Illinois Democrats Let Blagojevich Keep Naming Power (Update1)

By Joe Carroll

Dec. 16 (Bloomberg) -- Democrats in the Illinois House of Representatives postponed stripping Governor Rod Blagojevich’s power to fill the U.S. Senate seat vacated by President-elect Barack Obama that prosecutors say Blagojevich tried to sell.

The governor, a Chicago Democrat, retains authority to appoint Obama’s successor while the House pursues an impeachment process that may last weeks. Democratic lawmakers led by House Speaker Michael Madigan dropped plans late yesterday to schedule a special election to fill the post after failing to agree in a closed-door meeting, said Steve Brown, a Madigan aide.

Blagojevich, 52, has resisted demands he resign since his Dec. 9 arrest by the FBI and accusations he tried to auction Obama’s seat for personal gain and intimidate the Chicago Tribune newspaper into firing editorial writers. Republicans said Democrats, who hold a 67-51 majority in the chamber, seek to avoid a loss of the seat to the GOP in a special election.

“Shame on you,” Representative William Black, deputy leader of Republicans in the House, shouted during a debate in the state capitol building in Springfield. “We had an opportunity to limit the power of this governor and you refused.”

Democrats in the House met yesterday and aired “differences of opinion on the best way to proceed” with a special election for Obama’s seat, Brown said. The differences could not be overcome so a vote on taking the decision away from Blagojevich was “deferred for now,” he said.

‘Extremely Disappointing’

Brown and legislators declined to comment on the details of the debate. They wouldn’t respond to GOP accusations that the decision resulted from concern that a Democrat may lose an election to fill the Senate seat.

Republicans outside Illinois criticized the outcome.

“It’s extremely disappointing that Democratic leaders in Illinois are ignoring bipartisan calls for a special election,” Robert Duncan, chairman of the Republican National Committee, said in a statement distributed on PRNewswire.

A 21-member panel of the Illinois House of Representatives, composed of 12 Democrats and nine Republicans, is scheduled to begin deliberations today on whether to impeach the governor, Madigan said yesterday in a meeting with reporters televised on WGN-TV.

The last time Illinois impeached a state official was 175 years ago, according to the Legislative Research Unit, researcher for the General Assembly. Blagojevich is the fourth governor elected in Illinois among the past seven to be arrested.

Governor Won’t Attend

Blagojevich won’t attend the opening of the impeachment panel tomorrow in Springfield and probably won’t send a representative, spokesman Lucio Guerrero said yesterday in an e- mailed statement. Blagojevich has been working from his office in downtown Chicago since the day after his arrest, signing bills into laws involving health insurance for autistic children and tax breaks for film producers.

Until a replacement is appointed or a special election is held, the state’s 12.8 million residents are represented in the U.S. Senate by just one of the two seats to which they are entitled. Illinois is the fifth-most-populous state and home to four of the 30 companies in the Dow Jones Industrial Average stock index, including Caterpillar Inc. and Kraft Foods Inc.

Fitch Ratings cut the credit rating yesterday on $19.1 billion of Illinois bonds because of concern the governor’s legal woes will make it more difficult to deal with a $2 billion budget deficit.

Standard & Poor’s has said it may lower the state’s credit rating in response to Blagojevich’s arrest, which would add millions of dollars to borrowing costs, according to Scott Burnham, a spokesman for Illinois Treasurer Alexi Giannoulias.

Attorney General Request

“The people of Illinois are in this position because we have a governor who tried to monetize an appointment,” said Aaron Schock, a Republican member of the Illinois House who becomes a congressman next month. “The only way to restore their faith is to let this choice be decided in an open and fair election by the people.”

Blagojevich has been called unfit to serve by Illinois Attorney General Lisa Madigan, a daughter of the House speaker. The Illinois Supreme Court hasn’t indicated whether it will act on her Dec. 12 request that Blagojevich be declared incapable of fulfilling his duties and be temporarily removed from office.

U.S. Attorney Patrick Fitzgerald accused Blagojevich last week of threatening to withhold state funds from a children’s hospital unless an executive made a $50,000 campaign contribution.

The governor directed aides to tell the Tribune Co. that the company, which also owns the Chicago Cubs baseball team, would lose any chance of state help in selling the Cubs home stadium of Wrigley Field unless writers who penned critical editorials were fired, Fitzgerald’s office said in court documents. The Chicago-based company sought bankruptcy court protection from creditors on Dec. 8.

To contact the reporter on this story: Joe Carroll in Springfield, Illinois, at jcarroll8@bloomberg.net

Last Updated: December 16, 2008 09:51 EST

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