Golden (32 page)

Maybe there would be a deal after all. Kiferbaum had told Davis that if they came to some kind of an understanding that his firm eventually would be hired, Kiferbaum would wield his influence with Levine and the planning board for her. Reject Kiferbaum and expect a rocky road and a dead end.

“We'll find out what she's made of,” Levine said.

Despite the well-known philanthropy, the posts on state boards, and the knighthood by a Swedish king, this was the true Stuart Levine. The illustrious business and family man in control of the universe was a personality Levine wore like a cloak, presenting a facade that allowed him to seemingly manipulate and cheat anyone who crossed his path. The real Levine was a chameleon, a political fixer of the highest order, a con man, and a drug addict. He had bribed his way to success. When he controlled a charity linked to drug interventions, he cheated it by writing a $3 million check from its account for an investment deal that would benefit him—and then blamed his secretary for it.

Levine had also used his relationship with Vrdolyak as leverage. While acting as special counsel for HMO America Inc., Levine hired the alderman and lawyer and other insiders, including Republican powerbrokers Kjellander and Cellini, as lobbyists. Levine's relationship with Vrdolyak also had a seedier side that few knew about. Levine later claimed to have given Vrdolyak bribes to pass along to someone at a postal union to get the union to enroll in the HMO and again to someone at the Chicago Board of Education, where a dental insurance business Levine worked for had government business.

Much of the money he stole went to fund his extravagant living style and secret life. He had a ferocious drug habit and a desire to break away from his daily routine for all-night drug and sex binges at hotels with young men. He would party in Springfield under the guise of being there for work, and he had a Chicago-area getaway—the famed “Purple Hotel,” a brightly colored but dumpy place on Touhy Avenue in Lincolnwood. He paid the men cash, and his appetite shifted from mixing cocaine and Ecstasy in the 1990s to using crystal methamphetamine and the club drug ketamine in later years.

Much like Rezko, Levine was part of the “What's in it for me?” tribe. Despite his Republican ties and relationship with Jim Ryan, Levine cared little about political ideals or positions and was only interested in power and how he could get close to it.

Since that dinner in the fall of 2002 when he first met Rezko, Levine had pledged his allegiance to the new organization Rezko was helping build inside the Blagojevich administration. He and Rezko had made preliminary agreements to work together.

Among the chief reasons why Levine made his deal with Rezko was so Rezko could convince Blagojevich to allow Levine to continue sitting on the two state boards he had been appointed to by Blagojevich's Republican predecessors—the Health Facilities Planning Board and the $30 billion Teachers' Retirement System. Levine had invested a lot of time and effort cultivating power there. If Rezko could make that happen, Levine would be willing to do whatever Rezko wanted at the boards.

That setup still looked promising in April 2004, when Levine and Kiferbaum spoke on the phone after their little performance for Pam Davis of Edward Hospital.

“I am telling you that uh, I have never been in a better position that I am right now,” Levine bragged, his voice suddenly sounding more earnest. “Part of the reason is because there's never been such a tight control of the uh, central apparatus.”

And that was due to Rezko, he said.

“I mean uh, this guy is making decisions and can get anything done that he wants done,” Levine continued. “He wants us to take whatever we can.”

What Levine meant when he used the term
central apparatus
was the hidden machinery inside the governmental process that, when secretly corrupted, turned political power into cash that was available to steal.

To some extent, government in Illinois had always been this way. Some state boards, commissions, or agencies were always corruptible. It was just a matter of knowing the right person in the right position of power to make it happen. Levine had made a career of it. And since meeting Rezko at Massuda's party, he was quickly learning that all the right people to find were in Blagojevich's immediate circle of friends and fundraisers. Publicly, Blagojevich referred to this group as his kitchen cabinet, distinguishing them from his actual cabinet of department heads. In the simplest terms, they were the ones Blagojevich trusted.

Rezko and Kelly had never been elected to a political office, but with the governor giving them the power to appoint loyal people to decision-making boards, those who were in on the action could create situations where they could enrich themselves while no one was the wiser. After Blagojevich was elected in 2002, he had to name people to the hundreds of boards, commissions, and councils across the state. He was the first Democratic governor in
Illinois in a quarter century, leaving lots of pent-up demand for those loyal to the party to get a chance at a position. Many sought to be named to key roles on high-profile boards, while other positions on less glamorous panels were sometimes a challenge to fill at all.

But when it came to some of the most pivotal commissions, it was often Rezko and Kelly who had much of the say over which loyalists were named. In many cases, those they picked were not the best people for the job but
were
the best at taking direction from Rezko and Kelly when the pair communicated the wishes of “the administration.”

At the hospital board, these Levine and Rezko puppets allowed Levine to steer a project toward approval once a contractor like Kiferbaum was attached to it and willing to pay to play. Lucrative contracts always had room for many to siphon away extra money. In many instances, even the board members who were following directions from men like Rezko and Levine would be kept in the dark about who was taking in illegal payments for themselves from state business. Levine found a way to take bribes through the hospital panel, but even more money was to be had at the Teachers' Retirement System of Illinois (TRS), which manages the retirement funds of most of the state's public school teachers. TRS has some 325,000 members and annuitants and in 2004 held more than $31 billion in trust. Among the responsibilities of the TRS board is to review and consider bids by private investment management firms to invest TRS funds. Its votes mean tens of millions of dollars for investment firms.

By rigging the system and picking which firms were deemed eligible for such large allocations, Rezko, Kelly, Levine, and others also chose bogus consultants on the deals to collect “finder's fees” when allocations were made. The cover was the consultants linked the investment firm with TRS. In reality, the consultants had done little to no work since the deals were already preordained by the insiders. Many of the firms agreed to hire the fake consultants and pay the fees knowing they might very well have been paying off somebody in exchange for access to state funds. That was just the way it was done in Illinois, many knew.

Among those allegedly scheming to influence things at TRS was Cellini, who had an association with Commonwealth Realty Advisers. Commonwealth controlled pension fund investments on behalf of state retired employees and teachers.

Cellini later invested in one of the state's first-ever legalized riverboat casinos, an investment he would turn around and sell in 2004 for $63 million.

The fit and trim Springfieldian for more than forty years made friends and money in every corner of the state from both sides of the political aisle. If men like Rezko, Levine, and Kelly abided by the “What's in it for me?” credo, Cellini could have been considered its architect.

At age twenty-eight in the early 1960s, Cellini became the youngest-ever member of the Springfield City Council and before long became the state's first secretary of transportation. A Republican in name, Cellini left state government to become executive director of the Illinois Asphalt Pavement Association, a powerful roadbuilding group that became highly active in politics and political contributions. As Cellini got rich, he expanded into development projects and oversaw a firm that received state government leases. By the late 1980s, he had cofounded Commonwealth.

As he mastered the game, Cellini got to know everyone who played it, including Levine. By 2001, the two men had engineered what amounted to a coup on the eleven-member TRS board.

The panel is designed to have four members who are appointed by the governor, five who are elected by the thousands of members of the teachers unions, one who is selected by the board itself, and one who is the superintendent of schools. The board often split its votes along the appointed-versus-elected line, but Levine saw a weak spot in the summer of 2001 when one of the elected members was hurt in a motorcycle accident. Without its majority, the elected members saw Levine, with secret direction from Cellini, use his leadership of the appointed members to choose the single member selected by the board, as well as replace TRS's in-house legal counsel and executive director. Cellini leaked information to Levine that, in a snafu, the current legal counsel wasn't licensed to practice law in Illinois, a tidbit that Levine used to force the lawyer's resignation and the resignation of the executive director who hired him.

Replacing the men were Steve Loren, a lawyer and good friend of Levine, and Jon Bauman, a Cellini loyalist who would do what the men wanted when it came to reviewing and vetting potential investment firms to get massive TRS allocations. In the case of Bauman, he was rushed to approval by the Levine voting bloc when a candidate who had been selected by a TRS search committee was actually standing in the hallway waiting to be voted in. With Bauman in place, Levine would have his puppet to make investment recommendations to the board. And in case Bauman's loyalty ever slipped, Levine had himself named chairman of the TRS board's Rules and Personnel Committee, a position that made him responsible for giving
Bauman performance reviews and suggesting a salary for him. When things were going well in Levine's mind, he told Bauman that he could just write his own review and Levine would sign it as his own.

With their minions in place, Levine and Cellini effectively directed TRS staff toward certain investment firms and controlled the staff review of proposals. And when allocations came to a board vote, they had enough members under their control to get them approved. Then all that was left was to attach insider consultants to the deals who would share their finder's fees with the men that made it happen. Those fees typically were about 1 percent of the amount TRS was handing over for investment, but that's a nice sum when the investment amounts could be $50 million or more.

Levine and Cellini hadn't had their setup running for long when, just after Blagojevich was elected, his budget director, John Filan, pushed a plan to consolidate a number of the state's investment funds. That was a move that would have seen TRS disbanded and left Levine and Cellini without their influence. They weren't about to sit by and lose their new golden goose. Cellini simply went to Rezko and Kelly and explained how it would be better for all of them to leave TRS alone. If they would go to the governor and derail the consolidation plan, Cellini promised to allow the pair to select investment firms that would get TRS money. Rezko and Kelly could use that power to reward investment houses that made campaign donations to Blagojevich. The governor's advisers agreed, and the consolidation plan was shelved. By mid- 2003, Kelly was offering the names of firms that should have business steered to them.

So, with TRS locked down, Rezko turned his attention to other key panels, including the Illinois Health Facilities Planning Board and the Illinois Finance Authority, where he installed Blagojevich campaign contributor Ali Ata as president.

On the hospital planning board, Rezko placed Massuda, Imad Almanaseer, a Park Ridge pathologist who was an investor in Rezko's fast-food businesses, and Michel Malek, a neurologist and Rezko friend. Also on the panel was Thomas Beck, a former Cook County comptroller who had been appointed to his post by Governor Edgar and remained in place under George Ryan. He wanted to keep it after Blagojevich was elected, so he brought a $1,000 campaign check to Rezko's office on Chicago's North Side to ask that he remain in place. Together the three Rezko doctors, Beck, and Levine made up a board majority so tightly controlled by Rezko that he instructed Beck to have the bloc split its votes every once in a while on non-important matters just to make things look good.