Blagojevich, TRS and the crime he didn’t go to jail for.


Yesterday Blago asks for mercy. “I’ve made mistakes,” he said.

I was a tad surprised by the sympathy Rod Blagojevich has received. Yesterday a judge turned down our former Illinois governor’s plea for a reduced sentence.

He will get no sympathy from me.

I’m still holding a grudge from when he conspired with his buddies Tony Rezko, William Cellini and Stuart Levine to steal money from our Teacher Retirement System.

From the Sun-Times, 2006.

By Natasha Korecki, Chris Fusco, Dave McKinney and Steve Warmbir

A member of Gov. Blagojevich’s inner circle was hit with wide-ranging public corruption charges Wednesday, and now the feds want to know what the governor knew about his friend’s actions.

The 24-count indictment against Antoin “Tony” Rezko — a top fund-raiser for Blagojevich and a former business associate of the governor’s wife — outlines a “pay-to-play scheme on steroids,” U.S. Attorney Patrick Fitzgerald said.

Rezko, 51, is accused of trying to collect nearly $6 million in kickbacks from government deals and trying to shake down a Hollywood producer for $1.5 million in campaign contributions to Blagojevich.

Sources said the feds are looking closely at the alleged shakedown — first reported by the Chicago Sun-Times last month — and whether Blagojevich knew Rezko was trying to extort cash for the governor.

Investigators also have found strong relationships between the Rezko and Blagojevich families and continue to investigate their dealings, sources close to the investigation said. Illinois first lady Patti Blagojevich made nearly $39,000 off real estate deals involving Rezko, she disclosed on 2004 tax forms.


Blagojevich said he never authorized any shakedown, hasn’t engaged in pay-to-play politics and that the indictment “had absolutely nothing to do with Patti’s real estate business.”

Lawyers for Rezko called the indictment “sensational” and said it “contains no specifics as to how any money benefitted Mr. Rezko.”

But Fitzgerald said there was a “feeding frenzy” by Rezko and associates, including Teachers’ Retirement System board member Stuart Levine, who was indicted on corruption charges last year and is expected to plead guilty later this month.

“The amounts of money that were being shaken down in one . . . eight-week span was in the millions,” Fitzgerald said. But Rezko and Levine collected only about $250,000 because federal investigators tripped up their plans.

Chicago FBI chief Robert Grant called those named in the indictment “parasites that have plagued our public institutions.”

Rezko and others allegedly demanded the kickbacks under the guise of consulting fees from companies seeking business with TRS. Levine was able to control TRS business by working with Rezko to have two other people appointed by the governor who would vote with Levine, Fitzgerald said.

Two other political insiders allegedly were part of one of the schemes: to shake down Capri/Capital Advisors and Hollywood producer Tom Rosenberg, who co-owned the firm until recently.

One is Christopher G. Kelly, a close Blagojevich friend and top fund-raiser. The second is Springfield powerbroker William Cellini, a Republican who has helped direct $86,000 in campaign cash to the Democratic governor and whose family’s firm has secured $340 million in pension business under Blagojevich.

Cellini and Kelly were identified as “Individual A” and “Individual B” in the indictment, but sources confirmed their identities.

Rosenberg’s firm was slated to get a $220 million deal from TRS in February 2004, but Levine helped stall approval, according to the indictment. Three months later, Capri and Rosenberg allegedly were told to cough up $2 million to a financial consultant of Rezko’s and Levine’s choosing or arrange for $1.5 million to be contributed “to a certain public official.”

That official is Blagojevich, sources said.

By the way, in March, 2013, as Bruce Rauner was considering his run for Illinois Governor, Crain’s Greg Hinz raised questions about Rauner’s role in all this.

Which leads to a tale of Mr. Rauner’s involvement—perhaps unintentional, perhaps not—with Stuart Levine, the notorious political fixer, federal felon and corrupt Springfield insider who helped bring down Rod Blagojevich, whose old job Mr. Rauner is eyeing.

In testimony during the 2008 trial of Blagojevich pal Tony Rezko, Mr. Levine and others said Mr. Levine had had a $25,000-a-month contract “consulting” for CompBenefits Corp., an Atlanta-based dental and vision benefits company once known as CompDent. According to its website, CompBenefits at the time of Mr. Levine’s contract principally was owned by four private-equity firms, including GTCR LLC. Mr. Rauner, a founder of GTCR, is the “R” in the acronym.
Mr. Levine said his job was to get work for CompBenefits through whatever means were needed, including payoffs. A 2005 Sun-Times article says the firm then held contracts covering tens of thousands of workers at Chicago Public Schools and with the state.

Mr. Levine testified that he’d paid a bribe to obtain the CPS work, worked with insiders Bill Cellini and Ed Vrdolyak on other deals (both men later were convicted in unrelated federal cases) and plotted with Mr. Rezko to get work with Cook County via Orlando Jones, a key insider who later committed suicide.

Messrs. Levine and Rezko eventually went to prison on other matters, and prosecutors never took any action on CompBenefits. Perhaps that’s because they could not corroborate Mr. Levine’s testimony, or perhaps it’s because some major figures were going to prison anyway. I don’t know. Neither do I know whether Mr. Rauner or GTCR knew the details of what the firm was up to prior to the federal probe.
But I do know that Mr. Rauner, GTCR and Stu Levine had another interaction. That came in 2003, when the board of the Illinois Teachers’ Retirement System—on which Mr. Levine served—first tabled and then approved GTCR’s bid to get a $50 million investment from the giant pension fund.

According to a Sun-Times account, the bid stalled at the board’s February 2003 meeting after Mr. Levine objected but then was zipped through in May, when Mr. Rauner attended the board session. Now-retired TRS Executive Director Jon Bauman corroborates the gist of the newspaper report. He adds that he believes the February flop mostly was because of a bad presentation by GTCR but also says he does not know the particulars of Mr. Levine’s motives.

CompBenefits was acquired by Humana Corp. in 2007 for $360 million. In a statement, Humana says only that it “has never” employed Mr. Levine and “takes compliance and ethics very seriously.”

GTCR has had no comment but notes that CompBenefits said at the time of the TRS story that it would cooperate with any investigation.

Mr. Rauner, who might be able to answer questions about when he knew what, how long Mr. Levine was on the payroll and what kind of corrective actions GTCR might have ordered, hasn’t been available to comment himself. A spokesman, Chip Englander, did release a statement saying GTCR began to do business with TRS “long before Mr. Levine entered the picture.”

The statement adds, “It’s no surprise the long knives come out against a private citizen who’s considering running for governor and bulldozing the insiders and failed policies of Springfield. Bruce has never been accused of wrongdoing.”

Attempted and actual theft of Illinois teacher pensions is a decades-long practice.

Blago isn’t in jail on charges related to any of this. That is only because they had enough other stuff to accomplish the job of putting him away.

Yet Blago, Tony Rezko, Bill Cellini and Stuart Levine are about our pension theft.

Rauner might as well be considered an unindicted co-conspirator.

Actually, the Illinois legislature too.


4 Replies to “Blagojevich, TRS and the crime he didn’t go to jail for.”

  1. Our fine former governor tried to sell a senate seat. According to his attorney this was not for personal gain, only to help the folks in IL. Most commentators also seem to think our fine former governor got a harsh sentence. Bravo to the judge for standing his ground. No pol should get less than this sentence for what they do. Instead of all these people who are assigned 5 minute lawyers for petty crimes, the prisons should be full of politicians. Our fine former governor is blazing a trail that hopefully other judges will populate with the crocked pols of this country.

  2. He has a charm . That is why politics us full of sociopaths. I guess some friend of Jamie Anrade was whing about being extorted by Rauner and Munger because they were not being paid. There is a constitutional solution if they had the stones to do it. You just gave them more ammo. There is plenty to impeach Rauner including his new demand to attempt to steal pensions again. I suspect another sociopath does not mind this because he thinks it helps him politically…..

  3. Fred,

    This may not be very important to many teachers, or the public in general, but Blago is almost single-handedly responsible for the further demise of the Illinois Harness Racing Industry.

    Specifically, the formal investigation related to his wrong doings uncovered a $100K campaign contribution related to his holding up signing legislation that would allow Balmoral & Maywood Parks sharing IL casino profits. As a direct result under Federal Racketeering Laws (RICO), both race tracks declared bankruptcy and are now shuttered. Hundreds of barn worker, trainers, teller, grounds workers, parking lot attendants, security personal etc. lost their jobs. Not to mention the local area businesses that are affected.

    Hawthorne Race Course has a short month long meet in January and a summer/fall meet while the thoroughbreds are racing at Arlington, whereas before there was harness racing year round in the greater Chicago Area.

    The trickles down effect not only reduces State income from their share of the wagering, but also ripples down to the Illinois based harness breeding industry.

    I am sorry, but I have no sympathy for someone who is being portrayed as not financially benefiting from his schemes, when literally thousands have suffered due to his selfish criminal actions. I suppose that this is one of the crimes for which he did go to jail. To all of those whose world was turned upside down,14 years doesn’t seem like enough.

    Tom White, retired teacher and fan of IL Harness Racing

  4. And, as many have said, Patti is lucky the feds didn’t go after her.
    I have trouble with her whining–the impact on her family (which was the whole problem in the first place–what about her husband’s oath to uphold the laws of this state for the good of its people?)–exactly what did she do for us, as first lady?! Zero, zilch, nada.

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