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CHICAGO (CBS) ― Federal investigators said Tuesday that Gov. Rod Blagojevich has been on a "corruption crime spree,'' allegedly putting Barack Obama's Senate seat up to the highest bidder and attempting to shake down the Tribune Co. on the sale of Wrigley Field.

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Full Complaint
New Low For Illinois Politics
Lawmakers Calling For Impeachment
Governor's Words Caught On Tape

An astonishing 76-page affidavit reveals that federal agents tapped the governor's conversations and caught him attempting to gain financially from the Senate appointment. The arrest is also politcally embarrassing to President-elect Obama. While the governor and Obama are not close, Blagojevich's arrest will likely re-focus Obama's relationships with Illinois' political powerbrokers.

Obama on Tuesday said he was saddened by the news, but said he had no dealings with Blagojevich on the issue.

CBS 2 Chief Correspondent Jay Levine reports Blagojevich was at home Tuesday night, visited by his attorney, Sheldon Sorosky. Blagojevich's wife, Patti, was also at the home, for much of the day with her sister, Deborah Mell.

Questions continue to swirl around Blagojevich's future. Will he resign? Will he be impeached – or stripped of his power by the Supreme Court? Will he still try to make the appointment which became a key part of the case against him?

Authorities arrested the governor at his home Tuesday morning.

"This is a sad day for Illinois government.'' and angry U.S. Attorney Patrick Fitzgerald said at a news conference. "Governor Blagojevich has taken us to new lows. The most appalling conduct ... is that he attempted to sell the Senate seat.''

Both Blagojevich and his chief of staff John Harris were arrested Tuesday. FBI Special Agent In Charge Robert Grant woke him up at his home at 6 a.m. on Tuesday. Grant said he told him that two agents were outside waiting to take him into custody. He was asked to open the door and was arrrested without incident.

"Is this a joke?'' Blagojevich told Grant.

According to Fitzgerald, Blagojevich and Harris, were arrested on federal corruption charges alleging that they and others are engaging in ongoing criminal activity: conspiring to obtain personal financial benefits for Blagojevich by leveraging his sole authority to appoint a United States Senator; threatening to withhold substantial state assistance to the Tribune Company in connection with the sale of Wrigley Field to induce the firing of Chicago Tribune editorial board members sharply critical of Blagojevich; and to obtain campaign contributions in exchange for official actions – both historically and now in a push before a new state ethics law takes effect January 1, 2009.

The governor's conversations were taped by federal agents. During those converstions with advisers, the governor said he wanted "to make money'' on the Obama senate appointment. "I have got this thing and it's [bleeping] golden," he said on the tape.

"It is conduct that would make [President] Lincoln roll over in his grave," said Fitzgerald.

Blagojevich, 51, and Harris, 46, both of Chicago, were each charged with conspiracy to commit mail and wire fraud and solicitation of bribery. They were charged in a two-count criminal complaint that was sworn out on Sunday and unsealed Tuesday following their arrests, which occurred without incident. The two appeared in court at 1:30 Tuesday at the Dirksen Federal Courthouse, 219 S. Dearborn. They were both released under their own recognizance at about 2 p.m.

At various times, in exchange for the Senate appointment, Blagojevich discussed obtaining:

1) A substantial salary for himself at a either a non-profit foundation or an organization affiliated with labor unions.

2) Placing his wife on paid corporate boards where he speculated she might garner as much as $150,000 a year.

3) Promises of campaign funds – including cash up front.

4) A cabinet post or ambassadorship for himself.

Grant, FBI special agent in charge, also said Tuesday's developments were a new low for the state of Illinois.

"I can tell you one thing, if it isn't the most corrupt state, it certainly is one hell of a competitor," Grant said.

Grant said agents were "thoroughly disgusted and revolted by what we heard'' in Blagojevich's alleged actions.

The governor's press office issued a statement: "Today's allegations do nothing to impact the services, duties or function of the state. Families will continue to receive healthcare, seniors and persons with disabilities the support and services they need, the hundreds of thousands of unemployed Illinoisans will still receive assistance. Our state will continue to ensure health, safety, and economic stability for the citizens of Illinois."

A source with knowledge of the case and the governor tells CBS 2 that he doubts Blagojevich will be able to remain in office for very long. While not one to run from a fight, the pressure from prosecutors and state lawmakers may make him likely to jump before he's pushed.

The probe is part of Operation Board Games, a five-year-old public corruption investigation of pay-to-play schemes, including insider-dealing, influence-peddling and kickbacks involving private interests and public duties.

Federal agents Tuesday also executed search warrants at the offices of Friends of Blagojevich located at 4147 N. Ravenswood in Chicago.

The charges include historical allegations that Blagojevich and Harris schemed with others – including previously convicted defendants Antoin Rezko, Stuart Levine, Ali Ata and others – since becoming governor in 2002 to obtain and attempt to obtain financial benefits for himself, his family and third parties, including his campaign committee, Friends of Blagojevich, in exchange for appointments to state boards and commissions, state employment, state contracts and access to state funds. A portion of the affidavit recounts the testimony of various witnesses at Rezko's trial earlier this year.

Federal prosecutors have investigated Blagojevich's administration for at least three years. They've been looking at everything from how he hired people for state jobs to the actions of friends and contributors.

Blagojevich fundraiser Tony Rezko awaits sentencing on a federal corruption conviction in which he was charged with shaking down businesses wanting to do state work for campaign contributions.

The governor has repeatedly denied any wrongdoing.

Alderman Dick Mell, Blagojevich's father-in-law, said in a statement, "My main concern now is for my daughter and my grandchildren."

To read details of the complaint against Gov. Rod Blagojevich, click here.

CBS 2 Chief Correspondent Jay Levine and the Associated Press contributed to this report.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

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