CHICAGO (Reuters) - Illinois lawmakers opened an impeachment inquiry into Gov. Rod Blagojevich on Tuesday, saying they would look at years of questionable activities including last week’s charge that he tried to sell the U.S. Senate seat vacated by President-elect Barack Obama.
The head of the bipartisan committee said Blagojevich’s lawyer would attend the panel’s next hearing on Wednesday.
Blagojevich, a Democrat, was arrested and charged a week ago with scheming to trade the vacant Senate seat and political favors for campaign cash and jobs.
The governor has denied doing anything wrong and refused calls from within his own party to resign. His lawyer, Edward Genson, said Tuesday they would fight the charges.
“The case that I’ve seen so far is significantly exaggerated. It’s not what people think it is,” Genson said.
That stance and a lengthy impeachment process could be a distraction as Obama announces Cabinet nominations and tries to lay out an agenda for dealing with the recession and other crises after his January 20 inauguration.
Obama has said he had no contact with the governor, and his staff acted appropriately in discussions about the Senate seat. The president-elect was not implicated in the federal investigation.
Obama, asked on Tuesday whether the state should hold a special election to fill the Senate seat, said: “I’ve said that I don’t think the governor can serve effectively in his office. I’m going to let the state legislature make a determination in terms of how they want to proceed.”
After Illinois legislators authorized the impeachment committee on Monday, Democrats put off any consideration of a special election, triggering howls from Republicans who see an opening to fill the seat with one of their own.
Blagojevich still has sole authority to fill the seat, but has been urged not to in view of the taint from the charges.
The 21-member state legislative committee met briefly on Tuesday in Springfield, the state capital. Committee chair Rep. Barbara Currie, a Democrat from Chicago, suggested several avenues of investigation and asked the public to weigh in with any evidence of Blagojevich misdeeds.
“We would be more than happy to hear from ordinary folks, whistleblowers, whatever, who think they have something to offer,” she said.
Currie said the committee would seek permission to speak to witnesses and review documents from the U.S. attorney in Chicago, Patrick Fitzgerald, who brought the federal case last week with the help of court-approved wiretaps.
Hugh Totten, a Chicago lawyer unaffiliated with the case, said there is a danger that witnesses granted immunity by the impeachment committee may escape the grasp of prosecutors.
“The legislators might grant immunity to the guys making the payments” to the governor, he said.
But Currie said the committee would be sensitive to the federal investigation.
One witness who may not be heard from is imprisoned businessman Tony Rezko, a Blagojevich adviser who was convicted of extorting bribes as a political fixer and is cited as a cooperating witness in the complaint against the governor.
Rezko was an active campaign fund-raiser for the governor and also raised funds for Obama when he ran for Senate.
A federal judge on Tuesday granted a request from Rezko’s lawyers to postpone his sentencing, which may indicate he will be called upon to testify against the governor.
The legal cloud hanging over Blagojevich was also weighing on state finances. The charges and Illinois’ projected $2 billion budget deficit were cited by Fitch Ratings when it downgraded the state’s general obligation debt to “AA-minus” from “AA.” The two other major debt ratings agencies cited the impediment of the legal woes in issuing warnings.
The state on Tuesday held a delayed auction of $1.4 billion in notes that would help pay off some of the $4.5 billion backlog of unpaid bills. (Additional reporting by Karen Pierog; Editing by Michael Conlon and Doina Chiacu)