Golden (36 page)

News of Levine's woes and the subpoenas to the hospital board quickly reached Rezko's ears, those of Blagojevich's chief of staff, Lon Monk, and the governor himself. All the IHFPB members were considering hiring criminal lawyers, and everyone knew that bad publicity was coming. The members whose actions during the Mercy vote were most in question were Blagojevich appointees, so there was little doubt that he was going to catch some of the heat for the Levine debacle. Monk, Rezko, and Blagojevich were on a jet at O'Hare International Airport when Blagojevich asked Rezko to tell him what he knew about the situation. Rezko wasn't that concerned.

“Don't worry about it,” he said.

And there was only slightly more anxiety not long after when news spread that Levine's phones had been tapped. Rezko thought about conversations he might have had with the targeted insider and could only think of one. It wasn't a conversation he thought he had to worry about, but he did toss out his cell phone and get a new one. He told close associates he thought he was being watched and sometimes showed them bug-detecting devices he had installed in his office.

On October 30 of that year, federal agents arrived at Cari's home to question him. They asked about Stuart Levine and what Cari's relationship was with him. Having no idea where the investigation was going or what the agents were getting at, Cari lied and said he had no relationship whatsoever with Levine. He said he had no idea whether Levine was behind the promotion of a mysterious consulting firm to get a fee in a TRS deal with JER, but wanting to be in a decent position if things got bad, Cari promised
to help the agents and give them any documents he had collected in the arrangement.

But at that moment, Cari had decided to keep to himself what he knew about Rod Blagojevich and the fact the Illinois governor was dreaming up creative ways of making it to the White House.

In the midst of Rod Blagojevich's budget battles with Michael Madigan, federal prosecutors had made their approach to Stuart Levine, compelling him to resign from the state boards Blagojevich had reappointed him to and forcing Blagojevich to explain his relationship with the longtime Republican. Blagojevich said he didn't know Levine well and was just trying to bridge the gap with Republicans by reappointing him. But that excuse didn't completely fly because since the election Levine had become a Blagojevich donor, including picking up the tab for a plane ride to and from New York City for a curious fall 2003 fundraiser there.

A few weeks later, a whistleblower lawsuit filed by Edward Hospital detailed some of the accusations against Kiferbaum and Hurtgen and stated that a hospital official wore a wire. And the media began reporting on Rezko friends Massuda and Malek getting appointed to the Health Facilities Planning Board after each made $25,000 campaign donations to the governor— one of the first indications of what would be known as Blagojevich's $25,000 Club. In all, Blagojevich received more than two hundred individual donations of that amount, and a majority of the contributors got something from state government, from appointments to boards and commissions to state contracts.

Indeed, while Blagojevich was often an absentee governor he was still fully engaged in fund-raising, as he'd always been.

Rezko and especially Kelly continued to lead the push, assisted closely by Petrovic and Wyma, both of whom had picked up major clients with interests before the state. Blagojevich's main goal was to raise millions of dollars in one night each year by inviting hundreds of people to and hosting “the big event” during the early summer at major Chicago locales like Navy Pier or under the skeletal remains of the T. rex Sue at the Field Museum. Blagojevich was always successful, collecting $4 million or $5 million a pop, which even for Illinois was a colossal sum that was already scaring off potential competitors for the 2006 election.

But one man who wasn't overjoyed was Mell, who by now was being fully pushed to the side. With all the governor's men raising so much cash for Blagojevich, Mell's influence wasn't needed. And still portraying himself as a reformer, Blagojevich didn't want to even appear indebted to Mell. But perhaps mostly, Blagojevich
wanted
the separation, still resenting the feeling that others thought he was Mell's tool.

With Blagojevich's blessing, Kelly cut Mell out wherever he could. When the Thirty-Third Ward office staff, proud to have close ties to the sitting governor, placed Blagojevich's name on ward stationery, Blagojevich had legal counsel draft a letter to Mell's people declaring that was illegal. Then he had Kelly set up a meeting with Mell to explain the new order of things and stress the governor's independence from his original sponsor, which incensed Mell even more.

The old-timers and precinct captains loyal to Mell and who had helped Blagojevich win his state rep and congressional offices were livid. Some probably had been edged out of jobs or some other sort of benefit they felt they were owed, but many also felt Blagojevich was turning his back on those who had helped make him a success. Mell and Blagojevich were barely speaking, and the alderman wasn't talking with his daughter much either. He vented to friends that putting Blagojevich up for governor was the worst decision he'd ever made and that his sonin-law had turned into an “ungrateful son-of-a-bitch.”

But the two men put their disagreements aside briefly for the holidays. It was a very temporary thaw. During dinner on Christmas Eve 2004, Blagojevich overheard Mell talking about how successful one of his wife Marge's cousins was running a landfill in Will County near Joliet. Blagojevich quickly became suspicious. After talking about it with several friends, including Kelly, Blagojevich came to believe the relative, Frank Schmidt, was telling construction waste haulers that they could dump
whatever they wanted in the landfill because he was related to Mell and the governor.

Blagojevich said nothing about his suspicions that night. But two weeks later, he announced publicly he was closing the landfill. It was a highly unusual move for a governor to make even if there hadn't been any family ties. But Blagojevich said he was trying to send a message: nobody gets special treatment—not even his family.

The on-and-off hostility that had been brewing quietly for a decade between Mell and Blagojevich had finally reached its boiling point.

A seething Mell, vacationing in Florida, called reporters all over Chicago, blasting Blagojevich for being an ingrate and repeating to the press what he had previously said only privately: Blagojevich uses people and then throws them under the bus if he thinks it will help his career. He also took several swipes at Kelly, telling the
Sun-Times
he felt like one of those wives who for years supported a struggling husband only to be dumped for a trophy wife once the man became successful.

“I am the old wife,” Mell said. “The new wife is Chris Kelly.”

He then added even more fuel to the feud when he accused Kelly of trading appointments to state boards and commissions for “$50,000 campaign contributions” to Blagojevich's campaign fund.

Illinois's First Family was in full-on meltdown.

In the following days, Blagojevich demanded Mell retract the statement about the campaign contributions, which essentially accused Kelly of breaking the law. Kelly hired high-powered attorney Robert Clifford to threaten a defamation lawsuit. Clifford had known Mell for years. The two men had summer homes next to each other in Lake Geneva, Wisconsin, where Clifford had gotten to know both the alderman and Blagojevich. Clifford was one of Blagojevich's biggest campaign contributors and had met Kelly through the governor. When he arrived at Clifford's plush downtown offices, Kelly was righteously indignant. He said he was innocent, he told Clifford, and he wanted to sue to prove it.

Mell soon realized what he'd done. His pride prevented him from immediately taking back what he had said about Kelly, but he also realized he may have gone too far. When Clifford and Mell spoke, Mell said, “I get going sometimes, and maybe I took it out on the wrong guys.” Less than two weeks later, Mell officially recanted, and Kelly didn't sue.

The Mell accusations had virtually no impact on the ongoing federal probe. With Levine, Cari, and others already in the fold, agents and
prosecutors were well on their way into looking into the Blagojevich administration.

But Mell's words did spur the Cook County State's Attorney and Attorney General's offices. They couldn't unhear what Mell had said, and both offices launched their own probes.

Privately, Blagojevich became obsessed with the landfill spat, constantly talking to Kelly and aides about it. If one of the city's new major newspapers wrote a story on the issue, Blagojevich would churn it over and discuss every detail. While other business in the government had to get done, Blagojevich focused only on the landfill and the fallout.

“The whole situation was all driven by hatred of Mell,” one former top staffer recalled. “But that doesn't mean Mell wasn't up to no good. The two things aren't mutually exclusive.”

It was also a turning point for Blagojevich. Although the investigations by Lisa Madigan's office and county prosecutors never resulted in any charges, Mell's accusations—combined with the brewing investigations at the state boards—began to focus public attention away from the governor's policies and toward his growing scandals.

A few weeks later, a
Tribune
poll showed more voters than not wanted to see his administration end after one term. Blagojevich, who polled internally through Fred Yang's firm three to five times a year, seemed unfazed. He didn't blame the bad poll numbers on the ongoing investigations. Rather, he said, it was just the typical ups and downs of politics. What he did, taking on Mell, showed how different he was from other politicians who would have looked the other way to help a relative. Of course, Blagojevich had his own unique way of making his point.

“Do you have the testicular virility to make a decision like that, knowing what's coming your way and then stick to it?” he asked. “I say I do.”

At the end of the school year in 2005, a press conference was held on the steps of the Chicago Academy High School in the city's Portage Park neighborhood. The experimental school at 3400 N. Austin Boulevard was run by the Academy for Urban School Leadership and was a training ground for teachers. Incoming instructors would spend a year there under veteran teachers before going out and spending five years in underperforming schools around the city. It had a big backer in the neighborhood's congressman.

“We're talking about a program that was on the cover of the US Department of Education's newsletter recently as one of the most innovative teacher training programs in the country,” said Rahm Emanuel, who attended the press conference to announce a $2 million state grant that would turn a large parking lot at the school into athletic fields. “I'm a smitten convert.”

Arne Duncan was there, too, the Chicago schools CEO who would go on to be US education secretary under President Obama. Emanuel had made getting the state grant into a pet project and had successfully gotten it from Blagojevich. Or at least it seemed like Emanuel had gotten the money.

Work on the athletic fields started just after school got out the following spring. An engineer was hired, plans were finalized, environmental work was done, and the concrete was broken up. In short, bills were coming in, but the promised grant funds weren't materializing.

Emanuel was livid and contacted Tusk, the deputy governor, to see what the holdup was. When Tusk spoke to Blagojevich about it, the governor said something so outrageous that even Tusk—who had been listening to Blagojevich's craziness for two years—was taken aback. Blagojevich said he was holding up the grant until Emanuel's brother, Hollywood movie agent Ari, held him a fundraiser.

Tusk felt what Blagojevich was suggesting was illegal. He hung up the phone and made two calls—to Wyma and to Bill Quinlan, the state's general counsel. If Blagojevich persisted with his plan, Tusk thought the governor might turn to Wyma for his help. So Tusk called his friend to make sure Wyma knew what just happened and didn't do anything to help Blagojevich. As for the call to Quinlan, Tusk wanted to report what happened; he knew Quinlan was good at talking to Blagojevich. “You need to get your client under control,” Tusk told him.