Clout HMO pops up in Rezko case
Key figures from the old Chicago HMO are back in the spotlight due to trial
It had big-time connections and a bevy of Bears as pitchmen.
Walter Payton, Dan Hampton, Dave Duerson -- all helped Chicago HMO quickly become the dominant HMO here in the 1980s.
The company made multimillion-dollar deals with the state of Illinois to offer health care for 100,000 welfare recipients.
It signed up thousands of government workers from the city of Chicago, Cook County and the state; Chicago public school teachers, too.
It struck deals with the labor unions that represented many of them -- including one deal that involved a bribe.
In 1993, Chicago HMO's owners cashed out. They sold the company to United Healthcare Corp. for more than $400 million.
Today, many of the people who built Chicago HMO are back in the spotlight, this time thanks to the ongoing corruption trial of Tony Rezko, the political fund-raiser who became a top adviser to Gov. Blagojevich. There's:
• STUART LEVINE,the star witness against Rezko. The 62-year-old Levine was a shareholder in Chicago HMO and also its attorney. Chicago HMO's chairman was his late cousin, Theodore Tannebaum, a multimillionaire who once owned the franchise rights for all McDonald's restaurants in Canada. Levine testified at Rezko's trial that he passed a bribe to former Ald. Edward R. Vrdolyak so Chicago HMO could get a deal with the postal workers' union.
• DR. ROBERT WEINSTEIN, who was Chicago HMO's president. Weinstein is an unindicted "co-schemer" in the Rezko case for his alleged involvement in various kickback schemes involving state pension funds for teachers. Weinstein and Levine were co-executors of Tannebaum's $100 million estate. Levine has testified he bilked Tannebaum's estate out of $2 million, splitting the money with Weinstein and Sven Philip-Sorenson, a Swedish businessman who was a major shareholder and board member of Chicago HMO.
• WILLIAM F. CELLINI -- another unindicted "co-schemer" in the Rezko case -- hired by Chicago HMO to lobby state officials for business. Cellini's a longtime Republican power broker who had an influential role in state government under former Governors James R. Thompson and Jim Edgar. Under Thompson and Edgar, the state gave Chicago HMO more than $780 million to insure welfare recipients, plus another $130 million to insure state workers.
During Rezko's trial, prosecutors have played a secretly recorded, April 2004 phone conversation between Levine and Joseph Senese, president of Local 707 of the National Production Workers, which was once Chicago HMO's largest private subscriber. On the tape, Levine, then a member of the state teachers pension board, and Senese talk about the possibility of the state investing $200 million with a developer tied to Senese -- a deal that never went through.
Senese is the son of reputed mobster Dominic Senese, who was the target of a would-be mob hit in 1988. Struck by a shotgun blast while opening the security gate outside his Oak Brook home, the elder Senese survived, dying three years later, reportedly from cancer.
Chicago HMO was a target of a 1987 Chicago Sun-Times investigation -- dubbed the "Health-Care Hustlers." The newspaper found that the state barely monitored HMOs that covered welfare recipients and that patients were often treated by doctors who had repeatedly been sued for medical malpractice. A few years later, the Illinois attorney general's office sued, charging that one of Chicago HMO's doctors wasn't even licensed to practice medicine.
Weinstein once worked for Roosevelt Memorial Hospital, which set up a health plan to cover welfare recipients. A $1 million fraudulent-billing scheme led to the conviction of seven top hospital officials or other employees. The Roosevelt Health Plan was renamed Chicago HMO.
Among Chicago HMO's earliest investors was the late Charles R. Swibel, longtime chairman of the Chicago Housing Authority, who was also a major fund-raiser for Mayor Byrne. Swibel was a longtime friend of Tannebaum and Vrdolyak.
Tim Novak
