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Report: Posts Follow Rezko Deal With First Lady

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Nov 17, 2006 9:57 am US/Central

Report: Posts Follow Rezko Deal With First Lady

Gov's Office Says Patti Blagojevich's Work Has Nothing To Do With State

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CHICAGO (AP) ― Within months after first lady Patti Blagojevich earned nearly $50,000 in a real estate deal with an indicted political fundraiser, several of his associates were appointed to state boards and hired by state agencies, according to a published report.

Gov. Rod Blagojevich's office acknowledged last year that Patti Blagojevich has had a business relationship with developer and fundraiser Antoin "Tony" Rezko for at least eight years. Records obtained by the Chicago Sun-Times for Friday's editions reveals for the first time that a deal between her and Rezko and the state's hiring of Rezko's associates occurred around the same time.

The governor's office denies that the real estate transaction and the appointments and hirings are related.

"(Patti Blagojevich's) real estate work has nothing to do with state government," Abby Ottenhoff, spokeswoman for Gov. Blagojevich, said in a statement. "The ongoing effort to suggest that her success is the result of her husband's position is flat wrong -- she's been in business for much longer than four years -- and it's based on outdated and biased assumptions about women's abilities in business."

Rezko has pleaded not guilty to squeezing millions of dollars in kickbacks out of investment firms seeking state business. He also has pleaded not guilty to obtaining a $10.5 million loan from GE Capital by swindling investors.

No one in the Blagojevich family has been accused of any wrongdoing.

On Dec. 16, 2002, Rezko's development company bought land in Chicago that Patti Blagojevich's real estate firm was hired to sell, according to property records. Her firm, River Realty Inc., earned $47,557 from the sale.

On Jan. 20. 2003 Lon Monk, then the governor's chief of staff, faxed to the Blagojevich home a list of people who Rezko wanted appointed to state boards and commissions, according to documents obtained by the Sun-Times.

An accompanying note from Monk read, "Rod, Here is a list of candidates that Tony Rezko wants to be put on nonpaying boards. What are your thoughts?"

Blagojevich appointed 10 of the 19 people listed, or their spouses, to state boards or commissions. Others received state contracts or got state jobs for their children.

The governor also hired two of Rezko's former employees as state agency directors in January 2003.

In June, U.S. Attorney Patrick Fitzgerald confirmed officials were investigating Blagojevich's administration, saying Fitzgerald's office has found credible witnesses to "very serious allegations of endemic hiring fraud."

Rezko's business dealings have been tied to other politicians. In one Rezko-related transaction, Sen. Barack Obama got a bigger yard and Rep. Luis Gutierrez bought a town house from Rezko for much less than his neighbors paid.

Neither Obama nor Gutierrez have been accused of wrongdoing.

(© 2006 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)

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