Chicago Area Local News

CHICAGO (CBS) ― Federal prosecutors will be limited in what evidence they can present in their case against Gov. Rod Blagojevich's former fundraiser Antoin "Tony" Rezko.

Jury selection for Rezko's trial is expected to begin on Monday. Prosecutors say the Chicago businessman used political clout to run a multimillion-dollar extortion scheme, and have charged him with money laundering, attempted extortion, fraud and aiding bribery.

The Chicago Tribune reported Saturday that U.S. District Judge Amy St. Eve has ruled prosecutors cannot use evidence involving state hiring practices, nor information that could show Rezko wa behind large contributions to Blagojevich from members of a corrupt state panel.

Prosecutors say Rezko's scheme was rife with sneaky deals and strong-arm tactics, all aimed at landing millions in bogus fees from firms hoping to handle investments from a teachers' pension fund and obscure state boards.
Rezko, 52, is a Syrian-born real estate developer and fast-food tycoon who once raised thousands of dollars and presidential candidate Sen. Barack Obama. Obama's campaign has donated the money to charity.

Blagojevich has not been charged with wrongdoing, but members of his inner circle are under indictment.

Among the dizzying array of unidentified "co-schemers" and "individuals" in the scam is Christopher Kelly, the governor's chief fundraiser who has been indicted on charges of filing false tax returns.

The prosecution's star witness is expected to be attorney Stuart Levine, who allegedly put the shakedown scheme together with Rezko.

Prosecutors say Levine once sat on a private plane with Blagojevich and was told by the governor: "You stick with us and you will do very well for yourself."

Levine was a member of both the two state boards involved in the Rezko case, each of which is empowered to make decisions involving hundreds of millions of dollars.

The Illinois Health Facilities Planning Board's permission is needed for any construction involving hospitals. The Teachers Retirement System is the $30 billion nest egg that pays the pensions of thousands of retired teachers.

Prosecutors say the scheme got under way five years ago when Rezko, with the help of Levine, pocketed $250,000 -- the bulk of a finder's fee paid by a firm that received $50 million to invest for the pension fund.

Before it was over, they say, Rezko and Levine were plotting to shake down seven such firms, including one allegedly told it had to pay a mysterious consultant $50,000 and fax the signed contract to a sun-splashed Caribbean tax haven by the end of the day -- or lose the deal.

Hollywood producer Thomas Rosenberg was allegedly told that he had to make a $2 million payoff or a $1.5 million contribution to "Public Official A's" campaign fund or his Capri Capital firm would be frozen out.

Rosenberg balked, prosecutors say, and the schemers backed off.

Prosecutors say Rezko got power in state government because he "raised hundreds of thousands of dollars" for Blagojevich.

Judge St. Eve recently revealed in court that Blagojevich is the "Public Official A" to whom prosecutors in the Rezko case have referred, and who allegedly benefited from corrupt schemes involving state jobs and pension fund investments.

Blagojevich has declined to discuss the issues and has denied that he is "Public Official A." 

Levine pleaded guilty to charges and is now the government's star witness. But a source close to the case says Rezko's attorneys will try to undermine Levine's credibility by claiming he led a secret life of illicit drugs and all-night sex parties, and may have a faulty memory.

Witnesses have already made it clear that Levine was a heavy drug user -- cocaine, marijuana, crystal methamphetamine and ketamine (Special K). Secretaries heard snorting sounds coming from his office and saw him with bloody tissues and blood dripping from his nostrils. A wiretap picked up Levine asking over the telephone if his caller got "the stuff."

The case is a major initiative by U.S. Attorney Patrick J. Fitzgerald, the hard-nosed, crime-busting prosecutor brought in from New York to clean house in this corruption-riddled state. He also prosecuted administration insider I. Lewis (Scooter) Libby in Washington's CIA leak investigation.

Rezko has been held in jail, attending hearings in an orange jumpsuit and leg-irons, since Jan. 28 when St. Eve ruled that he had defied an order to keep her informed of his financial status.

She said a $3.5 million loan from London-based billionaire Nadhmi Auchi, now appealing a fraud conviction in France, showed Rezko had access to overseas money and thus might be able to skip out before the trial.

Besides the pain for Obama and Blagojevich, the case has been embarrassing to both political parties.

Attorney Joseph Cari, a former Democratic National Committee official, says he was the one who told the investment firm to fax the contract. He pleaded guilty to attempted extortion.

Lobbyist Bob Kjellander, a former Republican National Committee treasurer, funneled $400,000 to a go-between to pay Rezko's debts, prosecutors say. He has been charged with no wrongdoing in connection with the case.

Rezko has resolutely insisted that he will not plead guilty and make a deal with prosecutors to tell whatever he might now about state politics.

Prosecutors would plainly like to have a friendly talk with him.

"A lot of Illinois politicians would like to shoot him out of the sky the way they shot down that satellite recently," Roosevelt University political scientist Paul Green said. "Because Tony Rezko knows a lot. He really knows a lot."

Rezko has little to look forward to. Even if he escapes a long sentence in this case, he faces another court ordeal. He is charged separately with swindling the General Electrical Capital Corp. out of $10 million in the sale of a chain of pizza parlors.

Prosecutors are expected to call former Blagojevich campaign fund director Kelly Glynn to the stand as the first witness.

The Associated Press contributed to this report.

(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)

Editor's Picks

• Gay Celebrities
• Did You Know? Stars From Chicago!
• Celebs Who Lean To The Right
• Real Or Fake?