Blago discussed laundering campaign funds

Federal investigators have filed motions to freeze funds in Rod Blagojevich’s campaign accounts, worried that the governor might try to hide the cash.  NBC’s Chicago affiliate reports on a little-discussed aspect of the complaint filed against Blagojevich — his discussions on potential ways to launder campaign funds:

It should come as no surprise to Gov. Rod Blagojevich that authorities are reportedly moving to freeze his campaign fund – and not just because the same thing happened to George Ryan. According to the criminal complaint filed against Blagojevich, the governor and three of his aides contemplated that prosecutors might do just such a thing – and discussed ways to secure the millions of dollars in the fund by moving the money elsewhere.

“Also on December 5, 2008,” the complaint says, “Rod Blagojevich and three others discussed whether to move money out of the Friends of Blagojevich campaign fund to avoid having the money frozen and also considered the possibility of prepaying money to Rod Blagojevich’s criminal defense attorney with an understanding that the attorney would donate the money back at a later time if it was not needed. They also discussed opening a new fund raising account named Citizens for Blagojevich with new contributions received.”

The discussion appears to have been prompted by the Tribune’s story that day that an ally of the governor’s was cooperating in the federal probe.

“Prepaying” an attorney?  That’s money laundering.  The attorney would hold the cash until the feds went away, then suddenly “refund” the unused balance to Blagojevich.  Setting up a legal defense fund would have been perfectly acceptable, though, and will probably happen now that the state has refused to pay Blagojevich’s legal bills.

This could explain why Robert Blagojevich, the governor’s brother, has hired his own criminal defense attorney.  Robert took part in that discussion, at one point noting that the shell game would fall apart if someone wore a wire during the conversation — a statement that must have had the feds laughing.  He may have had more involvement in the Senate seat auction as well:

Robert Blagojevich was overheard on more than 30 different conversations, the sources say. They include ones in which the governor allegedly is discussing trading President-elect Barack Obama’s U.S. Senate seat — as well as the awarding of state contracts — for campaign contributions.

The governor’s brother became chairman of the Friends of Blagojevich campaign fund in August, state records show. Since that time, he had been pressing people who had raised money for Blagojevich to raise more campaign cash before the end of the year, a source familiar with the governor’s fund-raising operation said. “Rob was the point guy hounding people to raise money,” the source said.

If Governor Blagojevich wanted explicit quid pro quo for his appointment of Obama’s replacement, he’d likely have at least some of the cash directed to his campaign fund.   His brother Robert would have to know enough about the transaction to confirm its completion.  The timing of his brother’s appointment to chair his fundraising committee is a little curious, too.  Obama officially won the nomination in August, while Blagojevich had been governor for over five years at that point and had run two campaigns to win it.  Did he need someone he felt he could trust absolutely in case Obama won and he could cut deals for this “f*****g valuable thing”?