Ex-state official in Rezko trial links Blagojevich to bribes, corruption

Star prosecution witness Stuart Levine, testifying in Antoin "Tony" Rezko's trial, continued to describe this morning a web of corruption that, he suggested, extended to Gov. Rod Blagojevich.

Following Tuesday's testimony filled with talk of lies, bribery and drug use, Levine today described how he sought out Rezko in order to "make a lot of money together," and how he was led to believe he could exploit his relationship with Blagojevich to do so.

Levine, a former member of two powerful state boards, told federal prosecutors that after Blagojevich was elected, he thought he could benefit from a friendship with Rezko, who said he was close to top state administrators.

More Coverage Stories Levine tells about his first meeting with Rezko [03/19/08] Witness recounts Levine takeover of retirement board [03/18/08] Rezko roundup [03/19/08]

Testifying this morning, Levine said that while on a private fund-raising trip, he thanked Blagojevich for getting him re-appointed to the Illinois Health Facilities Planning Board. The governor, Levine testified, responded by saying, "You stick with us, and you'll do well for yourself."

Levine told the court: "I took it to mean I would have an opportunity to make a lot of money."

Levine testified that he told the governor's top staffers after Blagojevich took office in 2003 that he hoped to remain on the health facilities board. Levine said he passed the word that he would cooperate with the governor's office concerning pending hospital projects.

"I meant," Levine said, "that if there was an application pending that the governor's office wanted to have approved - or not approved - that, regardless of the merits, I would do as the governor's office asked."

Several days after that conversation, Levine testified, he heard from fund-raiser and power broker William Cellini, who told him Rezko had indicated that Levine would, in fact, be re-appointed to the health facilities board.

Blagojevich has repeatedly denied any wrongdoing and has not been charged with any wrongdoing.

In earlier testimony, Levine described a vacation with the Rezko family from March 27 to April 3, 2004, which Rezko left two days early, because he had to arrange a party for an Iraqi billionaire. Levine offered to return Rezko's family on his chartered jet, which Rezko accepted, Levine testified..

Levine also talked about attending dinner at the White House with the Rezkos in December 2003, upon an invitation from Illinois' Republican National Committeeman Robert Kjellander. Levine provided the transportation for that trip as well, he said.

Levine also testified that during some of their conversations Rezko talked in general terms about being partners with him concerning the Illinois Health Facilities Planning Board.

"Mr. Rezko said to me anything that I and Mr. Rezko decide to do at TRS, I would be a partner (in). I understood that to mean if there were things he would like done and my assistance was required, any money earned by doing that, we would share," Levine said.

Rezko, one of the most influential campaign fund-raisers in the state with close ties to Blagojevich, is accused of conspiring with Levine, who served on the health facilities board and the Teachers Retirement System, to shake down businesses in exchange for contracts. Levine was caught, he said Tuesday, after trying to arrange for Edward Hospital to hire certain firms with the promise that the Naperville institution's expansion project in Plainfield would get approval.

Levine also detailed Tuesday how he had participated in "pay to play" extortion schemes starting after his graduation from Kent Law School in 1971.

Today, he said he sought out Rezko.

"I was very interested in cultivating a relationship with Mr. Rezko because I felt Mr. Rezko and I could make a lot of money together," Levine testified.

Levine testified that he held meetings with Rezko, who assured him that he was "able to have individuals appointed to state boards and hired to state agencies." Levine also testified that Rezko told him decisions made in the governor's office through Blagojevich Chief of Staff Lon Monk were brought to Rezko.

Levine, wearing a charcoal suit and neutral tie, appeared relaxed, while in contrast Rezko stared at his former associate and appeared to scoff at certain statements.

Throughout Levine's testimony, defense attorney Joseph Duffy continually objected to his vague recollections of dates of conversations.

He also pounced on Levine, when he changed an answer to a question from assistant U.S. attorney Chris Niewhoener regarding whether Rezko had said anything else about Monk.

Levine initially answered, "No, sir," then moments later, he said, "I'm very sorry Mr. Niewhoener. I misspoke."

Duffy, emphasizing his theory that Levine makes up answers based on what he perceives the government wants, jumped up, saying, "I'm sorry judge, did the witness want to change his answer?"

Levine went on to add, "I did not give a complete answer ... Mr. Rezko told me that all major decisions made by ... Mr. Monk were cleared through Mr. Rezko."

Rezko has pleaded innocent and contends that Levine is dragging his name in the mud after striking a deal with prosecutors.

On Tuesday, Levine spent much of the day describing a history of passing along bribes to secure contracts from public entities like the Chicago Board of Education and the city's department of streets and sanitation.

He said he gave someone $50,000 on behalf of Consumer Tire so that the company could get the Chicago street department's tire business.

It worked.

He also passed along a bribe to someone at the Chicago Board of Education on behalf of Willett Bus Co. so the schools would get their buses from them.

That worked, too.

But the bribes didn't just stop with the public sector. Finding it a tried-and-true method, Levine used bribes when he helped run Chicago HMO from 1982 to 1994. During that period, he gave former Alderman Edward Vrdolyak a bribe to pass along to someone at the postal union to get the union to enroll in his HMO, he testified.

Success again.

But bribes weren't the only way Levine had of getting what he wanted. He also used lobbyists and at Chicago HMO he hired the best: Vrdolyak, Robert Kjellander and Cellini, he testified.

The same with Comp-Dent, a dental insurance company he worked for after 1996. He helped them "maintain" their government accounts and used Cellini and Kjellander to make sure they kept their state of Illinois clients. For the Chicago Board of Education, he used lobbyists Tom Rosenberg and Vrdolyak.

Again, with Vrdolyak, a bribe was used to make sure the business was retained. Levine said he and partner Dr. Robert Weinstein funded a bribe to give to someone at the Chicago Board of Education.

Vrdolyak's lawyer, Mike Monico, reached late Tuesday, responded angrily to Levine's testimony.

"If he made any comment at all about (Vrdolyak) bribing anyone, that's completely false," Monico said.

He also chafed at the idea the government would blindside him with the testimony.

"We had no notice that this was going to happen and we are surprised that this happened at this time since we had nothing to do with that case," said Monico. "It seems unfair to do it when we're not there."

Monico would not comment on whether Vrdolyak had ever done lobbying work for Levine. Vrdolyak faces a separate indictment in a case involving the sale of the Scholl building at Dearborn and Oak streets in Chicago. He has pleaded not guilty.

In his testimony, Levine said all the bribes brought in big business and he prospered. From 2000 to 2004, he made about $9 million to $10 million total.

"Were you spending more money than you were making?" asked Assistant U.S. Attorney Chris Niewhoener.

"At times," admitted Levine.

One of the things he was spending it on was drugs.

Lots and lots of drugs, according to court filings. As much as $25,000 a month, the filings say.

Levine himself said that beginning in 1973, he "experimented" with LSD, marijuana, cocaine, Quaaludes, ecstasy, crystal methamphetamines and ketamine, an animal tranquilizer.

By 2004, though, he said he was down to just two main drugs: crystal meth and ketamine "once or twice a month." But he admitted he would use them more than once a session and that he gave the drugs to others, a federal crime for which he was not charged.

Among his other pursuits that have already been revealed, Levine extorted bribes from businesses appearing before state boards he served on: the Illinois Health Facilities Planning Board and the Teachers Retirement System.

But one board he didn't care for, he said, was the Illinois Gaming Board.

"I found I didn't enjoy the pressure I was getting," said Levine.

He didn't say what kind of pressure, but at the time Levine was on it, the board was being heavily scrutinized both by the media and internal staff members -- some of whom were former FBI members -- for its supervision of the proposed Emerald Casino in Rosemont. One of the companies the gambling board supervised was Argosy Gaming, of which Cellini owned a portion.

But all of Levine's high-flying lifestyle came crashing down on May 20, 2004, when federal agents approached Levine to confront him about his dealings on state boards.

Unknown to Levine, the FBI had been tape-recording calls to and from Levine's house after the CEO of Edward Hospital in Naperville complained Levine had tried to shake the hospital down through the Illinois Health Facilities Planning Board.

Presented with the overwhelming evidence against him, he decided to cooperate in January 2006, he said.

The deal was that if he cooperated, prosecutors would drop some charges and recommend 67 months in prison on the remaining counts instead of the life in prison he would face if convicted of all the charges.

Prosecutors contend Levine's bribery scheme at the state boards was part of an arrangement with Rezko. They contend Rezko was in line to receive some of the bribes.

But Rezko contends Levine is a habitual liar who dragged his name in simply to save his own skin.

Levine admitted his propensity for lying Tuesday. He testified that even after he agreed to cooperate with the government, and potentially could face life in prison if he didn't tell the truth, he still lied in early debriefing sessions.

"I lied to the government with regard to Ed Vrdolyak," said Levine. "I tried to protect him."

And, he said, he confessed to his misstatements only when he got caught.

"I realized that the government realized I was lying," he said.

"Did you realize you'd been caught?" asked Niewhoener. Levine said he had.

The government is hoping that by airing much of Levine's dirty laundry up-front, prosecutors can blunt some of the damage Rezko's attorney is sure to do upon his questioning.