llinois scandal threatens presidential race

Published 10:43 am Thursday, June 5, 2008

CHICAGO (AP) — A day after Barack Obama sealed the Democratic nomination for president, a corruption scandal involving a fundraiser who helped bankroll his past campaigns resurfaced to slightly dampen the festivities.

Chicago businessman Antoin “Tony” Rezko, 52, was convicted Wednesday of fraud, money laundering and aiding and abetting bribery in a plot to squeeze illegal payoffs out of firms hoping to do business with the state.

Republicans are already capitalizing on Rezko’s ties to Obama, even though the presumptive Democratic presidential nominee is accused of no wrongdoing and his name was barely mentioned at trial.

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“Today’s verdict and Obama’s friendship with Rezko raises serious questions about whether he has the judgment to serve as president,” Robert M. “Mike” Duncan, chairman of the Republican National Committee, said in a statement.

Rezko’s $8 million bond was revoked and he was taken into federal custody after the verdict in the nine-week trial that exposed a corrupt culture of payoffs and campaign finance abuses plaguing Illinois politics.

U.S. Attorney Patrick J. Fitzgerald said the verdict represented “an antidote to the poison of corruption” that trial testimony alleged included the fixing of state boards that controlled a $40 billion pension fund and made major decisions about million-dollar hospital construction.

The trial included explosive testimony about all-night drug parties involving the government’s star witness and allegations that Gov. Rod Blagojevich personally discussed a state job for a campaign contributor.

Rezko has known Obama since he entered politics. He donated more than $21,000 to his campaigns in Illinois and raised far more, though he did not donate or raise money for his presidential bid. The two were also involved in a real estate deal together.

Obama has donated $150,000 in Rezko-related contributions to charity.

He issued a statement saying he was “saddened” by the verdict. “But now he has been convicted by a jury on multiple charges that once again shine a spotlight on the need for reform,” Obama said.

Rezko’s conviction also intensifies the spotlight on his relationship with Blagojevich. Though also not accused of wrongdoing, his reputation received a serious battering by the testimony. State lawmakers are already talking about impeachment and a primary fight is likely in 2010.

One witness said the governor — a Democrat in his second term — discussed a state payroll job for a campaign contributor with a $25,000 donation lying on the table. Another said Blagojevich spoke of big-money state contracts for those who helped him advance his political career — possibly as a presidential candidate.

A money management executive who wanted to invest state pension assets said he was told to sign a contract promising to pay a $800,000 fee to a consultant he had never heard of based in the Turks & Caicos Islands.

“That’s the way the governor handles patronage here,” he quoted a Chicago attorney who pressed him to sign the contract as saying.

Blagojevich has repeatedly denied taking part in any of the shadowy political dealings that witnesses described. On Wednesday, he read a statement to reporters in which he called Rezko a friend who had been his supporter.

“On a personal level I am deeply sad for what’s happened to Tony,” Blagojevich said. “The jury’s decision is yet another reminder that ours is a system of government that is ruled by laws and not by men. I respect the decision of the jury.”

Rezko, a Chicago real estate developer and fast-food entrepreneur, was convicted of six counts of mail fraud, six counts of wire fraud, two counts of aiding and abetting bribery and two counts of money laundering.

The jury acquitted him of three counts of wire fraud, four counts of aiding and abetting bribery and one count of attempted extortion. Rezko’s sentencing was set for Sept. 3.

Defense attorney Joseph Duffy said he would pursue an appeal. “Mr. Rezko, on his own, decided that if he was convicted he wanted to immediately start serving his sentence,” Duffy said.