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Illinois Governor's Aide Indicted

A key fundraiser for Rod Blagojevich is accused of trading state contracts for cash. The charges may boost the race's GOP challenger.

October 12, 2006|P.J. Huffstutter | Times Staff Writer

CHICAGO — Less than a month before the gubernatorial election, a federal grand jury has indicted a top advisor and fundraiser for Illinois Gov. Rod Blagojevich on suspicion of using his political clout to get millions of dollars in kickbacks from companies seeking state contracts.

The indictment, unsealed Wednesday, alleges that businessman Antoin "Tony" Rezko orchestrated a fraud scheme with Chicago attorney Stuart Levine, whom the governor reappointed to two state boards: one that handles hospital projects and another that manages teachers' pensions.

Rezko was one of Blagojevich's biggest fundraisers during the gubernatorial campaign four years ago, and himself contributed more than $49,000.

"Rezko used his relationship with certain state of Illinois officials to ensure that Rezko and Levine had the ability to influence the actions of [state boards] ... for the benefit of themselves and their nominees and associates," according to the indictment. The two men then "solicited and demanded millions of dollars in undisclosed kickbacks and payments, and received and directed hundreds of thousands of dollars in undisclosed kickbacks and payments."

Rezko also allegedly obtained more than $10 million in fraudulent loans from General Electric Capital Corp. for pizza franchises, and defrauded investors in that business, according to a second indictment unsealed Wednesday.

Levine has already been charged with using his position on the state boards to extort payoffs from medical groups and investment firms, and is cooperating with federal investigators, according to U.S. Atty. Patrick J. Fitzgerald.

An arrest warrant has been issued for Rezko, who is thought to be traveling abroad.

Though neither indictment names the governor, the charges further roil a nasty gubernatorial race between Blagojevich, a Democrat seeking a second term, and GOP rival Judy Baar Topinka, the state's three-term treasurer.

The indictments are part of a federal probe into whether campaign contributions to Blagojevich were given in exchange for business contracts or appointments to state boards and commissions.

The FBI also has been looking into claims that Beverly Ascaridis, the wife of the governor's former campaign treasurer, got her job as a state parks administrator in exchange for a $1,500 check her husband wrote to Blagojevich's daughter.

Blagojevich has repeatedly denied any knowledge of, or connection to, the alleged corruption.

"The allegations in today's indictments, if proven true, are a violation of my trust but far more importantly a betrayal of the public's trust -- the indictment details a pattern of self-enrichment by two individuals, acting on their own, that is reprehensible," Blagojevich said in a written statement Wednesday.

Illinois' gubernatorial race is being closely watched, with Democrats and Republicans fighting to attain a majority of the nation's governorships. And the Midwest is particularly contested, seen as key in the 2008 presidential campaign.

After 25 years, the GOP lost Illinois' governorship in 2002, when Blagojevich positioned himself as someone who would clean up state government.

Before that election, the GOP had held almost all top statewide offices.

Today, it has only Topinka's.

Michael Lawrence, director of the Paul Simon Public Policy Institute at Southern Illinois University in Carbondale, said this week's news could prove a break for Topinka.

A poll last month for Copley News Service showed Blagojevich with a 10-point lead over Topinka, 47% to 37%. But voters weren't particularly happy with Blagojevich: A third of voters rated his job performance as "excellent" or "good," two-thirds as "fair" or "poor."

Rezko "is not some little-known person," Lawrence said. "This is someone who clearly knows the governor and is close to him. The question is going to be whether the public will pay attention."

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p.j.huffstutter@latimes.com

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