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Judge to Set New Trial for Blagojevich

CHICAGO — U.S. District Judge James B. Zagel told attorneys in the corruption trial of former Illinois Gov. Rod Blagojevich to be back in court Aug. 26 to set a date for a new trial.

A jury late Tuesday found the impeached governor guilty of just one of 24 counts. Jurors said after 14 days of deliberation they were deadlocked on the remaining 23 counts and all four counts facing his elder brother, Robert Blagojevich, who served as his campaign finance chairman in 2008.

After the verdict, Zagel said he intended to declare a mistrial on the undecided counts. Federal prosecutors said that they wanted to retry the governor as quickly as possible.

The single guilty verdict — on the charge of lying to a federal agent — was considered the least serious of all the counts. It stemmed from a 2005 conversation in which Blagojevich told the Federal Bureau of Investigation that he maintained a "firewall" between his campaign fundraising and government actions.

The charge carries a maximum five-year sentence. Blagojevich said he would appeal the conviction.

After the verdict was released, several jurors told reporters that a lone juror was the holdout on many of the votes, and that the prosecution's case was often confusing and complex. Most of the jurors, however, said they believed the former governor was guilty on most counts, including the allegation that he sought to personally profit from his power to appoint President Obama's replacement in the U.S. Senate after Obama, then the junior senator from Illinois, was elected president.

Blagojevich faced 24 criminal counts alleging mail fraud, racketeering, racketeering conspiracy, attempted extortion, extortion conspiracy, bribery, bribery conspiracy, and lying to FBI agents.

Prosecutors during the eight-week trial alleged the governor and three associates hoped to personally profit from many pay-to-play schemes, including one involving the state's 2003 $10 billion pension bond sale. Blagojevich and the associates hoped to reap up to $500,000 from an $809,000 consultant's fee paid by Bear, Stearns & Co. for its role as book-runner on the bond sale, prosecutors said.

Former Blagojevich chief of staff Alonzo Monk testified that the promise of personal financial benefits drove the decision to select Bear Stearns, as did Blagojevich's decision, on the day of pricing in June 2003, to give the go-ahead to issue the full $10 billion of bonds that the Illinois Legislature had authorized.

Prosecutors also called former state debt manager Dave Abel, now a public finance banker at William Blair & Co., who said Bear Stearns was among the six firms ranked as highly qualified by the state finance team from proposals submitted by banks seeking to work on the deal.

A cost of issuance sheet, included in documents submitted by prosecutors, shows that Bear Stearns was credited with 23% of the transaction and made $8 million in fees. The state paid a total of $76.3 million in cost of issuance fees, including $35 million in underwriting fees.

The governor was arrested by federal authorities in December 2008. The General Assembly removed Blagojevich from office in early 2009.

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