CHICAGO – A former chief of staff and longtime friend of ousted Gov. Rod Blagojevich pleaded guilty to wire fraud yesterday and promised to cooperate with federal prosecutors in their corruption case against the former governor.

Alonzo ‘Lon’ Monk, 51, said that as Blagojevich’s top aide he had witnessed efforts to shake down roadbuilders, a hospital executive and a racetrack owner for hundreds of thousands of dollars in campaign contributions for the governor.

Monk said that even before Blagojevich was elected there was talk of using the powers of the governor’s office to raise a cash horde that would eventually be divided up among an inner circle of key advisers.

Monk’s decision to cooperate and take the witness stand if called upon at Blagojevich’s trial could be a devastating blow to the former governor because the one-time chief of staff might provide jurors with a firsthand account of the corruption that prosecutors say was swirling around the state administration.

Blagojevich, who is accused of plotting to sell or trade President Obama’s former U.S. Senate seat, among other things, has denied any wrongdoing and pleaded not guilty to the charges against him. His defense attorneys, Sheldon Sorosky and Samuel E. Adam, did not immediately respond to phone messages seeking comment.

Monk pleaded guilty to a single count of wire fraud for allegedly squeezing a racetrack owner for a $100,000 campaign contribution. In exchange, Blagojevich was to sign a bill taxing gambling casinos to subsidize Illinois racetracks, according to the Blagojevich indictment and Monk’s signed plea agreement.

Blagojevich signed the bill but the money was never paid.

Monk entered his plea before U.S. District Judge James B. Zagel as part of an agreement that his lawyer and federal prosecutors have negotiated for months.

Monk will get a lenient 24-month sentence as his reward if prosecutors are satisfied with the help he provides. Federal guidelines call for a 37 to 46 month sentence for the single count of wire fraud.

John Harris, who succeeded Monk as chief of staff, has already made such a deal. Prosecutors have not announced that convicted influence peddler Tony Rezko, another member of Blagojevich’s inner circle, is cooperating. But his sentencing has been deferred indefinitely – a sign that he may be doing so.

Another key Blagojevich adviser, contractor Christopher G. Kelly, was found dead in what police say was a suicide, just days before he was to report to prison to serve at least eight years for fraud. Prosecutors had been hoping he would change his mind and agree to cooperate in return for a reduced sentence.

Among other things, Monk said in his signed plea agreement that there was discussion among Blagojevich’s advisers of allowing the governor’s wife, Patti, to market a giant Rezko real estate project involving 62 undeveloped acres a few blocks south of the heart of downtown Chicago.

Rezko had planned to put a shopping center and homes on the site, but it was announced shortly before his trial that he transferred his share to London-based billionaire Nadhmi Auchi. The Iraqi-born tycoon had sent money to Rezko to help him post bail and lent money to Kelly to help finance a Las Vegas land deal.

Monk said he met with Blagojevich, Rezko and Kelly periodically in the early days of the administration to discuss ways of using state power to make money. But he said the meetings stopped abruptly in 2004 after they learned that FBI agents were questioning big-money campaign contributor Stuart Levine – who later became the government’s star witness at Rezko’s influence peddling trial.

Monk said Rezko gave him about $10,000 in cash seven to nine times and made it clear he did not have to repay.

He said he learned from Kelly and Rezko that Rezko would get a $500,000 share of a consulting fee paid in connection with the refinancing of $10 billion in state pension bond.

Bob Kjellander, a Springfield lobbyist and a former treasurer of the Republican National Committee, received an $809,000 commission from the now defunct Bear Stearns investment firm after it became prime underwriter for the pension bonds. He issued a statement Tuesday saying he has met Monk and knows Rezko but never took part in a scheme to provide them with money and hasn’t committed any crime.

Monk said he was on hand when Blagojevich pushed a contractor who was eager for a share of $5 billion in roadbuilding money to come up with campaign contributions.

‘Can we count on you for your support?’ he quoted Blagojevich saying as the contractor wrapped up a meeting with the governor.

Monk said that when the chief executive of Childrens Memorial Hospital was slow in coming up with a contribution, Blagojevich ordered an aide to hold up a state grant.

Whatever Blagojevich administration secrets there may be, Monk likely knows most of them.

Monk and Blagojevich met at Pepperdine University law school in Malibu, Calif., in the early 1980s, where they were roommates and ran marathons together. Later, Monk was a groomsman at Blagojevich’s wedding.

After law school, Monk worked in a law firm and became a sports agent in Los Angeles. His clients included tennis star Ivan Lendl.

When Blagojevich went to Congress, he tapped his old friend to serve as his chief counsel. And when he ran for governor he brought Monk along as campaign manager. The chief of staff job was his reward.

Monk went on to become a high-powered lobbyist in the Illinois capital, using his ties to the governor as a springboard.