Rezko cohort details fee scam
TRIAL | Ex-pension fund lawyer: 'It was a mistake'
A witness who's pleaded guilty in the Tony Rezko corruption case choked up as he testified Monday about his own wrongdoing.
"I acquiesced to what he was telling me . . . thinking . . . these monies are not being paid by the system," a choked-up Steve Loren, who appeared at times to struggle with his emotions, said of Rezko.
(AP)
Loren, former attorney for the Teachers' Retirement System of Illinois, was talking about a scheme he said he hashed out in 2003 with Stuart Levine, then a TRS board member. According to Loren, finder's fees on deals with the pension board were to go to people who'd done nothing to earn the money. Those getting the fees would be designated by Gov. Blagojevich fund-raisers Rezko and Chris Kelly, Loren told jurors.
He said it was Levine's way of repaying Rezko and Kelly for getting the Blagojevich administration to block a legislative proposal to merge TRS with another pension fund.
"It was a mistake on my part to acquiesce to it," Loren said.
Loren stopped practicing law in 2005, when he knew his indictment was pending. Accused of an IRS-related charge in the Rezko case, he pleaded guilty and agreed to testify against the Wilmette businessman and former top campaign fund-raiser for Blagojevich and Sen. Barack Obama.
Rezko, 52, is accused of using his influence in the governor's administration to stack state boards and control votes so he could pocket money or steer payments to political designees.
Loren testified he gave in to Levine's repeated pleas to write up a sham consulting contract to be used by Sheldon Pekin. Pekin represented Glencoe Capital, which successfully sought business from the TRS board. Pekin agreed to split his finder's fee with someone designated by Rezko and Levine, Pekin and Levine have testified. Loren said he knew of the plan but didn't tell the board.
"The TRS board should have known about this if I knew about it," Loren said.
He recalled once sharing a ride home with Levine, who has also pleaded guilty, and asking Levine who Pekin would split his fee with. He said Levine told him it was to go to Ald. Dick Mell, the governor's father-in-law.
"I said: 'How can these people be so stupid?' " Loren said, explaining it was an obvious conflict for Mell to get consulting money off a state deal.
According to prosecutors, the deal with Mell never went through, and the money instead went to Rezko associate Joseph Aramanda.
Mell has denied knowing of any such scheme.
Also Monday, Chicago fund manager and philanthropist Richard Driehaus told of meeting with Rezko through a mutual friend. Driehaus testified that Rezko asked if he wanted to get in on a deal to manage funds for the state. In return, Driehaus said, he would have to funnel consulting money to someone of Rezko's choosing.
Driehaus said he told Rezko: "I don't pay money to get money."