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Blagojevich Adviser Indicted On Federal Charges

Gov. Says Actions A Betrayal Of Personal, Public Trust If True

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CHICAGO (CBS) ― A major fundraiser for Gov. Rod Blagojevich was charged in indictments unsealed Wednesday with trying to collect millions of dollars in kickbacks from companies seeking state business in what a federal prosecutor called "a pay to play scheme on steroids."

In one case, Antoin "Tony" Rezko, 51, of suburban Wilmette tried to squeeze a company for a $1.5 million contribution "to a certain public official," according to the indictment.

Prosecutors declined to name the official or say whether Blagojevich or anyone in his administration might be a target in the ongoing investigation of corruption in state politics.

Rezko also was charged with swindling General Electric Capital Corp. out of $10.5 million in loans to a pizza restaurant business and bilking a group of investors.

Rezko attorney Joseph J. Duffy issued a statement saying his client was innocent and would be "vindicated at trial."

The indictments were unsealed just weeks before an election in which Democrat Blagojevich is being accused by Republican challenger Judy Baar Topinka of replicating the scandal-ridden record of former GOP Gov. George Ryan, who last month was sentenced to 6 1/2 years in prison in a government corruption case.

Blagojevich acknowledged at a Wednesday night news conference that Rezko "has been a friend and a supporter and ... I pray that these allegations are not true."

"If in fact these allegations relating to Tony are true, he betrayed my trust, he lied to me, he deceived me, but even more important than that he betrayed the public trust," Blagojevich said.

He said if true, Rezko and millionaire campaign contributor Stuart Levine, who already has been charged in the case, will be held accountable.

U.S. Attorney Patrick J. Fitzgerald dismissed any suggestion the timing was related to the election.

"We're not going to stop momentum or take a siesta for political reasons," Fitzgerald said at an earlier news conference. He said the case had been under investigation and surfaced because it was "ready to go."

"This basically involved a pay to play scheme on steroids," Fitzgerald said. He said Rezko and Levine engaged in "a frenzied effort to collect kickbacks."

Rezko, a Syrian-born U.S. citizen, has been a fixture in Illinois politics ever since Blagojevich won the governor's office. He raised funds for the campaign and contributed more than $65,000 himself.

Blagojevich said Wednesday night that he had directed his campaign to donate Rezko's donations to charity.

Several individuals close to Rezko got state jobs from Blagojevich.

Topinka said she believed the charges against Rezko would influence how voters perceive Blagojevich.

"This is his right-hand man. This is not some third-level clerk," she said.

Rezko is to be arraigned before U.S. District Judge Amy St. Eve on Friday, but prosecutors said they believe he is traveling abroad. Rezko's attorney said "efforts are being made to advise him of the charges and arrange for his return to the United States."

Fitzgerald said if Rezko fails to show on Friday he may be considered a fugitive.

The 24-count indictment said Rezko and Levine hatched their alleged scheme in 2003 when they agreed to divert $250,000 out of a $375,000 finders fee paid by an investment firm that received $50 million in assets to invest for the state's Teachers Retirement System.

Levine was a board member of the system, which has $30 billion in assets and pays the pensions of 325,000 retired downstate and suburban Chicago teachers. The indictment also charged that Levine, initially named to the board by Ryan, got reappointed thanks to Rezko's influence.

The indictment also said Rezko arranged to have two other members who would vote with Levine appointed to the board. Prosecutors declined to say who Rezko talked with to arrange the gubernatorial appointments.

"I have absolutely no recollection, ever, of Tony, ever, directly talking to me about a recommendation at a board or a commission," Blagojevich said Wednesday night.

Levine has indicated plans to plead guilty to felony charges at the end of the month -- a week before the election. Three other men already have pleaded guilty in the case.

Rezko attorney Duffy said the indictment unsealed Wednesday "appears to be the creation of Stuart Levine, a twice-indicted individual desperate to curry favor with the government to avoid being held accountable for his many years of corruption."

Levine attorney Jeffrey B. Steinback said Wednesday that Levine "is cooperating as he has since early this year and it is his full intention to continue to cooperate."

The indictment said Rezko and Levine in April and May 2004 agreed to split nearly $5 million in kickbacks from six investment firms seeking to do business with the teachers pension fund and another state pension fund.

Prosecutors said while they schemed to get "millions of dollars in undisclosed kickbacks," the men actually collected about $250,000 before federal investigations got in the way.

The indictment said Rezko and Levine agreed to tell another firm it would receive $220 million to invest for the teachers fund only if it paid $2 million to a consultant who then would funnel the money to them.

The firm was given the alternative of making a $1.5 million contribution to the "certain public official."

But the two men backed down and stopped seeking the money after the firm threatened to go to law enforcement officials, Fitzgerald said.

The indictment said Rezko and Levine planned to squeeze construction man Jacob Kiferbaum for a $1 million kickback in connection with an expansion program at Mercy Hospital in Crystal Lake. But it said that scheme fizzled as well. Kiferbaum has pleaded guilty in a related case.

Fitzgerald's news conference was in some ways reminiscent of one held on the eve of an election for governor eight years ago in which a drivers licensing station in Melrose Park had been raided by federal agents.

Officials at the station were charged with taking payoffs.

Then-U.S. Attorney Scott Lassar was asked if Ryan, who was secretary of state at the time, was a target of the investigation. He broke with the usual federal practice of refusing to comment on who might be a target and said Ryan was not. He said he wanted to avoid influencing the election.

Ryan went on to defeat Democrat Glenn Poshard and serve one term as governor before retiring amid a swirl of scandals and plummeting ratings in the polls. He was convicted in April of racketeering and other charges.

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