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Blagojevich was also accused of threatening to withhold substantial state assistance to the Tribune Company in connection with the sale of the Chicago Cubs’ baseball home Wrigley Field “to induce the firing of Chicago Tribune editorial board members sharply critical” of him.

The 51-year-old Blagojevich and his chief of staff, John Harris, were charged in a 76-page federal indictment with conspiracy to commit mail and wire fraud and solicitation of bribery. Both were taken into custody at their homes in Chicago.

In Illinois, the governor selects a successor when there is a mid-term Senate vacancy. Obama resigned from the Senate soon after winning the Nov. 4 presidential election.

Blagojevich allegedly was caught on court-authorized wiretaps during the last month.

He was seeking a “substantial” salary for himself at a nonprofit foundation or union affiliated organization, a spot on a corporate board for his wife, promises of campaign cash, as well as a cabinet post or ambassadorship in exchange for his Senate choice, the FBI affidavit added.

Blagojevich, in his second term, is the latest in a string of Illinois governors to run afoul of the law. His immediate predecessor. George Ryan, is in jail following a federal corruption conviction.

“Many, including myself, thought that the recent conviction of a former governor would usher in a new era of honesty and reform in Illinois politics,” Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, said in a statement.

“Clearly, the charges announced today reveal that the office of the Governor has become nothing more than a vehicle for self-enrichment, unrestricted by party affiliation and taking Illinois politics to a new low.”

A three-year federal corruption investigation of pay-to-play politics in Gov. Rod Blagojevich’s administration has expanded to include his impending selection of a new U.S. senator to succeed President-elect Barack Obama, the Tribune has learned.

Federal authorities got approval from a judge before the November general election to secretly record the governor, sources told the Tribune, and among their concerns was whether the selection process might be tainted. That possibility has become a focus in an intensifying investigation that has included recordings of the governor and the cooperation of one of his closest friends.

The governor has not been accused of any wrongdoing. The specific contents of the recent recordings have not been disclosed. Blagojevich has said the appointment of a Senate successor, which is his choice alone, could come in a matter of weeks.

Speaking to reporters Monday for the first time since the Tribune revealed federal investigators had recorded him and others as part of their corruption probe, Blagojevich said his discussions were “always lawful.” He also defended close confidant John Wyma, whose cooperation with federal agents helped lead to the recordings, as “an honest person who’s conducted himself in an honest way.”

“I should say if anybody wants to tape my conversations, go right ahead, feel free to do it,” he said. “I appreciate anybody who wants to tape me openly and notoriously, and those who feel like they want to sneakily, and wear taping devices, I would remind them that it kind of smells like Nixon and Watergate.”

Unlike the recordings that the federal government has of Blagojevich, the tapes that led to President Richard Nixon’s 1974 resignation over the burglary of Democratic offices at the Watergate complex and the ensuing coverup were made by Nixon himself.

Regardless of “whether you tape me privately or publicly, I can tell you that whatever I say is always lawful and the things I’m interested in are always lawful,” Blagojevich said. “And if there are any things out there like that, what you’ll hear is a governor who tirelessly and endlessly figures out ways to help average, ordinary working people.”

Blagojevich’s comments came amid increasing concern by Democrats that the governor’s pending appointment of a Senate successor may become politically tainted as a result of the investigations surrounding his administration. Federal investigators have been looking into allegations of corruption regarding state jobs, appointments and contracts in connection with Blagojevich’s prolific fundraising.

Blagojevich has not been charged with any wrongdoing and contended that if federal investigators are?s “going to those lengths and extents [of obtaining recordings], if in fact that’s true, that would suggest all the past has been pretty good.”

“I don’t believe there’s any cloud that hangs over me. I think there’s nothing but sunshine hanging over me,” the governor said.

Blagojevich made the remarks at a Monday morning visit to laid-off workers staging a sit-in at the Republic Windows & Doors plant on Goose Island.

Later Monday, he met for 90 minutes with Rep. Jesse Jackson Jr., the South Side and southwest suburban congressman who has been the most visibly active campaigner for the appointment to replace Obama. Jackson, who was among the last high-profile Senate successor candidates to speak with Blagojevich, has had disagreements with the governor and is not close to him.

Blagojevich issued a strong defense of Wyma and accused the Tribune of publishing misinformation and possibly defamatory material.

“To begin with, they didn’t get it right,” he said. “John Wyma’s lawyer put out a statement. The Tribune was wrong and very well may have defamed him.”

But the statement from Wyma’s lawyer did not directly address the Tribune story and instead appeared directed at media outlets and others who reported Wyma wore a wire.

The Tribune noted that Wyma’s cooperation with federal investigators helped lead to recordings of Blagojevich but did not report that he wore a wire.

Wyma’s lawyer also did not respond to the Tribune’s report that Wyma was cooperating with investigators. “John Wyma is a friend of mine, he was my chief of staff, and I’m sure whatever he does, he does ethically and follows the rules,” the governor said.

Blagojevich said he would not remove Wyma from his inner circle of advisers. He also told the Tribune that Wyma was not involved in the deliberations over an Obama successor. “No, I consider him a friend. and I don’t consider him as anything but a friend. And to someone who, as I’ve known him, always has been an honest person who’s conducted himself in an honest way,” Blagojevich said of Wyma. “That’s the John Wyma I know and it’s the John Wyma that [Obama’s incoming chief of staff, Rep.] Rahm Emanuel knows and a lot of other people know.”

Blagojevich said he had last spoken to Wyma the day before Thanksgiving, when he offered holiday wishes and “talked a little bit about the plight of the Detroit Lions. He’s from Michigan.”

Tribune’s woes stem from a combination of plunging advertising revenue and a heavy debt load of $12.9 billion, much of it incurred a year ago when it was taken private by Chicago real estate entrepreneur Sam Zell.

Tribune is far from being the only troubled media company. In the last week alone, the New York Times said it would mortgage its Manhattan headquarters for as much as $225 million to help cover operating costs, industry leader Gannett Co. pushed ahead with the layoff of 2,000 employees, and Denver’s Rocky Mountain News and the Miami Herald were put up for sale.

“Everywhere you go, it’s the same story,” said Alan Mutter, a veteran newspaper editor and investor who writes the Newsosaur blog. “It’s all kind of appalling.”

But Tribune has become the first major news organization to file for bankruptcy, which could add a new dimension of uncertainty for the company and its 16,000 employees. During a Chapter 11 bankruptcy reorganization, major management decisions must pass muster with a bankruptcy judge, and the ultimate fate of a company — including whether it remains intact or is sold off in pieces — could be decided in part by its creditors.

Zell said Monday that Tribune’s business units would operate as normal and that the focus of the reorganization would be “on our debt, not on our operations.”

“I believe in common-sense gun safety laws, and I believe in the second amendment,” Obama said at a news conference. “Lawful gun owners have nothing to fear. I said that throughout the campaign. I haven’t indicated anything different during the transition. I think people can take me at my word.”

But National Rifle Association spokesman Andrew Arulanandam said it’s not Obama’s words — but his legislative track record — that has gun-buyers flocking to the stores.

“Prior to his campaign for president, his record as a state legislator and as a U.S. Senator shows he voted for the most stringent forms of gun control, the most Draconian legislation, gun bans, ammunition bans and even an increase in federal excise taxes up to 500 percent for every gun and firearm sold,” Arulanandam said.

Obama answered “yes” in 1996 to a questionnaire from an Illinois group on whether he supported a handgun ban. But he later said a staffer filled out that answer and he did not support a ban.

Nationally, background checks for gun purchases jumped nearly 49 percent during the week Obama was elected, compared with the same time period last year, according to the FBI’s National Instant Background Check System.

Anecdotally, gun dealers around the country have reported spikes in sales. The Illinois State Rifle Association Reports gun sales for November were 38 percent higher than last year.

“We don’t dispute [the gun sales hike] because the numbers from the federal system certainly confirm that there is increased activity out there. We just think it’s a bit stupid,” said Peter Hamm, spokesman for the Brady Campaign against Gun Violence.

A “world government” would involve much more than co-operation between nations. It would be an entity with state-like characteristics, backed by a body of laws. The European Union has already set up a continental government for 27 countries, which could be a model. The EU has a supreme court, a currency, thousands of pages of law, a large civil service and the ability to deploy military force.

So could the European model go global? There are three reasons for thinking that it might.

First, it is increasingly clear that the most difficult issues facing national governments are international in nature: there is global warming, a global financial crisis and a “global war on terror”.

Second, it could be done. The transport and communications revolutions have shrunk the world so that, as Geoffrey Blainey, an eminent Australian historian, has written: “For the first time in human history, world government of some sort is now possible.” Mr Blainey foresees an attempt to form a world government at some point in the next two centuries, which is an unusually long time horizon for the average newspaper column.

But – the third point – a change in the political atmosphere suggests that “global governance” could come much sooner than that. The financial crisis and climate change are pushing national governments towards global solutions, even in countries such as China and the US that are traditionally fierce guardians of national sovereignty.

Barack Obama, America’s president-in-waiting, does not share the Bush administration’s disdain for international agreements and treaties. In his book, The Audacity of Hope, he argued that: “When the world’s sole superpower willingly restrains its power and abides by internationally agreed-upon standards of conduct, it sends a message that these are rules worth following.” The importance that Mr Obama attaches to the UN is shown by the fact that he has appointed Susan Rice, one of his closest aides, as America’s ambassador to the UN, and given her a seat in the cabinet.

A taste of the ideas doing the rounds in Obama circles is offered by a recent report from the Managing Global Insecurity project, whose small US advisory group includes John Podesta, the man heading Mr Obama’s transition team and Strobe Talbott, the president of the Brookings Institution, from which Ms Rice has just emerged.

The MGI report argues for the creation of a UN high commissioner for counter-terrorist activity, a legally binding climate-change agreement negotiated under the auspices of the UN and the creation of a 50,000-strong UN peacekeeping force. Once countries had pledged troops to this reserve army, the UN would have first call upon them.

These are the kind of ideas that get people reaching for their rifles in America’s talk-radio heartland. Aware of the political sensitivity of its ideas, the MGI report opts for soothing language. It emphasises the need for American leadership and uses the term, “responsible sovereignty” – when calling for international co-operation – rather than the more radical-sounding phrase favoured in Europe, “shared sovereignty”. It also talks about “global governance” rather than world government.

But some European thinkers think that they recognise what is going on. Jacques Attali, an adviser to President Nicolas Sarkozy of France, argues that: “Global governance is just a euphemism for global government.” As far as he is concerned, some form of global government cannot come too soon. Mr Attali believes that the “core of the international financial crisis is that we have global financial markets and no global rule of law”.

So, it seems, everything is in place. For the first time since homo sapiens began to doodle on cave walls, there is an argument, an opportunity and a means to make serious steps towards a world government.

But let us not get carried away. While it seems feasible that some sort of world government might emerge over the next century, any push for “global governance” in the here and now will be a painful, slow process.

There are good and bad reasons for this. The bad reason is a lack of will and determination on the part of national, political leaders who – while they might like to talk about “a planet in peril” – are ultimately still much more focused on their next election, at home.

But this “problem” also hints at a more welcome reason why making progress on global governance will be slow sledding. Even in the EU – the heartland of law-based international government – the idea remains unpopular. The EU has suffered a series of humiliating defeats in referendums, when plans for “ever closer union” have been referred to the voters. In general, the Union has progressed fastest when far-reaching deals have been agreed by technocrats and politicians – and then pushed through without direct reference to the voters. International governance tends to be effective, only when it is anti-democratic.

The company has retained Cushman & Wakefield, the real estate firm, to act as its agent to secure financing, either in the form of a mortgage or a sale-leaseback arrangement, said James Follo, the Times Company’s chief financial officer.

The Times Company owns 58 percent of the 52-story, 1.5 million-square-foot tower on Eighth Avenue, which was designed by the architect Renzo Piano, and completed last year. The developer Forest City Ratner owns the rest of the building. The Times Company’s portion of the building is not currently mortgaged, and some investors have complained that the company has too much of its capital tied up in that real estate.

The company has two revolving lines of credit, each with a ceiling of $400 million, roughly the amount outstanding on the two combined. One of those lines is set to expire in May, and finding a replacement would be difficult given the economic climate and the company’s worsening finances. Analysts have said for months that selling or borrowing against assets would be the company’s best option for averting a cash flow problem next year.

The move reveals the increasing severity of the nation’s water crisis at the end of the Murray River.

Necessary water supplies to Adelaide and towns across the state are at this stage not secured from July next year, which has forced the Rann Government on to the open water market.

It has already bought 30 gigalitres from water resources shared with NSW and Victoria and admitted yesterday it had spent tens of millions of dollars to bolster the state’s supplies.

Authorities must have 201gigalitres in reserve to ensure the water needs of the nation’s fifth-largest city and the rest of the state are able to be met.

The state’s Water Security Minister, Karlene Maywald, admitted yesterday that the lack of rainfall and dramatic reduction of inflows into the Murray River had meant the state could not accumulate its critical water needs without buying water from its neighbours.

Just over a year ago, water expert Professor Mike Young warned in The Australian that Adelaide could run dry this summer.

He said yesterday the Government’s move into the water market confirmed the dire situation the city and the state’s Riverland food bowl faced in the coming year.

State Treasurer Kevin Foley and Ms Maywald revealed the state’s spending on water for critical human needs while announcing domestic water prices would increase by 20 per cent from July next year.

“We have to accept that we are in a most extraordinary, critical period of our state’s history where it’s simply not raining,” Mr Foley said.

“And not raining not just in South Australia but in the critical catchment areas.”
Inflows into the Murray River remain at critically low levels, despite above average rainfall across the Murray-Darling Basin in November.

The Murray-Darling Basin Commission reports that inflow into the Murray last month was 140 gigalitres, just 18 per cent of the long-term average of 780gigalitres. November was the 38th consecutive month of below-average inflows. Under the River Murray dry flow contingency plans, the first priority is given to critical human needs.

Ms Maywald said sufficient water for human needs had been set aside for South Australia this financial year, but not enough had yet been accumulated for 2009-10.

“At this stage there has not been sufficient rainfall for us to accumulate the entire 201 gigalitres from (rainfall) improvements in the (Murray-Darling) system,” she said.

The annual Gifts for Guns program ended Sunday in Compton, a working class city south of Los Angeles that has long struggled with gun and gang violence. In a program similar to ones in New York and San Francisco, the Los Angeles County Sheriff’s Department allows residents to anonymously relinquish firearms in return for $100 gift cards for Ralphs supermarkets, Target department stores or Best Buy electronics stores.

Turning in assault rifles yields double that amount.

In years past, Target and Best Buy were the cards of choice, with residents wanting presents for the holidays.

This year, most asked for the supermarket cards, said sheriff’s Sgt. Byron Woods.

“People just don’t have the money to buy the food these days,” he said.

The research – to be detailed tomorrow in the most comprehensive report yet published – shows that a host of common chemicals is feminising males of every class of vertebrate animals, from fish to mammals, including people.

Backed by some of the world’s leading scientists, who say that it “waves a red flag” for humanity and shows that evolution itself is being disrupted, the report comes out at a particularly sensitive time for ministers. On Wednesday, Britain will lead opposition to proposed new European controls on pesticides, many of which have been found to have “gender-bending” effects.

It also follows hard on the heels of new American research which shows that baby boys born to women exposed to widespread chemicals in pregnancy are born with smaller penises and feminised genitals.

“This research shows that the basic male tool kit is under threat,” says Gwynne Lyons, a former government adviser on the health effects of chemicals, who wrote the report.

Wildlife and people have been exposed to more than 100,000 new chemicals in recent years, and the European Commission has admitted that 99 per cent of them are not adequately regulated. There is not even proper safety information on 85 per cent of them.

Many have been identified as “endocrine disrupters” – or gender-benders – because they interfere with hormones. These include phthalates, used in food wrapping, cosmetics and baby powders among other applications; flame retardants in furniture and electrical goods; PCBs, a now banned group of substances still widespread in food and the environment; and many pesticides.

The report – published by the charity CHEMTrust and drawing on more than 250 scientific studies from around the world – concentrates mainly on wildlife, identifying effects in species ranging from the polar bears of the Arctic to the eland of the South African plains, and from whales in the depths of the oceans to high-flying falcons and eagles.

It concludes: “Males of species from each of the main classes of vertebrate animals (including bony fish, amphibians, reptiles, birds and mammals) have been affected by chemicals in the environment.

Due to stampeding demand for safe short-term investments, the US Treasury’s four-week and three-month bills on Friday yielded an effective rate of 0.01 percent — down sharply from 1.515 percent and 1.785 percent, respectively, in early September.

Other Treasuries are also showing record low yields. The 10-year bond yield fell as low as 2.505 percent and the 30-year bond yield slid to 3.005 percent at one point on Friday. The six-month bond yielded a mere 0.20 percent.

The low yields reflect a surge in demand for these instruments, seen as the safest in the world during times of turmoil.

“Investors seem to be content to sell stocks and park into the bonds for now,” said Greg Michalowski of the financial website FXDD.

Analysts say the fear factor has pushed up demand for Treasuries, since investors are virtually certain the US government will not default.

Other factors include worries about deflation and the overall trend in interest rates, with the Federal Reserve having cut its base lending rate to a historic low of 1.0 percent, and further reductions possible.

But Bob Eisenbeis, analyst at Cumberland Advisors, said the unprecedented low yields are a sign of “dysfunction” in markets.

Eisenbeis said US municipal bonds are paying upwards of 6.0 percent tax-free and corporate bonds even more, but that fears of default and a lack of knowledge about underlying bond quality have led investors to shun these alternatives.

One reason for the surge in demand for Treasuries, said Eisenbeis, is the Federal Reserve’s decision to flood financial markets with liquidity including through other central banks.

Many central banks and commercial banks are reluctant to use this cash for traditional lending, and are buying Treasuries to ride out the storm, Eisenbeis added.

A big question for the market is whether the Treasury market has become a bubble that will burst.

Although the low rates allow Washington to borrow money cheaply, Eisenbeis said such a scenario could be perilous for the economy and the dollar.

“When you have this huge flood of liquidity into the marketplace, that can’t last forever,” he said.

A bursting of this bubble could mean a rush out of Treasuries, forcing the government to pay higher rates on an unprecedented amount of debt.

“We would have huge increases in our costs and people wouldn’t want to hold Treasury obligations anymore because of the capital losses,” Eisenbeis said.

“You could have a huge switch in interest rates very quickly.”

Mike Larson, an analyst at Weiss Research, says the long-term bond market could be “the biggest bubble of all,” worse than the dot-com and real estate bubbles.

“Treasury bonds almost never move this far, this fast. And interest rates, which move in the opposite direction of bond prices, almost never fall this far, this fast,” Larson said.

Larson said the yield on the 10-year Treasury bond plunged from a mid-October high of 4.08 percent to nearly 2.5 percent this week, “yielding lows not seen since the mid-1950s.”

“There are lots of reasons to believe this Treasury rally is unsustainable, and that a day of reckoning is fast approaching,” he said.

Sal Guatieri, economist at BMO Capital Markets, acknowledged that “investors are throwing money at Uncle Sam with the same conviction that they bought houses and dot-com stocks in their heydays.”

But he argued that if inflation is quashed and investors retain confidence in the US government, the dangers have not yet hit a boiling point.

“We have never seen as midnight an hour as we face this week,” the Rev. Charles Ellis told several thousand congregants at a rousing service at Detroit’s Greater Grace Temple. “This week, lives are hanging above an abyss of uncertainty as both houses of Congress decide whether to extend a helping hand.”

Local car dealerships donated three hybrid SUVs to be displayed during the service, one from each of the Big Three. A Ford Escape, Chevy Tahoe from GM and a Chrysler Aspen were parked just in front of the choir and behind the pulpit.

Ellis said he and other Detroit ministers would pray and fast until Congress voted on a bailout for Detroit’s embattled automakers. He urged his congregation to do the same.

Other Detroit-area religious leaders — including Christian, Muslim and Jewish leaders convened by Cardinal Adam Maida — have urged Congress to approve an auto aid package.

But the service dedicated to saving Motown’s signature industry at Greater Grace Temple was the highest profile effort to mobilize support yet.

“Everybody can’t live on Wall Street. Everybody can’t live on Main Street. But all of us have lived on the side street, the working class,” Ellis said. “I call it the working class because everything tells me there is no more middle class.”

Key Democratic lawmakers and the Bush administration were locked in negotiations over the weekend aimed at offering at least $15 billion in short-term loans to keep General Motors Corp and Chrysler LLC from immediate bankruptcy.

Automakers and their political allies contend a collapse by the industry would cost up to 3 million jobs as suppliers, dealers and companies in related industries were hit in turn.

Representing the 150,000 unionized workers at GM, Chrysler and Ford Motor Co, UAW Vice President General Holiefield said the industry had made its case for emergency funding as strongly as it could.

“We have done all we can do in this union, so I’m going to turn it over to the Lord,” Holiefield told the congregation.

Ellis said he started to organize the service last week after hearing from auto workers, retirees and their widows who were all fearful of even harder times.

At one point, Ellis summoned up hundreds of auto workers and retirees in the congregation to come forward toward the vehicles on the altar to be anointed with oil.