GOP official tied to state corruption
Identified as 'Individual K' in Levine plea deal
BY CHRIS FUSCO, NATASHA KORECKI, DAVE McKINNEY and ABDON M. PALLASCH Staff Reporters
Robert K. Kjellander, a nationally powerful Republican with strong ties to the White House, emerged Friday as a key figure in an ongoing probe of corruption in Illinois.
Kjellander is identified as "Individual K" in a guilty plea by Stuart Levine, a political insider who describes an underworld of behind-the-scenes deal makers who wielded clout to bilk millions of dollars through two state boards.
Levine said he used his connections to steer a $150 million state pension deal to a firm represented by Kjellander, earning Kjellander a lucrative finder's fee. In return, Kjellander allegedly agreed not to bill Levine for lobbying work.
The plea deal does not accuse Kjellander of any wrongdoing, but the mention of him indicates the feds are interested in his actions.
Besides outing Kjellander, Levine provides new detail about alleged actions by Kjellander's former business partner, state GOP powerbroker William Cellini. He says Cellini, identified in the plea as "Individual A," and others schemed "to defraud" Illinois taxpayers. Among those others is Antoin "Tony" Rezko, a former top fund-raiser for Gov. Blagojevich.
'A PATTERN OF WRONGDOING'
The government indicted Rezko on Oct. 11, but Cellini has not been charged.
Blagojevich, who reappointed Levine to seats on state teacher pension and health boards, said Levine's plea proves he knew nothing about Levine's dirty deals and kickbacks. The plea does not accuse Blagojevich of any wrongdoing.
"Today's news reveals a pattern of wrongdoing by Stuart Levine that betrayed the trust of former GOP Gov. Jim Edgar, who first appointed him, and to all of us here in Illinois," Blagojevich said. "Anyone who violates the public trust should be held accountable for their actions."
Still, Levine's plea reaches into the governor's inner circle.
It places Rezko in the center of schemes to make money from pension deals by allegedly forcing companies to pay kickbacks and hide them as consulting fees.
It also accuses top Blagojevich fund-raiser Christopher G. Kelly -- "Individual B" -- of helping Levine, Rezko and Cellini shake down an investment firm seeking business with the state for $1.5 million in campaign contributions to Blagojevich.
Though Kjellander and Cellini are longtime Republicans, they have fared well under Blagojevich, a Democrat. Kjellander made $809,133 as a consultant on a massive state bond deal in 2003. The Cellini family's investment firm, Commonwealth Realty, has been entrusted with investing $340 million in pension cash since Blagojevich took office.
LEVINE ADMITS SCHEMES
Cellini and Kjellander did not return calls. A call to Kelly's lawyer was not returned.
Commonwealth issued a statement that the firm "is not aware of the Levine allegations but its employees are remaining focused on serving their clients' investment needs."
In his plea agreement, Levine, 60, of Highland Park admits to hatching the kickback schemes while he was a board member of the Teachers Retirement System (TRS), where firms competed for investment deals worth millions of dollars. He also detailed schemes he pulled while a member of the Illinois Health Facilities Planning Board.
Levine raked in "millions" from the crooked deals, according to his lawyer. Levine and others allegedly plotted to steal as much as $50 million though they actually pocketed much less.
"Stuart Levine was a legitimate hardworking and successful businessman before he got involved with these boards," Levine attorney Jeffrey Steinback said. "You can become intoxicated with the ether of power and the ether of money."
Under terms of his deal, Levine would serve 5 1/2 years in prison, far less than the life sentence he could have faced. A federal judge either has to accept that prison term or reject the entire deal.
Pressure to cut a deal is now on Rezko, who prosecutors say faces at least 14 years in prison if convicted in just one of two cases against him.
Prosecutors have said they have substantial evidence against Rezko, including recordings where Rezko can be heard discussing allegedly illicit deals. Rezko has pleaded not guilty, has vowed to fight the charges and has painted Levine as someone making things up to save himself.
U.S. Attorney Patrick Fitzgerald has called Rezko's alleged deals a "pay-to-play scheme on steroids" and said there was a "feeding frenzy" by Levine, Rezko and associates.
nkorecki@suntimes.com
cfusco@suntimes.com
LEVINE PLEA BY THE LETTER
Stuart Levine's guilty plea names several people by letter only. The Sun-Times was able to confirm the identities of some through sources familiar with the document. None of these people have been charged with crimes. Many have declined to comment or could not be reached:
A. William Cellini: Longtime Springfield powerbroker. In 2004, Levine and Cellini allegedly talked about siphoning funds from a $220 million state pension deal with the Cellini family's real estate investment firm.
B. Christopher G. Kelly: Blagojevich fund-raiser. Allegedly helped shake down an investment firm for campaign cash for Blagojevich.
C. Sheldon Pekin: Consultant who allegedly agreed to kick back $250,000 in fees in return for getting pension business.
D. Joseph Aramanda: Associate of Blagojevich fund-raiser Antoin "Tony" Rezko who allegedly got $250,000 from Pekin.
E. Dr. Robert Weinstein: Levine business associate who allegedly helped Levine in multiple schemes.
G. Michael Winter: Rezko business associate who allegedly agreed to funnel fees from an investment firm to Rezko but did not want his identity revealed to the Teachers Retirement System board.
H. Myron Cherry: Attorney and political donor. Cherry's name was listed in place of Winter's on TRS paperwork. Cherry has said this was done without his knowledge and that he is cooperating with federal authorities.
J. Thomas Rosenberg: Movie producer and former investment firm owner. Balked at a shakedown attempt spearheaded by Levine and Rezko and threatened to go to law enforcement.
K. Robert K. Kjellander: Elected treasurer of the Republican National Committee in 2005, Kjellander is identified as having reached out to Levine on behalf of The Carlyle Group, an investment firm that was seeking a $150 million state pension deal. After the 2002 deal went through, Kjellander allegedly landed a "finder's fee" from the firm and then agreed not to bill Levine for lobbying work.
L. Sven Philip-Sorensen: Danish investor allegedly got a $1 million fee tied to a Chicago Medical School student housing project -- even though he did no work.