Federal prosecutors alleged Wednesday that
used his influence as one of
's closest advisers and fundraisers to seek millions of dollars in kickbacks and campaign donations from firms seeking state business.
Rezko's indictment comes less than a month before voters must decide whether to re-elect Blagojevich, a Democrat who won four years ago on a platform of ethics reform in the aftermath of the scandal-tarred tenure of George Ryan.The governor is not accused of any wrongdoing and the indictment does not mention him by name. But the long-rumored charges have been hanging over Blagojevich's campaign for months.
The indictment alleges that Rezko schemed to extort businesses that came before two state boards with the help of co-conspirator Stuart Levine, a campaign contributor re-appointed to the boards by the governor.
Blagojevich, in a Wednesday evening news conference at his campaign headquarters, described Rezko as a friend and supporter. But the governor played down Rezko's extensive influence in the administration, which ranged from recommending appointees to the governor's Cabinet to low-level jobs at the
Tollway. The governor said he had no personal knowledge of any alleged wrongdoing.
"If in fact these allegations relating to Tony are true, he betrayed my trust," Blagojevich said. "He lied to me. He deceived me. But a lot more important than that, he violated the public trust.
"And I feel a tremendous sense of personal betrayal," the governor said. "But no one is above the law and everybody is accountable to the law and God forbid he did these things. And I pray that he didn't, but if he did, he is going to have to be held accountable and answer to that."
Blagojevich's Republican challenger, state Treasurer Judy Baar Topinka, seized on news of the indictment, alleging the governor had violated the public trust by giving Rezko a prominent advisory role.
"My goodness, this man is just so intricately involved with Rod Blagojevich," Topinka said of Rezko while campaigning in Springfield. "You can spin it all you want, but this was his right-hand man."
In announcing the indictment against Rezko, 51, of Wilmette, U.S. Atty. Patrick Fitzgerald said his office was unconcerned about whether its actions would impact the upcoming election. Fitzgerald refused to discuss Blagojevich.
"We're not going to stop momentum or take a siesta for political reasons," Fitzgerald said. "We're not concerned with elections. We're concerned with bringing the cases as soon as they're ready to go."
Rezko, an international businessman and native of Syria, has been out of the country for weeks and his whereabouts had become a concern for federal investigators. Sources said investigators were waiting to see whether Rezko would return from overseas this past weekend. When Rezko did not return, authorities made the unusual decision to unseal the Oct. 5 indictment even though they aren't certain he will return to the United States.
An arrest warrant has been issued for Rezko and Fitzgerald said if he does not appear for his scheduled arraignment Friday, he will be considered a fugitive.
Joseph J. Duffy, Rezko's attorney, issued a statement denying his client committed any wrongdoing and expressing confidence he would be vindicated at trial. Rezko is currently traveling abroad, Duffy said, adding that he was attempting to notify him of the charges and arrange for his return to the United States.
Fitzgerald alleged the actions of Rezko and Levine, who is cooperating with prosecutors, represented "pay-to-play politics on steroids" and said the two engaged in a "frenzied" effort to score kickbacks.
, special agent-in-charge of the
office of the
, said the federal investigation, dubbed "Operation Board Game," continues to build and he all but promised more indictments.
"This is a gathering storm of an investigation with a goal of rooting out the parasites that have plagued our public institutions," Grant said. "Our investigative efforts and those of our partners are ongoing, methodical, aggressive and relentless."
Specifically, the indictment alleged Rezko used his influence with top officials in Blagojevich's office in the spring of 2004 to ensure that allies were appointed to or retained seats on a state hospital planning board and the state's Teachers' Retirement System Board, the $36.5 billion pension fund for retired teachers outside of Chicago.
The indictment alleged Rezko worked to secure Levine's reappointment to the pension panel, by using "his relationships and influence with high-ranking State of Illinois officials" so the two could pull off their extortion plans.
The indictment alleged Rezko would exert similar influence to gain the appointment of pension-board members who would be helpful to Rezko and Levine.
In May of 2004, the indictment said, "Rezko instructed a State of Illinois employee responsible for facilitating appointments to state boards to move forward on Levine's reappointment to the [teachers' pension board], and represented that the reappointment had been approved by a high-ranking state official. The high-ranking state official subsequently directed that Levine be reappointed to the [teachers' pension board]."
Blagojevich reappointed Levine to the teachers' pension board in 2004. A year earlier, the governor also reappointed Levine to the state's Health Facilities Planning Board, the agency in charge of approving hospital construction and expansion. Rezko previously served on the hospital panel.
The indictment contended that once Levine's post on the teachers' pension board was in place, Levine would use his power to try to leverage investment firms seeking state business into paying millions of dollars in "finder's fees" that he and Rezko would split or funnel to intermediaries and associates.
Those intermediaries, who were not named in the indictment or charged with wrongdoing, include significant insiders in state Democratic and Republican politics.
In one instance, the indictment alleges that Levine used his influence on the pension board in 2004 to withhold a planned allocation of $220 million in funds unless a kickback of $2 million was paid to a consultant of Rezko's and Levine's choosing or arrange for $1.5 million in campaign contributions to be made to an unnamed public official.
Though the extortion payment was never made, sources close to the investigation said the donations were solicited for Blagojevich's campaign fund.
Prosecutors alleged that Rezko and Levine used an unidentified intermediary to approach the investment firm.
Citing TRS records, Jon Bauman, the teacher fund's executive director, confirmed that the intermediary, identified in the indictment as Individual A, is longtime Springfield powerbroker William Cellini, a pre-eminent Republican fundraiser who has supported Blagojevich. A federal law enforcement source, speaking on the condition of anonymity, confirmed Cellini was Individual A.
Cellini, who has not been charged with any wrongdoing, did not respond to requests for comment.
While the indictment alleges Rezko and Levine displayed a pattern of attempting to extort several firms, federal prosecutors said Rezko netted $250,000 in a lone instance in which the two succeeded. They said Levine stopped efforts to coax money from other firms after FBI agents interviewed him in May 2004, alerting him to the ongoing investigation.
Levine, a millionaire businessman who was a prominent fundraiser and donor for Blagojevich's 2002 Republican opponent, former Atty. Gen.
, has agreed to plead guilty to corruption-related charges, federal prosecutors said.
Only 11 days before the Nov. 7 election, Levine is scheduled to enter a guilty plea for his role in the pension-fund charges. On Nov. 1, he is to enter another guilty plea regarding kickback charges involving his role at the Health Facilities Planning Board.
Prosecutors said Levine worked with Joseph Cari, a former finance director for the national
and a major fundraiser, to try to secure kickbacks and campaign contributions from firms seeking state pension fund business.
In his September 2005 plea agreement, Cari said he was told that pension fund business was steered to firms that made campaign donations under the direction of a high-ranking public official. The unnamed person was described in the plea agreement only as "Public Official A." Blagojevich has denied being that public official.
Cari and Levine traveled with Blagojevich to
on a fundraising trip following the Democrat's election as governor, which was recorded as a campaign donation to the governor worth more than $4,000.
Shortly after Cari's plea agreement last fall, Blagojevich defended his closest fundraising aides and advisers, including Rezko.
"I have confidence that they do things right," Blagojevich said then. "They don't break the law or make any promises or deals or quid pro quos. Those are obvious and I don't think it takes a brain surgeon to figure out you shouldn't do those things."