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Wednesday, Aug. 16, 2006 12:59 am

Trouble ahead

Levine in a position to confirm allegations of corruption

Stu Levine has flipped — and things are gonna get crazy real soon.

Levine was a big Republican insider with very close ties to Jim Ryan, Gov. Rod Blagojevich’s 2002 opponent. Some saw fair-minded bipartisanship when Blagojevich reappointed Levine to both the Teachers’ Retirement System board of directors and the Illinois Health Facilities Planning Board. As we soon discovered, though, the appointments may have been made for entirely different reasons —and now Levine is in a position to create some truly serious trouble for the governor.

You will recall that Joe Cari, former finance chairman for the Democratic National Committee, caused quite a stir when his negotiated guilty plea was released by the feds. In that plea, Cari claimed that Levine told him about a blatantly corrupt “fundraising strategy” involving the teacher pension fund. According to Cari, Levine and Blagojevich’s two top fundraisers would refuse to allow TRS to invest in a private equity fund unless those private firms hired a consultant of the cabal’s choosing.

The kicker was that the favored consultants would have to agree to make “certain political or charitable contributions.” The two fundraisers were identified in the media as Tony Rezko and Chris Kelly — two of the governor’s closest advisers during his first three years in office.

But the big news was that the Cari plea included a statement claiming that Blagojevich — identified in the plea as “Public Official A” — was “acting through” Rezko and Kelly to choose the consultants. The governor and his two guys have both maintained their innocence, with the governor charging that Cari’s testimony was nothing more than “triple hearsay.” The governor also denies that he is Public Official A.

Levine was also indicted by the feds in May 2005 for “influence-peddling, kickbacks, and other corrupt actions” involving his role as vice chairman of the Health Facilities Planning Board. Allegations surfaced in 2004 that some Blagojevich campaign contributors essentially purchased seats on the board for several thousand dollars. Some of those board members were allegedly recruited by Rezko. Levine and Rezko have a personal relationship going back several years.

Because the feds have obtained guilty pleas from some of his other co-conspirators, they have a pretty solid cases against Levine — and this U.S. attorney hasn’t lost a corruption case yet — so Levine’s guilty plea was not unexpected and has been rumored for weeks. Investigators also have hundreds of hours of wiretap recordings of Levine’s phone conversations and, according to one columnist, Levine may have even worn a wire.

If Levine and the federal wiretaps confirm Cari’s allegations or the “board seats for campaign cash” claims, well, you get the idea. Forget the “where there’s smoke, there’s fire” stuff. This will be a giant mushroom cloud directly over the governor’s office. Levine is scheduled to appear in court in September — right after the unofficial start of the campaign season.

But that’s not all the troubles the governor has right now. His lawyers are trying to nail a couple of whistleblowers to the wall.

The governor’s office claims that the former head of personnel for the Department of Central Management Services, Dawn DeFraties, broke the law when she helped thousands of politically connected state-job applicants. The governor’s lawyer admits that many of those tainted applicants were referred by the governor’s own office, but, he says, DeFraties should have scolded the patronage guys for demanding that she break the law.

This is almost an exact copy of Robert Sorich’s defense. The former patronage director for Chicago Mayor Richard M. Daley claimed that because he only “recommended” politically connected people for city civil-service jobs and didn’t actually hire them, he wasn’t guilty of breaking any laws. A federal jury disagreed, and Sorich is going to prison.

I think what’s going on here is, the Blagojevich administration desperately wants a win in front of the state Civil Service Commission, which is currently deciding whether to uphold the administration’s firing of DeFraties on grounds that she was corrupt. That way, the governor can claim that his office has been vindicated of all these scurrilous illegal political hiring allegations just in time for the November election.

Politically, it might work, but the legal maneuvering is destined to fail with federal prosecutors. This administration is in big trouble, campers. Big, big trouble.

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