http://www.suntimes.com/news/metro/709413,CST-NWS-rezko22.article#

Feds: Gov proposed 'pay-to-play' deals
'PUBLIC OFFICIAL A' | Steered 2 would-be donors to Rezko, Kelly, filing says

December 22, 2007

Chicago Sun-Times
BY ABDON M. PALLASCH

The U.S. attorney's office significantly raised the stakes against Gov. Blagojevich on Friday afternoon, alleging in a new court filing that the governor -- referred to as "Public Official A" -- told two people in separate conversations that supporting his administration could be very financially rewarding for them.

"You stick with us, and you will do very well for yourself," the filing quotes Blagojevich telling cooperating witness Stuart Levine. Blagojevich told attorney Joe Cari "he had lots of ways of helping his friends" and "he could award contracts, legal work, and investment banking," the filing said.

A document released Friday allegies that the governor told two people that supporting his administration could be very financially rewarding for them.

In both cases, Blagojevich told the would-be donors to his campaign to go through his friends Tony Rezko or Chris Kelly, the filing says. The filing comes in the government's case against Rezko, whose trial on charges of shaking down people for state contracts is scheduled to start Feb. 25.

Kelly appeared in court Friday in his own separate federal tax case and pleaded "not guilty."

Blagojevich spokeswoman Abby Ottenhoff said Friday: "No such conversation ever occurred. This administration does not do business that way." Blagojevich has not been charged with any wrongdoing.

The new 78-page filing in Rezko's case reads like a Tolstoy novel, introducing so many new actors referred to as "Co-schemer A" or "Individual Z," that it runs out of letters and has to start doubling up with "Individual AA" and "Individual HH."

Also, many of the actors earlier referred to as "individuals" have been renamed "co-schemers." Co-schemer A, sources tell the Sun-Times, is Springfield power broker William Cellini. "Co-schemer B" is Kelly, Blagojevich's chief fund-raiser.

Both men are featured prominently in Friday's "proffer," trying to control votes on either the state teacher pension board or the state hospital board. Cellini, Kelly, Levine and Rezko tried to shake down investment firms that wanted to do business with the teachers' retirement fund for multimillion-dollar "finder's fees" or contributions to Blagojevich, the filing states.

Rezko, through his close relationship with Blagojevich, was able to name majorities on both boards, the proffer says.

The filing refers to tape-recorded telephone calls numbering into the thousands, which prosecutors will introduce at trial.

The men tried to shake down movie producer and former investment firm owner Tom Rosenberg ("Individual J") for a $1.5 million contribution to Blagojevich, or $2.2 million for Levine, if Rosenberg wanted the Teachers Retirement System (TRS) to go forward with an expected investment of $220 million in Rosenberg's firm.

Cellini called Rosenberg and laid out the pay-to-play scheme, but Rosenberg threatened to go public and expose the extortion attempt, so Cellini, Levine and the others backed off, the proffer said.

Cellini is caught on tape telling Levine about how Rezko and Kelly had been "essentially hammerin' people for contracts, ah, contracts for fund-raising," the filing states.

Levine tells "Individual N" that Rezko was "aghast" when he realized the "magnitude" of what Rosenberg wanted to get "without doing anything for anybody all these years," the proffer states.

Levine says that in his conversation with Blagojevich on the plane, the governor signaled Levine was to take his cue from Rezko or Kelly about what to do on the boards and leave Blagojevich out of it, the filing states.