SPRINGFIELD (Illinois) - PRESIDENT-ELECT Barack Obama said on Monday that an internal investigation shows his staff had no involvement in the corruption scandal enveloping Illinois' governor, as lawmakers took the first step toward removing the state's scandal-plagued leader from office.

Responding to the controversy sparked by the arrest of Governor Rod Blagojevich's alleged attempt to sell Mr Obama's vacant Senate seat, the president-elect pledged to make the review public, but said he was holding off because prosecutors asked for a delay. US Attorney Patrick Fitzgerald released a statement confirming the request.

At a press conference in Washington to announce his new environmental team, Mr Obama called the corruption charges against the governor an 'appalling set of circumstances', but said they had nothing to do with his own office.

There are no suggestions that Mr Obama or his aides were involved in the alleged sale of his seat, but the scandal could prove to be a headache for him as he prepares to take over the presidency on Jan 20.

As governor, Blagojevich has sole authority to appoint a replacement, although fellow Democrats have demanded he refrain from doing so. Mr Obama resigned his Senate seat last month.

Blagojevich's political isolation intensified on Monday evening, with the Illinois House voting 113-0 to create a bipartisan committee that will study the allegations against the governor and recommend whether he should be impeached. Democrats in the Senate shelved action on a special election to fill Mr Obama's US Senate seat, for now leaving the decision in Blagojevich's hands.

'We ought to move as quickly as possible to correct our problems and to get ourselves on a track where we can do what we're supposed to do for the people of Illinois,' said House Speaker Michael Madigan, a Chicago Democrat and former co-chairman of Blagojevich's re-election campaign who has become one of the governor's fiercest critics.

At the Capitol, Mr Madigan cancelled plans to consider a special election to fill Mr Obama's vacant US Senate seat, saying Democrats are split over the best way to fill the vacancy.

Republicans harshly criticised the decision, which leaves the power to appoint a senator in Blagojevich's hands.

'Why is it, when the whole world is watching, you can't change your ways at least for one day and let democracy rule?' said Republican state Representative Ron Stephens.

If Blagojevich resigned, the power to appoint a new senator would go to Democratic Lt Gov Patrick Quinn.

A Blagojevich spokesman said the governor has not ruled out signing a bill to hold a special election to fill the seat. That was the first hint the embattled governor may loosen his grip on the position, though opponents of a special election say it would be too expensive, costing between US$30 million (S$45 million) and US$50 million.

Blagojevich was arrested on Tuesday after being under federal investigation for three years. He is also accused of shaking down businesses seeking state deals and scheming to get Chicago Tribune editorial writers fired over their calls for his impeachment.

On Monday, he tried to appear gubernatorial by signing a bill giving tax credits to Hollywood movie studios who film in Illinois.

But he also appeared to be digging in for the legal and professional battles ahead.

Chicago attorney Ed Genson, a tough, street-smart lawyer known for beguiling jurors with his plainspoken style, confirmed he would represent Blagojevich. He has said he would handle both the criminal and possible impeachment cases against the governor.

As he left Mr Genson's office on Monday night, Blagojevich declined to comment saying, 'There will be an appropriate time and place. .. I can't wait to talk to you guys.' Mr Genson, whose past clients include newspaper baron Conrad Black and R&B singer R. Kelly, chided the media's coverage of the scandal.

'I think that the case that I've seen so far is significantly exaggerated,' Mr Genson said outside his office. 'It's not what people think it is.'

Mr Madigan said the impeachment committee's review will include the criminal charges against Blagojevich as well as a long list of other possible wrongdoing during his six years in office: abuse of power, taking action without legal authority, ignoring state laws and defying lawful requests for information from the state's lawmakers in the General Assembly.

Mr Madigan often has clashed with Blagojevich, and his office produced a memo this year outlining all the arguments legislative candidates could make in favour of impeachment.

The state constitution gives lawmakers broad authority to impeach a governor. The House of Represenatives would decide whether to file charges against the governor, and the Senate would ultimately rule on them.

Mr Madigan's daughter, Illinois Attorney General Lisa Madigan, has asked the state Supreme Court to remove Blagojevich, claiming he is unfit to serve. Mr Madigan said Sunday she expects word on whether the court will hear her request 'probably just in a few days'. She is considered one of the top Democratic candidates for governor in 2010.

Controversy has swirled around Mr Obama and his incoming White House chief of staff, Representative Rahm Emanuel, following Blagojevich's arrest.

The president-elect sidestepped the question on Monday when asked whether Mr Emanuel had spoken with aides to the governor.

He called the probe by his incoming White House counsel Gregory Craig complete and thorough, but did not say which of his aides Mr Craig interviewed, whether any of them was under oath at the time, or any other details.

Mr Obama held his news conference shortly after his transition office released a statement by spokesman Dan Pfeiffer saying the internal review had found no wrongdoing. Like the president-elect, the statement left several issues uncovered.

It did not say whether Mr Emanuel was heard on a wiretap providing the governor's top aide with a list of names that the president-elect favoured. Nor did it say who, if anyone, on Mr Obama transition's team had made contact with the governor or his aides concerning a replacement for Mr Obama.

In recent days, Mr Obama's staff has declined to respond even to basic questions about the Blagojevich review, like how long it would take, who was leading it and what issues were explored.

Two people who have been briefed on the investigation had told The Associated Press that Mr Emanuel is not a target of the probe. They spoke on condition of anonymity because the criminal investigation is ongoing. One is a person close to Mr Emanuel, who said he has been told by investigators that he's not a subject of their probe.

Blagojevich himself, in taped conversations cited by prosecutors, suggested Mr Obama wouldn't be helpful to him and called him a vulgar term. Even if the governor were to appoint a candidate favoured by the Obama team, Blagojevich said, 'they're not willing to give me anything except appreciation'.

Mr Obama selected Nobel-prize winning physicist Steven Chu as energy secretary and Ms Carol Browner, a confidante of former Vice-President Al Gore, to lead a White House council on energy and climate. -- AP

Read also:
Governor's impeachment launched