By Janan Hanna
CHICAGO (Reuters) - By the summer of 2008, then Illinois Governor Rod Blagojevich realized he might have the power to appoint a senator to represent Illinois, Blagojevich testified on Tuesday at his federal corruption trial.
He said he was considering himself, Illinois Attorney General Lisa Madigan, then Illinois Senate President Emil Jones, Congressman Danny Davis and a yet to be determined African American war hero.
By October, the list was pretty much the same, Blagojevich testified. And Congressman Jesse Jackson Jr. was not under consideration, he said.
Madigan, daughter of Illinois House Speaker Michael Madigan, whom Blagojevich described as his "political nemesis," would be a good choice if it would help him broker a deal with the Speaker to get certain legislative initiatives passed, Blagojevich testified.
"He had to pass a capital bill," Blagojevich said of one of the conditions he thought he would impose on Michael Madigan in exchange for naming his daughter.
"I wanted a significant increase in expanding affordable healthcare in Illinois." he said.
Blagojevich said he also wanted a commitment in writing from Madigan that there would be no state income tax increase.
Under questioning by his own attorney Aaron Goldstein, Blagojevich said he talked "incessantly" with his advisers about the U.S. Senate seat ultimately vacated by Barack Obama, even before Obama was elected president in November, 2008.
"This was a big decision," Blagojevich said. "I obviously had a hard time making decisions. But there was a method to the madness and I really believed I was on the right track and then everything changed."
Blagojevich was arrested in December 2008 for allegedly trying to use his power to fill the vacant Senate seat, and perform other government actions, in exchange for personal gain, including campaign contributions.
He is on trial for a second time on 20 counts including wire fraud, conspiracy, attempted extortion and bribery. A jury in August found him guilty of one count of lying to federal authorities but was deadlocked on the more serious charges.
In other testimony on Tuesday, Blagojevich flatly denied he tried to extort fundraising help from an executive of Children's Memorial Hospital in exchange for approving an $8 million to $10 million increase in Medicaid reimbursements for pediatric doctors.
The executive, Patrick Magoon, testified for the prosecution that he felt he was being shaken down in exchange for the state action.
With his testimony regarding the Senate seat on Tuesday, Blagojevich was trying to persuade the jurors he was motivated by a desire to break the legislative gridlock that had stymied him in Springfield, and if that did not work, he would be interested in loyal political supporters.
Blagojevich said he was considering Jones, the former Illinois Senate president, because the two were strong allies at that time and Jones was very interested in the job. He liked Davis because he was a "good person" and cared a lot about the poor, Blagojevich said.
Prosecutors played tapes and presented testimony of witnesses that showed Blagojevich wanted powerful Democrats to contribute $10 million to $15 million to a non-profit organization he could head, or appoint him to a cabinet post, and also that he wanted a job for his wife in exchange for a decision to appoint Valerie Jarrett, Obama's choice for the Senate seat at that time.
In addition, testimony showed Blagojevich was seriously considering appointing Congressman Jackson, after learning Jackson supporters had promised as much as $1.5 million in campaign contributions to Blagojevich.
But in his own testimony Blagojevich vehemently denied that he ever considered Jackson as a candidate for the Senate position and said he would not make an appointment in exchange for campaign contributions.
He conceded that in a conversation with his chief of staff John Harris in November 2008 he asked Harris what he might have a shot at getting in exchange for appointing Jarrett to the Senate. Blagojevich said, reading a transcript of the call played for jurors by prosecutors, that Harris asked: "Besides good things for Illinois?"
Blagojevich said his response to Harris was not recorded by the FBI and so jurors did not hear it.
"I know what I answered here, but there's stars here," Blagojevich said, addressing the judge. "It's been deleted. I told Harris 'Good things for Illinois is our priority.' This is my definition of effing golden, if you will."
During the prosecution case, jurors heard a taped conversation in which Blagojevich says of the Senate seat appointment: "I've got this thing and it's f****** golden and, uh, uh, I'm just not giving it up for f****** nothing."
Blagojevich testified that he wanted to know if there was a "potential horsetrade" for the Senate seat, but it was "always predicated on being legal."
He said he consulted with several political and campaign advisers when he was talking about the Senate seat appointment. In addition, he said he got advice from his wife and political and business outsiders, including Republican former U.S. House Speaker Dennis Hastert; Jerry Reinsdorf, owner of the Chicago White Sox and the Chicago Bulls; and former mayoral candidate Gery Chico.
(Editing by Mary Wisniewski and Jerry Norton)