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Rezko gavel-to-gavel: Week 7

Check back several times a day for the latest Rezko trial updates from the Tribune's Bob Secter and Jeff Coen at the federal courthouse.
Click here for trial exhibits, video and past stories.

Tribune staff reporter

7:22 AM EDT, April 21, 2008

Rezko rewind. Day 27

April 21, 2008; 6:22 a.m.
For the first time since his corruption trial began in early March, Antoin "Tony" Rezko will walk into court Monday on his own. He had been deemed a flight risk in January and held in a federal jail in the Loop, but U.S. District Judge Amy St. Eve on Friday agreed to release him to home detention on a bond of $8.5 million in property and cash.

That action came after a parade of Rezko friends and relatives put up their homes as collateral to gain his release. St. Eve said she was impressed by the show of support for Rezko, adding that it was one of the highest bonds she has ever seen at the Dirksen U.S. Courthouse. And she lectured Rezko not to let down his friends and family, who stand to lose their homes if he runs.

Rezko's change in status should not be apparent to jurors, assuming they are true to their word and steering clear of media coverage of the case. Even though he up to now has been brought in and out of court each day be security guards, it never happens in the presence of the jury. By the time he enters court, he has already changed out of his orange prison suit and donned one of his own well tailored business suits.

The jury was not present for Rezko's latest bond hearing, which stretched over parts of Thursday and Friday. In another development, lawyers in the case gave St. Eve a status report on their timetables for presenting evidence and said they could be done by the end of May.

Judge makes firm point to Rezko, supporters

April 18, 2008; 3:06 p.m.
Antoin "Tony" Rezko will be allowed to go home for the first time since January after the judge in his fraud case agreed to release him on $8.5 million in property and cash.

The decision of U.S. District Judge Amy St. Eve came after the judge questioned Rezko and property owners who will put up their homes for his release. She called the bond one of the highest she has seen at the Dirksen U.S. Courthouse.

He may leave his Wilmette mansion only for the trial downtown or when the court gives him permission.

St. Eve lectured Rezko not to flee and not to let down the court and all those who put up their homes for him.

"You will leave me no choice but to foreclose on the property of each of these 30 individuals and take what is in some instances their life savings," St. Eve said.

"And I don't think you will, or I would not be releasing you today," she said.

She said the amount of family support for Rezko that she has seen during the trial swayed her, in part, to release him.

"At least one, often two benches, are filled with your family and supporters," she said.

Rezko must submit a revised financial statement next week.

The judge wanted to know where all the money went from the sale of the 62 acres as she questioned Rezko.

"I think you know how seriously I take your representations," St. Eve said.

"I sure do," Rezko answered.

The judge asked whether Rezko or any company of his still had any share of the South Loop property.

"None," Rezko answered.

Also among those St. Eve admonished Friday about what they stood to lose in the arrangement was Rezko's wife, Rita, who explained that some of the money she was putting up came from an account meant to pay tuition for the couple's two sons. The family came up with additional funds for bond when Rita Rezko downsized her car at a Lexus dealership.

"I replaced my larger car for smaller," she explained.

St. Eve asked whether Rita Rezko had any money abroad.

"I do not have any accounts overseas," she said.

Rita Rezko acknowledged the couple is in arrears on the mortgage for their Wilmette mansion. The mortgage hasn't been paid since the fall of 2006 when her husband was indicted, she said, and the issue is being handled by lawyers.

The couple will be given four months' notice if the family has to move, Rita Rezko told the judge.

Rita Rezko also agreed to be her husband's third-party custodian to ensure he abides by the conditions of his bond release.

"If you want me to be," Rita Rezko said to the judge, adding "absolutely."

Rezko to be released on bond, judge decides

April 18, 2008; 2:21 p.m.
Antoin "Tony" Rezko--a former top fundraiser and adviser to Gov. Rod Blagojevich who is on trial in federal court on fraud charges--was ordered released Friday from jail on $8 million bond by a federal judge presiding over his trial.

Rezko's lawyers proposed and the judge ordered that he be released to home detention on electronic monitors. He and his wife offered to post $350,000 in cash to ensure he would not flee. In addition, properties with a combined equity of $8 million were also be pledged to secure his bail.

Judge goes over funding details for possible bail

April 18, 2008; 1:45 p.m.
U.S. District Judge Amy St. Eve is going through the particulars of the financial arrangements that could allow defendant Antoin "Tony" Rezko to be released on bail Friday.

Thirty properties have now been posted, totaling more than $8 million in equity, attorneys say. In addition, Rezko and his wife, Rita, have written checks to the clerk of the court totaling more than $380,000.

The proposal of Rezko's defense is that he be sent to his home in Wilmette and be placed on electronic monitoring.

The $380,000 posted by the Rezkos is apparently coming from the infamous 62-acre development that Rezko has been involved in at Clark Street and Roosevelt Road in the South Loop.

St. Eve said she has questioned a lawyer for General Mediterranean Holdings, or GMH, which now controls the site, and has been told that Rezko was officially bought out in February.

Rezko's lawyer William Ziegelmueller told the court that about half of what Rezko received in that transaction will now be posted for his bond. The other half also has been documented for the court, St. Eve noted, and much of it has been used to pay Rezko's attorneys their fees.

It was the head of GMH, Nadhmi Auchi, who wired Rezko the more than $3 million that got him in trouble with St. Eve in January when it came to light. The judge decided that the court wasn't properly notified of that arrangement when she ordered Rezko detained early this year.

Trial could wrap up by end of May

April 18, 2008; 1:17 p.m.
It may be hard to believe that the Rezko trial is moving ahead of schedule, but that appears to be the case.

U.S. District Judge Amy St. Eve started her afternoon hearing with the lawyers by asking about scheduling. The attorneys said they could be done presenting evidence by the end of May.

Assistant U.S. Atty. Reid Schar told St. Eve the prosecution will call witnesses, including former attorney Steve Loren next week, and could be finished presenting evidence within a couple of weeks thereafter.

St. Eve then asked Rezko's lead lawyer, Joseph Duffy, what he thought about how long a defense case might last. A month, she asked?

"If it's a month, judge, everybody will shoot me," Duffy said.

Judge to handle issue of Rezko's release

April 18, 2008; 12:27 p.m.
Testimony has ended for the day, and U.S. District Judge Amy St. Eve has told lawyers she will take up the issue of whether Antoin "Tony" Rezko can be released on bond.

The judge still needs to question and advise a few property holders who want to put up their homes to secure Rezko's release.

St. Eve is going to handle a sentencing in another case and then get back to the question of Rezko's freedom. She has asked Rezko's lawyer William Ziegelmueller to be prepared with a figure that represents the total value of all the properties being pledged.

Rezko has been held at the Metropolitan Correctional Center in downtown Chicago since he was arrested in late-January. St. Eve rejected his explanations for a $3.5 million wire transfer he received from Lebanon in 2007. The overseas money was sent on Rezko's behalf after Rezko had told the court he had no access to funds from abroad.

Teachers' Retirement System officer takes the stand

April 18, 2008; 11:54 a.m.
Prosecutors called to the stand Scott Parrish, a private-equity investment officer for the Illinois Teachers' Retirement System when Stuart Levine and Antoin "Tony" Rezko were allegedly corrupting the state pension board and steering investments to firms in exchange for kickbacks.

Parrish is giving the jury background information on how TRS was supposed to work. He said he oversaw investments and was the initial contact for investment firms interested in doing business with TRS. He would contact fund managers and ask them to come in for meetings if TRS was interested in their investment proposal.

Jon Bauman, TRS executive director, would make recommendations to the board on proposals that the staff found to be acceptable, Parrish said. Bauman was the "final editor" of material that would be submitted to the TRS board for review.

Levine, the key prosecution witness in the case, previously explained to the jury how his control over Bauman helped Levine steer business to firms willing to pay bogus finder's fees. One such firm was Glencoe Capital. Parrish testified that Bauman asked him to contact Glencoe Capital around late-2002. Levine has already told the jury how he routed a fee for the deal through his friend Sheldon Pekin, who also has testified about the arrangement.

Assistant U.S. Atty. Carrie Hamilton asked Parrish to review the TRS questionnaire filled out by Glencoe. In the paperwork, Pekin is identified as a consultant in the deal.

No word yet on Rezko's release

April 18, 2008; 10:13 a.m.
There was no decision from U.S. District Judge Amy St. Eve Friday morning on whether Antoin "Tony" Rezko can be released on bond, and testimony has resumed.

Prosecutors have finished with investment manager Daniel Rosenberg, who had testified about arranging to give a finder's fee to someone named by Michael Winter, a Rezko associate.

Rosenberg is with Sterling Partners, a private-equity firm, and said no deal between the firm and the state Teachers' Retirement System ever was finalized in 2004.

On cross-examination, Rezko's lawyer, William Ziegelmueller, went right to a defense theme with his first questions.

To Rosenberg's knowledge, Rezko wasn't involved in the deal, right? Ziegelmueller asked "That's correct," Rosenberg said.

Rezko rewind. Day 26

April 18, 2008; 7:52 a.m.
When Antoin "Tony" Rezko tucks himself in for the night Friday, will he be sleeping in prison orange or North Shore silk?

The indicted fundraiser for Gov. Rod Blagojevich has been locked up in a federal jail since January after U.S. District Judge Amy St. Eve declared him a flight risk and revoked his bond. But St. Eve, who is presiding over Rezko's ongoing corruption trial, promised to rule Friday on a new motion by Rezko to release him to home confinement in his Wilmette mansion.

Bolstering the motion was a new round of pledges by friends and family of Rezko to allow the government to seize their homes if Rezko runs. Rezko's lawyers say some $8 million in property has now been pledged to secure his bond.

Prosecutors opposed Rezko's release, claiming that he has fleeced friends in the past and won't have any qualms about doing it again.

Meanwhile, the trial continued with the testimony of Charles Hannon, the husband of a wealthy Rezko business associate, and friend Fortunee Massuda. Hannon said his wife lent Rezko millions of dollars and Rezko once proposed a creative way of paying some of it back by making Massuda -- a podiatrist by trade -- a consultant on a proposed state real estate deal to sell the James R. Thompson Center in the Loop. Rezko and Massuda were also neighbors in a plush Lake Geneva, Wis., condominium complex.

But Hannon said his wife once paid $77,000 in property taxes on Rezko's unit after the millionaire developer fell three years behind in paying them.

19 properties offered in plea for bail

April 17, 2008; 5:55 p.m.
U.S. District Judge Amy St. Eve has taken up the renewed motion for bail, with defense attorneys telling the court that 19 properties are now being posted to boost the amount securing Rezko's possible release by $6 million.

The government opposed the move to free Rezko, Assistant U.S. Atty. Carolyn McNiven told St. Eve.

"In our view the risk of flight we have discussed previously has not diminished," McNiven said.

Even a total of $8 million in bail, which McNiven noted is "other people's money," won't deter Rezko from fleeing.

"It's a special case because of who Mr. Rezko is," she said. "He has quite literally taken millions of dollars from people he counted as his closest friends."

Rezko's lawyer, William Ziegelmueller, called the government's remarks an overstatement and said those who have come forward to volunteer to post properties have done so after speaking to Rezko.

St. Eve said she wants to speak to some of those property owners and review the value of the property before ruling on the motion Friday.

The first property owner being questioned in court late Thursday was a man who identified himself as Karem "Kevin" Razko, not to be confused with Rezko.

He told the court he has $112,000 in equity in a home in Hinsdale that he is willing to post for Rezko's bond. Rezko has done no political favors for him and owes him no money, Razko said. He identified Rezko as "my father's cousin."

"I consider him as a friend," Razko said.

If Rezko fled, St. Eve told Razko she would order his house seized. Razko said he understands the risk and was willing to go forward.

Next up, Kinda Rezko, who lives on Chicago's North Side. She said she has more than $60,000 in equity in her home and is willing to post it for Rezko. "He's my father's cousin," she said.

Investment manager on the stand

April 17, 2008; 5:22 p.m.
Before the trial ended for the day, prosecutors called to the stand Daniel Rosenberg, an investment manager for the private equity firm of Sterling Partners.

Sterling sought funds from the state Teachers' Retirement System in early 2004 during a meeting with Rezko associate Mike Winter, said Rosenberg, who acted as an introductory agent or finder on the potential deal.

Rosenberg said Winter delayed in giving him the name of a business that could be listed as a finder. Eventually, Winter provided the name of Myron Cherry, Winter's lawyer who had ties to Rezko.

Earlier, Charles Hannon wrapped up his testimony. Assistant U.S. Atty. Reid Schar zeroed in on a conversation in which Hannon said he was told by Rezko that he believed that finder's fees of the kind at the center of the case were legal and were "how the State of Illinois does business."

Rezko told him "this was a legitimate business," Hannon repeated. Hannon said he recognized the fees involved a "shocking amount of money."

Schar also asked about the Lake Geneva condo that Hannon said he and his wife own. Rezko had a unit in the complex, too, he said, and his wife, Fortunee Massuda, once paid three years in taxes on Rezko's place. The payout totaled $77,000, he said.

Talk of finder's fees

April 17, 2008; 3:48 p.m.
Rezko's lawyer, Joseph Duffy, has asked Charles Hannon about conversations he had with Rezko in 2003 when Hannon apparently asked Rezko about finding work with the state.

Hannon said Rezko had told him about finder's fees for placing state money. Hannon recalled Rezko telling him that such arrangements were legal.

Duffy asked whether Rezko told Hannon the process was "totally transparent" because contracts had to be filed to collect the fees. Hannon said that was correct.

Hannon said he remembered telling his friend he might like to be involved in that.

"If something comes up, I'd be interested," Hannon remembered saying.

Prosecutors have alleged that the finder's fees were bogus and used as a conduit to kick back money to Levine and Rezko.

As testimony proceeded this afternoon, Rezko appeared to be in a particularly upbeat mood. He could be seen doodling pictures of the sketch artists who have been drawing him for weeks.

Witness' relationship with Rezko explored

April 17, 2008; 3:11 p.m.
Charles Hannon, Rezko's friend and business associate, is still on the witness stand. Rezko's lawyer, Joseph Duffy, is exploring Hannon's relationship with Stuart Levine, the government's star witness.

Hannon described how Levine pushed the arrangement to have Hannon accept a bogus finder's fee when the state Teachers' Retirement System made a large investment with JER Partners, a private equity firm.

Levine, who was a member of the board of TRS and the Illinois Health Facilities Planning Board, was at a "celebratory dinner" at Hannon's home in 2002, Hannon said. The dinner was organized after Levine and other members of the hospital regulatory panel pushed through approval of a clinic that Hannon's wife, Fortunee Massuda, planned to open.

Levine has testified that he first met Rezko at this dinner.

"I understand you serve good wine," Duffy quipped.

"Right," Hannon said.

Hannon testified the dinner was the first time he spent time with Levine.

Duffy asked if Hannon was impressed with him.

"We were impressed with him by reputation before that," Hannon said.

Duffy, who for seven days had questioned Levine about his various scams and drug abuse, asked Hannon if he knew Levine to be a "wheeler-dealer."

"I could be guilty of that, yes," Hannon said.

Hannon said he had occasional conversations with Levine in early 2003 about his wife's clinic in the Scholl building, which was then owned by the Rosalind Franklin University of Medicine and Science. Levine sat on the school's board.

By 2004, Hannon said he and Levine had discussed business but described the relationship as "superficial."

Hannon and Duffy went around in circles over the name of the Rosalind Franklin school. It was named for a noted biophysicist who studied DNA structure.

Duffy has misstated the name as "Franklin Rosalind," and this afternoon Hannon called it the Rosalind Russell school, using the name of the late film actress best known for playing Auntie Mame.

Motion for bond is entered

April 17, 2008; 1:39 p.m.
Antoin "Tony" Rezko's new motion for bond has appeared on the court docket in his case and calls for his release to home detention and the posting of $8 million in property.

Rezko would be released into the custody of his wife, the filing states, and notes the couple would put up $350,000 in cash if Rezko is allowed to leave the Metropolitan Correctional Center, a federal jail in the South Loop.

"The Defendant now proposes that the Court release Mr. Rezko subject to any set of conditions the Court sees fit to impose," the filing states.

Which properties would be posted isn't revealed in the defense filing. U.S. District Judge Amy St. Eve has alerted the lawyers that she expects to take up a motion at the end of court Thursday.

Defense makes issue of witness' memory

April 17, 2008; 1:18 p.m.
Antoin "Tony" Rezko's lawyer, Joseph Duffy, is attacking Charles Hannon's credibility with questions suggesting that his memory is faulty and that he briefly took medicine for Alzheimer's disease.

Under questioning from prosecutors, Hannon had testified that Rezko was in the thick of attempts in the spring of 2004 to use Hannon as a straw consultant on a state pension investment deal. Prosecutors say Rezko tried to rig the $85 million deal with equity management firm JER Partners to illegally siphon off an $800,000 finder's fee.

But Duffy pointed out that Hannon could not remember JER when FBI agents came to his home in late-2004 to ask him about it.

Hannon, 72, said he visited a neurologist in the spring of 2005 after a bout of forgetfulness, and the doctor said it was a normal sign of aging. Even so, the doctor prescribed a medicine typically used by Alzheimer's patients. Hannon said he took it once, found it not to be helpful and stopped. But Hannon said he believed he did not have significant memory problems.

Duffy asked Hannon if he remembered that his lawyer had informed prosecutors about the Alzheimer's medication when they interviewed him in 2005.

"He may have," Hannon said. "I don't have a direct recollection of that."

As to Hannon's memories of Rezko, Duffy suggested they seemed to be getting better over time. And Duffy insinuated that Hannon's lawyer may have helped plant some notions in his client's head about Rezko. Duffy pointed out that the lawyer also represented Hannon's wife in a lawsuit against Rezko seeking the repayment of millions of dollars in loans.

Duffy's questions also made it clear that Hannon was a bit of a character. Hannon said he married Massuda in "1990 or 1991."

"Don't worry, I won't tell your wife," Duffy told him, referring to Hannon's inability to pinpoint the year.

"I'll get her a present," Hannon said.

Hannon said he was president of the Adventurer's Club, a travel group founded in 1911 by former President Theodore Roosevelt. With the group, he traveled the globe frequently.

"I started climbing mountains at 65," he said.

Hannon and Massuda own a spectacular mansion on Lake Michigan in Winnetka that they call Casa del Lago, as well as a condo at the John Hancock Building in Chicago and another condo in Lake Geneva, Wis., in a building where Rezko also owns a condo.

Hannon highlights all three residences on his personal stationery, which also is adorned with his family coat of arms.

"It's an Irish custom," he explained to Duffy, who is also of Irish ancestry.

"Somewhere along the line they forgot to tell me," the lawyer responded.

Husband of ex-hospital board member on the stand

April 17, 2008; 11:47 a.m.
Now on the stand is Charles Hannon, a retired Winnetka travel agent who is the husband of podiatrist Fortunee Massuda. She is a former member of a state hospital board corrupted by star prosecution witness Stuart Levine. Rezko had arranged for her appointment to that board.

Hannon and Massuda were longtime friends and business associates of Rezko, and Hannon said they had loaned him $7 million at one point and even paid his property taxes on a condo he owned. By 2004, Rezko had paid back only half the money.

We'll get to the narrative in a bit, but first let's highlight some glimpses that Hannon gave into Rezko's personality.

Hannon owned a building next to Rezko's North Side office and would drop in to chat with Rezko with some regularity.

In mid-2003, as Rezko was becoming increasingly involved in the Blagojevich administration, Hannon said Rezko told him during one of those conversations that he from time to time would have his office phones checked to see if they were tapped.

Then, at a party at Rezko's house in the summer of 2003, Hannon said Rezko asked him if he realized that if he carried a cell phone, outsiders could listen to his conversations even if the phone was turned off. "He told me the way to deal with that was to take the battery out," Hannon said. "He took the battery out of his cell phone."

Such testimony from Hannon could prove important to prosecutors as they seek to bolster the sometimes shaky earlier testimony of their star witness, Stuart Levine, who said he had conspired with Rezko to rig state boards in exchange for kickbacks. Prosecutors played numerous wiretap conversations of Levine earlier in the trial, but very few involved Rezko.

Levine claimed he rarely talked to Rezko on the phone because Rezko had told him he didn't want to discuss business on the phone, only in person. Rezko's lawyers have painted Levine as a consummate liar, but Hannon's assertion could bolster his credibility in the minds of jurors.

Hannon's testimony could also undermine another defense argument--that Levine was the sole mastermind of any shakedown schemes and was trying to frame Rezko to please prosecutors as part of a plea deal.

In 2003, as the Blagojevich administration was contemplating the sale of the Thompson Center in the Loop, Rezko asked Hannon's wife if she would be interested in becoming a consultant on the deal, Hannon testified. He said Rezko made clear that any fees she would earn in the sale of the state building would go toward satisfying his debt to Hannon and Massuda, Hannon testified. Massuda declined to become involved, her husband said.

Hannon also put Rezko at the center of a state pension investment deal that prosecutors contend was a shakedown. The deal involved JER Partners, a Virginia-based equity management firm seeking $85 million from a state teacher's retirement fund.

It was Rezko who first asked Hannon about becoming involved in the deal, said Hannon, adding that he had several subsequent discussions with Rezko about it.

Prosecutors claim Rezko and Levine brought Hannon in as a phony consultant to help them siphon $800,000 in finder's fees from the deal. Rezko told Hannon that his cut of the fee would be 10 percent, or $80,000, Hannon testified.

Defense attorneys preparing motion for release

April 17, 2008; 10:25 a.m.
It has been a busy morning, and the jury hasn't even been seated yet. Antoin "Tony" Rezko's lawyers announced they were preparing a renewed motion to ask U.S. District Judge Amy St. Eve to release their client on bond.

That followed the secret, early morning court session that was moved to a corner of the courtroom and out of earshot of a Tribune reporter who showed up anyway.

Rezko lawyer Bill Ziegelmueller made an offhand reference to that at the start of Thursday's regular court session as he greeted St. Eve with "good evening, your honor."

St. Eve revoked Rezko's bond in January after it was discovered he had received a $3.5 million wire transfer from Lebanon. St. Eve deemed him a flight risk.

Prosecutors also won a small victory as St. Eve ruled that they can recall an FBI agent to the stand even though he had been questioned earlier in the case. Government lawyers want to use testimony from Agent Daniel Cain to blunt defense assertions that federal agents lost trust in prosecution star witness Stuart Levine and stopped using him in undercover criminal investigations.

Mysterious early morning activity

April 17, 2008; 8:39 a.m.
Attorneys for Antoin "Tony" Rezko made a renewed push to have him released on bond during his trial at a secret hearing in U.S. District Court on Thursday morning.

The unannounced proceeding began at 7 a.m., but was quickly moved to sidebar after lawyers in the case and U.S. District Judge Amy St. Eve caught sight of a Tribune reporter in the gallery.

Little could be heard from the whispered session that followed. St. Eve spoke with Rezko lawyer William Ziegelmueller, a representative of the U.S. attorney's office and a probation officer. A court reporter took notes.

At 7:15 a.m. a couple who appeared to be friends or associates of Rezko apparently were admonished about posting property for Rezko's release. They could be seen being asked by St. Eve to raise their right hands to be sworn.

A few moments later, a man in a suit and another woman were questioned by the judge in the same way.

No announcement was made when St. Eve left the room before 8 a.m.

It was unclear whether St. Eve would make a public statement sometime this morning or if her decision would be made known another way.

Perhaps nothing will be known until later in the day, when Rezko either leaves court or remains in custody. He was not present at the hearing.

He has been in custody since earlier this year when the government raised questions about the movement of some of his funds. St. Eve was unhappy about an overseas transfer made to him that was not disclosed to the court.

Rezko's wife, Rita, also was present and spoke with some of those who apparently were being asked to post property.

One man who declined to give his name as he left court said he is considering posting property for Rezko's bond but had not made a final decision. He described himself as a friend of Rezko's and said he had not been told by the judge when she might decide on the matter.

Rezko's lawyers have previously suggested to the court that they could increase the amount of property being posted or even have a private security detail that would report to St. Eve posted in Rezko's Wilmette home.

Lead lawyer Joseph Duffy, who was not in court, has complained of having trouble preparing for trial with Rezko incarcerated at the Metropolitan Correctional Center in downtown Chicago.

Ziegelmueller declined to comment as he stepped out of court.

"Just another day at the office," was all he would say.

Firm's strategy was to reach out to people with TRS contacts

April 16, 2008; 5:21 p.m.
The trial ended for the day with Clyde Robinson, director of investor relations for JER Partners, on cross-examination. The defense began by asking about Robinson's contact with Rezko in JER's dealings with the Teachers' Retirement System or, more specifically, the lack thereof.

"In the entire series of events that you've testified to today, the name Tony Rezko never came up?" asked Rezko lawyer William Ziegelmueller.

"That is correct," Robinson said.

Ziegelmueller then walked Robinson through part of a TRS questionnaire that JER had filled out before getting its investment from the pension system. One item on the document asked if JER had a placement agent for its deal, and JER had identified a finder that apparently had nothing to do with Rezko or Levine--Atlantic-Pacific Capital.

Robinson agreed that the structure of the question signaled it would be acceptable to TRS if there were more than one finder and also that a finder could be paid for simply maintaining a relationship with TRS.

Robinson also agreed that JER would pay the placement agent out of its own funds, meaning TRS would not pay the fee directly. The insinuation was that there was no detriment to TRS from any fraudulent payment of such a fee.

Ziegelmueller also asked about an action plan that Robinson told the jury about under questioning from Assistant U.S. Atty. Carrie Hamilton. Robinson had said that JER had a strategic plan to reach out to people in Illinois who had relationships with TRS board members.

The idea was to find those with existing relationships with TRS leaders in the hope of eventually bringing in an investment, Robinson said. For example, Robinson said, he was tasked with calling David Wilhelm because JER was aware Wilhelm knew Stuart Levine, who was then on the pension board.

"You have a much better chance of success if you have a friend make the introduction?" Ziegelmueller asked.

"Correct," Robinson said.

JER had a number of individuals working on its behalf to make contacts at TRS, including Illinois Comptroller Dan Hynes, Robinson said.

As the lawyers were breaking up for the day, prosecutors announced that the first witness Thursday morning will be Chuck Hannon, a Rezko business associate who allegedly agreed to accept the bogus finder's fee that Levine was attempting to obtain from JER.

Investment firm received contract from Caribbean

April 16, 2008; 4:04 p.m.
An official with JER Partners, a real estate investment firm in Virginia, is testifying about how, as part of its efforts to land a state pension deal, a mysterious "consultant" contacted the firm for a fee in May 2004.

JER is one of several investment firms in the case allegedly hit up to pay a bogus finder's fee in return for state business. Star government witness Stuart Levine has told the jury that Antoin "Tony" Rezko was aware of the corrupt effort and had chosen a business associate named Chuck Hannon to take in the fee.

Clyde Robinson, who is director of investor relations for JER, said he returned a call left with JER on behalf of Hannon. A caller named Bill McCullom had left a message saying he had been brought in on JER's behalf as part of the effort to obtain funds from the Teachers' Retirement System.

Robinson said he had never heard that name before and called to try to explain to McCullom that JER wasn't aware of any such arrangement.

"There was an odd beep that kept on going on during the call," Robinson said. "It sounded as if this phone call was being recorded."

The name of the consultant provided to JER was "Emerald Star International," Robinson said. Prosecutors have said Hannon routed the payment he was going to get to another associate in the Turks and Caicos Islands. It was from that Caribbean location that JER received a proposed contract for consulting, Robinson said.

"I thought that was interesting and strange," he testified.

Robinson said he and JER principal Debbie Harmon later took a call from Joseph Cari about the consulting contract. Cari indicated that if the contract wasn't signed, JER's proposed deal with TRS would be "yanked" from the board's agenda.

Robinson said Harmon reacted with bewilderment and told Cari that the consulting contract came as a surprise. Cari said on the call that he was "close to the governor" and this was "how the governor handles patronage," Robinson said.

Cari was clearly lying about being close to the governor. He testified this week that he had met the governor only a couple of times.

Robinson said it was the first time JER had experienced anything like that kind of pressure on the political front.

The payment was never made by JER when it finally did receive funds to invest by TRS.

Democratic insider ends testimony about offers of state deals

April 16, 2008; 2:33 p.m.
Joseph Cari, a former national Democratic Party fundraiser, has left the stand after a quick flurry of questions from both sides at the Antoin "Tony" Rezko trial.

When Assistant U.S. Atty. Reid Schar had a chance to question Cari again, he went right back to a meeting with Rezko that Cari had testified about Tuesday.

Cari had told the jury how he met with Chris Kelly, a major fundraiser for Gov. Rod Blagojevich, over lunch and that Kelly had offered him state business and contracts if he would help Blagojevich raise money on a national scale.

Cari told Schar he didn't think the conversation was appropriate and said he told one of his office assistants how he felt when he returned from the meeting.

"I felt like I needed to take a shower," Cari testified.

That raised the ire of Rezko's attorney, Joseph Duffy, who went back over Cari's failure to call his longtime friend David Wilhelm or others in the administration about the pressure being put on him.

Wilhelm, a Democratic heavyweight, was helping to lead the Blagojevich transition team in early 2004.

"He was so close to the governor, and did you ever call and say what was going on?" Duffy shouted.

Cari said that he did not.

Witness admits not complaining about pressure from insiders

April 16, 2008; 11:05 a.m.
Defense attorney Joseph Duffy has been walking Joseph Cari, a former national Democratic Party fundraiser, down memory lane about several conversations he had with Stuart Levine in 2003 and 2004, mostly concerning pension investments and deals.

Before breaking for lunch, Duffy signaled he was nearing the end of his questioning of Cari. And one subject Duffy has trod lightly on is Cari's interaction with Rezko, who after all is the defendant in this trial.

Under questioning from prosecutors Tuesday, Cari said he met with Rezko just once in early 2004. Cari said that at the meeting in Rezko's office, Rezko made it clear he had the power to award contracts and get consultants hired in Gov. Rod Blagojevich's administration and controlled the governor's chief of staff, Lon Monk.

Rezko then picked up the phone and called Monk, just to illustrate the point, Cari testified.

And then Cari said Rezko pitched him on the notion of helping establish a national fundraising operation for the politically ambitious Blagojevich, dangling the promise of taxpayer-funded state business as an enticement.

Though that testimony would seem to bolster the government's argument that Rezko was quite willing to misuse his considerable clout with Blagojevich, Duffy has asked Cari few questions about it.

Instead, Duffy has focused almost exclusively on Cari's contacts with Levine. That fits with the defense theory that Levine is the mastermind behind any criminal activity involved in this case.

Cari said that as one pension deal Levine was trying to broker appeared to get stuck, Levine became increasingly "menacing" and even raised his voice on a few occasions when he visited Cari's law office.

Duffy asked Cari if he called Rezko or anyone else high up in the Blagojevich administration to complain about Levine and Cari said "no."

Defense again painting Rezko as victim

April 16, 2008; 11:05 a.m.
One theme hammered over and over again by the defense team for Antoin "Tony" Rezko is that he is the victim of prosecution star witness Stuart Levine, the big-talking, drug-snorting political fixer who tried to inflate his own importance by throwing around Rezko's name with abandon.

Rezko's lawyer, Joseph Duffy, is pursuing that line again this morning as he continues his cross-examination of Joseph Cari, a former national Democratic party fundraiser.

Cari testified Tuesday that he was pressed by Rezko, Gov. Rod Blagojevich and others to join Blagojevich's fundraising team and was offered his pick of plum state contracts or business if he'd comply.

But Duffy's questions of Cari have made it clear that most of his contacts about fundraising or other matters involving administration business were with Levine, a member of a state pension panel who helped an equity firm tied to Cari obtain large investments from pension funds.

It was in September 2003 that Cari said he met with Levine, who asked him questions about putting together a national fundraising operation and then took notes on index cards. Cari said Levine mentioned his ties to Rezko and claimed the two had known each other for years and participated in several business transactions. Neither claim was true.

At another meeting a month later, Cari said Levine went on and on about the private plane he owned. That also was not true. Levine leased a plane.

Rezko rewind. Day 24

April 16, 2008; 8:11 a.m.
Bye-Bye Stu Levine, hello Joe Cari and uh-oh Rod Blagojevich.

It was a newsy and transitional day of testimony at the Antoin "Tony" Rezko corruption trial Tuesday. Prosecution star witness Stuart Levine was finally dismissed after 15 days of testimony, and there couldn't have been many in the courtroom who were sad to see him go.

Levine was a shaky and largely unsympathetic witness with a foggy memory and a long history of drug abuse, a serial schemer with an admitted proclivity for deceit.

Rezko lawyer Joseph Duffy spent days assaulting Levine's credibility and motives for claiming that he and Rezko cooked up schemes to extort kickbacks off the decisions of state boards.

Levine was followed to the stand by former national Democratic Party finance official Joe Cari, who like Levine has pleaded guilty in the case and is testifying against Rezko as part of a plea deal.

As a witness, Cari appeared as the anti-Levine, focused, clear-headed and with a firm grasp of details and facts. His credibility will be much harder for Duffy to attack.

Cari sought state pension fund investments for an equity management firm he ran as well as another firm tied to a business associate, but he testified that Levine, as well as Rezko and others in Blagojevich's inner circle were more interested in his fundraising prowess than his investment acumen. Cari said that in the early years of Blagojevich's first term, they increasingly sought to turn up the heat on him to head up a national fundraising effort for the governor as a prelude to a presidential run.

Cari, then a recent widower still in mourning for his wife, said he didn't feel up to the task and repeatedly said "no." But he said the Blagojevich crowd didn't like that answer, and the governor himself was part of the hard sell. In late October 2003, Cari said he found himself alone with Blagojevich for part of a ride on a private jet to a New York fundraiser, and it was there that the governor offered him his pick of contracts or state business as a carrot.

"There were contracts, legal work, investment banking work and consulting work to be awarded to people who helped. . . ." Cari said Blagojevich told him, suggesting that the governor was quite willing to swap state services for political donations. An aide to Blagojevich on Tuesday dismissed the claim as "absurd" and insisted the conversation never took place. For complete coverage of Tuesday's testimony click here.

'This is the way in Illinois that it's done'

April 15, 2008; 5:31 p.m.
Joseph Cari ended his direct questioning by government lawyers by talking about his involvement with JER Partners of Virginia and Stuart Levine's push to have JER hire a consultant that Illinois political powers wanted hired.

Cari said he was a go-between for one of his partners at HealthPoint and tried to follow Levine's orders to have a finder's fee paid on an $80 million allocation for JER from the Illinois Teachers' Retirement System.

When the arrangement was delayed, Cari said, he spoke to a JER executive who was shepherding the TRS deal and told her what Levine had communicated to him. If JER didn't hire the consultant that had been named, the allocation would be pulled.

"I unequivocally told her that," Cari testified.

The governor and the people around him selected law firms, investment firms and consultants that were used in such arrangements, Cari said he told the executive.

"This has been the history of Illinois and this is the way in Illinois that it's done," he said.

Levine has testified that Antoin "Tony" Rezko selected a business associate to receive the finder's fee and that the associate had directed the payment to go through another person outside the U.S.

Cari said he learned some of that information in a subsequent meeting with Levine in Cari's office when lawyers for JER were on a conference call about the finder's fee.

One of the lawyers told him that JER had never met the consultant, and in fact the company had just gotten the consulting contract delivered by fax "from somewhere in the Caribbean."

At that point, Cari said, he advised the JER lawyers to advise their client as they wished and hung up the phone.

Cari was cross-examined briefly by Rezko lawyer Joseph Duffy before the trial ended for the day. Duffy asked Cari who had set up the meeting he had with Rezko, and Cary said Levine did.

So it was Levine who insisted on the meeting? Duffy asked.

"Absolutely," Cari said.

"Neither you nor Mr. Rezko had any interest getting together?" Duffy asked, and Cari said that was correct.

Cari's law firm, Ungaretti & Harris in Chicago, has had business with the City of Chicago over the years, Duffy pointed out, and has made political contributions in the city. Duffy asked whether there was anything inappropriate about that.

"No, sir," Cari said.

Cari says he was pushed hard to help Blagojevich

April 15, 2008; 4:40 p.m.
Joseph Cari has testified about subsequent meetings he had in 2004 with Antoin "Tony" Rezko and Christopher Kelly in which both indicated they would like his help organizing a national fundraising apparatus for Gov. Rod Blagojevich.

Cari said he met with Stuart Levine at Rezko's office in January that year. Rezko said he had the power to award contracts and get consultants hired through the governor's then-chief of staff, Lon Monk, Cari said.

"Mr. Monk took direction from [Rezko]," Cari told the jury.

Rezko illustrated his clout by picking up the phone and apparently calling Monk in front of him, Cari said.

Assistant U.S. Atty. Reid Schar then asked Cari, who was a managing director at an investment firm known as HealthPoint, what Rezko told him he could do for him.

"Legal work or help for HealthPoint," Cari said. "Things like that that would be helpful to me."

And what did Rezko ask in return? Schar queried.

"To raise money for the governor, nationally," Cari said.

Cari said he again told the men he was in no position to do that because of his personal woes. A few months later, Cari said, he met Kelly at a restaurant. Kelly was sitting at a table with two cell phones.

After finishing a conversation on one of the phones, Kelly again asked Cari for help on national fundraising for the governor, Cari said.

"Kelly pushed me pretty hard and said to me this would be pretty good for me," Cari testified. "I could have whatever I wanted, but they needed help nationally to raise money." Cari said whatever he wanted included legal work, consulting work or pension work with Illinois.

"I just said no," he said.

Cari said that at the time he was still meeting with Levine about getting HealthPoint pension business from Illinois. Levine told him he would need to hire a consultant. He told Levine he would do so, Cari testified.

"It was clear to me at this point if a consultant wasn't used, there would not be an opportunity to be successful with any of the state pension boards," Cari said.

Ex-fundraiser tells of candid conversation with Blagojevich

April 15, 2008; 4:10 p.m.
Former Democratic fundraiser Joseph Cari testified Tuesday afternoon about a 2003 fundraising trip he took to New York with Gov. Rod Blagojevich, offering some of the most damaging testimony for the governor to emerge from the trial of his fundraiser Antoin "Tony" Rezko.

Cari said the governor told him that he thought it would be easy to raise money for a presidential run because a governor had the ability to raise money by handing out contracts and state business.

Cari said his conversation with Blagojevich took place on a private plane arranged by Stuart Levine, the star witness in the case against Rezko who finished lengthy testimony earlier Tuesday.

Blagojevich told him how happy he was to be governor, Cari said, "but also that he had aspirations beyond the governorship."

Cari said he discussed with Blagojevich why former President Bill Clinton had been successful running for the office as a sitting governor in Arkansas. Blagojevich told him that it was easier for a governor to make a run than a senator "because a governor had the ability to award contracts," Cari said. "It was easier to obtain contributions."

Blagojevich then told Cari that Rezko and his fellow fundraiser Christopher Kelly were the two people he trusted the most.

"They were going to be the key people in his public-service career, wherever it went," Cari said.

The governor told him there were contracts and investment banking business "to give to people who helped them," Cari said. Cari told the jury that he understood "them" to mean "Governor Blagojevich and the people around him."

Cari said he told the governor he was not in a position to help because his wife had just died.

In response to a question by Assistant U.S. Atty. Reid Schar, Cari said he was surprised by the governor's remarks in part because he did not know Blagojevich well.

Schar asked if he would expect that those were the kinds of things the governor might say to a close confidant, Cari said, "Absolutely."

Blagojevich representatives have repeatedly denied that such a conversation took place and contend that the governor does not conduct business that way.

Judge contemplating idea of FBI agent's testimony

April 15, 2008; 1:03 p.m.
The government's plan to next call FBI Agent Daniel Cain to the stand is on hold after U.S. District Judge Amy St. Eve said she needs time to consider the move.

Prosecutors told the judge they want to call Cain to rehabilitate star witness Stuart Levine, particularly in the area of Levine's undercover work for the government.

Under cross-examination, Levine was asked a series of questions by Antoin "Tony" Rezko's lawyer, Joseph Duffy, about Levine's failure to record a conversation with former Chicago Ald. William Singer in which he tried to coax Singer to talk about a kickback.

The recording equipment apparently failed, and Duffy used the topic to suggest that Levine could have purposely shut off the equipment. Part of his line of questioning was to ask Levine whether the government had ever used him to do another secret recording, and Levine was uncertain.

Prosecutor Christopher Niewoehner told St. Eve he wanted to call Cain to tell the jury that Levine was asked to do other recordings and that the FBI had concluded Levine did not intentionally turn off the main recording device.

St. Eve said she was not certain whether the government should be allowed to call Cain now or during its rebuttal case at the end of the trial.

With Cain not immediately taking the stand, prosecutors are expected to call Joseph Cari, a lawyer and former finance chairman for the Democratic National Committee. Cari is expected to testify about his dealings with Levine on behalf of an investment house and a fundraising trip he took with Gov. Rod Blagojevich.

As court started Tuesday afternoon, St. Eve and the lawyers in the case were in a sidebar with Cari and his attorney, Scott Lassar, a former U.S. attorney in Chicago.

"And of course we know you wouldn't lie, would you, sir?"

April 15, 2008; 1:03 p.m.
Prosecution witness Stuart Levine's marathon of testimony appears to be winding to a close after 15 days on the stand. Antoin "Tony" Rezko's lawyer, Joseph Duffy, finished his cross-examination of Levine at noon, ending it with the same indignant flourish that has highlighted most of Duffy's questions for more than a week.

Wrapping up his questions, Duffy pounded away at the suggestion that Levine invented much of his testimony about conspiring with Rezko to rig decisions of two state boards in order to win a sentencing deal from prosecutors as well as their help in battling several civil lawsuits filed against him.

One of those suits was filed against Levine by the Teachers' Retirement System, the state pension board on which Levine once sat.

"Did you ask for any assistance from the U.S. government in getting that lawsuit stayed?" Duffy asked.

"No," replied Levine.

Duffy also asked Levine about a lawsuit filed against him in 2006 by Harris Bank, demanding payment on a $3 million loan it had made to Levine. After the suit was filed, Levine apparently filed a response in court contending that the bank had illegally received funds from TRS.

Under questioning, Levine acknowledged that assertion was incorrect. But in another of those maddening inconsistencies that have characterized much of his testimony, Levine refused to say the assertion was a lie.

"And of course we know you wouldn't lie, would you, sir?" Duffy asked with a sneer.

"Not in this courtroom, Mr. Duffy," Levine answered emphatically.

Duffy ended by asking Levine about the legal peril he had faced if he had not entered into a plea agreement with prosecutors. Under federal sentencing guidelines, Levine would have faced life in prison if convicted of the many crimes with which he had been charged.

The plea deal reduced that to a little more than a 5 ½-year prison sentence in exchange for his cooperation.

Duffy then went round and round with Levine, trying to get him to say that he was desperate to please prosecutors so as to not undermine the plea deal. Levine wouldn't bite.

"Yes or no, Mr. Levine, you are sitting in this courtroom testifying here so you can end up with a sentence of 67 months?" Duffy asked.

"I don't know the answer to that, Mr. Duffy," Levine said.

"All right, nothing further," Duffy said indignantly, tucking a folder under his arm and marching back to the defense table where Rezko is seated.

Prosecutors took yet another turn at questioning Levine, their star witness, but finished up quickly. Duffy followed up with a few more questions before Levine was excused from the witness stand, his testimony finally at an end.

Witness disputes tape transcript on fundraising idea

April 15, 2008; 11:25 a.m.
A day after Democratic presidential contender Barack Obama was mentioned at the trial of Antoin "Tony" Rezko, the name of President Bush was invoked Tuesday morning as Rezko's lawyer, Joseph Duffy, sought to deflect allegations of misconduct away from Rezko.

Duffy asked prosecution star witness Stuart Levine about a prestigious appointment Bush handed him in April 2004 to the board of the U.S. Holocaust Memorial Museum, the Washington museum commemorating the Jewish Holocaust.

Levine was recommended for the nomination by Robert Kjellander, the longtime Republican national committeeman from Illinois who had worked with Levine on several business deals.

The appointment was announced around the same time that Levine and Kjellander had talked about Levine raising $100,000 for Bush's 2004 re-election campaign. Duffy pressed Levine to connect the two.

"In return for that recommendation, you were asked, were you not, to raise $100,000 for President Bush's re-election campaign?" Duffy asked.

"Absolutely not," Levine insisted.

Duffy pressed on, showing Levine a transcript of one of his many interviews with government agents in which he had said that the fundraising was discussed with Kjellander before the appointment.

"Do you recall telling the government Kjellander had asked for help in raising money for the president's campaign?" Duffy asked.

Levine acknowledged that is what the transcript said, but he claimed the reality was the other way around. It was he, not Kjellander, who brought up the notion of raising $100,000 for Bush, Levine said.

Bush announced the appointment as FBI agents were in the thick of investigating Levine and had tapped his phone. Levine ultimately never served on the Holocaust museum panel.

Rezko rewind. Day 23

April 15, 2008; 8:11 a.m.
Democratic presidential contender Barack Obama's name came up again at the Antoin "Tony" Rezko corruption trial Monday.

For a change, Rod Blagojevich's didn't.

So who seemed to be paying close attention to the developments? The governor who consistently has claimed he isn't following the trial because it has nothing to do with him.

Here's the back story. Rezko, of course, was a longtime political fundraiser for both Obama and Blagojevich, though the corruption charges Rezko is now facing involve his role as an influential adviser to the governor. Prosecution star witness Stuart Levine testified that he attended a party in Rezko's Wilmette house in April 2004 for Nadhmi Auchi, a controversial British billionaire.

Rezko was trolling for investment capital for a South Loop development, and the party was part of his campaign to get Auchi to invest. Levine said guests at the party included Obama and his wife.

At the time, Obama was a freshly minted Democratic nominee for the U.S. Senate and riding a crest of national publicity. Though not flatly disputing Levine's account, an aide to Obama said neither the senator nor his wife has any recollection of being at the party or ever meeting Auchi, who ultimately did take a stake in Rezko's project.

As for Blagojevich, Levine said he was not at the Rezko party, although his lieutenant governor, Pat Quinn, was. Quinn, a self-styled reformer, has been distancing himself from Blagojevich of late, but Blagojevich was quick to note Monday that it was Quinn's name on Levine's lips Monday.

Up to now, Blagojevich has batted away questions about the Rezko trial by insisting he has paid no attention to it. For complete coverage of Monday's Obama story click here, and for the Quinn story click here.

Conversation with power broker examined

April 14, 2008; 6:01 p.m.
The trial ended for the day with defense attorney Joseph Duffy and star witness Stuart Levine talking past each other as the lawyer tried to pin Levine down on what was going on in a conversation he had in 2004 with Republican power broker William Cellini.

The topic was the attempted extortion of movie producer Tom Rosenberg, a principal in Capri Capital who was threatening to go to authorities. Rosenberg had been given the choice to either pay Levine a finder's fee on a large contract Capri was to get with the Teachers' Retirement System or make a $1.5 million campaign contribution to Gov. Rod Blagojevich.

Duffy was trying to get at the reaction Cellini and Levine had after Rosenberg said he would blow the whistle. The two allegedly backed off the extortion attempt. Duffy asked whether in May 2004, Levine and Cellini would have wanted "a spotlight" shone on their TRS activities.

Levine had a very hard time answering "yes" or "no," as Duffy demanded.

Eventually, he said no, that he would not have wanted a spotlight to illuminate his own dealings. However, he kept trying to give narrative answers on Cellini, but Duffy would cut him off. If Duffy would rephrase the question, Levine said, maybe that would help.

"Thank you," Duffy said.

"You're welcome," Levine shot back.

Still, Levine had trouble giving a yes or no answer. He repeatedly tried to parse words in a transcript of the call.

"[Cellini] ran one of the biggest asset managers there [at TRS]," an agitated Levine finally said. "It was public knowledge."

Duffy responded by telling Levine to close the transcript and react only to his questions.

"Let's try to rely on your recollection if we can," Duffy said.

At some point didn't Levine and Cellini discuss backing off Rosenberg because they didn't know what his reaction would be? Duffy asked.

Levine said he didn't think that would be an accurate description.

Levine pressed over take on deals

April 14, 2008; 3:56 p.m.
Duffy is trying to throw as much doubt as he can on Levine's story that at a 2004 meeting at the Standard Club, he and Rezko agreed to split up to $7.8 million from corrupt deals involving the state pension board on which Levine then sat.

Levine has testified that Rezko was to pocket half, or $3.9 million, and Levine and business associate Robert Weinstein would share the other $3.9 million.

But Duffy pointed to a taped conversation between Levine and Weinstein from April 17, 2004, in which the two discuss the money. Levine can be heard telling Weinstein that the take is $3.9 million "on your end," Duffy said.

"You say your end," Duffy repeated. The meaning was clear "if we understand the English language," Duffy said.

Levine grew testy again.

"That is a complete misrepresentation of the conversation between Mr. Weinstein and myself," Levine said.

If Weinstein and Levine were each to get $3.9 million, that would account for the entire $7.8 million, Duffy said, conveying that Rezko would be left out of the arrangement.

Levine's motivation for '04 meeting scrutinized

April 14, 2008; 3:37 p.m.
Antoin "Tony" Rezko's attorney is trying to raise doubt about the motivation for star witness Stuart Levine's meeting in April 2004 with Rezko at the Standard Club in downtown Chicago.

Levine testified earlier in the trial that he met with Rezko to discuss corrupt dealings at the Teachers' Retirement System, bringing along a chart to show how much the two could make by having investment firms pay bogus finder's fees on pension investments.

But attorney Joseph Duffy pointed out Monday afternoon that Levine was a consultant for CompDent, which was in the midst of losing a large contract to provide dental insurance for the State of Illinois.

Levine agreed that the loss of the CompDent contract could have cost him up to $2.2 million.

Levine denied discussing CompDent at the April 14, 2004, meeting at the Standard Club, but he acknowledged talking to Rezko about CompDent at one point and seeking his assistance.

That set off an exchange between Duffy and Levine in which both raised their voices. Duffy noted that the CompDent contract was never renewed by the state.

Didn't Levine tell the jury "over and over" how important Rezko was in state government?

"Yes, sir, I did," Levine answered loudly.

And didn't Levine say repeatedly that Rezko could get any contract he wanted to get? "Yes, sir," Levine said again. Even though it was his only earned income at the time, Levine said he was not concerned about losing the CompDent pay.

Duffy then asked Levine to recall his questioning about the Standard Club meeting, a central point in Levine's version of events.

Levine had begun cooperating on Jan. 20, 2006, but did not tell the government about the Standard Club at the first interview, Duffy pointed out. Levine next met with investigators four days later.

"On that date, did you tell the government about this very important Standard Club dinner?" Duffy asked.

Levine said he could not recall, prompting Duffy to ask Levine whether he was aware that in fact it wasn't until his 10th meeting with the government that he mentioned the dinner.

"It may be so. It may not be so," Levine answered.

Duffy's questioning then took on a more mocking tone, as Duffy pressed Levine on whether he had been "anxious" to provide information on Rezko to help himself.

"I was anxious to do what I was asked by the government and tell the truth," Levine said.

But maybe that wasn't quite accurate, Duffy said, because Levine has already told the jury he lied to the government at first in a bid to protect former Chicago Ald. Edward Vrdoylak. The two were allegedly involved in a separate kickback scheme over a real estate deal, prosecutors have said.

"So you can't sit there and tell this jury now that all you did was go in and tell the truth?" Duffy asked.

"Uh, no," Levine answered.

Obama appeared at 2004 party at Rezko's home

April 14, 2008; 12:57 p.m.
Democratic presidential contender Barack Obama's name came up again at the Antoin "Tony" Rezko corruption trial and in a way that earlier filings in the case did not telegraph.

Stuart Levine, the prosecution's star witness, said he and Obama were at a party Rezko threw at his Wilmette mansion on April 3, 2004, for Nadhmi Auchi, a controversial Iraqi-born billionaire who Rezko was trying to get to invest in a South Loop real-estate development.

Auchi, now a citizen of the United Kingdom, has faced criminal charges in Europe. He also figured in the revocation of Rezko's bond early this year after attempting to wire him more than $3 million. Upon learning of that attempt, U.S. District Judge Amy St. Eve declared Rezko a flight risk and ordered him held in a federal jail in the Loop.

The Rezko party in 2004 was designed to induce Auchi to pour money into the South Loop investment. Obama's presence at the party was not previously known. At the time, Obama was fresh off a surprise win in the Illinois Democratic primary for U.S. Senate and was riding a crest of national publicity.

Grand jury testimony differs from trial testimony

April 14, 2008; 11:12 a.m.
It's another day, another week, but the same old Stuart Levine is displaying a pretty shaky memory as he continues his testimony in the corruption trial of Antoin "Tony" Rezko.

On his seventh day cross-examining Levine, Rezko's lawyer, Joseph Duffy, trotted out a glaring inconsistency between Rezko's grand jury testimony in 2006 and what he testified to Monday in recalling an allegedly critical meeting with Rezko in 2003.

That meeting took place on July 23 of that year in Rezko's North Side office. Levine said he went there with a lawyer associate to brief Rezko on the workings of a teachers pension fund on which Levine served as a board member. That board is one of two panels that Levine claims he and Rezko rigged in exchange for kickbacks.

Levine said he, the lawyer, Rezko and a Rezko associate met in a conference room for a few minutes until Rezko left. Levine said he then left a few minutes later, met up with Rezko in his private office, and the two allegedly discussed how they could make money off actions of the pension board.

Levine has testified that Rezko told him at that point that they would be partners in manipulating the Teachers' Retirement System.

But Duffy showed Levine a transcript of his testimony before the grand jury in 2006 that indicted Rezko. (By the way, Levine could not remember when he gave that testimony.) And Duffy said that in Levine's earlier testimony, he made no reference to leaving the conference room and having a private meeting with Rezko in which they discussed manipulating TRS.

Levine's fuzziness and hairsplitting did lead to one moment of, perhaps, unintentional clarity under questioning from Duffy as he asked about Levine's attempts to ingratiate himself with Rezko. Levine gave money to Rezko's favorite charity, St. Jude Children's Research Hospital in Memphis, and began raising money for Gov. Rod Blagojevich, Rezko's close friend.

"You would agree with me that political fundraising is different from engaging in corrupt transactions?" Duffy asked Levine.

"It can be," Levine responded.

Rezko rewind. Day 22

April 10, 2008; 5:24 p.m.
Think of that point midway through old family road trips when everybody cooped up in the car got fed up with each other and that might give you a taste of the prickliness that pervaded the Antoin "Tony" Rezko corruption trial Thursday.

Even prosecution star witness Stuart Levine started getting a little feisty after days of being whacked like a piñata on the stand by Rezko lawyer Joseph Duffy.

Levine, on his 13th day on the stand and the 6th being cross-examined by Duffy, began to challenge the lawyer. At one point, Levine sharply asked Duffy to rephrase a question, and at another Levine accused him of misreading transcripts of government wiretaps.

As Levine pored over the transcript of one wiretap recording, he balked at directly answering a question about it posed to him by Duffy. "I will have to refer you to line 10," Levine said. "I will have to refer you to my line of questioning," Duffy shot back.

Levine's more confrontational attitude finally drew a strong rebuke from U.S. District Judge Amy St. Eve, who told the witness in no uncertain terms to cut it out. "You are not to engage in a conversation with him [Duffy]," St. Eve ordered Levine. "Please listen to him. This is your third week of testifying and at the rate we're going, you will still be on the stand in May."

The day's snarkiness didn't end there. Not satisfied with one of Levine's answers, Duffy snidely asked him: "Do you have telepathic powers, Mr. Levine?" And Duffy also got into it briefly with assistant U.S. Attorney Chris Niewoehner who raised an objection to a line of questioning posed by Duffy. "Judge, I object to that," Duffy snapped, in effect objecting to Niewoehner's objection.

The trial is now in recess until Monday, so perhaps the long weekend will give everybody a chance to cool down. But there still is a lot of trial to go, and it's not clear when Levine's marathon testimony will finally end.


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Check back several times a day for the latest Rezko trial updates from the Tribune's Bob Secter and Jeff Coen at the federal courthouse.
Click here for trial exhibits, video and past stories.