Blagojevich relying on state-tied donors to pay mounting legal bills

Gov. Rod Blagojevich is relying heavily on state-tied donors to pay off massive legal bills in the face of a federal corruption investigation -- a probe that focuses on the very link between state contracts and such fund-raising.

A total of 73 percent of money recently raised by Blagojevich came from those doing business with the state, lobbying the state or facing state regulation, a Daily Herald investigation found.

Government watchdogs say the governor's fundraising practices perpetuate the appearance of pay-to-play graft.

More Coverage Links Ethics legislation in political limbo? [03/10/08] Editorial: 'Reformer' Blagojevich keeps state politics mired in the mud [03/10/08]

"Obviously this is pretty troubling, especially given the fact that there are allegations of state contractors being shaken down for campaign donations," said Jay Stewart, director of the watchdog Better Government Association.

It is legal to take campaign cash from donors who rely on the state to stay in business or get business. Blagojevich's campaign spokesman says there is nothing wrong about their fundraising tactics.

"Everything that the governor does is well within campaign guidelines and election law and he follows it to the letter," said Doug Scofield.

Financing rules allow Blagojevich to use the money to defend his campaign against corruption allegations, even if he is not running for election.

Blagojevich -- a self-styled reformer -- and his administration have long been in the midst of a federal probe into allegations of rigging state hiring rules and trading campaign cash for contracts and appointments. The governor has not been charged with any wrongdoing.

But one of Blagojevich's former chief fundraisers and advisers, Antoin "Tony" Rezko, is on trial now in federal court, accused of scheming to steer lucrative state investment business for campaign contributions and kickbacks.

In court filings related to the case, prosecutors allege the governor told a fundraiser he had "lots of ways of helping his friends" and that "he could award contracts, legal work and investment banking to help with fundraising."

Blagojevich denies the accusations. And while he hasn't been charged with any crime, he has spent money on attorneys, with his campaign fund running up a $2.1 million legal tab as the multi-year probe drags on. He recently hit the fund-raising circuit again after a lengthy hiatus.

So Blagojevich's continued fundraising from those with state contracts and other such connections has sparked criticism from watchdog groups.

Consider the details of the Daily Herald's findings:

bull; State contractors chipped in at least 55 percent of the $1.5 million Blagojevich raised from individual donors in the last half of 2007.

bull; Those contractors reaped nearly $6 billion in state business since Blagojevich took office in 2003.

bull; Road builders and construction companies were the most lucrative source of the campaign cash -- $455,750.

bull; Companies or individuals who rely on the state for favorable EPA rulings, utility regulation or professional licensing made up 13 percent of donations, or $202,701.

bull; Lobbyists gave $72,500 to the governor's campaign and accounted for 6 percent of all donors. Blagojevich has railed against lobbyists in "Gucci loafers" as the reason nothing gets done at the statehouse.

The Daily Herald's analysis reviewed 488 donations Blagojevich received from individual contributors in the last six months of 2007.

"I hadn't realized it was this extensive at all," remarked David Morrison, deputy director of the watchdog Illinois Campaign for Political Reform, which tracks campaign donations and pushes fundraising restrictions.

Morrison says the heavy reliance on contractors and regulated entities suggests they must be one of the few sources of campaign cash left for a governor whose poll ratings continue to plummet.

"There is a broad perception that if you want something from the governor, you need to pony up to the campaign," Morrison said. "These numbers suggest that may be even more pervasive than we had thought."

Though Blagojevich has not made a similar pledge, several statewide elected officials have vowed not to take campaign donations from contractors due to at the very least the appearance of impropriety. And, after several scandals in his own administration, Chicago Mayor M. Richard Daley said he would stop taking money from contractors.

Blagojevich says he agrees with the concept but wants to get a state law passed making the practice illegal before he takes the same step. Legislation banning the practice has been tied up in the Blagojevich-allied state Senate for months and appears to currently have little chance of approval.

The most recently raised cash is largely going to pay legal bills from the same law firm that defended former Gov. George Ryan in his corruption trial. Ryan was found guilty and now is serving a 6#189;-year prison sentence.

Ironically, Blagojevich won his governor campaigns, in part, by tying his opponents to the maligned former governor and promising reform.

The Daily Herald's findings show an ongoing pattern in Blagojevich's fund-raising. The governor has been one of the most prolific campaign fund-raisers in Illinois history, amassing war chests of more than $30 million at times.

A 2005 Daily Herald probe found:

bull; Nearly 20 percent of Blagojevich appointees were campaign donors.

bull; More than 80 percent of tollway contractors had donated to Blagojevich's campaign.

bull; And more than 320 companies doing $2.6 billion in state business gave $3.8 million to the governor.

Still, Scofield says there is no corrupt or intentional connection between the governor's fundraising and state business. He said the governor does not specifically target contractors or lobbyists for campaign cash.

"People donate to the governor's campaign for a clear reason: Because they are supportive of the governor and the things he is trying to do for the state of Illinois," Scofield said.