Blago confidant gets another federal indictment
A close confidant of Rod Blagojevich was slapped with another federal indictment Thursday, ratcheting up pressure on a key member of the ousted governor's tainted fundraising and policy machine.
Christopher Kelly, who acted as both fundraiser and policy adviser to Blagojevich, now faces fraud and money laundering charges for an alleged bid-rigging scheme to overcharge American Airlines and United Airlines for roofing work at O'Hare International Airport.
Kelly and his roofing company are accused of paying at least $450,000 between 1998 and 2006 to a Rolling Meadows-based consultant - who had been hired by the airlines - to obtain $8.5 million in inflated contracts.
The airlines are not accused of any wrongdoing. Federal prosecutors refuse to identify the consultant.
Prosecutors said Kelly funneled $1.1 million from those jobs through his roofing company to pay personal expenses and gambling debt.
Kelly's attorney, Michael Monico, said he couldn't comment directly on the charges because he hadn't yet seen the indictment Thursday.
"It is my understanding that his roofing company did excellent work," Monico said.
Monico said the federal focus on Kelly is because of his relationship to Blagojevich, who had been under investigation since taking office in 2003 and was arrested Dec. 9 on corruption charges for allegedly trading state business for campaign donations.
Kelly pleaded guilty only a few weeks ago to tax fraud charges stemming from allegations he hid more than $1 million in gambling debt via his roofing business.
Kelly is set to be sentenced in late April on those charges, which could bring a maximum of eight years in prison.
At the time he was heavily gambling - and prosecutors say that wagering was done with illegal bookies - Kelly spearheaded the governor's casino policies.
Monico said Thursday Kelly is not cooperating with investigators in their probe of Blagojevich.
Yet, former prosecutor Joel R. Levin, who helped put former Gov. George Ryan in prison and now is in private practice at Perkins Coie LLC, said it's no secret that new charges give a new reason for Kelly to tell whatever he knows about Blagojevich.
"It just stands to reason that the higher penalties you're facing, it just increases the incentive (to cooperate)," Levin noted.
More often than not, the tactic works for prosecutors.
"Obviously, there are some people who dig their heels in ... but for most people, if the penalties they're facing are severe enough, they are going to consider cooperation," Levin said.
Meanwhile, Kelly's fundraising partner and another Blagojevich friend, Tony Rezko has been cooperating since he was found guilty last year in a state corruption scheme under the governor, authorities have indicated.
Monico wouldn't comment on whether or not the charges are an attempt to get Kelly to cooperate.
"That is not for me to say," he said.
Prosecutors are seeking to have Kelly forfeit more than $1.1 million and his Burr Ridge home.
Kelly, 50, and his Markham-based roofing company are charged with 11 counts of mail fraud and six counts of money laundering. He will be arraigned at a later date.
American Airlines spokeswoman Mary Frances Fagan declined to comment.
"We have actively participated in the investigation and will continue to do so to ensure the right people are held accountable," said United spokeswoman Jean Medina.
Daily Herald staff writer Anna Marie Kukec contributed to this report.
<div class="infoBox"> <h1>More Coverage</h1> <div class="infoBoxContent"> <div class="infoArea"> <h2>Related documents</h2> <ul class="morePdf"> <li><a href="/pdf/kellyrelease.pdf">U.S. DOJ Christopher Kelly press release</a></li> <li><a href="/pdf/kellyindict.pdf">Christopher Kelly indictment </a></li> </ul> </div> </div> </div>