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The problem with Blagojevich is that I believe he was planning on bigger and better things (like a President run at some point), so this "scandal" has really thrown a wrench into his plans.
Of course I don't think bigger and better things are possible, but by resigning or running away, it will make him look guilty and will most defiantly be little chance of him moving on to bigger & better things - and the only hope (small one now) that he has is to deny & fight back.