Last-minute Rezko witness packs a punch
At the last minute, federal prosecutors have inserted a surprising and powerful stinger in the tail of the biggest corruption trial in Illinois since the George Ryan case.
Political fundraiser Antoin "Tony" Rezko's lawyers weren't expecting former Illinois Finance Authority executive director Ali Ata to take the witness stand and had only a few days to prepare to confront him.
Once on the stand, Ata rattled off a raft of fresh allegations that are not only embarrassing to an already reeling Gov. Rod Blagojevich but hang like an ominous storm cloud as the trial nears its end.
Ata testified that, as FBI agents closed in on corruption in state government in 2005, Rezko said Republican bigwigs were working to have Chicago's chief federal prosecutor fired and replaced with someone who would lay the investigation quietly to rest.
Experts say that's going to hurt.
"In all these big trials, there's always a surprise," said veteran Chicago defense attorney Rick Halprin, whose clients include mob boss Joseph "Joey the Clown" Lombardo. "This one is not going to help."
Blagojevich has not been charged with wrongdoing, but the trial has badly smudged his political image.
Rezko, 52, developed enormous clout in the Blagojevich administration by raising more than $1.6 million for the governor's campaign fund, according to an FBI analysis. Prosecutors say he used his clout to control state boards that make decisions on issues involving millions of dollars.
According to the indictment, Rezko schemed to squeeze a $1.5 million bribe out of a contractor who wanted to build a hospital in Crystal Lake and planned to pressure kickbacks out of money management firms wanting to invest the assets of the $40 billion state fund that pays pensions of retired teachers.
Rezko, a Syrian-born Chicago real estate developer and fast-food entrepreneur, denies taking part in any such schemes.
And for eight weeks, many trial watchers have praised his cunning chief defense counsel Joseph J. Duffy, a former federal prosecutor, for carving up the government witnesses with a master's touch.
On cross examination, he forced star government witness Stuart P. Levine to reveal minute details of his marathon, overnight drug-taking sessions in hotel rooms with male companions. He forced Levine to disclose how he kept spending money on Porsches and parties even as his net worth plummeted from $79 million to deep in debt in just five years.
Levine said Rezko signed off on the kickback schemes at a dinner the two men shared in April 2004 in a private dining room in Chicago's swanky Standard Club. But Levine's credibility has now been severely mauled.
"Mr. Duffy certainly has done a good job of attacking Mr. Levine," concedes Better Government Association executive director Jay Stewart. "He certainly has done everything an attorney should do to defend a client."
But Stewart cautions "the government hasn't lost a major public corruption case yet -- and I don't think they will this time."
That was before the Ata factor.
Ata was charged with writing a bogus letter on finance authority letterhead suggesting the state would back a loan to Rezko. Ata knew Rezko intended to show the letter to the General Electric Capital Business Asset Funding Corp. to persuade the company to give him funds to purchase pizza restaurants.
Rezko is charged with swindling GE Capital out of $10 million.
Two weeks ago, Ata pleaded guilty to new charges of tax fraud and lying to an FBI agent about Rezko's role in getting him a state job, and agreed to take the witness stand in hopes of getting a lenient sentence.
Ata testified that he tried to dissuade Rezko from sending the GE letter.
He also said that after he held a fundraiser for Blagojevich and gave $25,000 of his own money to the campaign fund in August 2002, Rezko ushered him into a room with Blagojevich, who allegedly proceeded to speak of putting Ata on the state payroll.
Ata said that when he and two partners had a problem with an $8.3 million state lease on a building they were constructing, he had Rezko straighten it. But he said Rezko's price for putting in the fix was a 25 percent interest in the partnership.
At Rezko's urging, he said, he created a dummy corporation to hide Rezko's interest in the building and deliberately did not mention it on the financial disclosure statement that all state employees must file.
Ata also said that when Rezko pressed him for money, he dug $125,000 in cash out of a safe at a company his family owns. He said Rezko told him $25,000 was to pay contractors who were threatening to put a lien on the governor's home. Ata said $50,000 was delivered to Christopher Kelly, the head of Blagojevich's campaign fund who is currently facing tax charges.
Ata is to return to the stand Monday but isn't expected to be there long. Prosecutors may have another witness or two but say they are likely to rest their case on Monday.
Duffy says that, as with most trials, his defense will largely consist of cross examination and the actual defense case will be brief. U.S. District Judge Amy J. St. Eve says closing arguments will start May 12.