CHICAGO - A federal jury yesterday found businessman Antoin Rezko guilty on 16 of 24 counts stemming from charges that he used his influence as an adviser and fundraiser for Illinois Gov. Rod Blagojevich to seek kickbacks in exchange for state investment business for his own benefit or to funnel into campaign coffers.
The jury reached its verdict after 13 days of deliberations following a nine-week trial before U.S. District Court Judge Amy St. Eve during which testimony arose alleging that the governor awarded a campaign contributor, Ali Ata, with the job of executive director of the newly created Illinois Finance Authority in 2004. The governor is not charged with any wrongdoing but he is referred to repeatedly in federal documents as Public Official A.
Federal authorities first announced the grand jury charges in 2006. Rezko was found guilty on charges of mail and wire fraud, aiding and abetting bribery, and money laundering. He was acquitted of attempted extortion and one of the aiding and abetting counts. The charges alleged that Rezko sought to control two state boards and sought kickbacks from firms seeking state business or regulatory approval.
Rezko's indictment marked the closest the federal probe has come to the governor, and the trial hung heavily over the atmosphere of the most recent state legislative session, during which lawmakers approved a ban on contributions to state elected officials with power over the contracts from firms with state contracts worth at least $50,000.
The Rezko case and larger federal probe, known as Operation Board Games, further touched on the public finance community. Allegations surfaced during the trial of Rezko's influence in state government appointments after the governor took office in 2003 and his possible influence on the state's $10 billion pension obligation bond sale in June 2003.
St. Eve denied a request from prosecutors to introduce evidence alleging that Rezko steered to his associates portions of an $809,000 payment Bear, Stearns & Co. made to an Illinois lobbyist after the firm was chosen to senior manage a $10 billion pension bond issue.
The now former Bear Stearns' public finance banker who hired Robert Kjellander and worked to win the top spot on the state deal for Bear Stearns, P. Nicholas Hurtgen, is facing separate extortion charges in the larger probe, stemming from his alleged participation in the shakedown of a suburban hospital.
Numerous municipal market participants said it was Rezko and another former fundraiser, Christopher Kelly, who directed bankers as to which consultants they should hire to lobby for a role in the state's POB sales. Kelly faces separate federal charges of tax evasion.
The key witness against Rezko was businessman Stuart Levine, whom Blagojevich reappointed to a state investment board and as vice chairman of the Illinois Health Facilities Planning Board, which reviews hospital construction projects. It was while on that board that he orchestrated the scheme to shake down a suburban hospital, allegedly with Hurtgen, in exchange for regulatory approval.
Late in the trial against Rezko, prosecutors announced a plea deal with former IFA head Ata, who was facing a trial in another pending case against Rezko alleging that they participated in a fraudulent business scheme. Ata, who contributed at least $50,000 to the governor's campaign, testified that the governor told him he was aware of his contributions, the he had been a good friend, and that Blagojevich hoped he would receive a job where he "could make some money."
As he campaigned for governor in 2002, Blagojevich ran on a platform of "no more business as usual." He ran as incumbent Gov. George Ryan faced a corruption trial. Blagojevich has denied that he did anything improper. The governor's office did not issue a response to the verdict before press time.
Rezko was a prominent fundraiser to both Republican and Democratic officials, including Democratic presidential contender U.S. Sen. Barack Obama, D-Ill., who also had a personal and professional relationship with Rezko.
Rezko's sentencing is scheduled for Sept. 3.