Chicago Sun-Times
Inside the Rod Blagojevich investigation and related cases

Blagojevich trial: Cari discusses New York fund-raiser, alleged shakedown

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Reporting with Sarah Ostman

Former Democratic national fund-raiser Joseph Cari -- who once was presidential candidate Al Gore's top fund-raiser -- is back on the witness stand this morning. He's discussing a New York fund-raising trip he helped arrange for then-Gov.-Blagojevich in 2003, as well as the alleged shakedown of an East Coast investment-banking firm, JER Partners, in 2004.

Prosecutors are using Cari's testimony to try to show jurors how Blagojevich and his top fund-raisers were trying to control consulting fees tied to state teacher-pension investments in exchange for campaign contributions and kickbacks.

In 2003 and 2004, Cari, a Chicago lawyer, was a principal in another investment company, called HealthPoint Capital, that had gotten Illinois pension investment business and had been vying to get more. HealthPoint was based in New York -- hence the New York fund-raising swing that the firm helped set up for Blagojevich.

Cari also had become an intermediary between former Teachers' Retirement System of Illinois board member Stuart Levine and JER. (Levine has pleaded guilty to various crimes involving Blagojevich's administration but has not been sentenced.)

Levine had made it clear to Cari that JER would need to hire a specific consultant in order to get an $80 million deal to invest state teacher-pension money. Cari testified that Levine wanted that consultant hired based on orders from the now-jailed Tony Rezko and the late Chris Kelly, then top fund-raisers for Blagojevich.

Cari engaged in several conversations with JER officials regarding that consultant, whom he did not know. That consultant was to be paid a "finder's fee" from the deal, even though the consultant would do no work, according to prosecutors.

Cari told jurors this morning that in 2004 he implored a top JER employee to hire the consultant, saying something to the effect of, "In Illinois, the governor and the top people around him -- I'm talking specifically about Gov. Blagojevich, not Illinois historically -- that they pick the investment bankers, the law firms. And that's the way it's done in Illinois.

The JER employee "took it in," Cari then testified. "She said she understands the info. and said she would get back to me."

The consultant was never hired because the FBI confronted Levine about the deal before it could go through. The shakedown is one of the many reasons Levine cut a plea deal with prosecutors, as did Cari.

Besides testifying about the JER shakedown, Cari told jurors that Kelly seemed to be obsessed with controlling the money that was raised from a Blagojevich fund-raiser at the Harvard Club in Manhattan.

After dinner at a restaurant nearby, "Mr. Kelly was adamant that he wanted to take all the checks from the fund-raiser back with him that night to Chicago."

Cari wouldn't let him. He said they needed to make copies of the checks and "leave a paper trail."

Kelly was "upset" about that.

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This page contains a single entry by Chris Fusco published on June 17, 2010 10:15 AM.

Blagojevich trial: Day 10 Witness list, recap was the previous entry in this blog.

Blagojevich trial: Defense gets its shot at Cari is the next entry in this blog.

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