Witness: Rezko codefendant dropped Ald. Mell's name

Businessman Sheldon Pekin testified today that he was to be part of a sham consulting contract with Chicago Ald. Richard Mell (33rd), who Pekin was told wanted to enjoy the "spoils" of state business -- an accusation Mell called "absolutely false."

Testifying for the prosecution at Tony Rezko's corruption trial, Pekin said he was told by Rezko's co-defendant, Stuart Levine, that Mell wanted a cut of lucrative state consulting fees that prosecutors accuse Rezko of routing to friends and associates. Prosecutors accused Rezko of using his influence with the Blagojevich administration to make those illegal deals happen.

Reached after Pekin's testimony, Mell said he never spoke with anybody about doing business with Pekin. The alderman, who is Gov. Blagojevich's estranged father-in-law, theorized that Levine was dropping Mell's name to prod Pekin into participating in Levine and Rezko's schemes.

"It makes some sense that maybe Pekin would say, 'Oh, that's the governor's father-in-law, I'd better do it,' " Mell said. "I can't tell you that's the case for sure, but it's the only thing I can conceive of."

Pekin acknowledged in court that he didn't have any direct conversations with Mell; he said he went through Levine. Peking said Levine told him Mell was upset he wasn't cut in on finder's fees that consultants made through investment firms doing business with the state Teachers' Retirement System.

According to prosecutors, Levine -- a politically connected former TRS board member who has pleaded guilty and will testify against Rezko -- struck a deal with Pekin, who was a consultant for Glencoe Capital. Glencoe won a $50 million investment deal with TRS, and Pekin had agreed behind the scenes with Levine that, if Glencoe got the investment, he would share a $375,000 finder's fee with Mell.

Mell "was upset because he was not participating in the spoils," Pekin was told.

"Did you expect Mr. Mell to provide any consulting like that to Glencoe Capital?" Assistant U.S. Attorney Christopher Niewoehner asked Pekin of the consulting agreement, which was projected on a screen for the jury.

"Not really," Pekin said.

But, ultimately, there was a change of plans, prosecutors have alleged. The fee slated to go to Mell was instead shared with Joseph Aramanda, a friend and former business partner of Rezko. Prosecutors have alleged Aramanda then got $250,000 in payments from Pekin, who is 72, has Parkinson's disease and, at times in court today, was difficult to hear from the witness stand.

Aramanda allegedly directed a portion of his share of the money -- $10,000 -- to Sen. Barack Obama's campaign 2004 U.S. Senate campaign fund. Obama's name did not surface today, but, in a pretrial court filing, prosecutors refer to the Democratic presidential hopeful as the "political candidate" who got a $10,000 campaign contribution from Aramanda that was directed his way by Rezko, the Chicago Sun-Times has reported. Obama is not accused of wrongdoing and has donated the money to charity.