Jeopardy

Lawyer Joseph A. Cari Jr. made a stellar mark as a political strategist and fundraiser before an apparent favor landed him in trouble. His fall puts heat on Governor Blagojevich’s administration.

When he showed up in court on the morning of September 15th, Joseph A. Cari Jr. hardly looked like a man whose highflying life had crumbled. A 53-year-old lawyer, Cari is a stylish man of rugged good looks whose appearance oozes success. In court, he wore a charcoal gray pinstriped suit with an azure tie. As he stood before U.S. District Court judge Amy St. Eve, he appeared every bit the power broker whose pals included Bill Clinton and Al Gore and whose corporate client roster was packed with Fortune 500 companies. But now, despite his money and influence, he was officially entering the annals of Illinois political sleaze by pleading guilty to at-tempted extortion.

It was a stunning fall for Cari, and the ramifications still have not fully played out. According to his plea agreement, Cari has told prosecutors that a kickback scheme in which he participated was just a small part of a larger campaign fundraising strategy operated by Governor Rod Blagojevich and two of his top personal advisers. Blagojevich has strenuously denied the allegation, but at press time the governor appeared to be drawing the strong interest of the aggressive troops staffing the office of U.S. attorney Patrick Fitzgerald. The news of Cari’s plea came just as Blagojevich was readying his 2006 re-election effort. Cari, the man who for years has worked to elect Democrats, may have kicked the door open to taking down his party’s first governor in nearly 30 years.

Until recently, almost every Democratic presidential candidate who came through town trolling for money sought Cari’s support. He has been involved in every presidential campaign since 1980, along the way holding a variety of positions on the Democratic National Committee. (If Al Gore had prevailed in 2000, Cari might have been in line for the ambassadorship to Italy.) Before he was indicted, Cari was poised to take a major role in the prospective 2008 White House run of Delaware senator Joe Biden. Now Cari is looking at spending the next presidential campaign behind bars. (Cari and his lawyer, former U.S. attorney Scott Lassar, both declined to comment for this article.)

Cari’s fall is a classic cautionary tale featuring the tangle of personal and political relationships, once described by Cari as “kind of like spaghetti.” In this instance, Cari’s trouble seems to have stemmed from two intersecting relationships: his friendship and business partnership with H. Carl McCall, the unsuccessful 2002 Democratic nominee for governor of New York, and his acquaintance with Stuart Levine, a Highland Park millionaire and Illinois Republican Party patron with a knack for getting appointed to state boards. (Levine is facing a multitude of fraud charges in this case as well as another. He has pleaded not guilty in both cases and declined to comment for this article.)

The scheme, as explained by Cari to prosecutors, depends on the intersection of clout and campaign contributions, and suggests how savvy players leverage each for personal and political gain-a particularly grim illustration of the way the political game is played here. As Cari said on the telephone to lawyers of the company he was trying to extort, “This is how things are done in Illinois.”

Joe Cari was bred for success. Born and raised in the southwest suburb of Evergreen Park, he was the son of parents who were the first in their Italian immigrant families to make it past grammar school. Cari’s father, Joseph Cari Sr., built a prosperous medical practice and held an adjunct teaching position at what is now known as the University of Illinois at Chicago College of Medicine. He also befriended Mayor Richard J. Daley, and for a time was the physician for the Chicago Fire Department. Cari’s mother was a homemaker.

Joe Jr. excelled academically first at Brother Rice High School, where he also played baseball and basketball, and then at the University of Notre Dame, where he graduated cum laude with a sociology degree in 1974. Joe Cari Sr. wanted his son to go to medical school, but Joe Jr. preferred politics. So Daley sent him to work on the fledgling, long-shot Third District congressional campaign of Marty Russo. “For fifty bucks a week, I was Marty Russo’s visibility chairman,” Cari recalled to the Illinois Legal Times in 1998. “Which meant I put up Marty’s signs and tore the other guy’s signs down.”

Russo won and stayed in Congress for 18 years. Cari joined his new mentor in Washington, D.C., as a legislative assistant. “I was just coming of age as much of the cynicism in American politics started,” Cari told the Legal Times. “I have seen that cynicism build to horrible levels today.”

Having been sufficiently inspired by his experience with Russo, Cari returned to Notre Dame to attend law school. After graduating in 1978, he moved back to Chicago, where Russo’s sponsorship proved valuable. Cari was named counsel to President Jimmy Carter’s re-election effort in Illinois and performed well enough to land an expanded position four years later as counsel to Walter Mondale’s Midwest presidential operation. “All you had to do was open the door for him and Joe did the rest,” Russo says today. “People would call back and say, ‘Gee, this guy you sent is terrific.’” Cari also latched on to Richard M. Daley early, working on his first campaign for mayor in 1983, when he lost in the Democratic primary to Harold Washington. Cari remains a Daley ally.

Cari joined the law firm Coffield Ungaretti Harris & Slavin-now Ungaretti & Harris-in 1983. In one of his big early cases he successfully defended Cook County Hospital in a $31-million medical malpractice suit. Cari later became an expert in regulatory matters and governmental affairs. “Joe is one of those lawyers who is a problem-solver, not just a problem-identifier,” says Mark Treanor, a friend of Cari’s who is the general counsel for the Wachovia Corporation. “He has a good strategic sense for how things fit together.”

That skill also served Cari well in the political world; he not only raised huge amounts of money for a series of Democratic presidential contenders (Biden, Kerrey, Clinton, Gore, Kerry) but became a valued strategist. (In 2001, he was awarded a Harvard fellowship to teach a course on the financial aspects of presidential campaigns.) Cari was rewarded with a series of important positions with the Democratic National Committee.

The most fateful appointment, though, was a presidential one: in 1995, Clinton appointed Cari to the board of the Woodrow Wilson International Center for Scholars, a politically star-studded nonpartisan research institution. (Former Indiana congressman Lee Hamilton is the center’s current director; secretary of state Condoleezza Rice and secretary of education Margaret Spellings are among the current board members.) Cari eventually became the chairman of the Wilson board.

While on the board, Cari met John H. Foster, a Wilson Center adviser and a bigwig investor in the health care field who has sat on the boards of companies such as Avon and Corning. Foster asked Cari to help him start a private equity firm that would manage money solicited from pension funds and financial institutions by investing in the growing, lucrative orthopedic device industry. They called the company HealthPoint, and in 2003 they brought aboard Carl McCall, who oversaw New York’s state pension funds as comptroller and was a former Citibank vice president. HealthPoint would receive one of its first investments from the Illinois Teachers’ Retirement System pension fund.

Well before that happened, though, good fortune came Cari’s way in his personal life. In its January 1991 issue, Cosmopolitan named him its Bachelor of the Month. Soon after, Glamour called to interview him for a story called “Where Have All the Good Men Gone?” Cari was a divorcé with a daughter, though at the time the Cosmo article came out he was already dating the woman who would become his second wife, Rita Bahr; a lawyer and partner at McDermott Will & Emery, she would later take over the legal department of Motorola’s mergers and acquisitions division. Bahr was smart and cultured-though the child of Americans, she had grown up mostly in Central and South America, spoke Spanish fluently, and collected Latin American art. She and Cari fell in love; their friends still speak of their romance in reverent tones. “You know how some couples just really work and fit together?” says Michael Bauer, a veteran Democratic activist. “This was a couple that really belonged together. She was as smart as he was, and she had a personality to match his.”

Cari and Bahr had dated for eight years when she was diagnosed with skin cancer. They married four months later (Cari proposed while Bahr was in the hospital following surgery). “That’s the measure of the man,” says Russo. “The greatest part of his life was his love affair with Rita.” Bahr battled valiantly, including taking experimental treatments in California, but six years into the marriage the cancer had spread to her brain, and the prognosis was grim. Bahr was a devoted world traveler, so the couple took monthly trips to cherish the time they had together, including visits to China, France, Italy, and Ireland. In March 2002, Bahr died at the age of 44. “It was a torturous three years,” says Russo.

Although he knew it was coming, Cari was devastated. “He found the love of his life very late in life, and he had her for only a short period of time,” says Peter Giangreco, a Democratic strategist whose client roster includes Blagojevich. “It was a very profound sense of loss.”

Cari struggled to cope, and he has taken the antidepressant Paxil ever since, a fact he acknowledged in a court appearance.

“I don’t think he really came out of it until last year,” says a Cari confidante who asked not to be named. “I would look at him and there was just this glazed-over look.”

During Bahr’s illness, Cari was particularly touched by the generosity of Jim Ryan, the Republican state attorney general whose own successful fight against cancer became an integral part of his gubernatorial campaign biography. “I got to know Cari a little bit professionally, and as he started talking about Rita, he kind of opened up to me,” says Ryan, now a lawyer in private practice. The Caris invited the Ryans to a dinner party or two, Ryan says. “And then she showed up at one of my fundraisers and she could barely walk. I was startled that she came, but I was touched. My wife, too. Obviously she didn’t have to do that.”

Cari had been a supporter of Democrat Rod Blagojevich’s congressional campaigns, but in the 2002 governor’s race pitting Jim Ryan against Blagojevich, Cari contributed $3,666 to the Republican’s campaign-giving nothing to Blagojevich. “I was a little bit astounded because [Cari] was a high-ranking Democratic official,” says Ryan. “But I think honestly it was a personal thing, and he kind of told that to me, that some things are more important than politics.”

It was the first time Cari had supported a Republican. “Jim Ryan was so great to Rita,” says Giangreco. “The unfortunate outcome of that race for him was that that’s where he got to know Stuart Levine, and that’s how all his troubles started.”

In 2001, a lawyer named Sam Vinson-a former legislative assistant to Governor Jim Thompson, and later a Republican state representative and assistant Republican floor leader-joined Ungaretti & Harris. Vinson’s Republican ties made him perfect for expanding the clout base of the Democratic-leaning law firm. Vinson worked under Cari, who was the chairman of the firm’s legislative, regulatory, and public policy group.

In October 2002, Vinson arranged for Ungaretti & Harris to host a fundraiser for Jim Ryan. According to a source familiar with the matter, Vinson invited Cari to the party, where he introduced him to a longtime client, Stuart Levine, the campaign finance chairman for Jim Ryan. “We met the first day of law school in September 1968,” Levine once told the Chicago Tribune. “We were a study group of two. Jim Ryan got me through law school.” While Ryan went on to become DuPage County state’s attorney, state attorney general, and a Republican nominee for governor, Stuart Levine got rich as a lawyer and investor in the health care field (among other ventures, he was the founder of HMO America, which at one time operated the largest health maintenance organization in Illinois).

One of Levine’s biggest investments has been in Jim Ryan. Levine has contributed nearly $800,000 throughout Ryan’s political career. Contributions to other Republicans (more than $1.3 million since 1993) and a handful of Democrats helped make Levine a player. During his term as governor, George Ryan, a Republican to whom Levine had given a $25,000 campaign donation, appointed Levine to the Illinois Health Facilities Board, the Illinois Gaming Board, and the board of the Teachers’ Retirement System.

When Blagojevich was elected, Levine still sat on the health facilities and teachers’ retirement boards. Blagojevich reappointed Levine to both posts, despite Levine’s party affiliation and a few red flags. After he resigned from the gaming board in 2001, for example, it was revealed that Levine had not disclosed his past investments in the Argosy Gaming Company, a casino owner in Illinois and Louisiana, even as he voted on matters involving his former business partners there. And after landing his board positions, Levine donated at least $10,000 to George Ryan for two years in a row, even though Ryan had barred state board members from contributing to his campaign fund. The contributions had to be returned.

Blagojevich’s spokesperson Abby Ottenhoff says the governor reappointed Levine to the health facilities board because it required a Republican member, and he reappointed Levine to the teachers’ retirement board as “an olive branch,” she says, “really showing his intention to work in a bipartisan way.”

At first, meeting Levine was profitable for Cari. According to Cari’s plea agreement, at his request Levine consented to help HealthPoint. He pitched HealthPoint to an executive with the Illinois State Board of Investment, which handles pensions for judges, lawmakers, and rank-and-file state workers. The executive passed. But the teachers’ retirement board-on which Levine sat-approved two investments totaling $35 million.

Although Levine was known inside Illinois as a Republican rainmaker, his political contributions at the national level skewed toward Democratic officeholders. The burgeoning relationships between Levine, Cari, McCall, and the Blagojevich administration grew cozier in late 2003, when Levine paid more than $4,000 to fly the governor and some of his campaign operatives to fund-raising visits to Austin, Texas, and New York City, according to campaign reports and other sources. McCall hosted one fundraising event held in an exclusive New York club, and HealthPoint paid for $3,500 in meals at another funder in the city the next day. (This is legal as long as the contributions are reported.)

Cari acknowledges in his plea agreement that, in imploring an investment firm executive to get onboard, he claimed that as a matter of patronage, HealthPoint had hired a politically connected consultant in order to receive funding from a state board. According to the plea agreement, Levine told Cari that someone identified in the document as Public Official A, working through two associates, had used the system as a campaign fundraising strategy. Randall Samborn, a spokesman for the U.S. attorney’s office, declined to comment. But a source familiar with the case confirms news reports that the two associates are the construction mogul Chris Kelly and the businessman Tony Rezko, two members of the kitchen cabinet of Blagojevich-who himself is said to be Public Official A. Lawyers for Kelly and Rezko and a spokesperson for Blagojevich all deny wrongdoing by their clients.

One of Carl McCall’s major political patrons was James A. Harmon, an international financier whom Clinton appointed chairman and president of the Export-Import Bank of the United States. Harmon also sat on the global advisory board of an outfit called J. E. Robert Companies, an asset and real-estate management company based in McLean, Virginia. Harmon’s daughter, Deborah, was president of the company.

J. E. Robert had solicited the teachers’ retirement board for an $85-million investment, and McCall phoned Levine on Harmon’s behalf. Here is where the fundraising scheme described by Cari allegedly came into play. Levine, Cari says in his plea agreement, was willing to use his sway on the teachers’ pension board to award $85 million to J. E. Robert if, in return, the company would hire a consultant of Levine’s choice (which turned out to be for 1 per-cent of the investment-$850,000). Cari claimed the consultant would then contribute some of the money he or she made (without doing any work) to certain political or charitable organizations “as directed by Levine.”

The Blagojevich administration has dismissed the allegation, suggesting that Stuart Levine was just puffing himself up and that Levine and Cari are not credible. “This whole thing is speculation based on what Joe Cari says he heard from Stuart Levine about whoever these officials and associates are, so it’s already third- and fourth-person by the time it’s reported in the plea agreement,” says Abby Ottenhoff. Blagojevich himself issued a flat-out denial in September, saying, “This is not how we operate.”

But Chicago has learned that Cari has told federal investigators that Stuart Levine was not his only source of information on the purported campaign fundraising scheme-that others in or close to the Blagojevich administration also spoke of using state boards to raise money. Cari himself is said to have claimed that he was offered a board seat in exchange for campaign contributions. The allegations recall a charge by the Chicago alderman Dick Mell, the governor’s father-in-law, that Chris Kelly, the governor’s major fundraiser, was offering board seats in exchange for $50,000 contributions. Mell recanted his charge under the threat of a defamation suit by Kelly, but the Cook County state’s attorney’s office, in conjunction with the state attorney general’s office, has opened a joint investigation and convened a grand jury.

With the J. E. Robert application for $85 million on the agenda for an upcoming pension fund board meeting, J. E. Robert still had not signed the contract with Levine’s consultant (who so far has been identified publicly only as an Illinois businessman with a company based in Downers Grove). Levine wanted McCall to lean on Harmon, the Cari confidante says, but McCall suddenly disappeared and could not be reached. (McCall declined to comment for this article.) According to the plea agreement, someone known as a “law partner” pressured Cari to play the heavy in the absence of McCall. (The Cari confidante and a source familiar with the case say the “law partner” is Sam Vinson; he did not return calls for this article.) On May 20, 2004, Cari made four phone calls to J. E. Robert demanding that the company sign the consulting contract, which had been faxed to J. E. Robert from a lawyer in the Turks and Caicos Islands in the British West Indies. (Prosecutors allege that the lawyer was an associate of the Downers Grove businessman.)

In one phone call, noted in the plea agreement, Cari berated Harmon’s secretary, saying that she would lose her job and the deal would be off if his call was not returned within the hour. When executives and company lawyers got on the line with Cari, they said the consultant had not done any work and was not needed. Cari explained that this was how the governor of Illinois handled patronage.

Last year, the complicated dealings of Stuart Levine started to fall apart. He resigned from the health facilities board in June 2004; this past May, he was indicted on 27 counts of fraud, money laundering, and extortion in connection with an alleged kickback scheme involving a construction firm and the building of new hospital facilities. While pursuing Levine in that case, federal investigators learned of the alleged corruption at the teachers’ retirement fund.

In fall of 2004, federal agents paid a visit to Cari at his Lincoln Park home. Cari spoke to the agents for hours without a lawyer; he apparently thought he was a witness, not a target. In August of this year, Cari, Levine, and another lawyer, Steven Loren, were indicted. (Loren was a longtime friend of Levine’s who worked as outside counsel to the retirement fund; he has said in a plea agreement that he was in on a scheme with Levine to use Levine’s position to make money.)

Under the advisory federal sentencing guidelines, Cari, who has resigned from Ungaretti & Harris, faces 37 to 46 months in prison. His plea agreement requires him to cooperate with the continuing investigation. He probably will not be sentenced until the entire case is wrapped up.

Joe Cari once said he still held “the quaint notion that there are honorable men and honorable women in politics.” At least a few of Cari’s friends still think he is one of those men. “I know Joe,” says Marty Russo. “He’s a man of integrity and honesty.”

“I don’t think there’s anyone I know who goes through life who doesn’t end up making some mistakes,” says Michael Bauer, the Democratic activist. “Every day you’re making judgment calls. I find it hard to believe that Joe would have done something where he would have intentionally broken the law.”

So why did he do it? Perhaps Cari himself answered that question when he used the spaghetti metaphor to describe the tangle of personal and political relationships, particularly in Illinois, where favors are always at a premium.

The sad paradox of Cari’s fall is captured by an event held at his former law firm. Toward the end of 2003, the General Assembly passed a wide-ranging ethics bill that included rules prohibiting lobbyists, their spouses, and those with “significant” state contracts from sitting on state boards and commissions, which had become patronage havens. “It’s removing outside influence from decisions made by these boards and commissions,” Abby Ottenhoff said at the time. As Blagojevich signed the bill, he promised a new day in Illinois. “Today we are re-establishing the primacy of principle over politics,” he said. Seven weeks later, Ungaretti & Harris presented a half-day public seminar attended mostly by lobbyists and government officials titled “Illinois Lobbying and Ethics Laws in the Wake of the New Ethics Legislation.” Opening and closing the program: Joe Cari.

Research assistance by Drew Adamek

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