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Obama denies knowledge of Blagojevich's scheme

WASHINGTON — President-elect Barack Obama said Thursday that he was "appalled" at charges that Illinois Gov. Rod Blagojevich tried to sell Obama's vacant Senate seat, and said that he never spoke with the governor about the vacancy and that he's ordered an internal review to see if any of his staff did.

"I was as appalled and disappointed as anybody by the revelations earlier this week, Obama said at a Chicago news conference.

"I had no contact with the governor's office. I did not speak to the governor about these issues. That I know for certain.

"What I want to do is to gather all the facts about any staff contacts that . . . may have taken place between the transition office and the governor's office. And we'll have those in the next few days, and we'll present them.

"But what I'm absolutely certain about is that our office had no involvement in any deal-making around my Senate seat. That I'm absolutely certain of."

Obama held the press conference to announce his long-expected nomination of former Senate Majority Leader Tom Daschle of South Dakota to be his secretary of Health and Human Services. Daschle also will serve as the director of a new White House office of health reform, from which he'll direct the administration's quest to curb runaway health care costs and provide insurance to the uninsured.

Obama suggested that he doesn't know how he'd pay for his plans to expand health care. As a candidate, he proposed financing it by raising taxes on those who make more than $250,000 a year. Now, he's considering delaying those tax increases lest they slow economic recovery.

"I have not made yet a determination in terms of how we're going deal with the rollback of the Bush tax cuts for the wealthiest Americans," he said Thursday. He added, however, that some of the cost would be offset by savings from health-care efficiencies. He plans, for example, to push for streamlining medical billing and using more information technology to shave costs.

"We can't simply insure everybody under the current program without bankrupting the government or bankrupting businesses or states," he said. "So we're going to spend a lot of time on how do you streamline and rationalize the system."

The federal charges against Blagojevich strongly suggested that Obama either never knew about Blagojevich's alleged search for a payoff in exchange for appointing Obama friend Valerie Jarrett to the vacant seat, or that he or his aides rejected them outright.

Blagojevich is even quoted in transcripts cursing Obama for not playing along, something that Obama all but wore as a badge of honor Thursday.

"As is reflected in the U.S. attorney's report, we were not, I think, perceived by the governor's office as amenable to any deal-making," Obama said. "And, you know, I won't quote back some of the things that were said about me. . . . This is a family program."

He also said he hadn't been contacted by any federal officials about the investigation.

Speculation, however, was rampant about who Blagojevich might have talked to inside the Obama camp and whether it was merely routine political talk about who might get the Senate seat — the governor's appointment — or whether there was any discussion of what Blagojevich wanted as a payoff.

Rep. Rahm Emanuel, D-Ill., Obama's choice to be his White House Chief of Staff, refused to comment Thursday when asked if he'd spoken to Blagojevich about the Senate seat.

"You're wasting your time," Emanuel told a Chicago Sun-Times reporter who found him watching his children perform in a concert at City Hall. "I'm not going to say a word to you. I'm going to do this with my children. . . . I'm a father. I have two kids. I'm not going to do it."

As Blagojevich went to work Thursday with no signs of stepping down, Illinois state legislators prepared for possible impeachment proceedings, which could take months. Illinois Attorney General Lisa Madigan said she could go to the state Supreme Court and have him removed if he doesn't quit or isn't impeached.

The state legislature also was preparing for a special session to pass a law stripping Blagojevich of the right to fill the remaining two years of Obama's Senate term, instead giving that power to the people through a special election sometime next year.

With his state under fire for a culture of corruption — Blagojevich would be the fourth Illinois governor since the 1960s under criminal charges — Obama said he hoped people would also remember the good public officials the state has produced.

"In Illinois, as is true in American politics generally, there are two views of politics. There's a view of politics that says you go in this for sacrifice and public service, and then there's a view of politics that says that this is a business, and you're wheeling and dealing, and what's in it for me?" Obama said.

Obama renewed an earlier statement urging Blagojevich, a fellow Democrat, to step down. "I hope that the governor himself comes to the conclusion that he can no longer effectively serve and that he does resign."

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