Politics & Policy

First Wright, Now Rezko

This time, a speech may not be enough for Obama.

Chicago, Illinois — After the Reverend Jeremiah Wright’s now-notorious sermons gained a significant amount of national media attention, Illinois Senator Barack Obama felt compelled to explain his relationship with Wright in a major speech on race relations in America. Now that the governor of Illinois has been implicated in the schemes of Obama’s friend Tony Rezko, it might be time for Obama to explain his relationship with Rezko in a major speech on the endemic political corruption that afflicts his home state of Illinois.

Rezko’s trial has lifted the veil on Illinois’s infernally corrupt political establishment, and a government witness named Stuart Levine has taken the part of a meth-snorting, double-dealing Virgil, guiding the public through it. Levine is a broken man, testifying for the government in order to avoid spending the rest of his life in prison. Over seven days of direct examination, he has described an astonishingly broad network of fraud, extortion, and bribery, culminating in Wednesday’s revelation that Illinois Governor Rod Blagojevich allegedly knew about at least one such scheme.

Levine used his positions on various state boards to steal as much money as he could from people with business before those boards. One of those people was a Hollywood producer and financier named Tom Rosenberg. Rosenberg was a principal at a firm called Capri Capital. Capri managed over a billion dollars for the Illinois Teachers Retirement System, of which Levine was a trustee.

Through a variety of corrupt means, including allowing TRS executive director Jon Bauman to write his own (glowing) evaluations, Levine wielded a disproportionate amount of influence over TRS investment decisions. Levine used this influence to steer TRS contracts to whomever would pay him and his associates the biggest “finder’s fees.” Levine decided that Rosenberg was getting far too much TRS business and paying far too little in the form of kickbacks to him and his cronies — an arrangement that Levine saw an opportunity to amend when Capri sought a new contract from TRS in early 2004.

According to his testimony, Levine and an associate named Bill Cellini (both Republicans) conspired with two of Governor Blagojevich’s top fundraisers and advisers — Tony Rezko and a roofing contractor named Chris Kelly (both Democrats) — to offer Rosenberg a choice: Either pay a $2 million bribe or raise $1.5 million for Blagojevich’s re-election campaign. Rosenberg was to be made to understand that all of his business with TRS was at stake.

Levine testified that Allison Davis, a lawyer friend of Rosenberg’s, was the go-between. Davis allegedly approached Rezko on behalf of Rosenberg to ask about Capri’s business with TRS, and he told Rezko that Rosenberg would be willing to do some fundraising for Blagojevich if that would speed things along. Rezko told Davis that Rosenberg should “call Stuart Levine.”

When Rosenberg realized he was the target of such a massive shakedown, he was furious. In a recorded phone call between Cellini and Levine that prosecutors played for the jury, Cellini quoted Rosenberg’s reaction: “ ‘If [Tony Rezko and Chris Kelly are] going to do this to me and think they’re going to blackmail me, I’m going to take them down.’ ”

Rosenberg’s threat convinced the alleged conspirators to back off, and — in the biggest bombshell to emerge during the trial so far — Levine testified that Rezko told him that Governor Blagojevich had been informed of the situation. Prosecutors also played a recorded conversation between Cellini and Levine that appeared to confirm Levine’s testimony. In it, they discussed how “the big guy” had implied that Rosenberg should not get any further business from the state.

Blagojevich’s office issued a statement last night essentially accusing Levine of “not telling the truth” — an accusation that is by no means baseless. Levine has major credibility problems. For one thing, he is testifying as part of a plea deal. For another, he testified on Monday that his drug of choice from the late ‘80s until his arrest in 2004 was a cocktail of crystal meth and the animal tranquilizer ketamine, known on the street as “Special K.” But much of his testimony is nonetheless backed up by phone conversations that were recorded without his knowledge, in which he was speaking freely and had little incentive to lie.

If Levine’s testimony regarding Blagojevich is true, then such nakedly corrupt behavior at such a high level is bound to attract greater scrutiny from the national media to the problem of corruption in the state of Illinois. To illustrate the gravity of the issue, three of the last seven governors elected in the state of Illinois have ended up in jail. If Blagojevich is indicted, tried and convicted, that will make four out of seven.

Cook County Commissioner Tony Peraica, a Republican who is running for Cook County state’s attorney, calls an indictment of Governor Blagojevich “inevitable.”

“What we have,” Peraica says, “is a level of corruption that is integrated both vertically and horizontally across all layers of government: city, municipal, county, and state.” To him, the Rezko case illustrates that corruption in Illinois is a bipartisan problem. “We have a corrupt political combine, where the members of the two parties… have come together, not pursuant to a public interest, but to pursue their own financial interests, which they have done with great zeal and ingenuity.”

This corruption, should it become an issue in the campaign, could cause problems for Obama when people start to wonder how he could have made it through “the combine” without getting involved in the overlapping networks of patronage and influence. Peraica, for one, argues that he didn’t.

“Senator Barack Obama is an integral part and a product of this corrupt system,” Peraica says. “Senator Obama has endorsed Todd Stroger for Cook County board president, Mayor [Richard M.] Daley for mayor of Chicago, Dorothy Tillman for re-election as an alderman, and other epitomes of bad government throughout his career in order to promote himself politically, at the expense of, I would argue, principles and morals and good government.”

Obama’s relationship with Allison Davis — the alleged go-between in Rezko’s scheme to shake down Tom Rosenberg — could pose another problem for him. Obama worked for Davis at the law firm of Davis Miner Barnhill. Later, when Obama sat on the board of a charity called the Woods Fund, he voted to invest $1 million in a partnership operated by Davis, according to the Chicago Sun-Times.

Levine’s testimony in the Rezko trial puts Davis in the middle of an attempted quid pro quo, making him yet another associate Obama might be pressured to disown. And the trial could stretch well into May, at which point a Rezko conviction could lead to even more headaches for the candidate. If Rezko is looking at a long prison sentence and decides to start talking, who knows what he might say?

All the more reason that Obama might be tempted to try to address this metastasizing problem with a single bold gesture. Obama made a big speech about race to distract from his ties to one unsavory Chicago character, but distancing himself from an entire network of them might prove to be a tougher task. After all, Obama was able to claim the middle ground in his defense of Wright, denouncing Wright’s most radical views while excusing his run-of-the-mill resentments as being a not-atypical part of the black experience.

But America will have a harder time swallowing excuses for corruption as being a run-of-the-mill aspect of the Illinois political experience — particularly not from a candidate that has promised a new kind of politics. To succeed, Obama would have to denounce the behavior of some of his closest allies and demonstrate a candor about his own experience in state government that’s been missing from his campaign thus far. In the Rezko trial, Obama might have finally encountered a problem that a speech alone won’t solve.

– Stephen Spruiell is an NRO staff reporter.


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