Governor faces questions from feds, flimsy budget

July 1 arrives with no budget, so what's next?

Government can still pay bills owed to people from the just-ended budget year. And some payments are required even without a budget, such as pension and welfare checks.

Governor Rod Blagojevich could make the cuts and sign the rest of the budget into law then or veto the whole thing and make lawmakers pass a new one quickly.

The government will not be shutting down, at least for now. Agencies and other state-run services will operate normally until July 10. That's when the state controller needs authority to issue thousands of employee checks that are due on July 15.

Blagojevich has set a July 9 deadline for lawmakers to return to Springfield and pass more money-generating ideas.

While the governor did address the lack of a state budget Monday, he avoided answering a number of other questions on some timely topics.

The governor got blind-sided last week when a federal judge unsealed a document from the Rezko trial that raises new questions about Blagojevich's legal exposure in the ongoing investigation of contract and fundraising abuse by some of his top lieutenants. A spokesman for the governor says the allegations in the document are misleading. But on Monday, Blagojevich continued his policy of not answering the most basic questions about the corruption probe.

The governor's engaged in a robust give-and-take with pre-schoolers in Evanston Monday about Sponge Bob Square Pants and other topical issues. But the fun stopped when a reporter asks Blagojevich if he's a target of a federal corruption investigation.

"Any other questions?" Blagojevich answered.

The document that was unsealed by the federal judge who handled the corruption trial of Blagojevich fundraiser and advisor Tony Rezko claims that federal agents have interviewed Blagojevich on "multiple occasions" and that he denied the allegations of government witnesses Joe Cari and Stuart Levine that he, Blagojevich, was encouraging illegal pay-to-play politics.

On Monday, the governor was not adding anything to a spokesman's comment last week that he's only met with the feds twice. And the last interview was two years ago.

"I issued a statement and told you guys all about that, asked and answered. As I said before, I am just as interested as everybody else in trying to make sure those people who do things wrong are pursued. It would be inappropriate for me to say more beyond that," said Blagojevich.

Despite the allegation of fundraising abuse that's been swirling around Blagojevich and his administration for several years and several corruption cases, the governor held six separate fundraisers last week, including a multi-million dollar affair near Navy Pier last week, where he joked about the problems.

"We have to do events like this. You have to raise campaign funds because we can't just rely on all the good press we have been getting these days," Blagojevich joked.

Maybe all the campaign cash makes it easier to laugh as the feds buzz around your administration. Fellow Democrats in the Illinois House reject much of his budget and threaten impeachment. And the polls indicate he's more unpopular than President Bush.

But one question Blagojevich was willing to answer Monday was whether all of this is interfering with day-to-day government in Illinois. Absolutely not, he says, no impact at all.

The Associated Press contributed to this report.

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