One ruling in favor of Rezko, other against

The judge in charge of the Tony Rezko trial handed him both a defeat and a victory Tuesday, ruling the government can have its key witness testify about statements he alleges Rezko made, but also ruling that the defense can question that key witness about his frequent drug use.

U.S. District Judge Amy St. Eve ruled that Stuart Levine can testify about a conversation he claims he had with Rezko at the Standard Club, where the two discussed a scheme of kickbacks and contracts related to Illinois government.

Rezko was Gov. Rod Blagojevich's chief fundraiser at the time.

But also fair game is what authorities called the copious amounts of cocaine Levine was doing at the time and potentially at the time he was giving testimony to government agents. Levine also used crystal methamphetamine, marijuana and ketamine, testimony revealed.

In approving the hearsay, St. Eve wrote "the Court finds that the government's proffer has established by a preponderance of the evidence that a conspiracy existed and that (Rezko) participated in that conspiracy."

Because Rezko has been ruled a co-schemer, under federal evidence rules, that means Levine can testify to things Rezko said -- something that would normally be prohibited by hearsay rules.

Levine, the government maintains, will testify to two key conversations, including one held April 14, 2004, at Standard Club. Levine even outlined in a chart all the finder's fees he expected to receive from kickbacks on government contracts with the Teachers Retirement System, of which Levine was a member. Levine agreed to split the money with Rezko 50-50, he will testify.

Rezko "vehemently denies the truth of Levine's assertions," wrote his lawyer, Joseph Duffy.

Levine can also testify that Republican power broker William Cellini arranged with Rezko and Blagojevich adviser Chris Kelly to keep Levine in power on the teacher retirement board.

In exchange, Cellini and Levine promised to get state business for companies that Rezko and Kelly recommended, the filings said.

Duffy had objected to that because he claimed only Levine tied Cellini to the scheme, but St. Eve shot that argument down.

"In addition to Levine's testimony, the government has presented summaries of recorded phone calls and [movie producer Tom Rosenberg's] testimony that corroborate the government's contention that (Cellini) was a 'an integral player' in the scheme."

St. Eve allowed the drug usage testimony because it may be indicative of his ability to recall facts and conversations, she said.

In other filings Tuesday, attorneys in the case wrote that the government plans to call as witnesses Steve Loren, Charles Hannon, Sheldon Pekin, Jacob Keiferbaum and Daniel Mahru in the case.

Loren and Keiferbaum have already pleaded guilty in the case. The filings say Pekin will admit to sharing a finders fee from a government contract with those who did no work and Hannon will admit to receiving a finder's fee without doing any work. Mahru was a co-owner of a business with Rezko.