) — Former Sen. Tom Daschle has withdrawn his nomination to head the Department of Health and Human Services, according to a statement Tuesday from the White House.

Former Sen. Tom Daschle apologized for making mistakes on his tax records.

Daschle had been fighting to save his nomination as HHS secretary following controversy over his tax records and questions over his work in a field that some consider lobbying.

In a statement announcing his withdrawal, Daschle said it was an honor to be chosen to lead the reform of America’s health care system.

“But if 30 years of exposure to the challenges inherent in our system has taught me anything, it has taught me that this work will require a leader who can operate with the full faith of Congress and the American people, and without distraction,” he said.

“Right now, I am not that leader, and will not be a distraction. The focus of Congress should be on the urgent business of moving the president’s economic agenda forward, including affordable health care for every American.”

The Obama administration had stood by his side, and fellow Democrats lined up behind him, but Daschle’s problems, coupled with other nominees’ issues, gave critics ammunition to question President Obama’s call for a “new era of responsibility.”

The president said Tuesday he accepts Daschle’s decision “with sadness and regret.”

Tom made a mistake, which he has openly acknowledged. He has not excused it, nor do I. But that mistake, and this decision, cannot diminish the many contributions Tom has made to this country, from his years in the military to his decades of public service. Now we must move forward, with our plan to lift this economy and put people back to work,” Obama said in a statement.

Daschle’s resignation came hours after Nancy Killefer’s withdrawal as Obama’s chief performance officer, a new post in the administration.

Officials said privately the reason for Killefer’s withdrawal was unspecified tax issues. The much-touted post was designed to scrub the federal budget.

Daschle, the former Senate majority leader, apologized Monday for failing to pay his taxes in full. He said earlier he was “deeply embarrassed” for a series of errors that included failing to report $15,000 in charitable donations, unreported car service and more than $80,000 in unreported income from consulting.

Daschle recently filed amended tax returns and paid more than $140,000 in back taxes and interest for 2005-2007.

A New York Times editorial on Tuesday called for Daschle to withdraw.

The paper’s editorial board particularly took issue with Daschle saying he identified the unpaid taxes in June but did not pay them until his nomination for the top post at the Department of Health and Human Services.

The editorial also criticized Daschle for generating a sizable income from health-related industries while working in the private sector.

“Mr. Daschle is another in a long line of politicians who move cozily between government and industry. We don’t know that his industry ties would influence his judgments on health issues, but they could potentially throw a cloud over health care reform,” the editorial said.

Shortly after news of the tax quandary broke, a number of Democratic senators released statements expressing their support for Daschle, including Sens. John Kerry of Massachusetts, Charles Schumer of New York, Patrick Leahy of Vermont and Edward Kennedy of Massachusetts. In their opinions, Daschle identified the problem and corrected it.

Daschle’s supporters said that given his record of three decades of public service, he was still the right man for the job.

“One cannot underestimate how widely admired Tom Daschle is in Washington for his integrity, for his public service. And many, many Democrats look to him as one of the favorite people. He’s got a lot of support in this White House, starting with the president,” said David Gergen, a senior political analyst for CNN.

Obama and Daschle have a longstanding relationship. Daschle endorsed Obama for the Democratic presidential nomination in February 2007 — nearly 11 months before the first contest. Daschle was also considered to be a contender for Obama’s No. 2 spot.

Daschle also has a history with members of Congress. He represented South Dakota in the House of Representatives for four terms, and he served in the Senate for three terms. He was the Senate majority leader from June 2001 to January 2003, and was the minority leader before losing his re-election bid in 2004.

Daschle’s work in his post-Senate years was also a point of contention on his path to confirmation.

After leaving the Senate, Daschle went on to serve as a special public policy adviser at the law firm Alston & Bird.

According to the firm’s Web site, Daschle advised clients on “issues related to financial services, health care, energy, telecommunications and taxes.”

His work, for which he reportedly made millions, seemed to contradict Obama’s strict rules on lobbyists working in his administration.

Promising “a new era of openness in our country,” Obama signed executive orders relating to ethics guidelines for staff members as one of his first acts in office.

“If you are a lobbyist entering my administration, you will not be able to work on matters you lobbied on, or in the agencies you lobbied during the previous two years,” the president said.

The administration had defended its choice of Daschle, pointing out that he was not technically a lobbyist.

“If you’re not registered to lobby, you can’t be a lobbyist,” said White House press secretary Robert Gibbs, according to Time.com. Time.com: When is a lobbyist not a lobbyist?

Daschle and Kellifer were not the first of Obama’s nominees to come under scrutiny.

Before Tim Geithner was confirmed as treasury secretary, he was questioned over concerns involving his personal taxes and the immigration status of a former housekeeper.

New Mexico Gov. Bill Richardson also withdrew his nomination to be commerce secretary, citing the distraction of a federal investigation into ties to a company that has done business with his state.

Given Obama’s pledge for “unprecedented transparency, rigorous oversight and clear accountability,” some said the controversy surrounding Obama’s appointments are calling into question the president’s vetting process.

“Mr. President, your picks to help run the federal government don’t have to be perfect, but is it too much to ask that they pay like everyone else, to keep that same government functioning? And more importantly, that they don’t wait until everyone, including you, is watching?” CNN’s Campbell Brown wrote in a commentary.Read the commentary

Asked if the president is embarrassed by the slew of appointment problems, Gibbs was quick to negate that idea.

“No, I don’t think that — that we believe there’s any problem in the vetting,” Gibbs said Monday.

via Daschle withdraws as HHS nominee – CNN.com.

Performance Czar Withdraws After Tax Evasion

What did Obama do? Did he pick his choices from an IRS list of tax evaders? I guess she dropped out (crawled under bus with a little prodding) because Obama has to sacrifice someone at this stage of the tax evaders invasion…

So the change Obama was talking about was having the most tax evaders in his administration as possible… This administration thinks it is above the law and the sad part is it is only starting

What is really sad is that Congress already approved other members of the administration that have more severe violations and ties to lobbyists and will wield much more power in their new posts…

I dub this administration EvasionGate…

Change You Can Believe In!

WASHINGTON (AP) – Nancy Killefer, who failed for a year and a half to pay employment taxes on household help, has withdrawn her candidacy to be the first chief performance officer for the federal government, the White House said Tuesday.

Killefer was the second major Obama administration nominee to withdraw and the third to have tax problems complicate their nomination after President Barack Obama announced their selection.

“Nancy Killefer has decided to withdraw her nomination, and we accepted her withdrawal,” Tommy Vietor, a White House spokesman, said Tuesday. The 55-year-old executive with consulting giant McKinsey & Co., was expected to explain her reasons for pulling out later in the day.

When her selection was announced by Obama on Jan. 7, The Associated Press disclosed that in 2005 the District of Columbia government had filed a $946.69 tax lien on her home for failure to pay unemployment compensation tax on household help.

Since then, administration officials refused to answer questions about the tax error, which she resolved five months after the lien was filed. Obama’s first choice for commerce secretary, New Mexico Gov. Bill Richardson, took his name out of consideration when his confirmation appeared headed toward complications because of a grand jury investigation over how state contracts were issued to political donors.

More recently, Timothy Geithner was confirmed as Treasury secretary despite belatedly paying $34,000 in income taxes, and Tom Daschle is still waiting to see if his late payment of more than $128,000 in income taxes will harm his nomination to be health and human services secretary.

On paper, Killefer brought impressive credentials to the two jobs Obama selected her for: deputy director for management at the Office of Management and Budget, which requires Senate confirmation, and a new White House post, chief performance officer for the entire federal government, which does not require confirmation.

Killefer oversees McKinsey’s management consulting for government clients. During 1997-2000 in the Clinton administration, Killefer was assistant Treasury secretary for management. As such she was the chief financial officer and chief operating officer for the Treasury and its 160,000 employees and led a modernization of its largest component, the Internal Revenue Service.

But for nearly a month, the administration had refused to answer how its choice to make government workers more efficient and more responsive had bungled her household payroll taxes.

The AP reported that on March 7, 2005, the D.C. Department of Employment Services slapped a tax lien on her home in the tony Wesley Heights neighborhood. The local government alleged that just three years after she left the high-powered Treasury post she began to fail to pay unemployment compensation tax for a household employee. And she failed to make the required quarterly payments for a year and half, whereupon a lien for $946.69 was placed on her home.

That sum included $298 in unpaid taxes, $48.69 in interest and $600 in penalties. The lien was filed March 7, 2005, but Killefer didn’t get the lien extinguished for almost five months, not until July 29.

During that period, Killefer and her husband, an economics professor, had a teenage son and daughter, but she had two nannies and a personal assistant to run her life when she was on the road, she told Harvard business students back then. 

via Official: Performance czar withdraws candidacy.

Bye Bye Blagojevich

That’s all folks…

The Illinois Senate voted to remove Gov. Rod Blagojevich from office Thursday, marking the first time in the state’s long history of political corruption that a chief executive has been impeached and convicted.

The 59-0 vote followed several hours of public deliberation in which senator after senator stood up to blast Blagojevich, whose tenure lasted six years. And it came after a four-day impeachment trial on allegations that Blagojevich abused his power and sold his office for personal and political benefit.

The conviction on a sweeping article of impeachment means the governor was immediately removed from office. The Senate also unanimously voted to impose the “political death penalty” on Blagojevich, banning him from ever again holding office in Illinois.

Lt. Gov. Patrick Quinn, Blagojevich’s two-time running mate, has become the state’s 41st governor.

via BLAGOJEVICH REMOVED: Impeached Blagojevich has been removed — chicagotribune.com.

Dix Six – Last Five Defendents GUILTY AS CHARGED

The remaining Dix Six terrorists have been convicted of planning to kill US Soldiers at Fort Dix, NJ. To bad they could not get the attempted murdre charge to stick… but I guess that is a technicality and at least they are convicted of planning to kill soldiers and they will stay in jail…

CAMDEN, N.J. (AP) – Five Muslim immigrants were convicted Monday of plotting to massacre U.S. soldiers at Fort Dix in a case that tested the FBI’s post-Sept. 11 strategy of infiltrating and breaking up terrorist conspiracies in their earliest stages.The men could get life in prison when they are sentenced in April. 

The five, who lived in and around Philadelphia for years, were found guilty of conspiring to kill U.S. military personnel. But they were acquitted of attempted murder, after prosecutors acknowledged the men were probably months away from an attack and did not necessarily have a specific plan. Four defendants were also convicted of weapons charges.

The federal jury deliberated for 38 hours over six days.

The government said after the arrests in 2007 that case underscored the dangers of terrorist plots hatched on U.S. soil. Although investigators said the conspirators were inspired by Osama bin Laden, they were not accused of any ties to foreign terror groups.

Defense lawyers argued that the alleged plot was all talk—that the men weren’t seriously planning anything and that they were manipulated and goaded by two paid FBI informants.

Faten Shnewer, the mother of defendant Mohamad Shnewer, said the informants should be the ones in jail. “Not my son and his friends. It’s not right, it’s not justice,” she said after the verdict. The government “sent somebody to push him to say something; that’s it.”

Convicted were: Shnewer, a Jordanian-born cab driver; Turkish-born convenience store clerk Serdar Tatar; and brothers Dritan, Eljvir and Shain Duka, ethnic Albanians from the former Yugoslavia, who had a roofing business. A sixth man arrested and charged only with gun offenses pleaded guilty earlier.

“These criminals had the capacity and had done preparations to do serious and grievous harm to members of our military,” Ralph Marra, the acting U.S. attorney for New Jersey, said after the verdict.

But some Muslim leaders in New Jersey disputed that.

“I don’t think they actually mean to do anything,” said Mohamed Younes, president of the American Muslim Union. “I think they were acting stupid, like they thought the whole thing was a joke.”

Jim Sues, executive director of the New Jersey chapter of the Council on American-Islamic Relations, said: “Many people in the Muslim community will see this as a case of entrapment. From what I saw, there was a significant role played by the government informant.”

The yearlong investigation began after a clerk at a Circuit City store told the FBI that some customers had asked him to transfer onto DVD some video footage of them firing assault weapons and screaming about jihad.

The FBI asked two informants—both foreign-born men who entered the U.S. illegally and had criminal records—to befriend the suspects. Both informants were paid and were offered help obtaining legal resident status.

During the eight-week trial, the government relied heavily on information gathered by the informants, who secretly recorded hundreds of conversations.

Prosecutors said the men bought several assault rifles supplied by the FBI and that they trekked to Pennsylvania’s Pocono Mountains to practice their shooting. The government also presented dozens of jihadist speeches and videos that the men supposedly used as inspiration.

According to prosecutors, the group chose the Army post because one of the defendants was familiar with it. His father’s pizza shop delivered to the New Jersey base, which is 25 miles from Philadelphia and used primarily to train reservists for duty in Iraq.

The group’s objective was to kill “as many American soldiers as possible,” prosecutors said.

But the men’s lawyers attacked the credibility of the informants and accused them of instigating the plot.

After the verdict, Schnewer’s attorney, Rocco Cipparone, said there would not have been a conspiracy without the involvement of the informants. “I believe they shaped the evidence,” he said.

Prosecutor William Fitzpatrick defended the government’s handling of the case, telling the jury: “The FBI investigates crime on the front end. They don’t want to have to do it on the back end.”

Members of the jury would not speak to reporters after the verdict and instead released a statement that said, in part, “This has been one of the most difficult things that we have ever had to do.”

None of the defendants testified.

The government said after the men’s arrest that an attack was imminent, though prosecutors backed off that assertion at the trial.

The government has had a mixed record on terrorism prosecutions since Sept. 11. It won guilty pleas from Sept. 11 conspirator Zacarias Moussaoui; Richard Reid, who tried to blow up a trans-Atlantic jetliner with a shoe bomb; and the Lackawanna Six, a terrorist cell outside Buffalo, N.Y. And it convicted Jose Padilla of plotting terrorist attacks.

But a case against four men in Michigan fell apart after a federal prosecutor was accused of withholding evidence. And a case in Miami against seven men accused of plotting to blow up Chicago’s Sears Tower has produced one acquittal and two mistrials. 

 

Rahm Emanuel Caught On Wiretaps With F*cking Blagojevich

Barack Obama’s Chief of Staff, Rahm Emanuel had talks with the Governors office regarding Obama’s Senate Seat… This is based on recordings of Rahm’s voice on the wire taps…

Some things to ponder here…

Can you honestly believe that Barack Obama did not know his Chief of Staff had engaged Rod Blagojevich?

Scenerio one, you do not believe that, in which case Barack Obama is a liar, if Rahm was in communication with Blagojevich, then it was with Barack’s consent and therefore he was in communication, the word direct is mute in this case as Rahm was acting on Barack’s behalf as an extension of him.

Scenerio two, you do believe that, in which case two possible sub scenerios develope…

A – Rahm is working behind the scenes independant of Barack, which would lead one to believe this is how he will operate as Chief of Staff, which could be very dangerous.

B- Rahm is working behind the scenes with Barack’s consent, but without reporting or getting permission from Barack, in which case Obama has the perfect plausible deniability. This is even more dangerous than the first sub scenerio as it means Barack himself will use him in this capacity once Obama takes office.

Now any of the scenerious listed above are irrelevant as two very important things have surfaced as a result of the Blagejovich scandel…

1. No one from Obama’s camp reported the illegal operation Blagojevich was conduction even though they knew about it.

2. Obama’s PROMISE of transparency is gone before he takes office. He has only said he will make all known contacts between his camp and Blagojevich after he was pressured on it and Rahm went underground hidding behind his kids. Now that the news has brokent that Rahm was involved, Obama will release that fact next week, and try to brush it off because he himself did not know and that his campaign was not going to offer Blagojevich any reward for the Senate seat, however it is after the fact that Rahm was outed.

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This is Change You Can Believe In!

Rahm Emanuel, President-elect Barack Obama‘s pick to be White House chief of staff, had conversations with Gov. Rod Blagojevich‘s administration about who would replace Obama in the U.S. Senate, the Tribune has learned.

The revelation does not suggest Obama’s new gatekeeper was involved in any talk of dealmaking involving the seat. But it does help fill in the gaps surrounding a question that Obama was unable or unwilling to answer this week: Did anyone on his staff have contact with Blagojevich about his choice for the Senate seat?

Blagojevich and John Harris, his former chief of staff, face federal charges in an alleged shakedown involving the vacant Senate seat, which Illinois law grants the governor sole authority to fill.

Obama said Thursday he had never spoken to Blagojevich about the Senate vacancy and was “confident that no representatives” of his had engaged in any dealmaking over the seat with the governor or his team. He also pledged Thursday that in the “next few days” he would explain what contacts his staff may have had with the governor’s office about the Senate vacancy.

Emanuel, who has long been close to both Blagojevich and Obama, has refused to respond to questions about any involvement he may have had with the Blagojevich camp over the Senate pick. A spokeswoman for Emanuel also declined to comment Friday.

One source confirmed that communications between Emanuel and the Blagojevich administration were captured on court-approved wiretaps.

Another source said that contact between the Obama camp and the governor’s administration regarding the Senate seat began the Saturday before the Nov. 4 election, when Emanuel made a call to the cell phone of Harris. The conversation took place around the same time press reports surfaced about Emanuel being approached about taking the high-level White House post should Obama win.

Emanuel delivered a list of candidates who would be “acceptable” to Obama, the source said. On the list were Obama adviserValerie Jarrett, Illinois Veterans Affairs director Tammy Duckworth, state Comptroller Dan Hynes and U.S. Rep. Jan Schakowsky of Chicago, the source said. All are Democrats.

Sometime after the election, Emanuel called Harris back to add the name of Democratic Atty. Gen.Lisa Madigan to the approved list, the source said.

Blagojevich and Harris, who resigned his state post Friday, are charged with plotting to sell the selection of Obama’s replacement in exchange for lucrative jobs or campaign cash for the governor. Among other things, a government affidavit filed with the charges claimed that Blagojevich had kicked around the idea of using his Senate selection to leverage an appointment to an ambassadorship or Cabinet post in the Obama administration.

Federal authorities have not suggested Obama or his team knew about Blagojevich’s alleged schemes.

In an interview, Schakowsky said she spoke to Emanuel on Thursday and he seemed unfazed by the controversy.

Schakowsky also spoke of a conversation she had with Emanuel shortly after he was named chief of staff. She said she called Emanuel him “to get some intelligence” on whether Obama might approve of her selection as senator.

“He indicated that the president-elect would be fine with certain people and I was one of them,” Schakowsky said.

Schakowsky said it was natural for Obama to take an interest in the selection process for his Senate seat. “It makes perfect sense for the president-elect or his people to have some interaction about filling the seat he was vacating,” she said.

Though now working full-time onObama’s transition, Emanuel has yet to resign his congressional seat. Illinois law has a different process for filling vacant House seats than Senate seats. When Emanuel resigns, a special election will be held for his replacement.

One alleged scheme outlined in the charges against Blagojevich involves the special election for Emanuel’s seat. The government affidavit said Blagojevich and others were recorded talking about an unnamed “president-elect adviser” concerned about the election for Emanuel’s congressional seat who might help the governor land a new job at a non-profit organization.

Tribune reporter David Heinzmann contributed to this report. 

bsecter@tribune.com

F*ck Rod and Patricia Blagojevich

Rod Blagojevich, Illinois governor  BUSTED. This asshat needs to be thrown in jail. Illinois must impeach him. In the mean time, Rod surely should step down from his post if not resign… With his 4% approval rating, he must realize the people are pissed at him and he is not doing a good job as governor… Step aside Rod.

I think what has come out so far has been watered down and as more is revealed to the public this thing is going to be huge and implicate a lot of Chicagos corruption. I would venture say this is part of the the Tony Rezko whistle blower bargain deal. Keep your eyes open for more cases to break related to this…

But hey, this is not the Rod that Obama knew… Barack only knew his as a guy who lived in the neighborhood… Rest assured, the Obama camp will deny any ties to him and excile him like Wright….

Gov. Rod Blagojevich and his chief of staff, John Harris, were arrested Tuesday for what U.S. Atty. Patrick Fitzgerald called a “political corruption crime spree” that included attempts to sell the U.S. Senate seat vacated by President-elect Barack Obama.

Blagojevich and Harris were named in a federal criminal complaint that alleged a wide-ranging criminal conspiracy aimed at providing financial benefits to the governor, his political fund and to his wife, First Lady Patricia Blagojevich.

Blagojevich was taken into federal custody by FBI agents at his North Side home Tuesday morning—one day shy of his 52nd birthday.

The arrests dealt a tumultuous blow to Illinois government, at once raising questions about the leadership of the state and the fate of the open Senate seat—which the governor alone has the power to fill under the state law.

The allegations against Blagojevich provide a sharp contrast to a Democratic governor who campaigned for office promising reforms in the wake of disgraced, scandal-tainted Republican chief executive George Ryan. The complaint against Blagojevich comes little more than two years after Ryan was sentenced to 61/2 years in prison on federal corruption charges.

Robert Grant, special agent in charge of the FBI’s Chicago office, characterized Illinois’ place in the pantheon of political corruption.

“If it isn’t the most corrupt state in the United States, it’s certainly one hell of a competitor,” Grant said. And Fitzgerald, whose office also prosecuted Blagojevich’s predecessor, said Blagojevich’s “conduct would make Lincoln roll over in his grave.”

Lt. Gov. Pat Quinn called on Blagojevich to step aside, at least temporarily, or resign because the governor is “seriously impeded from carrying out his oath of office.”

“I think he knows what he needs to do for the people,” said Quinn, a Democrat.

Atty. Gen. Lisa Madigan, who had been viewed as a likely 2010 challenger if Blagojevich sought a third term, said the governor should immediately step down. Madigan, the daughter of longtime Blagojevich nemesis House Speaker Michael Madigan, also said she was moving forward on legal issues if the governor did not resign.

Despite facing myriad federal investigations throughout his five-year tenure, Blagojevich has maintained he committed no wrongdoing. On Monday, Blagojevich said any discussions he has had were “always lawful.”

The stunning, early morning arrest followed a series of Tribune stories revealing federal investigators had compiled secret recordings of the governor with the cooperation of a longtime confidant. In recent days, the focus of federal investigators expanded beyond a probe of allegations of wrongdoing involving state jobs, contracts and appointments in exchange for campaign dollars to the possibility that the Senate succession process had become tainted by pay-to-play politics.

Blagojevich and Harris were arrested simultaneously at their homes about 6:15 a.m., according to the FBI. They were transported to FBI headquarters in Chicago. Blagojevich appeared before U.S. Magistrate Judge Nan Nolan early in the afternoon and heard the charges read against him before being released on his own recognizance.

Spurring federal investigators to act was Blagojevich’s pending appointment of a Senate successor to Obama, whose resignation took effect Nov. 16. Blagojevich had said he expected to name a new senator around the end of the year.

Prosecutors said they had numerous recorded conversations of Blagojevich discussing the merits of potential candidates, including their abilities to benefit the people of Illinois as well as the financial and political benefits he and his wife could receive.

Prosecutors said their recordings revealed Blagojevich expressed feeling “stuck” as a sitting governor and he spent a large amount of time weighing whether he should appoint himself to the vacancy—possibly to avoid impeachment and help remake his image for a potential 2016 run for the presidency. A recent Tribune poll found Blagojevich with a record low 13 percent job approval rating.

Under state law, the governor has the sole unfettered discretion to name Obama’s appointment. Despite his arrest, he continues to have the naming authority and some lawmakers discussed looking for ways to wrest it from him.

Prosecutors alleged Blagojevich sought appointment as secretary of Health and Human Services or wanted an ambassadorship in the new Obama administration, or to be placed in a lucrative union-affiliated job in exchange for appointing Valerie Jarrett, a close friend and adviser to the president-elect to the Senate seat. Jarrett eventually took herself out of the running and Fitzgerald said “we make no allegation” that Obama was aware of Blagojevich’s attempt to leverage the appointment.

Fitzgerald quoted a Blagojevich conversation in which the governor said the Senate seat is “a bleeping valuable thing. You just don’t give it away. … I’ve got this thing, and it’s bleeping golden.”

Obama spoke briefly about the arrest today in Chicago. “Like the rest of the people of Illinois, I am saddened and sobered by the news that came out of the U.S. attorney’s office today,” Obama said. “But as this is an ongoing investigation involving the governor, I don’t think it would be appropriate for me to comment on the issue at this time.”

As reporters we being escorted from a brief photo opportunity following a nearly two hour meeting with Gore, reporters shouted questions about the matter at the president-elect. “I had no contact with the governor or his office and so I was not aware of what was happening. And as I said, it’s a sad day for Illinois,” Obama said.

Blagojevich also was alleged to be using a favors list, made up largely of individuals and firms that have state contracts or received taxpayer benefits, from which to conduct a $2.5 million fundraising drive before year’s end when a new tougher law on campaign donations, prompted by the governor’s voracious fundraising, would take effect.

Even Blagojevich’s recently announced $1.8 billion plan for new interchanges and “green lanes” on the Illinois Tollway was subject to corruption, prosecutors alleged. The criminal complaint alleges Blagojevich expected an unnamed highway concrete contractor to raise a half-million dollars for his campaign fund in exchange for state money for the tollway project. “If they don’t perform, [expletive] ’em,” Blagojevich said, according to the complaint.

Blagojevich and Harris also allegedly conspired to demand the firing of Chicago Tribune editorial board members responsible for editorials critical of Blagojevich in exchange for state help with the sale of Wrigley Field, the Chicago Cubs baseball stadium owned byTribune Co.

Fitzgerald thanked the Chicago Tribune, which had been reporting on the investigation, for honoring a rare request about eight weeks ago not to report on certain aspects of the investigation that he said could have been jeopardized.

Tribune Editor Gerould Kern said today that the newspaper delayed publishing some stories at the request of the U.S. attorney’s office during the course of reporting on the accelerating investigation of Blagojevich.

“On occasion, prosecutors asked us to delay publication of stories, asserting that disclosure would jeopardize the criminal investigation,” Kern said. “In isolated instances, we granted the requests, but other requests were refused.”

Tribune reporters Ray Long, John Chase, Monique Garcia, David Heinzmann, Hal Dardick and Susan Kuczka contributed to this report.

Speaking of good old Tony, his Obama 10′ land deal is back in play as well… Funny how that got pushed off until after the general election last month…

A former Illinois bank official, now claiming whistleblower status, says bank officials replaced a loan reappraisal that he prepared for a Chicago property that was purchased by the wife of now-convicted felon Tony Rezko, part of which was later sold to next-door neighbor Barack Obama.

In a complaint filed Thursday in the Circuit Court of Cook County, Kenneth J. Connorsaid that his reappraisal of Rita Rezko‘s property was replaced with a higher one and that he was fired when he questioned the document.

Mr. Connor, a real estate and commercial credit analyst at the Mutual Bank Corp. in Chicago, also noted in the complaint that the bank received a grand jury subpoena in October 2006 requiring it to produce information concerning Mrs. Rezko’s purchase, including the bank’s files on the property.

The complaint also said that the grand jury wanted information on Mrs. Rezko’s checking account and loan file and that the Federal Deposit Insurance Corp. (FDIC) had audited the Rezko file – although Mr. Connor’s lower reappraisal had been replaced with a higher amount.

“Connor’s internal whistle-blowing activity at Mutual Bank implicates Mutual Bank and the potentially guilty officers thereof to prosecution under federal and Illinois statutes,” said the complaint, filed by attorney Glenn R. Gaffney.

The complaint said Mutual Bank officials could be guilty of making false statements, willfully overvaluing property, bank fraud, witness retaliation, willful violation of a lawful subpoena, FDIC violations, and state banking regulations.

Mr. Gaffney, contacted at his office, declined to elaborate but confirmed that the complaint had been filed.

“It says what it says,” said Mr. Gaffney of Glendale Heights, Ill.

According to the complaint, Mr. Connor reviewed the appraisal of the Rezko property by another firm, Adams Appraisal, which had set the value at $625,000. Mr. Connor’s complaint said that he told his bosses in a report that the property had been overvalued by at least $125,000 and that a “reasonable and fair evaluation” should have been no greater than $500,000.

Later, the complaint states, Mr. Connor observed that his lower appraisal was not in the Rezko file and that he notified his supervisors that it had been replaced. He said, according to the complaint, the new file had been reviewed by the FBI and “if the FBI were to ask me about such matters, I would tell them the truth. I never rescinded my original findings.”

Critics of Mr. Obama’s dealings with Rezko charge that the senator may have gotten a deal on his property purchase, noting that Mrs. Rezko paid the full asking price for her property on an adjacent lot. Both of which were sold by a single seller. Mr. Obama bought his house for $1.65 million – $300,000 below the asking price.

When the property was sold, Mr. Obama knew Rezko was under investigation on fraud charges.

The complaint said the Rezko loan was approved by Mutual Bank President and CEO Amrish Mahajan and others so that Mrs. Rezko could buy a 9,090-square-foot vacant parcel of real estate. It said that in January 2006, Mrs. Rezko and Mr. Obama, along with his wife Michelle, signed an agreement to sell a 10-foot strip of the property to the Obamas. At that point, according to the complaint, Mr. Connor’s firm asked him to conduct the reappraisal.

The complaint said Mr. Connor is seeking $4.2 million for compensatory damages, plus unspecified punitive damages.

Rezko was a key supporter and donor throughout Mr. Obama’s political career, with the Illinois Democrat estimating that Rezko raised $250,000 for his various political campaigns, though not for his presidential bid. The two were friends who talked frequently about politics and occasionally dined out together with their wives.

Rezko was convicted this summer on federal charges of using his clout with state government to squeeze kickbacks out of firms wanting to do business with the state. The charges did not involve Mr. Obama. Rezko is now cooperating with federal prosecutors in a continuing probe of corruption in Illinois government.

Mr. Obama consulted Rezko, a real estate developer, before buying his home in 2005.

As a state senator, Mr. Obama wrote letters endorsing government support of a Rezko housing project for senior citizens. Obama aides say he was simply supporting a project that would help residents of his district, not doing a favor for a friend.

Jennifer Haberkorn contributed to this article.