The U.S. Attorney’s office allowed two
guilty-plea agreements to weave a sinister tale last week about an
alleged “fundraising strategy” supposedly headed by
Gov. Rod Blagojevich. The alleged strategy was designed to
strong-arm firms seeking business with the Teachers’
Retirement System and other state boards into hiring do-nothing
consultants who would then kick money back to the governor’s
campaign fund.
By including these allegations in the plea
agreements — some of which didn’t seem necessary
— the feds appear to have been going out of their way to
point a flashing neon arrow right at Blagojevich and his two top
fundraisers, Chris Kelly and Tony Rezko. Joe Cari’s plea agreement is the more
interesting of the two. A one-time finance chairman of the
Democratic National Committee, Cari claimed in the plea agreement
that the infamous Stuart Levine told him that “a high-ranking
Illinois public official (“Public Official A”), acting
through two close associates, was selecting consultants for the
private equity funds that appeared before the State Pension
Funds.”
Several media reports and independent sources
say that Blagojevich is Public Official A. Media reports and
sources identify Rezko and Kelly as the governor’s top
fundraisers and advisers.
According to Cari’s plea agreement,
“Levine said that Public Official A, and his associates, were
going to pick law firms, investment banking firms, and consultants
that would help Public Official A.”
Levine was a longtime member of the TRS board
and has been implicated in similar shenanigans at the Illinois
Health Facilities Planning Board. He was reappointed to both boards
by Blagojevich. Perhaps not coincidentally, many of the
governor’s pals signed on as hospital representatives after
Blagojevich was sworn in. What was the reason for hiring the
consultants? “Levine told Cari that consultants
selected by Levine and those associates would subsequently be
required to make certain political or charitable contributions as
directed by Levine and those associates.”
Cari was allegedly told by Levine to make
sure that an investment company identified as “Firm 4”
hire one of Public Official A’s guys as a consultant or he
and the TRS board would reject an $85 million investment with the
firm. “Cari talked to the general counsel for
Firm 4. Cari said that Firm 4 had to sign the contract, or Firm
4’s application for funds would get pulled off the TRS
agenda. Cari said that it was political and this was how Public
Official A handled patronage.”
The governor’s office claims that the
allegations shouldn’t be believed because they’re being
made by “convicted extortionist” Cari and
twice-indicted extortionist Levine. Levine may have misrepresented his
connections with the governor’s team. Here is what Levine
allegedly told Cari: “It was Cari’s understanding that
if Levine did not want something to be approved by the TRS Board,
it would not be approved. Levine had previously told Cari that he
had the ability to control what would be on the TRS agenda.”
The feds don’t mention this in the plea
agreements, but it turns out that Firm 4 ended up getting its $85
million investment with TRS when another board member intervened on
its behalf. The firm never had to hire the consultant. So Levine
apparently vastly inflated his importance on the board. He
allegedly lied about that, so he may have also lied about the
Blagojevich team’s so-called fundraising strategy.
On the other hand, Cari told prosecutors and
Firm 4 that he had been through this sort of thing before with
Public Official A: “Cari said that his private equity firm
had agreed to hire a consultant in order to get funding from
another State board.”
Interestingly enough, back when George Ryan
was labeled “Official A” in an indictment of somebody
else, it wasn’t completely clear at the time that the
official was actually Ryan.
This time around, the feds left no doubt.
This article appears in Sep 22-28, 2005.
