Defiant Blagojevich Pledges to Fight

CHICAGO - Ten days after his arrest on federal corruption charges and two days into an Illinois House impeachment committee hearing, a defiant Gov. Rod Blagojevich made his first public statement Friday, declaring his innocence and vowing to stay in office.

"I will fight, I will fight, I will fight until I take my last breath," Blagojevich said at a brief appearance last Friday afternoon at the state building in downtown Chicago. He asked the people of Illinois to "wait and be patient, sit back, and take a deep breath and please reserve judgment."

The governor's statement comes nearly two weeks since federal authorities arrested Blagojevich and his now former chief of staff, John Harris, on criminal corruption charges that included various pay-to-play allegations. Chief among the charges was the allegation that the governor sought to personally profit from his power to name President-elect Barack Obama's Senate replacement.

Since the arrest, Blagojevich has remained defiant, refusing to resign while hiring a team of high-profile criminal defense attorneys.

Blagojevich's statement Friday came at the end of an eventful week in which an Illinois House special impeachment committee launched hearings, the Illinois Supreme Court shot down Attorney General Lisa Madigan's historic request that the court declare Blagojevich unfit to govern, and members of an Illinois Senate impeachment committee met with constitutional lawyers to discuss procedures of a removal trial.

Calling his critics a political lynch mob, Blagojevich said he refused to "quit a job people hired me to do."

"I have on my side the most powerful ally there is, and it's the truth," he said. "And besides, I have the personal knowledge that I have not done anything wrong."

The 76-page Federal Bureau of Investigation affidavit against Harris and Blagojevich, which features taped recordings of the governor, alleges a series of shakedown schemes, including an attempt to remove members of the Chicago Tribune editorial board who had been critical of Blagojevich.

The scandal has started to cost the state fiscally. After postponing the sale of $1.4 billion of general obligation notes immediately after Blagojevich's arrest, the state moved to sell the notes last week amid concerns over the scandal.

In advance of the sale, Fitch Ratings downgraded Illinois GO debt to AA-minus from AA, Standard & Poor's put the state's AA long-term rating on negative CreditWatch, and Moody's Investors Service assigned a short-term rating of MIG-2 to the notes, down from the MIG-1 rating on the state's last note issue in April.

The ratings and concerns over the scandal helped sour broker-dealer interest in the Dec. 16 note sale. JPMorgan was the sole bidder on two of three maturities and won the deal offering a 4.5% coupon on the three maturities due in April, May, and June with an average yield to the state of 3.99%, including issuance costs.

Illinois Treasurer Alexi Giannoulias estimated that the downgrades would cost the state about $20 million in added interest based on a comparison to short-term index rates.

After the governor's statement last Friday, one of his criminal attorneys, Sam Adams Jr., taking questions from reporters, said the governor would consider stepping aside "if the people of Illinois suffer."

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