President-elect Barack Obama hasn't even stepped into office and already a scandal — not of his own making — is threatening to dog him.

Obama isn't accused of anything. But the fact that Illinois Gov. Rod Blagojevich, a fellow Democrat, has been charged with trying to sell Obama's now-vacant Senate post gives political opponents an opening to criticise him. A slew of questions remain. The investigation is still under way. And the ultimate impact on Obama is far from certain.

Since Blagojevich's arrest, Obama has been pointedly distancing himself from the case and he took another step back yesterday by joining others calling for the governor's resignation.

A day earlier, Obama said: "I had no contact with the governor or his office, and so I was not aware of what was happening" concerning any possible dealing about Blagojevich's appointment of a successor.

In an interview published in the Chicago Tribune and the Los Angeles Times, Obama reiterated that point though he wouldn't answer a question on whether he was aware of any conversations between the governor and his top aides, including incoming White House chief of staff Rahm Emanuel.

"It's an ongoing investigation," Obama said. "I think it would be inappropriate for me to ... remark on the situation beyond the facts that I know."

In Chicago on Tuesday, US Attorney Patrick Fitzgerald said prosecutors were making no allegations that Obama was aware of any scheming. And Blagojevich himself, in taped conversations cited by prosecutors, suggested Obama wouldn't be helpful to him. Even if the governor was to appoint a candidate favored by the Obama team, Blagojevich said, "they're not willing to give me anything except appreciation".

Republicans pounced nonetheless.

"The serious nature of the crimes listed by federal prosecutors raises questions about the interaction with Gov. Blagojevich, President-elect Obama and other high ranking officials who will be working for the future president," said Rep. Eric Cantor of Virginia, the new GOP House whip.

Robert Gibbs, an Obama spokesman, said: "We did not know about this recent part of the investigation until today."

The two Illinois politicians have never been close and have largely operated in different Democratic Party camps in the state. Blagojevich's disdain for Obama was clear in court documents; he is quoted as calling the president-elect a vulgar term in one phone conversation recorded by the FBI.

Despite all that, at the very least, the episode amounts to a distraction for Obama just six weeks before he's sworn into office while he works to set up his new administration and deal with a national economic crisis. It also raises the spectre of notorious Chicago politics, an image Obama has tried to distance himself from during his career.

In court documents, FBI Special Agent Daniel Cain detailed several phone calls between Blagojevich and his aides that were intercepted on court-authorized wiretaps over the past month. Blagojevich is accused of conspiring to sell or trade the vacant Senate seat for personal benefits for himself and his wife, Patti. Among his alleged desires: a Cabinet post, placement at a private foundation in a significant position, campaign contributions or an ambassadorship.

There were signs the continuing investigation could still involve Obama.

It appears that Obama friend Valerie Jarrett, an incoming senior White House adviser, is the person referred to repeatedly in court documents as "Candidate 1". That individual is described as a woman who is "an adviser to the president-elect" and as the person Obama wanted appointed to the Senate seat. Court papers say Candidate 1 eventually removed herself from consideration for the Senate seat.

Blagojevich talked at length about Candidate 1 in a November 11 phone conversation with an aide. One day later, Jarrett, a Chicago businesswoman who is one of three co-chairmen of Obama's transition team and was a high-level adviser to his presidential campaign, made it known she was not interested in the seat. On November 15, Obama announced that Jarrett would be a senior White House adviser and assistant for intergovernmental relations.

Court documents say they don't include all calls dealing with the governor's efforts regarding the Senate appointment. And many people in the documents are referred to by aliases; there's little doubt their identities will eventually surface. – The Associated Press