Court documents suggest governor knew of fund schemes

For the first time since they began indicting members of Gov. Rod Blagojevich's inner circle, federal prosecutors alleged Friday that a witness says the governor intimated he had no problem exchanging contracts and government perks for campaign contributions.

Quoting lawyer Joseph Cari, prosecutors alleged Blagojevich "asked about Cari's fund-raising experience. (Blagojevich) stated he had a lot of ways of helping his friends and that (Blagojevich fundraisers Antoin) Rezko and (Chris Kelly) were his point people in helping his friends and coordinating fundraising. (Blagojevich) also informed Cari that he could award contracts, legal work, and investment banking to help with fund-raising."

The allegations were made in a document known as a "Santiago Proffer" filed in advance of Rezko's February trial on corruption charges. While prosecutors did not refer to Blagojevich or Kelly by name, they referred to them by letter, and sources have confirmed to the Daily Herald the letters refer to Blagojevich and Kelly.

More Coverage Stories Rezko court filing [12/21/07]

Cari has already pleaded guilty to trying to extort money from an investment firm trying to do business with the state and is cooperating with prosecutors.

Abby Ottenhoff, a spokeswoman for the governor, denied the conversation ever occurred.

But the Cari conversation is not the governor's only problem.

Prosecutors allege that powerbroker Stuart Levine personally shared a plane ride with Blagojevich and Kelly shortly after being reappointed by Blagojevich to the Illinois Health Facilities Planning Board in 2003.

"After Levine was reappointed, he shared a private plane ride from New York to Chicago with (Blagojevich) and (Kelly). Levine, (Blagojevich), and (Kelly) were the only passengers on the flight. At the beginning of the flight, Levine thanked (Blagojevich) for reappointing him to the Planning Board. (Blagojevich) responded that Levine should only talk with 'Tony' (Rezko) or (Kelly) about the board, 'but you stick with us and you will do very well for yourself.'"

While prosecutors nip at Blagojevich's heels in the document, they take whole chunks out of Rezko, Levine and Republican powerbroker William Cellini.

Levine and Cellini, prosecutors contend, were the "it" boys of Gov. George Ryan's administration, and enjoyed control of several members of important state panels. So powerful were they that one state pension board official referred to Levine as "The Rabbi" and Cellini as "The Pope."

But with the changeover of the governor's mansion from a Republican to a Democrat, they found their power waning to Blagojevich's new powerbrokers, Kelly and Rezko, whom Cellini derisively referred to as the "Bobbsey Twins," the government charges.

So Levine, who has already pleaded guilty and is now cooperating with prosecutors, made it clear his party loyalty extended past typical "red" Republican or "blue" Democrat loyalties to strictly green. After persuading Rezko and Kelly to reappoint him to the state's health facilities planning board, he took a step further and tried to retain his power on the Teachers Retirement System board.

Cellini and Levine, prosecutors contend, had enjoyed enough influence over the Teachers Retirement System to dictate how a majority voted. But Levine saw that it was only a matter of time before Rezko controlled a majority. So Levine took a gamble.

He arranged to meet with Rezko April 14, 2004, at Chicago's Standard Club and laid his cards on the table. He told Rezko exactly who he controlled and what fees he was collecting -- fees Rezko didn't know could be mined. Levine offered to share with Rezko, and in turn Rezko would not have to spend one or two years slowly feeling out who on the state pension boards he could corrupt for payoffs and campaign donations for Blagojevich, the government contends.

Instead, the bi-partisan combine could roll on unimpeded and Rezko could start making money immediately, the government charges. The deference to the new kid in town paid off, the government contends.

In a phone call recorded by the government, Levine recalled to a close friend how Rezko ate up the adulation.

"Tony said to me on the ah, on the mortgage thing (an investment firm seeking business with the Teachers Retirement System), (Rezko) said, he said well what do you, what do you, what do you need to do to proceed? I said um, 'your permission.' (Rezko) (expletive) loved that."

Attorneys for Rezko could not be reached late Friday after the government released its bombshell. Neither could attorneys for Kelly or Cellini.