April 16, 2008

Blagojevich had big plans, witness says

White House hopes linked to pay-to-play

By Bob Secter and Jeff Coen |Tribune reporters

11:11 PM CDT, April 15, 2008

A veteran Democratic fundraiser testified Tuesday that Gov. Rod
Blagojevich once offered to give him his pick of contracts and state
business in exchange for help building a nationwide political money machine as a
prelude to a presidential run.

The governor said "that there were
contracts, legal work, investment banking work and consulting work to be awarded
to people who helped," Joseph Cari recalled as he took the stand in the federal
corruption trial of Blagojevich insider Antoin "Tony"
Rezko.

The allegations by Cari, once a finance chairman for the
Democratic National Committee, were the most explicit accusations of pay-to-play
politics leveled against Blagojevich at a trial where he is not even the
defendant.

But federal agents continue to investigate allegations that
his administration illegally swapped jobs and board appointments for campaign
cash. And now Cari's allegations suggest that the governor was personally
willing to trade lucrative state business for political donations.

A spokeswoman for Blagojevich flatly denied the accusation
Tuesday and insisted no such conversation with Cari ever took
place.

"It's absurd," said Abby Ottenhoff. "The governor barely knows Mr.
Cari."

Cari took the stand after 15 days of often contentious and
rambling testimony from prosecution star witness Stuart Levine wrapped up. Both
men have pleaded guilty in the case and testified under sentencing deals with
prosecutors, but there the similarities end.

Levine was a shaky and
largely unsympathetic witness with a foggy memory and a long history of drug
abuse, a serial schemer with an admitted proclivity for deceit. Cari, 55, came
across as more earnest and sorrowful in his first turn on the witness stand, a
widower struggling to cope with the loss of his wife to cancer in 2002 shortly
before he became entangled in scandal through Levine.

Even Rezko lawyer
Joseph Duffy, whose questions to Levine often dripped with indignation, treated
Cari with utmost politeness. When it was Duffy's turn to ask questions, he began
by expressing condolences for Cari's loss.

Cari was a Chicago lawyer who
also was managing director of a private equity fund called HealthPoint, which
sought investments from Illinois pension funds, including the Teachers'
Retirement System, on whose board Levine sat. Prosecutors contend that Levine
and Rezko conspired to rig investment decisions of TRS in an attempt to extort
millions of dollars of kickbacks from investment firms.

National fundraising

Cari said his background in
fundraising appeared to intrigue not just Levine but also the governor, Rezko
and Chris Kelly, another Blagojevich confidant. He said they pressed him at a
series of meetings to lead a national effort to raise money for Blagojevich,
ignoring his repeated refusals because he was still in mourning.

Cari
said they openly promised him help for HealthPoint, or any other state work he
wished, in exchange for his fundraising prowess.

Cari did agree to help
organize one fundraiser for Blagojevich in New York on Oct. 29, 2003. He flew
there with Blagojevich and others on a private jet chartered by Levine, and it
was on that flight that, Cari said, he had a 20- to 30-minute private chat with
the governor.

Though less than a year in office, Blagojevich was already
contemplating a White
House run and talked about how easy it had been for former President
Bill Clinton to raise cash because he was the sitting governor of Arkansas when he
launched his presidential bid.

"A governor had the ability to award
contracts," Cari quoted Blagojevich as explaining. "It was easier to obtain
contributions."

Blagojevich then said that Rezko and Kelly were the two
people he trusted most, Cari testified.

"They were going to be the key
people in his public service career, wherever it went," Cari said.

Then,
Cari said, Blagojevich shocked him by offering the national fundraising post as
well as state-funded inducements. That was the kind of thing he would expect to
remain in the governor's inner circle, Cari said.

Cari ended his direct
questioning by testifying about Levine's pressure to have another investment
firm hire a "consultant" that Cari understood Rezko and other political powers
to be behind. One of Cari's associates at HealthPoint was involved with a
company called JER Partners, which was angling for a multimillion-dollar
allocation from TRS.

'Somewhere in Caribbean'

Cari wound up as the go-between
and told the jury how Levine pressured him to get JER to sign the consulting
agreement under threat of pulling the business off the table. Cari said he tried
to get Levine's point across by telling one JER executive that such moves were
simply the way things were done in Illinois.
The alleged kickback bid apparently ended when Cari learned in a conference call
that JER didn't know the consultant and received a proposed contract by fax from
"somewhere in the Caribbean."

Duffy had just minutes with Cari before
trial ended for the day, but the lawyer made a point to emphasize that Cari and
Rezko had met only once in a meeting set up by Levine. The defense contends that
Levine is the villain in the case who won a plea deal from prosecutors by trying
to frame Rezko.

Levine's account of scheming with Rezko to corrupt two
state boards remains the anchor of the government's case against
Rezko.

In his marathon appearance on the stand, Levine painted himself as
a pragmatic but crooked political survivor concerned mainly with using
connections to line his pockets. Levine seemingly corrupted everything he
touched, going so far as to create charities in order to fleece them.

With his admissions that he deceived his family to binge on
cocaine and crystal methamphetamine at all-night hotel parties, it might be hard
for the jury to like him. But the government is sure to argue that it was Rezko
who chose Levine as his operative and that the jury only has to believe Levine
when he says Rezko was pulling the strings and giving Levine the political clout
to pull off his plans.

Levine told the jury how he met with Rezko at the
Standard Club in downtown Chicago in April 2004 and allegedly laid out for him
all the illegal money they could take in by manipulating TRS. Levine said he
told Rezko he stood to make $3.9 million if everything went as planned, and
Rezko agreed to it.

Rezko's lawyers say Levine enhanced his own clout by
liberally dropping Rezko's name. Rezko was engaged in normal, everyday politics
as he made recommendations to Blagojevich about whom to appoint to state boards,
Duffy has argued. It was Levine, Duffy said, who had his hands on "the
machinery" of any corrupt deals involving those boards.

Levine's possible
motivation to accuse Rezko in exchange for a lighter sentence was Duffy's focus
as he ended his cross-examination.

Duffy pointed out that only the
government can make a motion in court to have Levine's sentence reduced, so why
was Levine sitting in the witness chair?

"I am here, sir, to tell the
truth about what happened between Mr. Rezko and myself," Levine
answered.

"Sir, you are sitting there to obtain your part of the bargain,
are you not?" Duffy said, folding his arms and staring back at Levine.

"I
don't know the answer to that, Mr. Duffy," Levine said.

bsecter@tribune.com

jcoen@tribune.com