Source: http://www.chicagotribune.com/news/local/chi-rezkofeb26,0,3564222.story

Judge reveals Blagojevich is 'Public Official A'

Rezko allegedly sought donations for governor

February 26, 2008

Chicago Tribune

Jeff Coen, Bob Secter, and John Chase

Laying to rest the latest parlor game of Illinois politics, a federal judge on Monday made it crystal clear that "A" stands for Rod Blagojevich in the public corruption case against the governor's indicted fundraiser, Antoin "Tony" Rezko.

A ruling by U.S. District Court Judge Amy St. Eve dispensed with an array of pseudonyms that had cloaked the identities of several people who allegedly benefited from Rezko's financial schemes, including Blagojevich. He had previously been referred to in court documents only as Public Official A.

The nine-page ruling was heavy on political names and dealmaking, revealing for the first time what Robert Kjellander, Illinois' Republican national committeeman, allegedly did with a controversial $809,000 finder's fee he got as part of a Blagojevich administration bond deal. Prosecutors contend much of the windfall ended up with Rezko associates, according to St. Eve's ruling.

Blagojevich has repeatedly denied that he was Public Official A, but St. Eve underscored the link Monday by saying prosecutors claimed he was the intended beneficiary of an alleged attempt by Rezko to extort a $1.5 million campaign donation from Chicago financier Tom Rosenberg.

The governor has not been charged with any wrongdoing, and St. Eve did not suggest that he was aware of the alleged extortion attempt. In earlier court filings, however, prosecutors have alleged that Blagojevich told a former political operative now cooperating with federal authorities that he could steer contracts, legal work and investment banking their way in exchange for fundraising.

Blagojevich spokeswoman Abby Ottenhoff dismissed any alleged conversation that suggested a campaign donation needed to be made in exchange for an investment. "The governor was never involved in such a conversation," said Ottenhoff, who didn't directly address the identification of Blagojevich.

Also in the ruling, St. Eve cited allegations by prosecutors Rezko offered to place the brother of another of his business partners, Joseph Cacciatore, on the Illinois Banking Board in exchange for a $50,000 contribution to Blagojevich's campaign. Cacciatore is the owner of a real estate firm that owned a portion of a proposed Rezko development in the South Loop.

"Rezko responded that a $50,000 contribution to Gov. Blagojevich would help his brother's chances of the board appointment," the ruling noted. Eventually, Rezko and Joseph Cacciatore allegedly agreed that Joseph Cacciatore would contribute $25,000 to the campaign and Rezko's development firm, Rezmar, would contribute the other $25,000 on behalf of Cacciatore. Rezko recommended Cacciatore's brother, Phil, for the banking board in February 2004 and Blagojevich later appointed him to the board.

Ottenhoff said the $50,000 pay-to-play allegation is the "first we've heard of this, and we have absolutely no knowledge of it." The ruling by St. Eve only underscored how prosecutors believe Rezko's reach into the inner workings of Illinois politics was both broad and not limited by party affiliations. The key witness against Rezko is expected to be businessman Stuart Levine, a longtime Republican fundraiser who has pleaded guilty in the case. Levine is alleged to have used his position on two state boards to help Rezko shake down investment firms and hospitals. In Monday's ruling, Blagojevich's former chief of staff, Lon Monk, was mentioned as signing off on Levine's reappointments. Joseph Cari, a former finance director for the national Democratic Party, has already pleaded guilty in the case to charges that he helped siphon millions illegally from Illinois pension funds.

Kjellander has held a similarly prominent role with the national Republican Party, once serving as its treasurer. He still represents Illinois on the GOP national committee. A longtime Springfield insider, Kjellander has insisted it "wasn't clout" that landed him the fees referred to in Monday's ruling.

Monday's ruling indicated that prosecutors allege that Kjellander served as a straw man for Rezko in the bond deal. Rezko, the ruling suggested, directed the investment bank Bear Stearns to give the fee to Kjellander, who then transferred $600,000 of the $809,000 fee to Joseph Aramanda, a Rezko business associate. Aramanda then allegedly turned over $450,000 to four other people designated by Rezko.

In an interview Monday, Kjellander said he made a "loan" to Aramanda "because I got a very favorable interest rate. That loan was repaid before the due date, and I made a very nice profit on the interest."

"I did nothing improper," he said. But Kjellander also emphasized he had "no knowledge of what" Aramanda did with the money.

St. Eve's ruling came in response to a bid by prosecutors -- opposed by the defense -- to raise a number of allegations at trial that weren't part of the Rezko indictment. The filings had been made under seal, so the judge's ruling was the first public disclosure of the allegations. St. Eve barred prosecutors from raising the Kjellander allegations but allowed other evidence to be aired.

According to the ruling, Rezko and Levine met at a dinner party on Nov. 2, 2002 -- just three days before Blagojevich defeated Jim Ryan for governor. At the time, Rezko was one of Blagojevich's biggest fundraisers and Levine, Jim Ryan's law school classmate, was the largest single contributor to Ryan's campaign for governor.

The party was hosted by Fortunee Massuda, a shareholder in Rezko's pizza business, and her husband, Charles Hannon, according to the ruling. In 2003, Blagojevich appointed Massuda to the state's Health Facilities Planning Board, just weeks after she gave Blagojevich's campaign $25,000.Prosecutors contend Hannon was to be the recipient of a bogus consulting fee from an investment firm awarded business by the Teachers Retirement System, on whose board Levine sat, St. Eve said in her ruling. The fee is alleged to have been arranged by Rezko and Levine.

St. Eve's ruling also gave details of another alleged scheme involving Rosenberg, the principal of Capri Capital and a well-known movie producer. Capri was in line for a $220 million deal with the teachers' pension system, but Levine -- allegedly working with Rezko -- moved to block it unless Rosenberg agreed to pay Levine a multimillion dollar fee or make a $1.5 million donation to Blagojevich's campaign.

Prosecutors allege the extortion attempt was halted when Rosenberg threatened to go public.