Mr. Inside Out

Tony Rezko climbed from immigrant roots to the highest circles in Illinois. In his first interview since his indictment on corruption charges, he’s defiant—and faithful to a governor who now shuns him.

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The case against Rezko is closely linked to Stuart P. Levine, 61, of Highland Park, who grew wealthy in the HMO field. Under Governors Edgar, Ryan, and Blagojevich, Levine served on the Illinois Health Facilities Planning Board, which controls hospital construction. Blagojevich reappointed Levine to that board at Rezko’s behest. Levine has also sat on the state Teachers’ Retirement System board and the Illinois Gaming Board.

In May 2005, Levine was indicted on 27 counts of official corruption, and he faced a possible sentence of life in prison. Later, he pleaded guilty to two counts and agreed to cooperate with the government by wearing a wire. In return, prosecutors would recommend a sentence of just 67 months. When Rezko was indicted in October 2006, it seemed clear that Levine would be the major witness against him. Rezko declined to discuss how he met Levine or to describe their relationship. Levine, through his attorney, Jeffrey B. Steinback, similarly would not comment.

In essence, the government accuses Levine and Rezko of demanding kickbacks from private investment firms seeking funds from the Teachers’ Retirement System. The two disguised the kickbacks as consulting fees or finders’ fees for themselves or as campaign donations to favored politicians, the government claims. The alleged fraud involved nine different bribery and extortion schemes spinning at once—what the U.S. attorney, Patrick Fitzgerald, called “a pay-to-play scheme on steroids.” Levine, Rezko, and certain accomplices not identified by name in the indictment could have reaped more than $8 million if all the schemes had worked, prosecutors said.

Regarding the case, Rezko says, “It’s been [one year] since I’ve been indicted, and since that day the prosecutors have not turned over one single [bit of] evidence of wrongdoing.”

The government, as his lawyers put it in a recent court filing, “has produced over 500,000 documents in this case, which fill 182 banker’s boxes, and more onerously, 1,668 [recorded] phone conversations . . . [but] the government has indicated that only three calls involving Rezko were intercepted, only one of which is substantive.”

(Usually, the government does not detail its evidence until filing a proffer a month or two before the trial, which is scheduled for February. Christopher Niewoehner, an assistant U.S. attorney working on the Rezko case, declined to comment.)

Still, Rezko is implicated in plea agreements made by Levine and by another high-profile defendant in the government’s investigation. In September 2005, Joseph A. Cari Jr. pleaded guilty to one count of attempted extortion in a kickback scheme involving the state teachers’ pension fund. That plea agreement mentioned Levine and an “associate,” whom the news media quickly identified as Rezko.

Fitzgerald’s strategy in pressing public corruption cases here has been obvious. He indicts underlings and squeezes them to “flip"—provide evidence against higher-ups in exchange for leniency. In this way, the Operation Safe Road investigation moved up the ladder from clerks in the secretary of state’s vehicle services division all the way to former governor George Ryan, convicted last year on corruption charges.

When Levine cut a deal to swap a possible life sentence for just 67 months, political and legal observers speculated that he must have promised federal agents a lot of goods against higher-ups. For years now, observers have wondered whether Fitzgerald’s ultimate target is Blagojevich.

The governor has not been charged with any crime and has consistently denied any wrongdoing. He told the State Journal-Register in Springfield that the Rezko scandal “will never touch [him]” because he never took part in any discussion about such a “ridiculous and blatantly illegal scheme.” Blagojevich said he sought Rezko’s “advice on recommendations for agency directors for two reasons. Number one, I had every reason to think he was honest and independently successful in business and that he was able to bring us people who were not part of state government before. And he has connections and roots in the African American community, and he could help us with candidates . . . because part of what we wanted to do was to have a diverse administration.”

Blagojevich may be running away from Rezko, but Rezko remains one of the governor’s strongest defenders, saying that in his first term he balanced the budget, reduced the state work force without cutting services, and boosted spending for education and children’s health care. “What else do you want a governor to do?” Rezko says. “He doesn’t always get along with the legislative branches, but is that bad governing? I don’t know.”

Asked whether he is considering cooperating with the government and testifying against others as part of a plea bargain, Rezko laughs loud and long. “Hell, no,” he says. “Tell them I’ll see them in court on February 25th.”

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