By Michael Conlon and Andrew Stern
CHICAGO (Reuters) - President-elect Barack Obama called on the governor of Illinois to resign on Wednesday after he was charged with trying to sell Obama's U.S. Senate seat and swap favours for money.
Obama spokesman Robert Gibbs said Gov. Rod Blagojevich needed to step down because "under the current circumstances it is difficult for the governor to effectively do his job and serve the people of Illinois."
There were mounting calls within Obama's home state of Illinois to strip Blagojevich of the power to make the appointment he allegedly tried to barter, either by driving him from office through legal means or letting voters fill the Senate seat with a special election.
Obama, who takes office on January 20, resigned from the Senate after winning the November 4 presidential election.
The Democratic governor showed no sign of stepping down after he was arrested at home before dawn on Tuesday and then released without having to post bail.
His office said Bob Greenlee, one of three deputy governors in appointed positions, had resigned. No reason was given.
Obama, who called the charges against the two-term governor sobering and sad, has had a cool relationship with the fellow Democrat -- who has been under investigation on other issues for years -- although both of their political careers sprouted in the often corrupt seedbed of Chicago politics.
In Washington, Jesse Jackson Jr., a U.S. congressman from Illinois who waged a public campaign to win Obama's seat, said he did nothing wrong in his quest.
His lawyer identified Jackson as the unnamed Senate hopeful in a government wiretap whose "associate" Blagojevich claimed was willing to raise $1 million (676,000 pounds) in exchange for a Senate seat.
"I did not initiate or authorise anyone at any time to promise anything to Gov. Blagojevich on my behalf," the son of veteran civil rights leader Rev. Jesse Jackson said.
"I never sent a message or an emissary to the governor to make an offer, to plead my case or to propose a deal about a U.S. Senate seat, period," he added.
GOVERNOR UNDER SIEGE
The Chicago Tribune and Chicago Sun-Times newspapers ran nearly full-page editorials demanding the immediate resignation of Blagojevich.
He left his stately brick house in Chicago on Wednesday, his 52nd birthday, under siege by news media but said nothing.
"It's outrageous," said Beth Pinter, who lives a block away and was out walking her two dogs. "He should resign, but he won't because he's a sociopath ... I don't want him in my neighbourhood because he's a crook."
The saga threatens to follow Obama to Washington at a time when the president-elect is preparing for his White House move with ambitious plans that include proposals to get the U.S. economy moving.
"Among the remarkable facts of the recent presidential election is that Barack Obama emerged from this political culture virtually untainted -- and with Chicago's political mores all but unexamined by the press," the Wall Street Journal said in an editorial on Wednesday.
Democrats, with independent allies, will have at least 58 seats in the 100-seat Senate when the new Congress convenes if Obama's successor as Illinois senator is a Democrat.
That might not happen if the matter goes to a special election. A Minnesota Senate seat is still undecided.
Since the state constitution gives the governor sole power to fill Senate vacancies, there were legal questions over how to proceed.
Impeachment in the legislature could be a lengthy process. The state's attorney general was exploring whether the state supreme court could oust Blagojevich, one report said.
In the meantime, the governor retains the power to appoint anyone, including himself, to the empty seat. But Senate leaders have said any appointment he makes would be tainted.
Blagojevich and his chief of staff, John Harris, were charged in a federal complaint with conspiracy to commit mail and wire fraud and a second count of solicitation of bribery.
Prosecutors said Blagojevich was caught on tape using an expletive as he described the Senate seat as something so valuable "you just don't give it away for nothing."
The federal charges say Blagojevich tried to trade the Senate appointment for personal gain and muscle the Chicago Tribune into firing critical editorial writers by interfering in a deal involving the sale of Wrigley Field, the baseball stadium owned by the paper's parent company.
(Additional reporting by Karen Pierog in Chicago; Editing by Peter Bohan and Doina Chiacu)
