Embattled Blagojevich's agenda could take hit with Rezko verdict

SPRINGFIELD -- While there is arguably no good time for a governor to have one of his political insiders on federal trial, the looming verdict in the case of Gov. Rod Blagojevich's pal Tony Rezko likely couldn't come at a worse time.

In the coming weeks, Blagojevich faces the daunting task of trying to win support for his version of education funding, health care spending and an overall budget plan before a May 31 deadline. Plus, he's still trying to win lawmakers over on the idea of spending billions of dollars for roads, bridges and schools, something he's been unable to marshal since taking office in 2003.

A Rezko verdict -- any verdict -- is sure to be a major distraction at a crucial point in time, lawmakers say. A conviction, they added, could be "another nail in the coffin" for the embattled governor.

Rezko, 52, of Wilmette, was Blagojevich's chief political fundraiser and held significant influence in deciding who received state jobs in the Blagojevich administration. He's charged with scheming to extort millions in kickbacks and campaign donations from those seeking to do business with the state.

While Blagojevich has not been charged with any wrongdoing, recent trial testimony included allegations that he was in the room when money changed hands and discussion ensued about what jobs donors should get.

The governor steadfastly denies such allegations.

A spokeswoman did not respond to questions concerning what impact, if any, a verdict might have on the governor and his agenda.

But no shortage of opinions exists around the Statehouse.

"It's a huge dark cloud over the Blagojevich administration," said state Rep. Michael Tryon, a Crystal Lake Republican.

"It doesn't seem that any of the possible outcomes of the Rezko trial at this juncture would bode well for the governor," said state Rep. John Fritchey, a Chicago Democrat and ardent Blagojevich critic. "A guilty plea would simply signal another nail in the coffin resulting from the allegations put forth by the U.S. attorney's office."

State Rep. Bob Molaro, a Chicago Democrat who's previously helped push the governor's budget agenda, said any verdict "sucks the air" out of the Capitol by distracting lawmakers for several days.

"Naturally, of course, if he's found guilty … then the games begin. All anybody's going to want to talk about is, 'What does it mean for the governor? Is he next?'

"And obviously none of us knows that. But again, all the focus will be on talking about that and not talking about the real issues. So I just really, really dislike the timing of it," Molaro said.

Even before this trial, lawmakers have increasingly tried to marginalize the governor.

Last year, House and Senate leaders cut the governor out of a budget deal, only to have the Senate president subsequently back out of the pact and side with the governor amid allegations of political backstabbing among Democratic leaders.

It's no secret the governor does not spend much time at the Capitol and has a rocky relationship with the General Assembly. The Illinois House this year pushed to let voters recall the governor solely because of Blagojevich. The effort was blocked in the Senate.

And one of the biggest stumbling blocks with a multibillion-dollar construction plan is trust, specifically lawmakers saying they can't trust the governor to spend the money on what they approve. For instance, last year Blagojevich vetoed money for lawmakers' projects and instead announced he'd use it to finance the health care expansion he wanted but that lawmakers had rejected.

"The air around here is poisoned bad enough," said Senate Republican leader Frank Watson of Greenville. That said, he didn't think a Rezko verdict could make things worse.

"We've been living under that cloud for almost a year now," Watson said. "That is what it is and we've just got to move on."

Pundits have repeatedly written Blagojevich off as irrelevant. But so far he's managed to rebound.

"Blagojevich has taken more hits than the Bismarck. He's still sailing," said Paul Green, director of Roosevelt University's school of policy studies. "He hasn't had a hit on the engine yet."

But past events show connections to federal investigations and scandal can damage a governor.

Last year, lawmakers claimed they were on the verge of a gambling expansion deal that'd finance billions' worth of road, bridge and school construction. As the final pieces were allegedly falling into place, federal authorities indicted Blagojevich buddy Chris Kelly, once the governor's chief outside adviser on casinos, on charges of tax fraud linked to illegal gambling debts.

A year later, that casino deal has yet to surface and numerous lawmakers have said Kelly's indictment torpedoed any momentum in negotiations.

In 2002, House and Senate leaders were having trouble rounding up the votes for budget cuts needed as the post-9/11 economy tanked. They struck a deal with then-Gov. George Ryan to send an unbalanced budget to him and then he'd bite the political bullet and make the unpopular cuts.

But less than a day after leaders announced that deal, rank-and-file lawmakers voted it down, saying they were no longer willing to trust Ryan, whose administration was engulfed in a federal investigation that later sent Ryan to prison.

These days at the Capitol, many lawmakers and insiders say the only real effect on the governor would be if Rezko were found innocent. One insider said such a verdict would be "a gallon of political gas in the governor's empty tank."

Not enough for a long trip, but more than enough to keep the engine running.

The governor's stake in Rezko verdict

Government witnesses in the trial of Antoin "Tony" Rezko have directly alleged Gov. Rod Blagojevich knew about his confidant's corrupt dealings. A guilty verdict against Rezko could bolster the accusations, all of which come from individuals who accepted federal plea deals. Here is a summation of the most direct allegations:

Who: Ali Ata, longtime Blagojevich donor, Rezko business partner and former head of the Illinois Finance Authority.

What he said: Ata alleges he donated more than $50,000 to Blagojevich's campaign to get the state appointment. He testified Blagojevich personally thanked him for the cash on two occasions while also talking about his appointment. The most damming account came during a Navy Pier fundraiser in 2002.

"(Blagojevich) said he understood I was considering a job with the new administration," Ata testified. "(Blagojevich) said, 'It had better be a job where I can make some money.'"

Ata also alleges he gave Rezko $25,000 to pay contractors threatening to put a lien on Blagojevich's Chicago home for unpaid work. Rezko oversaw some of the governor's home renovations.

"(Rezko) said it would be an embarrassment for everyone," testified Ata, referring to the possible lien.

The rebuttal: Blagojevich spokeswoman Abby Ottenhoff said the governor paid for work on his family room that cost nearly $100,000. However, the governor has refused to turn over documents that would show what work was done, who did it and how the bills were paid.

As for Ata's appointment, Ottenhoff said, "We don't endorse or allow the decisions of state government to be based on campaign contributions."

Who: Joseph Cari, veteran Democratic fundraiser, including a national finance chair for Al Gore's presidential run

What he said: In the fall of 2003, Cari said, Blagojevich talked of White House ambitions and said he would be able to raise significant funds by rewarding contributors with state work. Blagojevich wanted Cari to head up his national fundraising efforts.

Blagojevich's response: "No conversation like that ever took place," Ottenhoff said. "It's absurd. The governor barely knows Mr. Cari."

Who: Stuart Levine, a millionaire Highland Park lawyer and political insider with a history of drug abuse. He admits to orchestrating a scheme with Rezko to strong-arm state contractors for kickbacks and large contributions to Blagojevich's campaign fund. Blagojevich appointed him to two state boards.

What he said: After the governor re-appointed him to a board at Rezko's urging, Levine recounted a meeting with Blagojevich on a fundraising trip.

Levin testified Blagojevich appeared to know of his corrupt plans and told him, "You stick with us, and you'll do well for yourself."

Levin told jurors, "I took that to mean I would have an opportunity to make a lot of money."

The response: "Stuart Levine's assertions about the governor are wrong," Ottenhoff said.