Two days before last November's elections, benefactors held a fashion show in the Rosemont convention center to raise money for St. Jude Children's Research Hospital in Memphis. The invitation to the affair offered a veritable guidebook to political influence in Illinois, much of it centered on one St. Jude benefactor, Antoin "Tony" Rezko.
The chair of the event was Rezko's wife, Rita, a member of the Cook County Employee Appeals Board, which hears cases brought by fired or disciplined workers. (She was appointed to the part-time post, which pays $37,000 a year, by John Stroger, the former president of the Cook County Board, whose 2002 campaign finance committee was headed by Tony Rezko.) The fashion show's honorary cochair was Governor Rod Blagojevich's wife, Patti, who owns a real-estate firm (and has been involved in real-estate deals with Tony Rezko dating back to 1997).
The event's sponsoring committee included Governor Blagojevich's former spokeswoman, Cheryle Jackson, who now heads the Chicago Urban League; Becky Ruff Chipparoni, whose husband, Guy Chipparoni, was the press secretary for then secretary of state Jim Edgar before setting up a public-relations firm in Chicago (Chipparoni has represented some of Rezko's businesses); and Hollie Rumman, whose husband, Michael Rumman, served as one of Blagojevich's cabinet members (and is an investor with Rezko in various deals, such as a proposed power plant in Iraq).
Michelle Obama, wife of the Democratic U.S. senator and presidential candidate Barack Obama, was a special guest that day (even though the news had just broken about Rezko's participation in a funky real-estate transaction involving the Obamas' Hyde Park home).
The fashion show attracted little if any media coverage, which may have been exactly as its organizers and sponsors had hoped. Just three weeks earlier, Tony Rezko had been indicted on charges of extorting kickbacks from businesses seeking contracts from the Blagojevich administration. Rezko has pleaded not guilty. The trial is scheduled for February 25th in the U.S. District Court for Northern Illinois.
Were it not for that hovering indictment, Tony Rezko, 52, could boast a résumé straight out of the American rags-to-riches canon. In 1974, he stepped off an airplane at O'Hare Airport as a 19-year-old engineering student who barely spoke English. Within a decade, he had become a U.S. citizen and was moving in the highest financial and political circles in the state. Though one former colleague recalls that Rezko had little interest in politics when he first made his way in business, that changed in time, and he developed a remarkable knack for spotting political talent early, including a young African American president of the Harvard Law Review. Was Rezko simply interested in advancing smart public servants (and perhaps basking in the excitement of being close to power)? Or did he have a more mercenary motive, as the charges against him suggest?
Rezko agreed to sit down with Chicago to talk about his past, though he refused to discuss his indictment or pending trial (with a few brief exceptions). Interviewed in the Loop offices of his lawyer, Joseph J. Duffy, Rezko, as always, looked as though he had just stepped out of a barbershop after visiting his tailor. Of average height and buttoned up in both dress and demeanor, Rezko—who still speaks with an Arab accent—gives clipped, terse answers to many questions about his personal and business affairs. He always liked to operate privately and behind the scenes, which might be one reason he was able to grow close to assorted politicians.
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Photograph: Katrina Wittkamp
Tony Rezko was raised in Aleppo, the second-largest city in Syria. His father, a Catholic in a Muslim nation, was a community leader. "The Syrian TV carried only one channel and that was the government broadcasting channel, so there was little knowledge about the outside world," Rezko recalls. "But I always had curiosity about visiting the USA." Encouraged by a high-school teacher, he enrolled at the Illinois Institute of Technology. "The reason why I came to Chicago versus New York, Boston, or other cities was that the teacher recommended IIT," he says.
Armed with an undergraduate and a master's degree in civil engineering from IIT, Rezko practiced as a civil engineer for several years; indeed, he once worked for the State of Illinois on road-widening projects. But he quickly grew wealthy in the fast-food business and real estate. "I don't know what took me into fast foods," he says, "but I opened the first Subway franchise in Chicago." In time, his corporations held more than 100 Panda Express and Papa John's Pizza franchises in the Midwest.
When Harold Washington was running for mayor of Chicago in 1983, Rezko held a fundraiser after Jabir Herbert Muhammad, who was Muhammad Ali's business manager, urged him to get involved in the campaign. Subsequently, Rezko also joined Ali's entourage, traveling the world with him for five years. Rezko apparently took little interest in boxing—he says he and Ali did watch a few matches together—but he relished putting together business and endorsement deals for the champ. "My role model in life is my father and Muhammad Ali," Rezko says.
Rezko ran Jabir Muhammad's firm, Crucial Concessions. Under Mayor Washington, Crucial won the concessions to sell food at city beaches. Rezko also directed the Muhammad Ali Foundation, formed to promote Islam around the world. But Rezko was ecumenical in his associations. Daniel Mahru's Automatic Ice sold ice to Crucial, and by 1989 Rezko and Mahru, who is Jewish, had founded Rezmar Corporation, a major development company.
Rezko was bipartisan in politics as well. He financially supported Republican governors Jim Edgar and George Ryan before backing Rod Blagojevich, a Democrat, in 2002.
"Practicing politics was not an option, a choice, in Syria," Rezko says. "I found myself in Chicago. The more I got to know the system, the more I got to know the Constitution. . . . We have the best constitution in the world. There's no perfect society, no ideal country, anywhere. But I think that the chance or practice of being involved in politics helps people with vision."
Asked how he became a friend of and fundraiser for such a variety of political figures, he says, "I met with people who were running for office, some elected, some not. I always worked with people I developed chemistry with. People I liked, they liked me, so we developed a relationship."
Jay Stewart, executive director of the Better Government Association of Chicago, a watchdog group, has another view of Rezko's rise. "Historically, we are a city where you come here and make it big," Stewart says. "In business and politics and government, you can establish yourself very quickly. There are two ways you can move up. One, join the organization and play the loyal foot soldier. Two, if you have money, it happens more quickly. Money brings you access [to people in power]. Likely that is how [Rezko] got as far as he did."
Daniel Mahru was Rezko's partner in Rezmar for 16 years until the two men had, according to Mahru, "a difference of opinion" in 2005. He says they developed more than $600 million in properties, not counting a billion-dollar deal for 62 acres in the South Loop that has been stalled for years. By Mahru's account, Rezko initially showed little interest in the trappings of power. "Back in the eighties, Tony had an opportunity to go to the White House with Muhammad Ali," Mahru says. (The occasion was a dinner during the December 1987 summit of Ronald Reagan and Mikhail Gorbachev, the Soviet leader; Ali had been invited as a guest.) "I commented to Tony, ‘Wow, that is something I would love to do, see history in the making!' He said, ‘Dan, that doesn't make me any money. I'm not interested.'
"That changed. I think everything went to his head. After the late nineties he was more interested in being around powerful people. He went to a Christmas party at the Bush White House." Rezko cochaired a major fundraiser for President Bush's campaign in 2003.
Rezko declined to comment about Mahru, likening their breakup to a divorce. "You would hear my story; you would hear his story. I wish him no harm."
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If hanging around the likes of Blagojevich and Obama went to Rezko's head, as Mahru suggests, one reason might be that Rezko had befriended them before they became famous, forming bonds of loyalty from the start. The BGA's Stewart says, "I would give the guy credit for being shrewd. He would identify young up-and-comers early. Fine, Obama, he's the editor of the Harvard Law Review, but in Chicago politics, big deal, so what. But [Rezko] approached Obama. Rod Blagojevich, he's an unimportant state legislator. What distinguishes Rezko—he didn't just give money to established figures."
Rezko read a newspaper article about Obama's Law Review election and had a colleague get in touch; in 1990 Rezko offered Obama a job at Rezmar before he had graduated from Harvard Law School. Obama declined, joining a Chicago law firm instead. There he did what he has described as a minimal amount of legal work for Rezmar. Chicago Tribune reporter David Mendell, author of the recently published Obama: From Promise to Power, says, "Rezko threw an early fundraiser for Obama at his North Shore house, and that fundraiser was instrumental in providing Obama with seed money" for his U.S. Senate race in 2004.
In our conversation, Rezko was reluctant to discuss his association with Obama, except to stress that he has had no formal role in Obama's campaigns. He would not comment on Obama's real-estate deals.
Rezko met Blagojevich in 1995, when the future governor was a state representative from the Northwest Side. Rezko helped to finance Blagojevich's runs for office, in 1996 for Congress and in 2002 for governor. The Chicago Sun-Times has reported that Rezko and his family, businesses, and business associates have contributed more than $675,000 to 15 prominent Illinois politicians since 1989. That sum includes $117,652 for Blagojevich.
"What distinguishes Rezko—he didn't just give money to established figures."
Rezko became a virtual one-man headhunting firm for staffing the Blagojevich administration, sending along recommended candidates, many of whom ended up getting appointments. He recommended or had personal or business ties with people who became the heads of the state departments of employment security, central management services, commerce and economic opportunity, housing development, and the finance authority. In addition, Rezko successfully urged the appointments of three members of the teachers' retirement system, four of the health facilities planning board, and at least one member of the state board of capital development. (The U.S. attorney here has charged that Rezko schemed to pack the government with his cronies so that they could peddle their influence.)
The clout of Rezko and his associates reflects the growing political presence of Arab Americans as a group. Ray Hanania, author of Arabs of Chicagoland, estimates there are 250,000 people of Arab descent in northeastern Illinois. Hanania describes Rezko as "very personable and generous" and remembers that he was "a major donor" to the Arab American Democratic Club, which Hanania helped found in 1994. The club staged a major fundraiser in Bridgeview in September 2006 for Blagojevich's reelection.
Aside from a donation, Rezko says, "I was never involved with that. I am proud of being Arab American, don't get me wrong, but I was never involved with that [club]."
One member of the club, Khalil Shalabi, was director of project development for the Illinois Department of Human Services. He left the department in October 2006 after the state's executive inspector general alleged he had arranged fundraisers for Blagojevich on state time. (Shalabi has not been charged with a crime.) Another Blagojevich appointee, Ali D. Ata, resigned as head of the Illinois Finance Authority in March 2005 after a harshly critical state audit of his agency. Ata was indicted last May as a codefendant in the Rezko case and has pleaded not guilty.
Hanania criticizes Arab American business leaders as "a small cluster of activists, and they are all in trouble. They had a push for clout empowerment, not community empowerment—you know, a hunger for being part of the system, sharing the perks among the insiders. When you connect all the names and lines, it's going to look like a spider web."
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Today, Rezko remains free on bond, though legally confined to his Wilmette home except for daily trips to his office in the Loop. He no longer owns a second home in Lake Geneva, and LaSalle Bank initiated foreclosure proceedings on the Wilmette property, but Rezko still lives there while the matter is being litigated. When Rezko was indicted, his attorney said he had a "negative cash flow" and only $5,000 in the bank. The court ordered Rezko to file a personal financial affidavit, which remains under seal. Prosecutors have alleged that Rezko is more than $50 million in debt.
Rezko says the government's claim that he is so deep in debt is "misleading" because a developer's cash flow is "always like a roller coaster," and he remains invested in ventures that might take off. He no longer has interests in a proposed Iraqi power plant or other projects in the Middle East. Asked about any local business ventures, he says, "I am focused on my defense; I am spending more time with my family." But he acknowledges that he still is a member of the limited liability corporation with an interest in 62 acres southwest of Roosevelt Road and Clark Street. In April, the Sun-Times reported that Rezmar had received more than $100 million in government and private loans over six years to rehab 30 buildings, mostly on the South and West sides, for low-income housing, only to let the apartments deteriorate. Rezko volunteered that he takes personal offense at the Sun-Times's description of him as a slumlord: "There is nothing further from the truth than for me to be called a slumlord. There is no basis for that."
Despite his mounting troubles, he insists he is undaunted. "You don't see me crying in the corner for myself," he says. "All I can tell you, one good thing that came out of this, I have been spending much more time with my family than I did before." Rezko married his wife, Rita, a native Syrian who attended McGill University in Montreal, in 1985. The couple have three children, the oldest two in college in Illinois. Rezko has a sister here and another in Montreal. He also has brought his two brothers and many other relatives to the Chicago area. When Rezko was arraigned last fall, various friends and family secured his $2-million bond with 11 pieces of property in Chicago, Libertyville, Palatine, Orland Park, Orland Hills, and Oak Lawn.
"It's tough on the family," Rezko says, "but I know myself. I know I'm innocent." He draws strength, he says, from his late father. "He was a very, very generous man. He was well known in his community, well respected. Lots of people seek his advice and wisdom. I always wanted to carry maybe 10 percent of my father's character if I could."
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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."