Illinois Governor Rod Blagojevich has been released on bail following his arrest on corruption charges.
The arrest followed allegations of trying to sell the US Senate seat vacated by fellow Democrat President-elect Barack Obama.
In Illinois, the governor selects a successor when there is a mid-term vacancy in the US Senate.
Mr Obama resigned from the Senate soon after winning the 4 November presidential election.
Irish-American US Attorney Patrick Fitzgerald, the federal prosecutor, said he was trying to stop a 'crime spree' by arresting the Governor and his chief of staff this morning.
While prosecutors are not suggesting that Mr Obama or his presidential transition team was aware of the allegations, Gov Blagojevich's arrest is likely to be an embarrassment.
Read the Prosecutor's Complaint and Press Release
Mr Fitzgerald also pointed out that, despite the arrest, Gov Blagojevich still has the power to appoint Mr Obama's replacement.
51-year-old Rod Blagojevich and his chief of staff, John Harris, whjo was also arrested today, are further accused of attempted extortion in an attempt to achieve the sacking of certain editors of the Chicago Tribune newspaper who were critical of the governor.
They are said to have threatened to withhold state assistance to the Tribune Company in connection with the sale of the Chicago Cubs' baseball home, Wrigley Field.
'For Sale' sign
In his statement, Mr Fitzgerald said the charges 'allege that Blagojevich put a 'for sale' sign on the naming of a United States senator; involved himself personally in pay-to-play schemes with the urgency of a salesman meeting his annual sales target; and corruptly used his office in an effort to trample editorial voices of criticism.'
Mr Blagojevich allegedly was caught on court-authorised wiretaps during the last month.
He was seeking a 'substantial' salary for himself at a nonprofit foundation or union affiliated organisation, 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, an FBI affidavit said.
It was unclear what would happen now to the selection of a successor to Mr Obama, although the spot would be certain to go to a Democrat.
Democrats, with independent allies, will hold at least 58 seats in the 100-seat Senate when the new Congress convenes in early January. A Minnesota Senate seat is still undecided.
Mr 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.'
Long prison term possible
If Mr Blagojevich is convicted, each mail and wire fraud charge carries a maximum sentence of 20 years in prison while each bribery charge carries a maximum sentence of 10 years in prison. Each count carries a maximum fine of $250,000 (€192,000).
Mr Blagojevich was born in Chicago to a working-class Serbian immigrant family, working odd jobs and in a meatpacking plant to get through college.
He was elected to the Illinois state House in 1992 and later won a seat in the US Congress that had been held by another politician who fell foul of the law, Dan Rostenkowski.
He became Illinois' first Democratic governor in nearly 30 years when he replaced George Ryan in 2003, on a platform of reform.
But his popularity has descended to an all-time low after wrangles with fellow Democrats in the state legislature, some of whom had threatened him with impeachment.
