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Here's a bit more from the statement, which goes some way to explaining why Blagojevich might have been reckless enough to put a Senate seat up for sale even while knowing that he was under federal investigation:

The charges focus, however, on events since October when the Government obtained information that Blagojevich and Fundraiser A, who is chairman of Friends of Blagojevich, were accelerating Blagojevich's allegedly corrupt fund-raising activities to accumulate as much money as possible this year before a new state ethics law would severely curtail Blagojevich's ability to raise money from individuals and entities that have existing contracts worth more than $50,000 with the State of Illinois. Agents learned that Blagojevich was seeking approximately $2.5 million in campaign contributions by the end of the year, principally from or through individuals or entities - many of which have received state contacts or appointments - identified on a list maintained by Friends of Blagojevich, which the FBI has obtained.

More from Pat Fitzgerald's statement on the Blagojevich charges:

A 76-page FBI affidavit alleges that Blagojevich was intercepted on court-authorized wiretaps during the last month conspiring to sell or trade Illinois' U.S. Senate seat vacated by President-elect Barack Obama for financial and other personal benefits for himself and his wife. At various times, in exchange for the Senate appointment, Blagojevich discussed obtaining: - a substantial salary for himself at a either a non-profit foundation or an organization affiliated with labor unions; - placing his wife on paid corporate boards where he speculated she might garner as much as $150,000 a year; - promises of campaign funds - including cash up front; and - a cabinet post or ambassadorship for himself.

Just last week, on December 4, Blagojevich allegedly told an advisor that he might "get some (money) up front, maybe" from Senate Candidate 5, if he named Senate Candidate 5 to the Senate seat, to insure that Senate Candidate 5 kept a promise about raising money for Blagojevich if he ran for re-election. In a recorded conversation on October 31, Blagojevich claimed he was approached by an associate of Senate Candidate 5 as follows: "We were approached 'pay to play.' That, you know, he'd raise 500 grand. An emissary came. Then the other guy would raise a million, if I made him (Senate Candidate 5) a Senator."

Who's Senate Candidate 5? Sounds like we'll find out...

From a statement from US Attorney Pat Fitzgerald...

Blagojevich was intercepted on court-authorized wiretaps during the last month conspiring to sell or trade Illinois' U.S. Senate seat vacated by President-elect Barack Obama for financial and other personal benefits for himself and his wife.

It's also alleged that Blagojevich wanted to purge Chicago Tribune editorial board and in return help them sell Wrigley Field.

After the jump is the full statement...

Read More →

Beleaguered Illinois governor Rod Blagojevich was taken into custody by law enforcement authorities at his home this morning, reports the Tribune Company, sourcing a US Attorney's office spokesman. The governor's chief of staff, John Harris, was also arrested.

Hours earlier, the Chicago Tribune reported that the federal probe of pay-to-play politics in the Blagojevich administration had expanded to include the question whether the process of filling Barack Obama's US Senate seat -- for which the governor is responsible -- had become tainted.

Earlier this week, the same (also beleaguered!) paper reported that the feds had secretly taped Blagojevich as part of their investigation.

Yesterday, the governor told reporters: "I don't believe there's any cloud that hangs over me. I think there's nothing but sunshine hanging over me".

Late Update: Prosecutors have filed a criminal complaint.

That didn't take long.

Yesterday, as we noted, the Wall Street Journal reported that Merrill Lynch CEO John Thain was seeking an annual bonus of as much as $10 million -- after seeing his company lose over $11 billion this year.

New York Attorney General Andrew Cuomo and Senate Majority Leader Harry Reid were both quick to express their outrage, noting that Bank of America, which has completed a deal to buy Merrill, received $15 billion from the bailout fund this fall. And Merrill's board appeared reluctant to go along.

And sure enough, at the company's board meeting yesterday afternoon, Thain announced that he, along with other senior execs, would forgo bonuses this year, "given current economic and market conditions."

Given the level of outrage that Thain's request had provoked so quickly, the board's apparent opposition, and the broader public mood against excessive CEO pay, Thain may have seen the writing on the wall.

And given that he got a $15 million bonus when he joined the firm last fall, we think he should be fine.

Last week, the Bernie Kerik Legal Defense Trust held a $75-a-plate-minimum beefsteak dinner in honor of the man himself.

First, a quick reminder of why the former New York City Police Commissioner needs the money:

Kerik became mired in muck in late 2004 after President Bush unsuccessfully nominated him to be Homeland Security Secretary. The national scrutiny helped to result in a 16-count indictment filed late last year, for charges that included lying to White House officials during the nomination process, accepting mob-tied money for renovations to his apartment, and tax fraud. Last Friday, federal prosecutors accused him of having embarked on a "crime spree." His trial begins in January.

The beefsteak dinner fundraiser, which attracted 200 people to Kerik's hometown of Paterson, NJ, was detailed by The New Yorker, which described "thick-necked" men tucking into their steaks. The program celebrated both Kerik's Jersey roots and his now infamous New York career. It culminated in a fifteen minute long "soundtrack of strings and a video of still images from the World Trade Center site played--like an extended Giuliani campaign commercial."

And it looks like Kerik's colorful personal life apparently hasn't alienated some members of the religious community. The magazine reports:

"...Monsignor David Cassato, an N.Y.P.D. chaplain, had made the trip from Bensonhurst to offer a blessing. "Tonight, I was supposed to meet Cardinal Martino," Cassato said. "He lives in Rome, and he's very, very close to our Holy Father. I got a call and they said, 'There's this function going on for Bernie.' I said, 'I'm skipping the Cardinal and I'm coming.'"

Kerik ended the night with a speech met by a standing ovation.

The news that John Thain, the CEO of Merrill Lynch, has requested a $10 million bonus isn't sitting well with some prominent political figures.

A statement from Senate Majority Leader Harry Reid notes that in October, Merrill received $10 billion in bailout money. Reid then declares:

The TARP program, from which Merrill Lynch has taken billions of taxpayer dollars, was designed explicitly to limit executive compensation, bonuses and golden parachutes. While American families struggle to keep their jobs and their homes, I question the chutzpah of asking for a $10 million taxpayer-subsidized bonus. Americans deciding which bills to pay this month just to make ends meet do not want their hard-earned money even indirectly spent rewarding executives from banks that are largely responsible for the economic crisis. I sincerely hope that Merrill Lynch rejects this request.

Meanwhile, New York Attorney General Andrew Cuomo, who is conducting an investigation of executive pay on Wall Street, has written a letter to Merrill board members that makes similar points. Cuomo writes:
Paying executives at Merrill millions each in "performance" bonuses in this context [of a taxpayer-funded bailout of Wall street firms] would be oxymoronic to say the least and certainly a thumb in the eye to taxpayers. Enough is enough.

Earlier today we reported that Newt Gingrich had recently been on Fox denouncing Democatic lawmakers for ties to Fannie Mae and Freddie Mac -- despite himself having worked as a consultant for Freddie back in 2006, helping to fight off potential regulation.

But it turns out that the Newt-Freddie relationship goes even deeper.

A July 1999 story in the American Banker, a banking trade publication (via Nexis), reports that the former House Speaker had recently been hired by Freddie "to provide strategic counsel on a range of issues," according to a company spokesman.

The same story adds that Gingrich's former chief of staff, Arne Christenson, was hired that year by Fannie Mae as senior vice president for regulatory policy.

Just to remind you, Gingrich is the guy who was saying in September:

what you have today is that the rich in Wall Street and the powerful at Fannie Mae and Freddie Mac had so many politicians beholden to them that, in fact, nobody was going to check them. And so they got away with things that were absolute bologna, and it's a tragedy.

Talk about tone deaf!

Merrill Lynch chief John Thain wants a bonus of as much as $10 million, reports (sub. req.) the Wall Street Journal.

Merrill's compensation committee is, not surprisingly, said to be objecting, pointing out among other things that, due to the dire economic situation, other firms like Goldman Sachs -- which did better than Merrill -- are forgoing bonuses this year.

Merrill has lost almost $12 billion this year, and is about to be taken over by Bank of America. Its shares have fallen fom $50 when Thain took over late last year to $13.04 at close of trading Friday.

It looks like Thain -- who was a major fundraiser for John McCain's campaign and was described by USA Today as a member of McCain's "team" -- is a practitioner of the bargaining strategy in which you begin with a maximalist offer as a starting point for negotiation:

A few months ago, when the board began seriously considering 2008 bonuses, a proposal was presented to the compensation committee by Merrill that Mr. Thain should be paid in excess of $30 million, according to people familiar with the matter. That number has since come down in recent talks with various board members and Mr. Thain has recently indicated to committee members that $5 million to $10 million is more reasonable.

The Journal notes some evidence in Thain's favor:
Mr. Thain's decision to sell Merrill likely salvaged billions of dollars for shareholders and saved a huge number of jobs at the firm, even though thousands of positions will be eliminated following the takeover.

Mr. Thain's quick moves won him respect on Wall Street, especially in contrast to top executives at Lehman Brothers Holdings Inc. and Bear Stearns.

Still, to Americans hit by the mortgage crisis that Merrill and other Wall Street firms helped set the stage for, those points may not carry much weight.

Moments ago, officials with the Department of Justice wrapped up a press conference at which they are publicizing the charges -- previously contained in a sealed indictment -- against the five former Blackwater guards charged with manslaughter in the deadly September 2007 shootings of 17 unarmed Iraqi civilians.

The case has been assigned to a US District Court in Washingotn DC, but defense lawyers want the case moved to Utah, where one of the former guards lives, and where they would presumably find a more conservative, pro-gun jury, reports the Associated Press.

The ex-guards could face 30-year sentences under an anti-machine gun law designed to target drug offenders.

We're also seeing an interesting emerging defense strategy of suggesting that DOJ is bowing to Iraqi pressure: "We are confident that any jury will see this for what it is: a politically motivated prosecution to appease the Iraqi government," Steven McCool, who represents one of the defendants, told the AP.

One ex-Blackwater guard, Jeremy Ridgewater, has already come to a plea deal with prosecutors, pleading guilty to voluntary manslaughter.

Blackwater is the largest security contractor in Iraq.

Late Update: In a lengthy statement emailed to TPMmuckraker, Blackwater responds:

Blackwater does not have access to all of the information gathered by federal investigators. Based on the information available to us, we understand that these individuals acted within the rules set forth for them by the government and that no criminal violations occurred.


As noted by the Department of Justice during its press conference, Blackwater as a company has not been charged with any crimes, and neither have any of the hundreds of other Blackwater professionals serving in Iraq.

Late Late Update: Read the court documents: - Indictment against Blackwater - Jeremy Ridgewater charges - Jeremy Ridgewater plea deal