Golden (33 page)

The FBI and US attorney's office started tapping Levine's phones on April 8, 2004, and agents weren't exactly sure what kinds of conversations they might capture.

Among the first was on April 12, when investment fund manager and adviser Sheldon Pekin called Levine at home. Pekin had approached Levine about getting TRS money for a firm and was willing to do what Levine said with a finder's fee if Levine could turn on the TRS cash faucet for him. From the call, it was clear to the agents that Pekin had a lot of irons in the fire, acting as a finder on a number of deals Levine was orchestrating, and that Robert Weinstein, a doctor and businessman whom Levine defrauded the charities with, was playing a role. Investigators later learned Levine and his partner Weinstein were plotting to set up their own company to act as finders on such deals, with Weinstein as its public face and Levine steering it business. That would cut out the middleman and bring money off corrupt TRS deals directly into their hands without them having to share it with anyone.

“Listen, Shelly, are you around tomorrow?” Levine asked.

“I will be around,” Pekin answered.

“I'm gonna stop by because um, I wanna talk to you about—a couple of things—you know, the arrangement with Bob,” Levine stammered.

“There is no reason that Bob cannot [share] your finder's fees for LLR. And for uh, Stockwell,” Levine went on, mentioning two firms he hoped to push through the TRS board and collect on.

Levine and Weinstein were hoping to bring in investment business from New York for their new company to latch onto, but at that point it hadn't panned out. Sharing what they had on the table in Illinois so far was the way to go, Levine said.

“So Bob can, you know, can enjoy the benefit of the fees from Teachers' itself,” he said of TRS. “New York, ah, things may come through, but in Illinois we know what we got.”

By that point, Rezko was passing word to those in the know around Illinois that it would take a $50,000 Blagojevich campaign donation for firms to even make a list to be considered for TRS investment, and he and Levine already had steered a $50 million investment to Glencoe Capital, with Pekin acting as the finder and bringing in a 1 percent fee of $500,000.

Rezko, Kelly, Monk, and Blagojevich also already had the experience of directing a finder's fee to the investment firm Bear Stearns in 2003. When
it came time for the state to refinance the $10 billion in pension obligation bonds, the group made sure Bear Stearns would handle the deal. Acting as a consultant to the firm was Kjellander, who after taking in his $809,000 fee allegedly kicked back $600,000. Those funds went to Joseph Aramanda, a man linked to Rezko businesses who passed on most of it to people and entities that Rezko named. Kjellander would long deny he had any role in the illegal passing of funds, calling his movement of money a loan.

Over the next several days that April, agents picked up chatter on Levine's telephones as his various corrupt deals came together. They caught snippets of one arrangement after another. Levine gave directions and made promises to associates, getting them to have their own conversations with the people necessary to make things shake out as Levine wanted. He was not unlike someone moving chess pieces around a board, manipulating everyone he spoke to.

On April 14, it was political fundraiser Joe Cari on the line. Cari had been Al Gore's national finance chairman in 2000 and would later be pressured by Blagojevich to take the governor's fund-raising national in front of a possible presidential bid. Levine was using Cari as a go-between on a TRS contract for JER Partners of Virginia, a firm that was in line for a TRS investment. Levine learned of the firm at a New York fundraiser Cari held for Blagojevich in late 2003, when Cari's partner at Healthpoint Capital, Carl McCall, mentioned it. Healthpoint was a private equity firm both Cari and McCall hoped could get TRS business with Levine's help, so they were eager to please him.

Levine later had Cari tell JER's leaders that they needed to sign paperwork giving a $750,000 finder's fee to a mysterious “consultant” in the Turks and Caicos Islands.

“All right, that's all set up, but I need to give uh, uh, Carl [McCall] the name of the guy their marketing people should call,” Levine said, asking Cari to pick up the ball and pass messages to McCall and to JER. Cari agreed and said he would get things moving.

On April 15, Levine was on the phone with Joseph Senese, a Chicago area union boss and the son of Dominic Senese, a Teamsters official with reputed ties to the Chicago Outfit and underworld figures. Dominic was probably best known for surviving an attempt on his life that involved a shotgun blast to the face outside his suburban house.

Senese heard from one of the principals in an arrangement he and Levine were working on that would steer $200 million in TRS money to Investors
Mortgage Holding, a company that would turn around and make loans to developers. Everything was going perfectly, Senese promised.

“Well, my meeting last night went absolutely perfect too,” Levine answered. “Full steam ahead.”

Everything sounded like it was on track, the men agreed, and they were optimistic that once they pushed the $200 million from TRS in the direction they pleased, there would be many more deals later. “Better than a poke in the eye,” Levine said.

Investigators later came to learn the meeting Levine mentioned had allegedly been with Rezko himself. Levine had gotten a private room at the Standard Club in Chicago, a posh members-only club with dining and rich amenities. He and Rezko met there over New York strip steaks and cabernet, and Levine took time to explain how the rest of the TRS deals he had lined up could work. Rezko—who later disputed that the meeting had happened at all—allegedly agreed and gave Levine a green light to do as he pleased. Phone records later showed Rezko called Tom Beck, head of the health facilities board, during the sitdown. And the next day, investigators captured another call between Levine and Weinstein.

“Great meeting last night,” Levine said of the Standard Club get-together. “And I got everything all, uh, laid out and um, full speed ahead, fair and equitable, where everybody participates,” Levine went on. “Whatever I want.”

Levine and Weinstein would chat throughout the time the FBI had Levine's phones tapped. Two days later, on April 17, Weinstein and Levine discussed, among other things, a $220 million TRS allocation Levine hoped to make money on. And by the way, Levine told his friend, Levine was hoping to be named to a post with the US Holocaust Museum soon.

“You are a holocaust,” Weinstein joked. “Good-bye.”

In just the first few weeks of taping Stuart Levine, investigators were amazed by the amount of information that poured forth. It seemed that in any twenty-minute phone call, Levine would plow through fourteen or fifteen frauds as he chatted with someone close to him.

Leading the effort in the US attorney's office was Christopher Niewoehner, a Minnesota native who was Harvard educated and eager to work on public corruption cases. Niewoehner was often soft-spoken in public, but his quietness cloaked the deep intelligence of a shrewd prosecutor who was more than up to the task. Niewoehner was brought onto the case out of the narcotics division in the US attorney's office in Chicago because that experience left him knowing how to manage a wiretap. Levine had been captured talking about Rezko offering the keys to the kingdom, as it were, and Niewoehner would be in for the long haul.

That same April, Levine had been named vice chairman of the Illinois Health Facilities Planning Board, which Rezko sanctioned because it was necessary to drive the board's agenda if Beck, the chairman, couldn't run a meeting for some reason.

The five-member bloc on the panel voted Rezko and Levine's way, regardless of the merits of a particular project. That constituted a majority that could impose the administration's will on any question before the panel. If a proposal came up that the administration wanted to steer through or stonewall, Rezko told Beck which way to have the bloc vote. Levine and
Beck spoke before each meeting, and if there was an item of particular concern to the administration, Beck pointed it out and indicated which way the outcome should go. Beck often pulled the Rezko board members aside one at a time to tell them what to do at the meeting and sometimes even passed out note cards before meetings instructing the bloc which way to vote on particular agenda items.

It was supposed to run smoothly, though it didn't always.

What was supposed to be a behind-the-scenes scheme was nearly outed that spring when the first hospital Kiferbaum was to pay a bribe on came to a vote before the panel. Kiferbaum and Levine had been working on their plan to get an approval for the facility, to be built by the Mercy hospital system, as far back as the fall of 2003.

Levine had gone that spring to Beck to see about getting Mercy what was known as a certificate of need, or a CON, to build the hospital, and had been told Rezko was against it. Mercy submitted a poor application and didn't have the right clout behind it. So Levine visited Rezko that fall to see what could be done.

Others had been promised the Mercy plan would not get a go-ahead, Levine was told, but that wasn't the end of it. Levine later remembered asking Rezko if it would make any difference if he and Rezko could make a lot of money if Mercy got the CON. The two already had pushed the allocation for Glencoe through TRS, and Rezko siphoned money off that deal. In the Mercy matter, Kiferbaum paid a heavy bribe to get the plan pushed through and promised to make significant campaign donations to Blagojevich. The information that he could make money under the table did change Rezko's mind on Mercy, but he decided to keep even Beck, the chairman, in the dark that Mercy's fortunes were about to change.

With that assurance in hand, Levine went back to Kiferbaum with some direction. Mercy should start by hiring Steve Loren as its attorney on the proposal. That would get Loren a client and give Levine a lawyer he could communicate with behind the scenes.

In December 2003, a vote for Mercy came up for the first time. Kiferbaum wanted it approved immediately, but Levine and Rezko agreed they shouldn't push it through on the first shot. It wouldn't be wise to do anything unusual and draw attention to the plan. Most proposals making their first appearance before the panel would get what was known as an Intent to Deny from the board, directing additional work on a proposal before it would get approval. So Levine and Rezko decided to do nothing to help
Mercy the December before the FBI began its taping, allowing it to come for a vote and receive its first denial. But thereafter, Levine helped steer the project toward a better-looking proposal by giving Kiferbaum inside information he could take back to hospital leaders to guide them. That would help Kiferbaum's standing because the hospital would know the builder was getting them information they could not have gotten elsewhere, and Levine went as far as to appear at Kiferbaum's offices on one occasion to meet a Mercy leader there and show off Kiferbaum's influence.

By the time of the alleged Standard Club meeting between Levine and Rezko on April 14, 2004, Mercy was set to come for a board vote just a week later, on April 21. Beck hadn't been given his directions yet, Levine told Rezko, but by the time their meeting was through, he knew Mercy would be getting its approval.

Beck and Levine were caught on a recording just two days before the meeting, and it became clear to investigators that the wheels were in motion to get Mercy approved. The conversation began with Beck giving Levine some news.

“Uh, well we've got two new board members,” Beck said.

Levine perked up and quickly asked who they were. One was named Pamela Orr, an African American woman who worked for a nursing home.

“And uh, I don't know, she's not one of Tony's,” Beck said, seemingly first sharing with Levine the only thing they really cared about. “Tony told me she was from Balanoff,” meaning Tom Balanoff, the local head of the powerful Service Employees International Union and one of Blagojevich's largest campaign contributors.