Rezko witness ties Blagojevich's father-in-law to kickback plan

Political insiders in the Blagojevich administration at one point prepared a sham consulting agreement to divert $125,000 to Chicago Alderman Dick Mell after he "was upset because he was not participating in the spoils" of the administration, a witness testified Monday.

But, the witness at the trial of Antoin "Tony" Rezko also testified, the deal was never consummated because "Mr. Mell did not want to go ahead with it."

Sheldon Pekin, 72, and a friend of convict Stuart Levine, testified he planned to split a "finder's fee" from Glencoe Investments with someone Levine would designate. The finder's fee stemmed from Pekin getting the state's Teachers Retirement System to invest with Glencoe. Levine was a board member of the system, and he has since pleaded guilty to improperly steering it to invest in Glencoe.

Pekin testified he was eventually told by Levine that the designated person he would split his fee with would be Mell, Gov. Rod Blagojevich's father-in-law.

Mell, for his part, said in a phone interview Monday he was never approached by anyone about engaging in a consulting contract -- sham or otherwise. And, he added, he wouldn't have done it had he been approached.

"No one even asked me," said Mell. "I've never ever talked to Pekin or met a guy named Pekin."

Mell said he has not seen Levine since 2001 "when I ran into him trying to raise some money for my son-in-law."

Mell said he was trying to raise campaign contributions from another person, not Levine, when he ran into him in 2001.

Pekin said the contract was drafted with instructions from Levine, which he then relayed to an attorney. One of the provisions specified that Mell -- who was never named in the draft of the contract, which was left blank -- should not receive any money as a result of any deals with public entities but would merely provide opinions to Pekin, an investment guru, as to whether certain investments were good bets.

"Did you expect Mr. Mell … to actually provide something like that?" asked Assistant U.S. Attorney Christopher Niewhoener.

"Not really," Pekin said.

But the Mell contract never happened.

Pekin said the language about not receiving money from any public interests was inserted by Levine to give Levine cover.

"He was the trustee of TRS … and didn't want any tie to him," Pekin said.

After the Mell deal didn't happen, Pekin testified, Levine told him his new "consulting" partner would be Joseph Aramanda, a friend of defendant Rezko.

The implication prosecutors want to convey is the corruption at the retirement system was not just Levine's but Rezko's as well.

Rezko's attorney, Joseph Duffy, said in his opening statements that lawyers for the retirement system told Pekin it was perfectly legal for Pekin to split his fee with anyone he wanted. But Monday, U.S. District Judge Amy St. Eve ruled that, for now, she would not allow Pekin to testify to that because it would amount to hearsay.