Politics & Policy

Million Dollar Blagojevich

The politician at the center of the Rezko trial is Illinois Governor Blagojevich.

Chicago, Illinois After a weeklong break, the federal corruption trial of Antoin “Tony” Rezko resumed on Monday. Rezko has been in the news for his ties to presidential candidate Barack Obama, but Obama has played a small role in the trial, and so far it doesn’t look like he was involved in any of Rezko’s alleged wrongdoing. The politician at the center of this trial is not Obama; it’s Illinois governor Rod Blagojevich.

Monday began with testimony from the prosecution’s star witness, an opportunistic ex-political operative named Stuart Levine. According to the prosecution, Levine used his positions on two state boards to shake down businesses for bribes in return for lucrative state contracts, investments, and board approvals.

One of these boards was the Illinois Teachers’ Retirement System, and Levine has testified that as a trustee he wielded a great deal of influence over which investment firms got contracts to manage billions of dollars in teachers’ pension funds. This power enabled him to extort millions of dollars in kickbacks from money managers eager for the state’s business. On Monday, Levine told jurors about a potential threat to his fiefdom and how he dealt with it.

When Blagojevich, a Democrat, took office in 2003, the state budget director, a man named John Filan, proposed the consolidation of several state pension funds in order to streamline state government and save money. Such a move would have dealt a serious blow to Levine’s ability to steer public funds to favored firms, so he took action to block Filan’s plan.

Levine testified that he and another operative named Bill Cellini approached two of Blagojevich’s top fundraisers — Rezko and a roofing contractor named Chris Kelly — and asked them to convince Blagojevich not to consolidate the funds. Prosecutors allege that Rezko and Kelly agreed to do so in exchange for Levine’s help rewarding Blagojevich’s campaign contributors with TRS contracts.

Levine told the jury that Blagojevich was amenable to stopping the consolidation but that he needed a substantive justification if he was to defy his state budget director. Levine said that he and Cellini provided Rezko and Kelly with a set of talking points for Blagojevich to use. Without Blagojevich’s support, Filan’s proposed consolidation went nowhere. Levine kept his powerful post, and he testified Monday afternoon that this enabled him and Rezko to dole out several multi-million-dollar investments in exchange for exorbitant “finder’s fees” and campaign contributions for Blagojevich.

Prosecutors plan to walk Levine through a description of one such scheme during Tuesday’s testimony. Levine and Rezko are accused of offering Hollywood producer and financier Thomas Rosenberg a choice: Either give them a $2 million bribe, or donate $1.5 million to Blagojevich’s campaign. Rosenberg (ironically, the producer of a film entitled Million Dollar Baby) stood to win a $220 million investment from TRS, but he refused to pay up and threatened to go to the feds. Levine got a visit from the government shortly thereafter.

Rezko’s defense team has attempted to impeach Levine’s credibility by emphasizing his plea deal (he is testifying in exchange for five-and-a-half years rather than life in prison), his criminality, and a history of drug abuse that makes Tommy Lee look like Hannah Montana. For his part, Blagojevich has denied any wrongdoing and refused to comment on the case beyond that. But this is not the first time he has found himself fielding questions about an improper network of patronage centered around his office.

In 2006, U.S. Attorney Patrick Fitzgerald announced that he had opened an investigation into “very serious allegations of endemic hiring fraud” involving “the alleged rigging of state employment practices” to benefit Blagojevich’s political cronies. Just a few months later, news broke that Blagojevich accepted a $1,500 check from a friend and subsequently found his friend’s wife a job with a state agency, even though she had failed a state hiring exam (Blagojevich claimed the $1,500 was a gift for his daughter).

Blagojevich nonetheless won re-election in 2006, which says something about the state of the GOP in Illinois. The party still hasn’t recovered from the damage done by Blagojevich’s predecessor, Republican George Ryan, who is currently serving a six-and-a-half-year sentence for fraud, racketeering, and bribery. Corruption is a bipartisan game in Illinois, as it is in most places.

Blagojevich was supposed to represent a new day in Springfield, and therein lies a lesson for those Americans enamored of Barack Obama and his message of change. Illinois voters have some recent experience electing a young, ambitious, hard-charging Democrat who promised them a break from the past. Last November, over half of them said they would vote to recall him.

– Stephen Spruiell is an NRO staff reporter.

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