Jesse Jackson Jr.: Is he in serious trouble?

A Chicago businessman has alleged that Rep. Jesse Jackson Jr. was involved in an illegal scheme to win the appointment to Barack Obama's former Senate seat. Jackson has denied the charges.

Allegations that Rep. Jesse Jackson Jr. offered to raise $6 million for former Illinois Gov. Rod Blagojevich in exchange for an appointment to Barack Obama's former Senate seat are potentially damaging politically, but Congressman Jackson is unlikely to face legal action, say experts.

A Chicago Sun-Times story reported Tuesday that at an Oct. 8, 2008 dinner meeting, Jackson told Chicago-area businessman Raghuveer Nayak to tell representatives of Governor Blagojevich of his interest in the seat and his alleged willingness to raise $6 million on Blagojevich's behalf to help secure it.

But federal prosecutors are already well aware of the meeting. They used the meeting in their case against Blagojevich to try to show that the former governor was willing to negotiate in a pay-to-play scheme to sell off the seat. In the trial, Robert Blagojevich, the former governor’s brother, testified that Nayak approached him on Oct. 31, 2008, and said Jackson was willing to raise $6 million for the governor.

But neither Jackson nor Mr. Nayak were charged.

That fact raises doubts about whether federal prosecutors believed they had enough evidence to link him to any wrongdoing, says Andrea Lyon, a professor at the DePaul University College of Law in Chicago.

It also suggests Nayak’s credibility may have been in doubt. “If they wanted to do something to [Jackson], they would have done it,” says Ms. Lyon.

Nayak’s decision to approach the Sun-Times with the allegation raises further questions about his agenda, she says. “This has already been investigated and that’s the end of it.… Does [Jackson] look suspicious? I suppose so, but I don’t know anything about [Nayak’s motivations], either.”

Nayak is facing an IRS inquiry regarding his business relationship with Rajinder Bedi, a Blagojevich emissary and fundraiser, according to the Sun-Times.

Jackson is denying any wrongdoing. Last week he told a local radio talk show that Nayak was talking with Mr. Bedi in Hindi at the dinner. “I didn’t participate in any of that part of the conversation, nor do I remember hearing it,” Jackson said.

Jackson released a statement Tuesday calling Nayak's allegation "preposterous." “My interest in the Senate seat was based on years of public service, which I am proud of, not some improper scheme with anyone,” he said.

Nayak also told the Sun-Times Jackson told him to pay for two flights from Washington to Chicago for Giovana Huidobro, a hostess at a Washington restaurant and lounge. According to Nayak, Ms. Huidobro was present at the October dinner meeting in Chicago. The Sun-Times reports the FBI questioned her about a year ago to determine Jackson’s direct role in pursuing the Senate seat.

In his statement Tuesday, Jackson called Huidobro “a social acquaintance” and said the nature of their relationship was “a private and personal matter” that was handled “some time ago” between Jackson and his wife, Sandi Jackson, a Chicago alderman.

Depending on the value of the airline tickets, the allegation could trigger a federal inquiry regarding a violation of the US House of Representatives' ban on gifts. Jackson did not disclose Nayak’s alleged gift on his House ethics statements or on his federal campaign contribution records.

The low monetary value of the flights makes an investigation is unlikely, says Ronald Allen of Chicago's Northwestern University School of Law.

"It’s hard for me to imagine anyone will spend much time on this. I’m not condoning it, but this sort of thing is at a pretty low level of triviality,” he says.

If the allegations are proven true, Jackson might be required to pay back the amount of the flights but because they were not connected to a crime, his failure to report them will be seen as a technical violation, says Lyon of DePaul University.