From a political and public relations perspective, the most troubling testimony to the Obama White House so far from Rod Blagojevich's criminal corruption trial was the surprise revelation that on election eve 2008, Barack Obama, confident he would win the White House on Nov. 4, called Illinois SEIU union leader Tom Balanoff to discuss the Illinois Senate seat he would soon be vacating.
In that call, Obama mentioned Valerie Jarrett as a possible replacement saying at the same time he would prefer she work with him in the White House.
Balanoff testified that at the conclusion of the call he told Obama he would call Blagojevich -- and went on to have a Nov. 6 meeting with him to recommend Jarrett for the seat. When Blagojevich brought up getting a Cabinet post, Balanoff told him, "that's not going to happen." Balanoff and Jarrett met Nov. 7; by Nov. 9, Jarrett had dropped her interest in being a senator and signed on as a White House senior adviser.
Balanoff's testimony about the call -- prosecutors had Balanoff on the stand to bolster the allegation Blagojevich tried to sell or trade the seat for a big job -- raised questions about why the conversation was not revealed in an internal report then-President-elect Obama ordered up after Blagojevich was arrested Dec. 9, 2008.
On Dec. 11, then-White House counsel-designate Greg Craig was tasked with determining what communications, if any, took place between Obama staffers, Blagojevich and others in his office.
On Dec. 23, Craig released a report to Obama with a "review" of contacts or communications between Blagojevich and his advisers and Obama and three people who now play key roles in the White House: senior advisers Jarrett and David Axelrod and White House Chief of Staff Rahm Emanuel. Obama pal Eric Whitaker, who did not join the administration, was also included. Craig concluded that nothing improper occurred.
Obama's call to Balanoff was not revealed in the report or in a briefing for reporters conducted by Craig and Obama spokesman Robert Gibbs on Dec. 23.
The questions about why Obama's team was not forthcoming about the Balanoff call come as the Blagojevich defense starts today, with the possibility that Emanuel and Jarrett may be called to testify.
Republicans and other Obama foes have seized on the omission of the Balanoff call in the report as an example, at the least, of a lack of candor from the get-go on the part of Obama, who was elected on promises of transparency and a new way of doing business.
A neutral observer, however, could conclude that knowing about the Obama phone call helps explain how Blagojevich knew Jarrett was interested in the Senate appointment. (Another way: John Wyma, a former Blagojevich confidant, testified that Emanuel told him Obama was interested in Jarrett replacing him.)
The Dec. 23 report, however, I am told, was designed not to fill in a political backstory starting the night before the election -- but to demonstrate the more important legal matter that no one connected with Obama made a deal over the Senate seat or did anything inappropriate. The report was intended to address if there was a corrupt bargain -- and there was not. That was the goal.
In that context, from the White House perspective, the lack of disclosure over the Balanoff call did not seem material. On Dec. 11, Obama said, ''I have never spoken with the governor on this subject.'' The Blagojevich trial showed that is true.
Obama did talk to Balanoff, who talked to Blagojevich about Jarrett.
In interviews with people familiar with how the Obama team handled the matter, here's what else I can pass along:
• I'm told by a source that the Obama team was not tipped off before Blagojevich's arrest that Blagojevich was being probed for trying to auction off the Senate seat.
• The Blagojevich arrest sent the Obama team scrambling -- they were under pressure to get a government up and running but felt there needed to be some kind of a report issued quickly about possible staff contacts with Blagojevich.
• The Obama team gave the U.S. attorney's office in Chicago, run by Patrick Fitzgerald, a heads-up that they were producing a report. The Obama team limited the scope of the report to ensure it would not disrupt the ongoing criminal investigation.
• Much of the information in the Craig report was conveyed through attorneys. Emanuel was represented by W. Neil Eggleston, a Washington lawyer; Jarrett and Axelrod retained Chicago counsel -- for Jarrett, Vincent Connelly, a former assistant U.S. attorney; for Axelrod, Dick Devine, the former Cook County state's attorney.