Everything has a price, including a used seat in the U.S. Senate.
It appears that before his arrest Tuesday, Illinois’ Democratic Gov. Rod Blagojevich was simply trying to test the market.
“I’ve got this thing, and it’s (bleepin’) golden,” Blagojevich allegedly observed on an FBI wiretap, according to an arrest affidavit. “And, uh, uh, I’m just not giving it up for (bleepin’) nothing. I’m not gonna do it.”
This bleepin’ governor had just been handed the power to name President-elect Barack Obama’s successor to the U.S. Senate. But he couldn’t auction it on eBay or put it on Craigslist. He couldn’t even solicit buyers on a Blago bloggo. So instead, he became something akin to a sports agent, the FBI alleges.
The “trick” Blagojevich is quoted as saying, “is how do you conduct indirectly . . . a negotiation.”
What many Americans indignantly call corruption is just business in the Windy City, named for the constant rush of air from its politicians.
Shakedowns, kickbacks, threats and extortion — these are very harsh words for what many Illinois leaders, historically, have preferred to think of as just a highly deregulated market.
I was born there and grew up thinking that leaders pursued riskier professions than pimps and dope dealers. If you served in office, you might just serve in the pen, too.
I think the state’s last governor, George Ryan, would back me up on this. But he has been busy pleading for clemency from the hoosegow.
Financially struggling, dogged by federal investigations and fearing impeachment, Blagojevich saw Obama’s vacated Senate seat as his ticket out, according to the affidavit. He immediately recognized its value and wondered if the open market would, too.
Obama spent nearly $15 million capturing this seat in 2004. But it is only good for another two years, putting its residual value at roughly $5 million.
Senate seats go for a premium in the Land of Lincoln.
Illinois Democratic Sen. Dick Durbin just spent about $11 million recapturing his. By contrast, candidates just spent an average of $7.4 million each to win five open Senate seats nationwide, according to a recent report in the Chicago Tribune.
A clever sports agent could claim that Obama’s seat has magical properties, having launched a relatively unknown black man to the White House in less than one term.
Additionally, the supply of available Senate seats has fallen dramatically since Nov. 4.
Given this scarcity, I’m thinking $5 million would be the minimum opening-bid price in negotiations that easily could have attracted millions more.
Yet, at one point in his price-discovery process, Blagojevich considered selling the seat for as little as $500,000, according to the FBI affidavit.
This was just one of many alleged discussions, though.
Ultimately, the governor decided to make a list that he said “can’t be in writing,” but would enumerate things he would accept in exchange for the seat, the FBI alleged.
This list, according to the FBI, included: a job at the Red Cross; the secretary of Health and Human Services post; an ambassadorship; a job at a group connected to several labor unions; a job at a foundation that is “heavily dependent on federal aid”; a corporate job making $250,000 to $300,000 a year; boardroom seats at corporations for his wife where she “picks up another 150 grand a year or whatever.”
He even thought of starting a nonprofit organization and asking Obama to get “his friend Warren Buffett or some of those guys to help us on something like that.”
Surely, Bill Gates could pitch in, too: $10 million, $15 million, $20 million in an organization like that.
Here are some more alleged Blagojevich quotes from the arrest affidavit:
“The immediate challenge (is) how do we take some of the financial pressure off of our family.”
“I can drive a hard bargain. You hear what I’m saying. And if I don’t get what I want, . . . then I’ll just take the Senate seat myself.”
“It is not coming for free. . . . It’s got to be good stuff for the people of Illinois and good for me.”
Too bad U.S. Attorney Patrick Fitzgerald arrested Blagojevich before he could finish testing the market.
“The conduct would make Lincoln roll over in his grave,” Fitzgerald said Tuesday at a nationally televised news conference.
But this simply isn’t true.
President Abraham Lincoln has been sealed under tons of steel-reinforced concrete since 1901.
Some folks in the counterfeiting business had plotted to nab Lincoln’s body for a $200,000 ransom and the release of their engraver from prison.
The concrete over his grave proved to be what business school professors like to call a barrier to entry.
Consequently, the market for dead presidents has never been tested, either.
Al Lewis: 201-938-5266 or al.lewis@dowjones.com
