Rezko trial may have far-reaching effects

Opening arguments could start as early as Wednesday in the corruption trial of political insider Antoin "Tony" Rezko, court officials said today.

That observation followed a morning during which more than two dozen potential jurors were interviewed.

Rezko joins a long list of state leaders and their cronies accused of "pay to play" tactics, the latest being former Gov. George Ryan, who was convicted in 2006 of abusing power for personal gain and is serving time in a Terre Haute, Ind., federal penitentiary. Whether he is found innocent or guilty will go a long way toward relieving or ratcheting up the pressure on his one-time bosom buddy, Gov. Rod Blagojevich.

Rezko, who also has ties to presidential candidate Barack Obama, looked grave and intense when he appeared in court today and watched as St. Eve began questioning potential jurors. The real estate developer denies federal prosecutors' claims he extorted money for businesses in return for government contracts.

Before recessing for lunch, St. Eve had questioned 26 potential jurors, and another 16 are expected to be interviewed this afternoon. Prosecutors said the trial could get under way Wednesday.

The judge asked numerous potential jurors whether they had read about the case before, personal interests and their opinions about issues that may come out in the trial.

One of those is evidence obtained from wiretaps. A female juror asked her opinion of government wiretaps said, "It seems as if a judge gives permission to wiretap someone, there must be a reason."

But another woman said wiretapping without evidence could be considered an infringement on civil rights. Asked how she'd feel if she knew the eavesdropping was authorized by a court, the woman said such actions were acceptable.

At one point, Rezko turned and exchanged smiles with family who had gathered inside the courtroom.

But he is not the only one being watched in all this. For Blagojevich, the glare of the spotlight flashed even brighter last week after St. Eve removed any doubt that he is the "Public Official A" identified in court papers as having benefited from the hundreds of thousands of dollars of campaign cash raised by Rezko.

Blagojevich, for his part, says it doesn't matter one whit what comes out of the trial; he himself did nothing wrong.

And indeed, government prosecutors have not charged Blagojevich with breaking any laws.

But at a minimum, a guilty finding in the trial would show that Blagojevich had the same type of pay-to-play shenanigans going on in his administration as that of George Ryan, the former governor now in prison.

That is politically damaging -- if not devastating -- for someone who campaigned on cleaning up state government, even if Blagojevich had no idea it was going on, experts say.

"I expect (the trial) to probably end the governor's career. … I don't think he can be re-elected," said Dick Simpson, a political science professor at University of Illinois at Chicago.

But Blagojevich is not the only politician at risk from his trial. Democratic presidential hopeful Barack Obama, the freshman Illinois senator, has a lot to lose, even if he's never accused of wrongdoing in the case, simply because of his past relationship with Rezko.

Obama has returned thousands of dollars that Rezko raised for his political fund. Obama also purchased a piece of land next to his Chicago home from Rezko -- a deal that's been a point of sharp criticism against Obama, who has said he never did any favors for Rezko in return.

And Chicago and Cook County officials have plenty to fear as well.

Rezko is intimately tied into county government. His wife, Rita, and several family members work at Cook County hospital, and court documents showed that Bureau of Health leader Robert Simon once loaned Rezko $50,000. Rezko also was in business with Orlando Jones, the 8th Ward power broker and Stroger family friend who recently killed himself rather than face trial in Las Vegas alongside Lacy Thomas. Thomas, a former administrator at Cook County's public hospital, took a similar job in Las Vegas. He is accused of giving away no-work contracts that benefited his friends to the detriment of Las Vegas' public hospital.

Political shrapnel will fall down on Cook County officials if the trial reveals any of Rezko's buddies ended up with county government contracts while Rezko was showering county officials with campaign money.

On the city side, Simpson notes that Rezko was active in several real-estate developments in Chicago that required zoning changes.

"It's very likely that several of those decisions were, in the city vernacular, 'greased,'" said Simpson.

But what exactly is Rezko, a 52-year-old Wilmette resident who was born in Syria, charged with is money laundering, attempted extortion, fraud and aiding bribery. The government alleges:

• Rezko used his influence with the Blagojevich administration to load up state boards with appointees he could control. The boards included the Teachers Retirement System, a state panel that determines where teachers' pension money is invested. He also had influence with the Illinois Health Facilities Planning Board.

• Rezko conspired with TRS board member Stuart Levine to demand kickbacks from investment companies that wanted to do business with TRS. Levine, of Highland Park, has already pleaded guilty.

• In 2003, Rezko and Levine made Sheldon Pekin, who represented an investment firm that won a $50 million state investment, kick back $250,000 of his "finder's fee" from the contract to Rezko friend Joseph Aramanda, and Aramanda then used that money for Rezko's benefit.

• In 2004, Rezko and Levine conspired to force movie producer and investor Tom Rosenberg to pay a $2 million kickback to them or a $1.5 million campaign donation to Blagojevich, or risk losing $220 million of business with the state. Rosenberg threatened to go public, so they backed off, but agreed not to give him any future business.

• Rezko and Levine conspired to demand a $1 million kickback from Mercy Hospital, which was applying to build a Crystal Lake facility. The kickback would be delivered by having Mercy Hospital hire Kieferbaum Construction, which would inflate its rates to disguise the kickback. Jacob Kieferbaum has already pleaded guilty.

• A similar scheme was attempted on Edward Hospital in Naperville. But unbeknownst to Rezko and Levine, executives alerted federal authorities to the scam and began cooperating.

In addition to the actual criminal charges, prosecutors allege Rezko was approached in 2004 by Winnetka businessman Joseph Cacciatore about putting his brother Phil Cacciatore of Elmhurst on a state banking board. Rezko, according to court documents, replied that it would help if Joe Cacciatore donated $50,000 to Blagojevich's campaign. The two agreed, the government claims, that Cacciatore would make a $25,000 donation directly and that Chicago-based Rezmar Corp., one of Rezko's companies, would take the other $25,000 and make the donation for him. Campaign finance records show Joe Cacciatore make a $25,000 donation in 2002, but not after the time frame laid out by prosecutors. Neither did Rezmar.

Rezko attorney Joseph Duffy denies that any of the accusations are true. Duffy contends Levine, seeking to save his own skin, made up the allegations that Rezko was involved. Levine, they intend to show, was a drug addict with a $25,000-a-month drug habit and a "secret" lifestyle that they decline to elaborate on. Fear that the government would publicize his secret lifestyle led him to make up stories about Rezko, Duffy contends.

In addition, Joseph Cacciatore has signed a sworn affidavit saying the cash-for-board-seat deal never happened.

Duffy is an experienced litigator intimately familiar with how government prosecutors put the squeeze on targets to work their way up the chain of command, and how sometimes those witnesses may exaggerate to save their own skin. Duffy served as the second-in-command of the U.S. attorney's office he is now battling.

On the prosecution side, the government is represented by a team of prosecutors, chief among them Christopher Niewhoener, Reid Schar and Carolyn McNiven.

Where Blagojevich fits into the entire drama of alleged pay-to-play politics is unclear. So far Niewhoener and his team have kept their cards close to their vests.

But in court documents, they have hinted at some direct involvement by the governor.

Prosecutors also alleged in a pre-trial document known as a "Santiago proffer" that Levine, during a 2003 plane ride with the governor, thanked him directly for his reappointment to the health facilities planning board.

Blagojevich was quoted in the documents as telling Levine he shouldn't speak directly to him about such matters, but should always deal with Rezko or another Blagojevich adviser, Chris Kelly, who has since been indicted on unrelated income tax charges.

Blagojevich, then added, prosecutors claim, "You stick with us and you will do very well for yourself."

One of those who Rezko and Levine allegedly used to pressure investment companies for kickbacks was Joseph A. Cari, of Chicago, a former finance director at the Democratic National Committee.

Cari copped to his involvement and said in his plea agreement that Blagojevich, "acting through two close associates, was selecting consultants for the private equity funds that appeared before the state pension" boards.

In the Santiago proffer, prosecutors said that Blagojevich directly "asked about Cari's fundraising experience. (Blagojevich) stated he had a lot of ways of helping his friends and that Rezko and (adviser 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 fundraising."

The trial is expected to last about four months. The judge expects to seat a jury beginning today and start hearing opening statements as early as Thursday.