The Democrat appeared in court Tuesday afternoon to hear federal corruption charges against him and was released on $4,500 bail.
"He's sad, surprised and innocent," Blagojevich attorney Sheldon Sorosky told reporters Tuesday night.
Early Tuesday, FBI agents arrested Blagojevich and his chief of staff, John Harris, on charges that the governor attempted to sell or trade President-elect Barack Obama's former Senate seat in exchange for financial benefits for the governor and his wife, Patti.
Meanwhile, state lawmakers said they are preparing to take from the governor his power to fill the vacant Senate seat. Otherwise, Blagojevich -- despite the charges he faces -- could still move to nominate anyone he chooses for Obama's replacement.
Jay Stewart, executive director of Chicago's Better Government Association, said Blagojevich retains the right to fill the Senate vacancy until he's out of office, which won't happen unless he quits or is removed by impeachment.
The government had bugged the governor's campaign office, placed a tap on his home phone and listened to the governor talk about wanting possible deals, said U.S. Attorney Patrick Fitzgerald.
According to the affidavit, Blagojevich was recorded saying of the Senate seat: "I've got this thing and it's [expletive] golden and uh, uh, I'm not just giving it up for [expletive] nothing."
"Gov. Blagojevich has taken us to a new low," Fitzgerald said Tuesday. "This conduct would make Lincoln roll over in his grave."
Both Blagojevich and Harris were charged with a count of conspiracy to commit mail and wire fraud and a count of solicitation of bribery, authorities said.
The 76-page affidavit, which describe Blagojevich's actions as a "crime spree," alleges that the governor often weighed the option of appointing himself to the Senate seat.
He said he was "stuck" at governor and might have access to more resources as a senator than as a governor, the affidavit said. A Senate seat also could help him remake his image ahead of a possible presidential run in 2016. "If ... they're not going to offer anything of any value, then I might just take it," he said in one conversation.
Obama reacted at a news conference Tuesday.
"Obviously, like the rest of the people of Illinois, I am saddened and sobered by the news that came out of the U.S. attorney's office today," he said. "But as this is an ongoing investigation involving the governor, I don't think it would be appropriate for me to comment on the issue at this time."
Obama said he had no contact with the governor or his office about the Senate seat. "I was not aware of what was happening," he added.
At times, Blagojevich discussed obtaining a substantial salary for himself at a nonprofit group or an organization affiliated with labor unions as well as placing his wife on paid corporate boards, where she might make as much as $150,000 a year, the government said.
During one recorded conversation, Blagojevich said he needed to consider his family and said he was financially hurting, the affidavit said.
"I want to make money," Blagojevich said, according to the affidavit.
The intercepted phone calls also caught the governor and Harris discussing the possibility of the Tribune Co.'s obtaining assistance from the Illinois Finance Authority in efforts to sell the Chicago Cubs and the financing or sale of Wrigley Field, the government said. The company owns the Chicago Tribune, the Cubs and Wrigley Field.
Tribune announced Monday that it is filing for Chapter 11 bankruptcy protection.
Blagojevich allegedly directed Harris to tell Tribune officials that state assistance would be withheld unless members of the Chicago Tribune's editorial board were fired. The Illinois governor saw them as "driving discussion of his possible impeachment," the affidavit said.
"Our recommendation is fire all those [expletive] people, get 'em the [expletive] out of there and get us some editorial support," the governor allegedly said in one phone call.
Federal authorities also allege the governor and Harris schemed with others -- including convicted real estate developer Antoin "Tony" Rezko -- to obtain financial benefits for himself, his family and others, including his campaign committee, Friends of Blagojevich.
Reports from the Chicago Tribune last week said federal authorities were investigating the governor and were secretly taping his conversations -- with the help of his former congressional chief of staff, John Wyem.
"I don't believe there's any cloud that hangs over me," Blagojevich told WLS-TV in Chicago on Monday as he responded to the reports of wiretapping. "I think there's nothing but sunshine hanging over me."
He added, "By the way, I should say if anyone wants to tape my conversations, go right ahead, feel free to do it. I appreciate anybody who wants to tape me openly."
Fitzgerald said the case required "unusual measures" because of actions Blagojevich was expected to take soon, including filling the vacant Senate seat. "There were a lot of things going on that were imminent," he said.
"We were in the middle of a corruption crime spree, and we wanted to stop it," Fitzgerald said.
At a news conference Tuesday, U.S. Sen. Dick Durbin, an Illinois Democrat, said he wants the state Legislature to act quickly to pass a law setting up a special election to fill Obama's seat to prevent Blagojevich from making an appointment.
"No appointment by this governor under these circumstances could produce a credible replacement," Durbin said.
Fitzgerald said Blagojevich was looking to pull $8 million in funding for a children's hospital after the hospital's chief executive officer did not give a $50,000 contribution to the governor's campaign.
Also, Fitzgerald said, it was expected that Blagojevich would soon sign into law a bill that would direct a percentage of casino revenue to the horse racing industry -- a bill supported by someone who contributed $100,000.
"To let that bill be signed, to me, would be very, very troubling," Fitzgerald said.
The governor's office said the allegations "do nothing to impact the services, duties or function of the state."
"Our state will continue to ensure health, safety and economic stability for the citizens of Illinois."
Lt. Gov. Pat Quinn said the governor should use a provision in the Illinois Constitution that allows him to step down but not necessarily to resign. "I recommend to the governor to realize ... that he cannot carry out his responsibilities of office today, and he should, in my opinion, step aside."
Quinn, a Democrat, said under the provision, a determination can be made later as to whether he can return to office.
Quinn said he had not spoken to Blagojevich at length since summer 2007.
Blagojevich, who turns 52 on Wednesday, is in his second four-year term as Illinois governor. His term ends in January 2011.
He served as a U.S. congressman for Illinois' 5th Congressional District from 1997 until 2003, according to his online biography.
He and his wife have two daughters.
The state's last governor, George Ryan, was convicted in April 2006 on racketeering and fraud charges.
Ryan reported to a federal prison in Wisconsin in November 2007 to serve a 6½-year sentence. Earlier this year, the U.S. Supreme Court said it would not hear an appeal from Ryan.
