Governor Blagojevich on Gambling

Source: http://www.chicagotribune.com/news/politics/chi-rezko_governor_bdmar02,0,694950.story?page=1

 

Trial knocks on governor's door

 

March 2, 2008

Chicago Tribune

Bob Secter and Ray Long

 

 

Illinois has a rich and infamous history of political corruption trials, but the trajectory of the case against Antoin "Tony" Rezko -- a chief fundraiser for Gov. Rod Blagojevich -- may be without parallel.

Perhaps never before has a sitting Illinois governor become so enmeshed in a criminal proceeding of such breadth.

Rezko's trial, set to begin with jury selection Monday, is expected to shed unflattering light on the inner workings of an administration that Blagojevich vowed would clean up state government after his predecessor left in scandal.

Boiled to its essence, the prosecution's complex case against Rezko involves allegations that he and other insiders exploited their relationship with Blagojevich to seek millions of dollars in kickbacks from firms seeking state business or regulatory approval.

The government's case is expected to include testimony about separate conversations between Blagojevich and two political insiders in which he allegedly gave a thumbs-up to pay-to-play politics. In one conversation, according to court documents, Blagojevich was said to have explicitly raised the notion of rewarding campaign donors with state contracts, legal work and investment banking.

Blagojevich has not been charged with any wrongdoing and steadfastly maintains his commitment to reform. He is not expected to testify at the trial.

Last week, Blagojevich said he hadn't been following the case and didn't know much about it. But he denied being involved in any of the questionable acts attributed to him by prosecutors in pretrial filings in which he was referred to by a pseudonym, Public Official A.

"I'm simply going to say, whatever letter of the alphabet you want to put on something, what's described there does not describe how I operate or how I do things, and all I'm going to say about a court case that I'm not involved in is that there's not anything for me to say," Blagojevich said at an unrelated news conference.

The case is attracting nationwide attention, in part because Rezko also befriended Democratic presidential candidate Barack Obama on his way up the political ladder and prosecutors have signaled that the U.S. senator's name is likely to come up. Some cash Rezko allegedly obtained through shakedowns of state contractors ended up in Obama's campaign coffers.

Obama, however, is expected to be a footnote in the trial, Blagojevich and his administration will be a central focus.


Rewards started early

Blagojevich could crusade as an ethics reformer when he first ran for governor in 2002 because the administration of outgoing Republican Gov. George Ryan was mired in a licenses-for-bribes scandal.

Almost immediately after Blagojevich took over, prosecutors say, Rezko and others in the governor's inner circle began manipulating state government to reward their friends and Blagojevich's political contributors.

A key figure in the federal investigation is Christopher Kelly, long the chief fundraiser for Blagojevich. Kelly has not been charged in the case, though he was indicted last year by a federal grand jury on separate federal tax-fraud allegations.

Kelly and Rezko were central to Blagojevich's successful campaign for governor in 2002 and formed the nucleus of his kitchen cabinet once he took office. They held sway over government appointments and filled several key positions in the new administration with friends and business associates.

Prosecutors say they also threw around their weight to shake down would-be state contractors.

"Rezko parlayed his success in raising significant sums of money for Gov. Blagojevich into power by gaining access to high-ranking Illinois officials, being given deference in filling board and job positions, and by influencing how certain boards conducted business," prosecutors alleged last week in a pretrial filing. The government's case against Rezko relies heavily on the assertions of political operatives Stuart Levine and Joseph Cari, who have pleaded guilty in the case and are cooperating with prosecutors.

Prosecutors say Rezko, Kelly and others conspired to keep Levine on two pivotal state boards, where Levine rigged decisions to extort money for himself, Rezko and others from would-be state contractors. Cari is a longtime Democratic fundraiser and was once finance director for the national party.

In a December court filing that outlined a road map to their case, prosecutors highlighted a conversation about fundraising that Cari alleges to have had with Blagojevich, who was referred to in the document as Public Official A.

Blagojevich "stated he had a lot of ways of helping his friends and that Rezko and [Kelly] were his point people in helping his friends and coordinating fundraising," according to government lawyers. "[Blagojevich] also informed Cari that he could award contracts, legal work, and investment banking to help with fundraising."

The same filing also describes an alleged conversation between Levine and Blagojevich as they shared a flight on a private plane from New York. During the ride, Levine was said to have thanked Blagojevich for reappointing him to a state panel that regulated hospital expansion.

Blagojevich "responded that Levine should only talk with 'Tony' or [Kelly] about the board, 'but you stick with us and you will do very well for yourself,'" the prosecution document stated.

Defense lawyers insist such eyewitness accounts have been fabricated to buy lighter punishment for Levine and Cari. They also have vigorously attacked Levine as a chronic user of hard drugs who lacks credibility.

 

Ryan indicted after office

Scandal has touched many previous governors, but in vastly different ways.

Federal agents had been circling around Ryan's administration for years. Still, it wasn't until just days before Ryan was to leave office that prosecutors first publicly suggested he had a role in the licenses-for-bribes scandal, which began when he was secretary of state.

The federal indictment that would lead to Ryan's conviction and imprisonment came nearly a year after his departure.

Even former Republican Gov. Jim Edgar had a brush with scandal during his second term when prosecutors charged that a multimillion-dollar public aid contract was steered to a company run by some of his biggest political donors.

The scandal sent two mid-level state workers and two officials of the company, Management Services Inc., to prison.

Edgar was never accused of wrongdoing. But he did testify for the defense, becoming the first sitting Illinois governor in decades to take the witness stand in a criminal case.

In Springfield, where Blagojevich's unpopularity with Republicans and Democrats alike helped fuel last year's record standoff on the state budget, the consensus among lawmakers was that the trial will weaken him further, whatever the outcome.

"The governor came here riding a white horse and he was our ethics czar and he definitely doesn't deserve a pass," said Sen. Susan Garrett (D- Lake Forest). "But I think it's really more important that we as legislators and leaders look into why this continues to happen over and over again."

Rep. Rosemary Mulligan (R- Des Plaines) said Blagojevich brought his current troubles on himself.

"Innuendo can kill you even if it proves not to be true," said Mulligan. "Part of the problem is he was so cocky about [saying] he was going to do this like nobody else had ever done it before. He was just asking for people to scrutinize him."


Rezko's reach

The following have either been implicated in the indictment or are expected to testify in the trial of political fundraiser Antoin Rezko.

Stuart Levine

A Highland Park lawyer and Republican insider whose account of his time on two state boards will make up the backbone of the government's case against Rezko. Levine is expected to tell jurors he plotted with Rezko to control majorities on the boards and bring in kickbacks.

William Cellini

A Republican power broker who remained a political heavyweight after Gov. Rod Blagojevich took office, and was influential when it came to making recommendations for state offices. He is uncharged in the case, but is named as Co-Schemer A, allegedly working with Levine from early on in the scheme to use control of the board of the Teachers Retirement System to force illegal payments.

Chris Kelly

One of Blagojevich's closest advisers and chief fundraiser on his two campaigns. He is uncharged in the Rezko case but is referred to in case documents as Co-Schemer B. He allegedly had knowledge of the pay-to-play scheme that would bring in campaign money and supported it, a contention his lawyers have denied.

Sheldon Pekin

A Chicago businessman who acted as an agent for investment firm Glencoe Capital, which paid him a "finder's fee," in a TRS deal. Part of those funds allegedly were directed by Rezko, through Levine, to Rezko associate Joseph Aramanda. Pekin is not charged, but is expected to testify for the government.

Joseph Aramanda

A Rezko confidant who was an executive of the Rezko company that ran a group of pizza franchises. Aramanda is not charged and is not expected to testify. He allegedly accepted $250,000 from Pekin and passed some of the funds on to other Rezko associates.

Tom Rosenberg

A Hollywood producer and a principal for Capri Capital, which allegedly was a target of an extortion attempt. Players in the case are accused of plotting to tell him Capri would lose a pending $220 million investment deal with TRS unless either Levine was given a 1 percent fee or a $1.5 million donation was made to the campaign fund of Gov. Rod Blagojevich. Cellini, named as Co-Schemer A, is accused of first approaching Rosenberg, who threatened to go to authorities. Rosenberg is expected to testify.

Steven Loren

A lawyer who acted as outside counsel for TRS, and who followed Levine orders to draw up sham contracts to make some of the alleged transactions look legitimate. He has pleaded guilty in the case and is expected to testify.

Joseph Cari

A nationally prominent Democratic fundraiser, including a post as national finance chairman for the Gore campaign in 2000, he was also managing director of a private equity firm that sought TRS business. He has pleaded guilty in the case and is expected to be a witness. Cari was accused of acting as a go-between in a deal that would have seen a finder's fee passed to Rezko associate Charles Hannon through a sham "consultant."

Jacob Kiferbaum

Owner of a construction firm that agreed to pay kickbacks for being able to build a hospital whose expansion Levine was steering through the Illinois Health Facilities Planning Board. He has pleaded guilty and is expected to testify. 

 

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