News for March 2006 - Illinois Issues

News October 2006

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"Board Game"

Less than four weeks before the November general elections, Gov. Rod Blagojevich's chief fund-raiser was indicted on federal charges for allegedly playing politics with public money.

Antoin "Tony" Rezko, a Wilmette businessman, received a 24-count indictment October 11 for allegedly receiving kickbacks and illegal fees from investment firms seeking business with two state agencies. The indictments range from mail fraud to attempted extortion and call for Rezko to forfeit $250,000. He also received two indictments for fraudulent loans involving Chicago pizza restaurants.

Federal prosecutor Patrick Fitzgerald, who convicted former Gov. George Ryan of corruption earlier this year, said timing of the indictment's release Wednesday had nothing to do with elections.

"We're not going to stop momentum or take a siesta for election season," Fitzgerald said at a Chicago news conference, streamed live on the Internet. "We're just going to bring the cases. When they're ready to go, they go. We're not doing it for political reasons and we're not going to not do it for political reasons."

In June, he wrote a letter to Illinois Attorney General Lisa Madigan that acknowledged the federal investigation into "endemic hiring fraud" and contracting practices in the Blagojevich Administration.

In a statement, Blagojevich said the indictments show a "pattern of self enrichment by two individuals, acting on their own, that is reprehensible." He has not been accused of any wrongdoing.

In Rezko's indictment, prosecutors said he conspired with Stuart Levine, who was indicted for allegations of wrongdoing while he served on the Teachers Retirement System Board and was vice chairman of the Health Facilities Planning Board, which oversees hospital construction.

They and at least five others allegedly steered millions of dollars from investment firms to benefit themselves and specific political campaigns. Fitzgerald said the lucrative transactions were conducted in a "feeding frenzy" between April and May of 2004. "People were feeding at the trough of millions of dollars of money that really belongs to teachers and others whose retirements were being invested."

He said the good news for the public is that the Federal Bureau of Investigation's interviews of Levine had a chilling effect that spring.

"A lot of fraud that would have happened, didn't happen," Fitzgerald said. "Therefore, millions of dollars that might have been collected in illegal fees didn't go through."

Others indicted in the scheme include attorneys Joseph Cari and Steven Loren and construction contractor Jacob Kiferbaum. At least two others remain unnamed in the ongoing investigation.

Robert Grant with the FBI said the federal probe — coded "Board Game" by the investigation team — focuses on people who play politics with public trust out of "greed, avarice and arrogance."

"It never ceases to amaze me the amount of greed you find in these investigations, particularly amongst people who are affluent," Grant said. "Abusing the public trust is not a game. Those who wish to monopolize our government will not pass go, will not get a get out of jail free card. Our effort is to put them in jail where they belong."

They noted that the investigations are ongoing and that all who have been indicted plan to or have already pleaded guilty and cooperated with the investigation.

Rezko/Levine indictment (.pdf file)
Attorney's press release (.pdf file)
Rezko's second indictment (.pdf file)

Illinois Issues, October 11, 2006

Gov. Ryan apologizes for letting Illinois down

Former Illinois Gov. George Ryan was sentenced in federal court September 6 to six-and-a-half years in prison. He also was fined more than $600,000 in restitution as part of a federal corruption conviction for using public office for personal gain during his eight years as secretary of state and four years as governor.

"People of this state expected better, and I let them down," Ryan said in a statement before the sentencing, according to reports. He apologized and said it was the saddest day of his life.

The Kankakee Republican’s long road to the sentencing started with a federal indictment in December 2003, a few years after he issued a controversial moratorium on executions of Death Row inmates before leaving office in January. His seven-month trial ended in April. Ryan and Chicago businessman and close political friend Lawrence Warner were convicted on a combined 22 counts of corruption. U.S. District Judge Rebecca Pallmeyer dropped a few counts for lack of evidence.

Attorney and former Gov. Jim Thompson helped defend Ryan pro bono, costing his law firm Winston & Strawn millions in lost revenue. The defense asked for no more than two-and-a-half years, far shorter than the six- to eight-year sentence sought by prosecutor Patrick Collins and the maximum 20-year sentence for federal racketeering charges.

Ryan's sentence mirrors that of Scott Fawell, his former top aide and campaign manager. He is already in prison for such crimes as diverting state money to Ryan's campaign fund and ordering employees to do campaign work on state time.

Ryan was ordered to start serving his time on January 4, but his defense team asked the judge to delay the start of the sentence through the appeals process.

For more background, consider these links:

Operation Safe Road summary (.pdf file)

Fitzgerald’s convictions (.pdf file)

Illinois Issues, September 2006