Rezko trial: 10/27/06

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Here's the story we wrote in October, 2006, when Levine pleaded guilty.

Robert K. Kjellander, a nationally powerful Republican with strong
ties to the White House, emerged Friday as a key figure in an
ongoing probe of corruption in Illinois.
Kjellander is identified as "Individual K" in a guilty plea by
Stuart Levine, a political insider who describes an underworld of
behind-the-scenes deal makers who wielded clout to bilk millions of
dollars through two state boards.

Levine said he used his connections to steer a $150 million state
pension deal to a firm represented by Kjellander, earning
Kjellander a lucrative finder's fee. In return, Kjellander
allegedly agreed not to bill Levine for lobbying work.

The plea deal does not accuse Kjellander of any wrongdoing, but the
mention of him indicates the feds are interested in his actions.

Besides outing Kjellander, Levine provides new detail about alleged
actions by Kjellander's former business partner, state GOP
powerbroker William Cellini. He says Cellini, identified in the
plea as "Individual A," and others schemed "to defraud" Illinois
taxpayers. Among those others is Antoin "Tony" Rezko, a former top
fund-raiser for Gov. Blagojevich.


The government indicted Rezko on Oct. 11, but Cellini has not been

Blagojevich, who reappointed Levine to seats on state teacher
pension and health boards, said Levine's plea proves he knew
nothing about Levine's dirty deals and kickbacks. The plea does not
accuse Blagojevich of any wrongdoing.

"Today's news reveals a pattern of wrongdoing by Stuart Levine that
betrayed the trust of former GOP Gov. Jim Edgar, who first
appointed him, and to all of us here in Illinois," Blagojevich
said. "Anyone who violates the public trust should be held
accountable for their actions."

Still, Levine's plea reaches into the governor's inner circle.

It places Rezko in the center of schemes to make money from pension
deals by allegedly forcing companies to pay kickbacks and hide them
as consulting fees.

It also accuses top Blagojevich fund-raiser Christopher G. Kelly --
"Individual B" -- of helping Levine, Rezko and Cellini shake down
an investment firm seeking business with the state for $1.5 million
in campaign contributions to Blagojevich.

Though Kjellander and Cellini are longtime Republicans, they have
fared well under Blagojevich, a Democrat. Kjellander made $809,133
as a consultant on a massive state bond deal in 2003. The Cellini
family's investment firm, Commonwealth Realty, has been entrusted
with investing $340 million in pension cash since Blagojevich took


Cellini and Kjellander did not return calls. A call to Kelly's
lawyer was not returned.

Commonwealth issued a statement that the firm "is not aware of the
Levine allegations but its employees are remaining focused on
serving their clients' investment needs."

In his plea agreement, Levine, 60, of Highland Park admits to
hatching the kickback schemes while he was a board member of the
Teachers Retirement System (TRS), where firms competed for
investment deals worth millions of dollars. He also detailed
schemes he pulled while a member of the Illinois Health Facilities
Planning Board.

Levine raked in "millions" from the crooked deals, according to his
lawyer. Levine and others allegedly plotted to steal as much as $50
million though they actually pocketed much less.

"Stuart Levine was a legitimate hardworking and successful
businessman before he got involved with these boards," Levine
attorney Jeffrey Steinback said. "You can become intoxicated with
the ether of power and the ether of money."

Under terms of his deal, Levine would serve 5 1/2 years in prison,
far less than the life sentence he could have faced. A federal
judge either has to accept that prison term or reject the entire

Pressure to cut a deal is now on Rezko, who prosecutors say faces
at least 14 years in prison if convicted in just one of two cases
against him.

Prosecutors have said they have substantial evidence against Rezko,
including recordings where Rezko can be heard discussing allegedly
illicit deals. Rezko has pleaded not guilty, has vowed to fight the
charges and has painted Levine as someone making things up to save

U.S. Attorney Patrick Fitzgerald has called Rezko's alleged deals a
"pay-to-play scheme on steroids" and said there was a "feeding
frenzy" by Levine, Rezko and associates.


Stuart Levine's guilty plea names several people by letter only.
The Sun-Times was able to confirm the identities of some through
sources familiar with the document. None of these people have been
charged with crimes. Many have declined to comment or could not be

A. William Cellini: Longtime Springfield powerbroker. In 2004,
Levine and Cellini allegedly talked about siphoning funds from a
$220 million state pension deal with the Cellini family's real
estate investment firm.

B. Christopher G. Kelly: Blagojevich fund-raiser. Allegedly helped
shake down an investment firm for campaign cash for Blagojevich.

C. Sheldon Pekin: Consultant who allegedly agreed to kick back
$250,000 in fees in return for getting pension business.

D. Joseph Aramanda: Associate of Blagojevich fund-raiser Antoin
"Tony" Rezko who allegedly got $250,000 from Pekin.

E. Dr. Robert Weinstein: Levine business associate who allegedly
helped Levine in multiple schemes.

G. Michael Winter: Rezko business associate who allegedly agreed to
funnel fees from an investment firm to Rezko but did not want his
identity revealed to the Teachers Retirement System board.

H. Myron Cherry: Attorney and political donor. Cherry's name was
listed in place of Winter's on TRS paperwork. Cherry has said this
was done without his knowledge and that he is cooperating with
federal authorities.

J. Thomas Rosenberg: Movie producer and former investment firm
owner. Balked at a shakedown attempt spearheaded by Levine and
Rezko and threatened to go to law enforcement.

K. Robert K. Kjellander: Elected treasurer of the Republican
National Committee in 2005, Kjellander is identified as having
reached out to Levine on behalf of The Carlyle Group, an investment
firm that was seeking a $150 million state pension deal. After the
2002 deal went through, Kjellander allegedly landed a "finder's
fee" from the firm and then agreed not to bill Levine for lobbying

L. Sven Philip-Sorensen: Danish investor allegedly got a $1 million
fee tied to a Chicago Medical School student housing project --
even though he did no work.

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Obviously the Governement can't choose it's witnesses- but Rezko picked his business partners! The question is will all this be put into perspective once "millon dollar baby" takes the stand. My guess is that Levine is just part of what Rezko has to worry about.

It is strange that Cellini, Bib Bib K (who gave more than 1/2 of his Bear Stearns/Hurtgen $800,000 "finders fee" to Rezko) haven't been indicted. I wonder what they have said to investigators?

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Natasha Korecki

Natasha Korecki is the Federal Courts Reporter for the Chicago Sun-Times, covering federal news, corruption investigations and trials.

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This page contains a single entry by Natasha Korecki published on April 7, 2008 10:50 AM.

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