The US Attorney's office allowed two guilty plea agreements to weave a sinister tale last week about an alleged "fundraising strategy" supposedly headed by Governor Rod Blagojevich.
The alleged "strategy" was designed to strong-arm firms seeking business with the Teachers Retirement System and other state boards into hiring do-nothing consultants who would then kick money back to the governor's campaign fund.
The actual allegations of the "fundraising strategy" were made by two people who pled guilty to various federal charges. However, by including their striking statements in the plea agreements - some of which didn't seem necessary - the feds appeared to be going out of their way to point a bright, flashing neon arrow right at Governor Rod Blagojevich and his two top fundraisers, Chris Kelly and Tony Rezko.
Joe Cari's plea agreement is the more interesting of the two. Cari, a one-time finance chairman of the Democratic National Committee, claimed in the plea agreement that the infamous Stuart Levine told him:
"...that a high ranking Illinois public official ("Public Official A"), acting through two close associates, was selecting consultants for the private equity funds that appeared before the State Pension Funds. Levine said that this was part of a fundraising strategy."
Several media reports and independent sources say that Governor Rod Blagojevich is "Public Official A." The official's "two close associates" have been identified in media reports and by sources as Tony Rezko and Chris Kelly - the governor's top fundraisers and advisors.
"Levine said that Public Official A, and his associates, were going to pick law firms, investment banking firms, and consultants that would help Public Official A."
Levine was a longtime member of the Teachers Retirement System (TRS) board and has also been implicated in similar shenanigans at the Illinois Health Facilities Planning Board. He was reappointed to both boards by Blagojevich. Perhaps not coincidentally, lots of the governor's pals signed on as hospital representatives after Blagojevich was sworn in.
What was the reason for hiring the consultants?
"Levine told Cari that consultants selected by Levine and those associates would subsequently be required to make certain political or charitable contributions as directed by Levine and those associates."
Cari was allegedly told by Levine to make sure that an investment company identified as "Firm 4" hire one of Public Official A's guys as a consultant or he and the Teachers Retirement System board would reject an $85 million investment with the firm.
"Cari talked to the general counsel for Firm 4. Cari said that Firm 4 had to sign the contract, or Firm 4's application for funds would get pulled off the TRS agenda. Cari said that it was political and this was how Public Official A handled patronage."
The governor's office claims that the allegations shouldn't be believed because they're being made by "convicted extortionist" Cari and twice-indicted extortionist Levin.
I could buy into the proposition that Levine misrepresented his connections with the governor's team. Here is what Levine allegedly told Cari:
"It was Cari's understanding that if Levine did not want something to be approved by the TRS Board, it would not be approved. Levine had previously told Cari that he had the ability to control what would be on the TRS agenda."
The feds don't mention this in the plea agreements, but it turns out that "Firm 4" ended up getting its $85 million investment with TRS when another board member intervened on its behalf. The firm never had to hire the consultant. So, Levine apparently vastly inflated his importance on the board. Since he allegedly lied about that, he may have also lied about the Blagojevich team's so-called "fundraising strategy."
On the other hand, Cari told prosecutors and Firm 4 that he had been through this sort of thing before with Public Official A:
"Cari said that his private equity firm had agreed to hire a consultant in order to get funding from another State board."
Interestingly enough, back when George Ryan was labeled "Official A" in an indictment of somebody else, it wasn't completely clear at the time that the official was actually Ryan. This time around, the feds left no doubt.
I'm not totally sold on the governor's involvement. But the feds seem to know more than they're letting on.
Rich Miller also publishes Capitol Fax, a daily political newsletter. He can be reached at capitolfax.blogspot.com.