Better Government Association

The next Ryan?

With a federal corruption case possibly on the horizon and his credibility in Springfield on the wane, Blagojevich is on the hot seat

May 24, 2007
BY CHRIS FUSCO AND DAVE MCKINNEY Staff Reporters/cfusco@suntimes.com dmckinney@suntimes.com

Gov. Blagojevich is on the hot seat. A newspaper report quoting law enforcement sources says his campaign fund has been subpoenaed in an ongoing criminal probe.

The governor and his aides won't confirm or deny that.

So what does it all mean?

Based on what has happened so far, quite a bit. Blagojevich is doing little to squelch speculation that federal prosecutors might make him the next George Ryan.

Authorities have been bearing down since at least September 2005, when a guilty plea in a public pension fraud case referred to the governor as "Public Official A" and two of his top fund-raisers, Tony Rezko and Christopher G. Kelly, as "two close associates," sources have told the Chicago Sun-Times.

The man who entered that plea, former national Democratic fund-raiser and Chicago lawyer Joseph Cari, said Rezko and Kelly schemed to steer lucrative state pension business to investment firms and consultants who agreed to give money to Blagojevich's campaign.

Since then, there has been ample evidence the feds are looking to build a Ryan-style corruption case against Blagojevich -- a case that likely would need to prove Blagojevich used his office to benefit himself and cheat taxpayers.

That's where a campaign fund subpoena becomes important.

In Ryan's corruption case, the feds persuaded a judge to freeze $1 million of his "Citizens for Ryan" fund before they indicted the former governor.

So if authorities now have an interest in "Friends of Blagojevich," it's a sign they want to find records that could help them build a similar case. It also signals that the probe is at the governor's doorstep and threatens to cork a supply line of cash that could help pay potential legal bills.

Last year alone, Blagojevich paid $887,534 to Winston & Strawn, prompting speculation a criminal defense might be in the works.

But the campaign fund is only one piece of a much larger investigative puzzle. Among other parts:

• • The Sun-Times in September reported that the feds are investigating two New York political fund-raising trips made by Blagojevich in 2003. The feds want to see if East Coast donors were illegally nudged ahead in line for state business.

• • In October, Rezko was indicted on fraud charges, including accusations he helped shake down a pension firm seeking state business for $1.5 million in campaign cash to Blagojevich. Rezko is denying the charges. Kelly, the other top fund-raiser mentioned in the Cari plea, hasn't been accused of a crime.

• • Rezko also has had business dealings with the governor's wife, Patti. They include her getting a nearly $50,000 real estate commission in December 2002 from a deal involving Rezko. In the next two months, the governor began giving friends of Rezko seats on influential state boards and began hiring former Rezko employees to upper-level state jobs.

• • Authorities also are probing hiring fraud. In a letter made public last year by the Illinois attorney general, U.S. Attorney Patrick Fitzgerald wrote that investigators probing job-rigging allegations "have implicated multiple state agencies" and "have developed a number of credible witnesses."

In light of past Blagojevich statements that his administration "does things right" and that he had no knowledge of Rezko's alleged wrongdoing, one might think it is in his best interest to open up about his dealings with the feds.

Early in his administration, the governor did just that. But after a string of subpoenas to state agencies kept coming, he changed his tune and said the law prevents him from discussing such matters.

The Better Government Association has since filed a lawsuit to make the documents public, but Blagojevich isn't budging.

Meanwhile, his credibility with lawmakers in Springfield is eroding.

Blagojevich entered office in 2003 repeatedly vowing to end "business as usual" in state government.

Right now, his silence is deafening.