Of course, he knew.

In Blago's trial, here in Chicago, a witness has said that Obama knew about Blagos attempts to get favors in exchange for Barack's old senate seat.

From the Chicago Sun Times:

"The president understands that the governor would be willing to make the appointment of Valerie Jarrett as long as he gets what he's asked for. . . . The governor gets the Cabinet appointment he's asked for," Harris said, explaining a recorded call.

You see, Obama wanted Valerie Jarret to have that seat. He even passed along a list of 4 senate candidates that he wanted in. Which means, at the very least, that Obama knew that a crime was being committed.
Of course.