Ex-Rezko partner’s sentencing delayed
By CHRIS FUSCO AND TIM NOVAK Staff Reporters / firstname.lastname@example.org July 11, 2011 12:20AM
Daniel T. Frawley in 1988.
Updated: July 11, 2011 4:58PM
UPDATE: After this story was published Monday morning, U.S. District Judge Ronald A. Guzman canceled Daniel T. Frawley’s sentencing hearing, which had been scheduled for Tuesday. Court records did not indicate why Guzman did this. Frawley’s sentencing had not been re-scheduled.
Daniel T. Frawley once teamed with Tony Rezko — the political fixer who’s now in jail — in what turned out to be a doomed effort to open a training school for Iraqi security forces in western Illinois. Now, Frawley faces a federal prison stretch of his own.
On Tuesday, the 60-year-old onetime Chicago cop is set to appear before a federal judge for sentencing after pleading guilty in February in a $4.4 million bank fraud.
The scheme appears to have no connection to Rezko, the Wilmette businessman who was once a prolific campaign fund-raiser for politicians including the current president, Barack Obama, and the recently convicted former governor, Rod Blagojevich.
Still, federal prosecutors are seeking a reduced sentence for Frawley — of a year and a half in prison, rather than the 35 years he could face — apparently because Frawley has been secretly cooperating since at least 2006 in their investigation of Rezko, who was found guilty in June 2008 of having used his clout with the Blagojevich administration to enrich himself and his business associates.
Details about Frawley’s cooperation with the U.S. attorney’s office, the FBI and the Illinois attorney general’s office can be gleaned from a 65-page court deposition he gave seven months ago in a legal-malpractice lawsuit that he filed against his former longtime lawyer, George Weaver. In the lawsuit, Frawley accuses Weaver of having overbilled him and telling him to “withhold certain information from the government” when he was cooperating with authorities.
That sworn statement, given Dec. 1, 2010, is posted at suntimes.com/news/watchdogs. In it, Frawley talks about three meetings he’s had with law enforcement authorities since 2006. The deposition outlines how he secretly recorded Rezko, and it raises a new and unsubstantiated question about Rezko’s once-close relationship with Obama — an issue that dogged the then-U.S. senator during his presidential campaign four years ago.
Frawley says in the deposition that on March 13, 2006, he was in the Dirksen Federal Building at 219 S. Dearborn, making a phone call to Rezko’s cell phone and secretly recording him when attorney Weaver walked in and interrupted him.
Also in the room at the time, according to Frawley, were: Assistant U.S. Attorney Jacqueline Stern; James “Sam” Dorger Jr., of the Illinois attorney general’s office’s public-integrity unit; an “FBI agent whose name I do not recall”; and Thomas Durkin, a criminal attorney also representing Frawley.
“I was on the phone, making a phone call to Tony Rezko,” Frawley says, according to the transcript. “I had a luncheon engagement with him. George was outside of the room where I was making the telephone call, and the purpose of the call was for me to keep my luncheon engagement with Tony Rezko and to go over and to record Tony Rezko.
“George saw and heard me on the phone, came running in and went like this [demonstrating]: Cut it,” drawing his hand across his throat.
Later in the deposition, Weaver’s lawyer, Daniel F. Konicek, asks Frawley about what specific information Weaver is supposed to have told Frawley to withhold from federal authorities.
“I’m assuming the information is about the payments made by Rezko to Obama, so we know we’re talking about the right conversation, right?” Konicek asks Frawley.
Frawley doesn’t answer. So Konicek presses him: “Am I correct it was about Obama being paid by Rezko?”
Frawley replies: “I’m not answering that question, based upon my attorney’s instructions.”
Nobody directly involved with the deposition — including Frawley and his lawyers, Weaver and his lawyers, and the FBI and U.S. attorney’s office — would comment.
Ben LaBolt, a spokesman for Obama’s presidential campaign, called Konicek’s suggestion that Rezko might have made any cash payments to Obama “utter nonsense.”
Besides the Rezko-Obama issue, Konicek also asks Frawley during the deposition, without any explanation, about “the $1.5 million from Rezko.”
One of Frawley’s lawyers objects to the question, and there’s no explanation about what Konicek is talking about.
At Rezko’s trial in 2008, Rezko’s lawyers disclosed in a court filing that federal authorities had accused Rezko of paying a $1.5 million bribe to obtain the security-training contract from the Iraqi government. Rezko’s lawyers then called that allegation completely false. Prosecutors have declined to comment.
On Jan. 26 of this year — eight weeks after Frawley gave his deposition in his lawsuit — federal prosecutors charged him with a decade-old crime, accusing him of bank fraud for creating fictitious bills to secure $4.4 million in business from the First Bank of Missouri between 1999 and 2001. They also charged Frawley with skirting federal currency-reporting laws by making nine cash withdrawals of less than $10,000 each in late 2005 — totaling $87,000 — from the former New Century Bank.
Frawley, who pleaded guilty to those charges, also owes $521,845 in taxes to the state and federal governments, mostly for delinquent income taxes, records show.
Frawley, who lives in Westchester, was a Chicago cop for seven months, in 1977.
In 2004, he and Rezko started a company called Companion Security, which landed a $50 million contract in April 2005 from the Iraqi government’s Ministry of Electricity to bring Iraqi power-plant security guards to the United States for training.
The country’s electricity minister at the time was Aiham Alsammarae, a close friend of Rezko since they met in Chicago while attending the Illinois Institute of Technology.
Like Rezko, Alsammarae has denied any wrongdoing regarding the security deal.
Within a month after Companion got the contract, Alsammarae was ousted in a regime change, and the country’s new electricity minister killed the deal.
Still, Frawley and Rezko pushed ahead. In June 2006 — after Frawley began cooperating with U.S. authorities — the Blagojevich administration offered Companion a site for the training school at the closed Savanna Army Depot, southeast of Galena. Frawley then met with a member of Obama’s U.S. Senate staff in hopes Obama could persuade the Iraqis to honor their original deal. Obama declined to help, and Companion’s training-school plans later fell apart.
Obama faced criticism during his first presidential run after being involved in a land deal with Rezko at a time when Rezko was known to be under federal investigation.
“As has been reported four years ago, then-Senator Obama’s office rejected Mr. Frawley’s request for support of his business interest in Companion Security,” LaBolt said. “That was the end of the contacts with Mr. Frawley, and any suggestion now of improper offers or payments from anyone is utter nonsense.”