Dec. 30 (Bloomberg) -- Illinois Governor Rod Blagojevich will appoint former state Attorney General Roland Burris to fill President-elect Barack Obama’s vacant U.S. Senate seat, a person familiar with the decision said. Senate Democratic leaders said they wouldn’t allow Burris to be seated.

Blagojevich, a Democrat who is facing possible impeachment by the Illinois legislature for allegedly trying to sell Obama’s seat, is scheduled to make the announcement at a news conference set for 2 p.m. Chicago time, said the person, speaking on condition of anonymity.

In a statement, Senate Democratic leaders said they wouldn’t allow Burris to be seated if appointed by Blagojevich. The leaders cited a Dec. 10 letter by 50 U.S. Senate Democrats who demanded the governor’s resignation following Blagojevich’s arrest on political corruption charges.

“This is not about Mr. Burris; it is about the integrity of a governor accused of attempting to sell this United States Senate seat,” the top Democrats said in the statement issued by the office of Democratic leader Harry Reid of Nevada. “Under these circumstances, anyone appointed by Governor Blagojevich cannot be an effective representative of the people of Illinois and, as we have said, will not be seated by the Democratic Caucus.”

Nomination Bids

Burris, 71, has lost bids in a series of Democratic primaries ranging from Chicago mayor to governor and U.S. senator. His most recent campaign was an unsuccessful race for the Democratic nomination for governor in 2002, which he lost to Blagojevich. Burris then served as vice-chair of Blagojevich’s transition team.

After Burris lost the gubernatorial primary, his Chicago- based consulting firm, Burris and Lebed Consulting, contributed $1,000 to Blagojevich’s campaign, according to the National Institute on Money in State Politics. Burris also gave $1,000 to Blagojevich’s re-election campaign in 2006.

Burris’s firm lobbied Blagojevich’s office, the General Assembly and regulators for the past seven years on behalf of industries such as cable television, mortgage brokers, funeral directors and utilities, according to registration documents filed with the Illinois Secretary of State’s Office.

The Chicago Tribune first reported the appointment on its Web site.

‘Thumbing His Nose’

“This is simply Rod Blagojevich thumbing his nose at the citizens of Illinois, the U.S. attorney, the rest of the world, and, oh yeah, the United States Congress,” Jay Stewart, executive director of the Chicago-based Better Government association, said today in a telephone interview.

A former bank examiner from rural Centralia, 275 miles (440 kilometers) south of Chicago, Burris wore a cowboy hat during his 16 years in state government to distinguish himself from the Chicago politicians who dominated Illinois politics for most of that period.

Burris’s first state job was as purchasing chief for former Governor Dan Walker, who served a prison sentence for bank fraud after he left office in 1977. Burris went on to win election as state comptroller and then Illinois attorney general.

‘Tainted’

“I don’t know why on earth Roland would accept this appointment, given that everything the governor touches is tainted,” said Stewart, who testified against the governor during the impeachment hearings.

Burris didn’t immediately return a voice mail left at the office of his consulting firm.

A Senate appointment would “have no impact on the impeachment process,” said Steve Brown, a spokesman for Illinois House Democrats who declined to comment further on reports of the appointment.

Nick Shapiro, an Obama presidential transition team spokesman, declined to comment.

Republicans criticized Democrats who control both chambers of the Illinois General Assembly for failing to strip Blagojevich of his appointment powers when they had the chance.

“Once again, Blagojevich Democrats have failed the people of Illinois by refusing the strip Rod Blagojevich of his Senate appointment power and blocking a vote of the people,” Andrew McKenna, head of the Illinois Republic Party, said today in an e-mailed statement.

House Speaker Michael Madigan, who also heads the state’s Democratic Party, abandoned plans to hold a special election for the U.S. Senate post three weeks ago after a revolt among Democrats concerned about costs and the risk of losing the seat to the Republicans.

To contact the reporters on this story: Joe Carroll in Chicago Jcarroll8@bloomberg.net; James Rowley in Washington jarowley@bloomberg.net

Last Updated: December 30, 2008 14:36 EST