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Inside the Rod Blagojevich investigation and related cases

Blagojevich trial: Who is Joseph Aramanda?

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Businessman Joseph Aramanda was just called to the witness stand in Rod Blagojevich's trial. He's testifying under immunity, which means he won't be charged with any crimes even if he testifies to being part of criminal wrongdoing.

Here's some background on him:

Aramanda has been in and out of the news since shortly before Blagojevich fund-raiser Tony Rezko's indictment in 2006. Aramanda, however, didn't testify during Rezko's 2008 trial, in which Rezko was found guilty.

Now, he's cooperating with the prosecution, and he's expected to walk jurors through a complicated "follow the money" scenario that shows how a $10 billion state pension borrowing deal was designed to put money in Rezko's pocket -- money that Rezko allegedly had planned to share with Blagojevich and others.

In summer 2003, the state of Illinois sold $10 billion in bonds on one day to help prop up its financially struggling retirement systems. Bear Stearns, a now-defunct investment banking firm, was the lead underwriter.

After the bonds were sold, Rezko told Blagojevich's then-chief of staff Alonzo "Lon" Monk that Aramanda -- a longtime friend and associate of Rezko's in his restaurant businesses -- "was putting money in a separate account that would later be turned over to Rezko," according to a prosecution court filing.

The money, Rezko indicated, was to come from a consulting fee that Bear Stearns was pay to Springfield lobbyist Robert Kjellander. Kjellander "was going to give Rezko $500,000, which Monk understood was for the help that Rezko had provided to Bear Stearns and Kjellander" on the bond deal.

On Sept. 24, 2003, Kjellander got an $809,000 fee from Bear Stearns, according to prosecutors. According to prosecutors, Rezko then arranged for "a $600,000 transfer of funds to Joseph Aramanda," on Oct. 2, 2003, "pursuant to a loan agreement between [Kjellander] and Aramanda that Rezko had arranged to draw up."

"At Rezko's direction, Aramanda then transferred approximately $450,00 of the $600,000 he received from [Kjellander] to various individuals and entities chosen by Rezko," according to prosecutors. Aramanda then "ultimately paid [Kjellander] back in June 2004, shortly after Rezko arranged for Aramanda to receive another loan of approximately $600,000 from another associate of Rezko's who did business with the State of Illinois."

Who got the $450,000 in transfers has never been publicly disclosed. Neither has the identity of the other Rezko associate who gave Aramanda the other $600,000 loan.

Kjellander -- who never has been charged with any crimes -- repeatedly has denied any wrongdoing. He's said he simply gave Aramanda a loan.

Besides Aramanda's presence in Blagojevich's criminal case, Aramanda also factored heavily in Rezko's.

In Rezko's criminal trial, prosecutors said Aramanda got an illegal $250,000 "finder's fee" tied to a state teacher-pension investment deal. Prosecutors also said that Aramanda did no work for the money, and that some of it was used to pay a Rezko debt.

Some of that $250,000 also was routed to Barack Obama's campaign back when Obama was running for U.S. Senate, according to prosecutors in Rezko's case. Aramanda gave $10,000 in campaign cash to Obama's Senate campaign on March 5, 2004 -- money that Rezko apparently had directed Aramanda to give.

Obama -- who's said he had no idea at the time the Armanda contribution was tainted in any way -- later gave the Aramanda money to charity, as well as tens of thousands of dollars more from Rezko, who was part of Obama's senatorial finance committee.

Here's one other small connection between Rezko, Aramanda and Obama: Obama's Senate office hired Aramanda's son as an intern in 2005, at Rezko's urging.
Obama's camp, however, has said that Obama did not know Aramanda personally.

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This page contains a single entry by Chris Fusco published on June 15, 2010 3:22 PM.

Blagojevich trial: Testimony resumes was the previous entry in this blog.

Blagojevich trial: Aramanda alleges plans for loan abruptly switched is the next entry in this blog.

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