Illinois Gov. Rod Blagojevich was arrested Tuesday on charges of conspiring to sell off to the highest bidder the U.S. Senate seat left vacant by Barack Obama after he was elected president.
Obama said he did not speak to Blagojevich about the Senate seat, adding he was saddened by the case.
"I had no contact with the governor or his office and so I was not aware of what was happening," Obama told reporters Tuesday. "But as I said, it is a sad day for Illinois. Beyond that I don't think it's appropriate to comment."
Prosecutors have not accused Obama of any wrongdoing in the case.
Obama quit his post at the Senate following his election in November. Under U.S. law, the state governor is to choose Obama's replacement.
An FBI affidavit says Blagojevich was intercepted on wiretaps conspiring to sell or trade the vacant Senate seat for personal benefits for himself and his wife.
The 76-page affidavit alleges the 51-year-old Democratic governor even considered appointing himself if he wasn't offered anything of value.
U.S. Attorney Patrick Fitzgerald, speaking to reporters Tuesday, quoted some of Blagojevich's comments intercepted over a wiretap.
"It's a [expletive] valuable thing," said Fitzgerald, quoting Blagojevich's comments on the Senate seat. "You just don't give it away for nothing."
Fitzgerald described the situation by saying: "We were in the middle of a corruption crime spree, and we wanted to stop it."
Fitzgerald said the corruption charges against Blagojevich represent "a truly new low."
Governor allegedly wanted to influence newspaper
According to a federal criminal complaint, Blagojevich also was charged with illegally threatening to withhold state assistance to Tribune Co., the owner of the Chicago Tribune, in the sale of Wrigley Field. In return for state assistance, Blagojevich allegedly wanted members of the paper's editorial board who had been critical of him fired.
Blagojevich also was charged with using his authority as governor in an attempt to squeeze out campaign contributions, prosecutors said.
Blagojevich's chief of staff, John Harris, also was arrested.
Federal agents were in Blagojevich's office in Thompson Center in downtown Chicago on Tuesday morning.
Corruption in the Blagojevich administration has been the focus of a federal investigation dubbed Operation Board Games involving an alleged $7 million US scheme aimed at squeezing kickbacks out of companies seeking business from the state.
Blagojevich hiring practices investigated
Federal prosecutors have acknowledged they're also investigating "serious allegations of endemic hiring fraud" under Blagojevich.
Political fundraiser Antoin "Tony" Rezko, who raised money for the campaigns of both Blagojevich and Obama, is awaiting sentencing after being convicted of fraud and other charges. Prosecutors have said there were no improprieties on Obama's part in connection with Rezko's conviction.
Blagojevich's chief fundraiser, Christopher G. Kelly, is due to stand trial early next year on charges of obstructing the Internal Revenue Service.
Blagojevich took the chief executive's office in 2003 as a reformer promising to clean up former Gov. George Ryan's mess. He has repeatedly denied any wrongdoing.
Ryan, a Republican, is serving a six-year prison sentence after being convicted on racketeering and fraud charges.
The decade-long investigation began with the sale of driver's licences for bribes and led to the conviction of dozens of people who worked for Ryan when he was secretary of state and governor.