17Apr/121

Jack Lavin testifies in a stealth law suit, along with other notables

Share

Hugo Floriani, PayToPlay Investigative Reporter

Did you know that a federal civil law suit went to the jury today, April 17, after Governor Pat Quinn’s Chief-of-Staff, Jack Lavin, testified as a witness; Tony Rezko was deposed; and Daniel T. Frawley didn’t testify because his lawyer indicated that, if called, he would “take the 5th”? Here's Jack.

You probably didn’t know any of that, unless you hang around the court house for grins.  And you certainly didn’t know it if you rely on the Chicago Tribune or the Chicago Sun Times to keep you informed.  (Although today, the Times did report that some bald eagles are nesting in the south suburbs. Good to know stuff.)

The case, filed April 24, 2008, in the United States District Court for the Northern District of Illinois, Eastern Division, pits Semir D. Sirazi vs. Panda Express, Inc., Panda Restaurant Group, Inc. and the Citadel Panda Express, Inc.

(Illinois PayToPlay reported earlier on another law suit, filed just last January, pitting Semir Sirazi vs. Nadhmi Auchi. Tony Rezko plays a role in both cases.)

Here’s the “Nature of the Action” paragraph in the Sirazi vs. Panda Express case that’s now in the jury’s hands:

“1. This is an action by Sirazi against Panda Express for unjust enrichment, fraud, civil conspiracy, aiding and abetting a breach of fiduciary duty and for violations of the Illinois Uniform Fraudulent Transfer Act. From 1993 to 2006, Panda Express, Antoin (“Tony”) Rezko, and various Rezko-controlled companies owned and operated numerous Panda Express restaurants in 5 Midwestern states, the majority of which were in the Illinois/Chicagoland area. In June of 2006, knowing that Tony Rezko was under severe financial and legal distress, and desperate for funds, Panda Express (among other improper actions) bought out PE Chicago, LLC’s 50% interest in the Rezko-Citadel partnership – the entity that owned and operated the Panda Express restaurants – at a price many times less than the fair value of that interest. At the time of the purchase, Panda Express knew that Sirazi and others had significant ownership interests in PE Chicago. In fact, Sirazi, at the time of the purchase – through his interest in Rezko Enterprises, LLC – owned a significant majority of PE Chicago. Panda Express, however, fraudulently conspired with Rezko to acquire PE Chicago’s entire interest in the Rezko-Citadel partnership without Sirazi’s knowledge and at a price far less than the fair value of such interest. As a result of the improper actions of Panda Express, Sirazi has suffered losses in excess of $15 million.”

So, Sirazi asserts he was cheated big-time by Rezko and the Panda Express Chinese food chain, headquartered in Rosemead, California. The originating Pandas were “Andrew and Peggy Cherng and Andrew's father, Master Chef Ming Tsai Cherng, all of whom used to live in the Yangzhou region of China’s Jiangsu province. They started their first Panda Inn restaurant in 1973 in Pasadena, California.”

Here’s the real interesting part: Daniel T. Frawley, in a recently obtained email sent to a confidential source and forwarded to Illinois PayToPlay, claims that Governor Pat Quinn’s Chief-of-Staff, Jack Lavin, fraudulently cooked Rezko’s Papa John’s books by transferring $4,000,000 from Panda Express accounts into Tony’s pizza business.  Here’s that email:

From: Dan Frawley <Address withheld>

Date: Thu, Jun 2, 2011 at 1:00 PM
Subject: I MET OBAMA'S AID AT THOMPSON PRISON WHERE BO WANTED TO SHIFT QUANTANIMO PRISONERS
To: robert XXXXX <Address withheld>

THOMSON PRISON, OBAMA, REZKO, JACK LAVIN & MOE CONTRACT

THOMSON PRISON IS THE FIRST SIGHT THE STATE OF ILLINOIS PROVIDED ME TO LOOK AT TO TRAIN THE IRAQI MOE CANDIDATES.

SEAMUS AHERN OF SENATOR OBAMA’S JOILIET ILLINOIS OFFICE WAS AT THOMSON. NEVER CALLED THE SENATOR’S OFFICE TO ARRANGE TO BE MET.

TONY REZKO CALLED JACK LAVIN REGARDING TRAINING THE IRAQI’S AT AN ILLINOIS GOVERNMENT SIGHT.

JACK LAVIN WAS THE CEO OF ONE OF TONY’S COMPANIES. JACK LAVIN MADE A JOURNALENTRY IN PANDA RESTARAUNTS FINANCIAL STATEMENT. JACK TOOK 4 MILLION DOLLARS OF PANDA’S PROFITS AND MADE A JOURNAL ENTRY INTO PAPA JOHN’S PIZZA PROFITS IN ORDER FOR TO OBTAIN A 10 MILLION LOAN FROM G.E. CREDIT.

ANDREW CHERNIG WAS A 50/50 PARTNER OF TONY’S IN PANDA. WHEN CHERNIG DISCOVERED THAT LAVIN AND REZKO DEFRAUDED HIM CHERNIG CAME INTO CHICAGO ON A FRIDAY AND EMPTIED THE PANDA OFFICE.

TONY AND LAVIN KEPT A DOUBLE SET OF BOOKS FOR PAPA JOHN’S. TOD SELACK THE ACCOUNTANT FOR RECKON AND LAVIN PREPARED THE DOUBLE SET OF BOOKS PER AL CHAIB AND REZKO’S ORDERS.

I HAVE SEEN BOTH SET OF BOOKS AND PROVIDED THE USAO’S OFFICE THE OPPORTUNITY TO COPY SAID BOOKS. THE ENTRY LAVIN MADE INTO THE PAPA JOHN BOOKS WAS KNOWN AS THE MIRACE ENTRY AROUND THE REZMAR OFFICE.

CHERNIG NEVER REPORTED THE FRAUD BECAUSE CHERNIG PARTICIPATED WITH AL CHAIB AND TONY IN STAFFING PANDA RESTAURANT WITH ILLEGAL CHINESE ALIENS CHERNIG HELPED SMUGGLE INTO THE UNITED STATES. CHERNIG WORKED THE CHINESE 80-100 HOUR PER WEEKAND PAID THEM FOR 40. TONY AND CHAIB HOUSED THE CHINESE IN THEIR BUILINGS IN OVER CROWDED CONDITIONS AND OVER CHARGED THE CHINESE FOR RENT.

Plenty to chew on there, such as…

  • Was Rezko deposed about the allegation that he was a slum landlord for illegal Chinese immigrant workers employed by the Pandas?
  • Was Lavin asked about the fraudulent bookkeeping allegation from Frawley?
  •  Is this why Frawley’s attorney announced that Frawley would “take the 5th” if called to testify?
  • Peggy Cherng testified at the trial.  Did she mention the use of illegal Chinese immigrants in Panda Express restaurants, as alleged by Frawley?
  • How about Al Chaib – was he asked about any of this?

Now that they have this email, no doubt the intrepid investigative reporters at the Sun Times and the Trib will jump on this story.

Hey, we can dream can’t we?

 

Share
8Dec/110

NewGeography.com Questions Chicago Press Complicity In Illinois Corruption

Share

Pay-to-Play Editorial Staff

Steve Bartin, writing for the website NewGeography.com, in an article entitled “Blago’s Historic Sentencing: Organized Crime in Illinois,” asks an important question. One that the Chicago media, particularly the Tribune and Sun Times, should be asking themselves today: “Could a more vigilant press have stopped the amazing political career of Rod Blagojevich?”

At Illinois Pay-to-Play, we’ve been wondering the same thing. Bartin mentions Robert Cooley in his piece. We at Illinois Pay-to-Play trust Cooley. He’s proved his veracity as few in Chicago have. His story, linked within the excerpt from Bartin’s article below, proves his reliability.

Also, we here are aware of the identities of several reporters, from both big Chicago tree-killing news outlets, who were given information by Cooley about Candidate Obama’s associations with…let’s say, persons-of-interest, before the ’08 election. In most cases, the information was ignored. It didn’t fit the papers’ template of support for their local Senator. Obama, they assumed, would help Chicago get the Olympics, guaranteed to help slow the city’s slide toward bankruptcy and grease the palms of some connected Southside land developers and contractors – not to mention politicians.  Good for business, and, therefore, circulation.

In one particular instance, a well-known reporter was so bold as to say to Cooley something to the effect that, “Our editors don’t want us reporting on that.”

We can report here that a staff member at Illinois Pay-to-Play had a similar response, nearly verbatim, with a reporter for one of the two major dailies concerning another corruption story.

Here’s part of what Bartin writes:

Former Illinois Governor Rod Blagojevich was sentenced today to 14 years in prison. Illinois will now have the dubious distinction of having two back-to-back Governors in jail at the same time. Could a more vigilant press have stopped the amazing political career of Rod Blagojevich? When you look into the background of the former Governor the tentacles of organized crime can’t be ignored.

Rod Blagojevich has been identified as a former associate of the Elmwood Park street crew of the Chicago Mob by Justice Department informant Robert Cooley. The allegations concern Blagojevich paying street tax to the Chicago Mob to operate a bookmaking operation. Former senior FBI agent James Wagner confirmed that Cooley told the FBI about Blagojevich in the 1980s. The Chicago Sun-Times and Chicago Tribune still haven’t reported on the Cooley allegations concerning Blagojevich.

Visit here to read the rest of Bartin’s article.

As the nation becomes further aware of Illinois’, and especially Chicago’s, depth of corruption, its attention is likely to turn toward the Chicago newspapers and start asking questions. One of those questions will be this:

Could the depth of Illinois corruption exist without, if not the direct complicity, at least the negligence and incompetence of the two big dailies?

Share
27Nov/110

Chicago’s New Media Outperforms Two Old Dying Papers

Share

Annabel Kent, Chicago Media Critic

It’s no secret that Chicago’s two major daily newspapers are circling the drain.

According to chicagoist.com, in 2011: 

Fewer Chicagoans are getting their fingers stained turning the pages of newspapers. Daily circulation for both the Tribune and Sun-Times for the six-month period ending Sept. 30, [declined] according to numbers from the Audit Bureau of Circulations.

The Tribune's daily circulation fell by 2.7 percent to 425,370, while the Sun-Times' weekday numbers of 236,371 reflected a 7.2 percent drop. There was some good news for the Tribune. Their Sunday circulation numbers rose to 781,128. The Sun-Times' Sunday numbers fell slightly to 233,445.

Compare those numbers with these tallied by the Audit Bureau of Circulations (ABC), according to the Tribune, in the not too distant past.

Tribune March to Sept. 05 950,582 (S) 586,122 (M-F)
Tribune March to Sept. 06 937,907 (S) 576,132 (M-F)
Tribune March to Sept. 07 917,868 (S) 559,404 (M-F)
Tribune March to Sept. 08 864,845 (S) 516,032 (M-F)

Sun-Times March to Sept. 05 281,129 (S) 349,968 (M-F)
Sun-Times March to Sept. 06 264,371 (S) 341,448 (M-F)
Sun-Times March to Sept. 07 244,962 (S) 326,018 (M-F)
Sun-Times March to Sept. 08 255,905 (S) 313,176 (M-F)

In the seven years from 2005-2011, the Monday-Friday circulation of the Trib went from 586,122 to 425,370.  For the Sun Times, the numbers declined from 349,968 to 236,371.  In the old math, that’s a 27% decline in daily circulation for the Trib in the last 7 years, and a 32% decline for the Sun Times.

In short, Chicago’s two major dailies are in a drag race to the cliff.

Causes for their decline abound. People are increasingly looking to the internet for news. TV cable channels have multiplied with outlets offering up-to-the-minute, 24-hour news.  Younger generations have grown up with cell phone where they can now read the news while commuting on the train, keeping their fingers clean of ink.

There’s another reason the two big old dailies are dying.

More and more readers are less and less trusting of the veracity of what they read there. Case in point:

During the run-up to the 2008 Presidential election, both Chicago dailies served as shills for the Obama Campaign.  The vetting of candidate Obama was powder-puff league quality, rather than hardball major league reporting. Puffery prevailed.

Sure, Chicago’s long been a Democrat Party town, and many Trib and Sun Times readers support the bias. But others, particularly those in the burbs, live where Democrat water doesn’t run as deep as in the City.

For the Fourth Estate, there’s a price to be paid for playing fast-and-loose with the news. Even those in sympathy with a bias, whatever it may be, eventually lose their underlying confidence in a news source the spins the story line, drives a meme, and promotes a political theme.

Let’s say it aloud: The two Chicago dailies helped Senator Barack Obama become President Obama.

The Tribune cooked the news somewhat more so than the Sun Times, but both outlets promoted his election.  And as his presidency fails, some of the blame is falling at the feet of the Chicago print media that helped put him in the White House.

Today, if readers want to more fully understand Chicago and national politics they must expand the horizons of their news sources to include Chicago’s New Media.

If the people of Northern Illinois want to stay abreast of stories like the Rezko and Blago trials, they need to visit outlets like the Chicago Daily Observer and Citizen WElls.  Both websites are linked in the margin of this website, along with Steve Bartin’s Newsalert, a running, updated compendium of current articles covering a variety of topics of interest, specializing in political corruption. A national pastime these days.

These are the news sources of the future – Chicago’s New Media.  For the Old Media is dying a slow, self-inflicted death.  And the New is just now being born.

Meanwhile, there will always be homes that welcome the old ink and paper media.

Share
21Nov/110

The Sun Times Asks “How much time will Tony Rezko serve?”

Share

Hugo Floriani, Investigative Reporter

Natasha Korecki, Federal Courts Reporter for the Sun Times, asked that question in a recent article.

Tony is scheduled, once again, to be sentenced Tuesday, November 22, in federal court. We’re holding our collective breath.

The rest of Natasha’s piece is designed to prepare us for a sentence of “time served.”  Here’s what we’re told:

  • The U.S. Attorney, Patrick “Elliott Ness” Fitzgerald, wants Tony to serve 11-15 years for failing to cooperate. (That’s because Patrick’s what John Kass of the Tribune calls, the Exterminator of criminals.)
  • Tony’s lawyer says that Tony’s “talks with the government” help encourage others, like Lon Monk, to testify against Blago.
  • A defense attorney says that the judge could credit Tony for his cooperation (What cooperation?) even though he wasn’t called to testify against Blago.
  • The judge doesn’t have to follow the prosecution’s sentencing recommendation. (Oh, oh. Brace for impact.)
  • Meanwhile, “Rezko served about nine months in the most restrictive jail conditions at the downtown Metropolitan Correctional Center — a Special Housing Unit called the ‘SHU,’ where ‘high-risk’ inmates, including accused terrorists and currently a suspected high-ranking leader of a violent Mexican drug cartel, are held. High-profile defendants or those cooperating with prosecutors are also held there.”  (So now the Sun Times knows where Tony’s been. Who leaked this time? Chase again?)
  • Unidentified “legal observers” say the judge could credit Tony for having done jail time in harsh conditions. (Are you feeling set-up yet?)
  • A former Chief of Staff of former Governor, now inmate, George Ryan says that the SHU “should not be shrugged off.”  (Are you feeling Tony’s pain yet?)
  • Tony also spent time in a Wisconsin county jail (Really?) “…where he cannot go outdoors and has not had any physical contact with family.”  (OMG, such an ordeal for poor Tony!)

This article reads like the storyline for a sequel to A Christmas Carol with Tony playing a grown-up Tiny Tim.  Patrick Fitzgerald is the legalistic Scrooge. The kindly Judge St. Eve releases Tony from the clutches of debtor’ prison and he limps into the sunset – a free man.

Sort of like…John Thomas. Another faux witness to corruption in Crook County, never called to testify.

Get ready for time served. Unless there’s another sentencing postponement. And what a shock that’d be!

Share
13Oct/110

Chicago’s Political Sensei, Congressman Jesse Jackson, Junior

Share

Thomas Barton, Illinois Pay-to-PlayPolitical Commentator

In a recent interview with a reporter from The Daily Caller, Chicago’s own Congressman Jesse Jackson, Jr., displayed his karate sensei-like political skills in offering a clear, novel, and creative suggestion to President Obama on how to get his Jobs’ Bill enacted. (That’s J.J., Jr., above, on the left.)

With a range of verbal dexterity seldom witnessed among contemporary politicians, J.J., Jr. chopped his way through all the fuss and fury surrounding the Obama administration’s failing efforts to get Congress to pass his Jobs Bill.

With the decisive thrust of the agile Karate Master, he defined a solution for the President.  In his interview with Nicholas Ballasy – an apropos last name for a man willing to stand toe-to-toe with J.J., Jr., while representing a non-liberal news outlet – Ballasy listened stone-faced as the Congressman advised the President.

In case you think you might have mistaken what he said, here’s part of it, as reported in The Daily Caller:

“President Obama tends to idealize [suppose he meant idolize?] — and rightfully so —Abraham Lincoln, who looked at states in rebellion and he made a judgment that the government of the United States, while the states are in rebellion, still had an obligation to function,” Jackson told The DC at his Capitol Hill office on Wednesday.

“On several occasions now, we’ve seen … the Congress is in rebellion, determined, as Abraham Lincoln said, to wreck or ruin at all costs. I believe … in the direct hiring of 15 million unemployed Americans at $40,000 a head, some more than $40,000, some less than $40,000 — that’s a $600 billion stimulus. It could be a five-year program. For another $104 billion, we bailout all of the states … for another $100 billion, we bailout all of the cities,” he said.

Jackson added that his $804 billion stimulus plan is the only way to solve the unemployment crisis. “I support the jobs plan. I support the president’s re-election. I support Barack Obama,” he said. “But at this hour, we need a plan that meets the size and scope of the problem to put the American people to work.”

“We’ve got to go further. I support what [Obama] does. Clearly, Republicans are not going to be for it but if the administration can handle administratively what can be done, we should pursue it. And if there are extra-constitutional opportunities that allow the president administratively to put the people to work, he should pursue every single one of them,” Jackson suggested.

He also said that the Presidents solution to the jobs problem is about “one-twentieth” of the problem.  So, if we take, say, $600,000,000,000 as the minimum cost of the President’s Job Bill, and multiply that by 20, we get a J.J., Jr. solution that will cost about – just a second while I get out my jumbo calculator – $12,000,000,000,000, as in twelve trillion dollars.  (Somewhere in China, people are laughing in their noodle soup.)

Although J.J., Jr. didn’t have time to define the work these 15 million unemployed Americans would be doing to earn their incomes from the Federal Government, doubtless some would be engaged in: voter registration campaigns among heavily disenfranchised communities – like his, of course; changing light bulbs in every American’s home in order to dispense with the incandescent bulb and substitute a G.E. florescent unit Make in China;  picketing outside the homes of Tea Party members and persons identified as rich Republicans; and, as the ’12 general election approaches, serving as audience extras for enthusiastic Obama Rallies For Victory.

Only a political sensei like J.J., Junior would think to equate Congressional Republicans with the Confederate States of America of the Civil War era, and compare Republican (and some Democrat) opposition to Obama as a Rebellion. The linkage is, well…pure brilliance.

And, to complete the analogy, J.J., Jr. suggests that Obama declare a national emergency, suspend the U.S. Constitution, and simply dictate policy.  (Hey, it worked for King George III and even Der Fuehrer, for awhile anyway.)

Let’s see if the editorial page of the Sun Times, or the Tribune, endorses J.J., Jr.’s solutions. 50-50 odds.

Share
28Sep/110

Patrick Fitzgerald: Intrepid Crime Fighter? Or, Politically-Driven Leaker? The Silent Mole & A Complicit Newspaper (Part 5)

Share

Hugo Floriani, Investigative Reporter

Was Bernard Barton, Jr. relocated to Chicago on a mission to help bring down Tony Rezko and, thereby, shield a young, articulate, African-American politician from his potentially incriminating associations with Rezko? Too conspiratorial, you say? Maybe. Maybe not.

Let’s review the highlights of the Silent Mole, starting with an admission from the Complicit Newspaper.

The Chicago Tribune identified Thomas as a Mole in this May 4, 2007, article written by David Jackson.

John Thomas bought and sold downtown office buildings and helped other property developers secure multimillion-dollar mortgage loans.

But the high-living dealmaker had a double life.

Thomas, who was convicted of federal business fraud in New York in 2004, has been serving as an undercover government mole in Chicago for at least a year as part of an ongoing federal investigation into fraud in the financing of large-scale commercial real estate deals, the Tribune has learned.

Records made public so far do not identify the targets of the federal probe and the FBI and US Attorney’s Office declined to comment for this article.

That same May, a concerned citizen spoke on the phone with a well-known Chicago Tribune reporter.  The concerned citizen was trying to chase down information as to when the Tribune learned that John Thomas was an FBI mole while working in Rezko’s office.  “Thomas” was Barton’s new name in Chicago after being relocated from New York, where he faced prosecution and eventual sentencing for fraud.  (The complete story of Burton-Thomas is well documented and won’t be rehashed here.)

The concerned citizen asked the reporter why the Trib had sat on the Mole’s story since, at least, 2006.  That timeframe was implicitly provided by the Trib reporter when stating that Patrick Fitzgerald warned the paper, a year earlier in May 2006, that outing the Mole would cause problems for the investigation and could prove dangerous for Burton-Thomas.

Then, in a moment of indiscretion, the reporter added that Fitzgerald told the Trib in May 2006 that identifying the mole could also “influence the election.”

Now, the Illinois gubernatorial election came in November 2006, and the national election came two years after that.  To which election was the reporter referring? It wasn’t explicitly stated, but the obvious inference pointed to the Presidential election in 2008. In either case, it’s a curious statement coming from the USAO, as it was conveyed by the reporter.

There are other elements of the Burton-Thomas story equally curious.

Way back on February 22, 2002, then Tribune staff reporter Thomas A. Corfman, who followed the Mole over the years like a bloodhound, wrote this in an article:

Developer Donald Trump has picked prominent Chicago real estate firm U.S. Equities Realty to handle leasing for his proposed mixed-use skyscraper on the riverfront site of the Chicago Sun Times..

The selection was announced as questions surfaced in real estate circles about alleged criminal activity by two members of a small brokerage firm that, with Trump's blessing, last fall did some marketing of the 1.3 million square feet of office space in the massive tower.

John Thomas, a partner in Chicago-based Carnegie Realty Partners, and a Carnegie employee, Louis Giordano of New York, were arrested last year in connection with an alleged fraud scheme that took place over five years in New York.

According to an affidavit by an FBI agent, the wide-ranging scheme involved credit card fraud, forgery and allegations that the defendants, while running several billboard leasing companies, defrauded restaurants such as Hard Rock Cafe and Planet Hollywood, and entertainment companies such as Motown Records and Arista Records.

Thomas allegedly took upfront lease payments for billboards in Manhattan's Times Square and along Broadway, even though he has no contracts to hang the advertising from the buildings, according to the affidavit, which was filed in U.S. District Court in Chicago in order to obtain a warrant for Thomas' arrest.

Thomas and Giordano are free on bond, according to court records. The U.S. attorney for the Eastern District of New York would not comment on the case.

They have not yet been indicted, although a formal charge is expected, said attorney Eugene E. Murphy Jr., who represents Thomas [and also represented Buddy Wilkins when Buddy appeared before the Rezko Grand Jury as a witness against Rezko, and he later represented Tony Rezko while at the Byran Cave law firm.]. "I look forward to defending this case," said Murphy, a partner with Chicago-based law firm Horwood Marcus & Berk. Giordano and his New York attorney could not be reached for comment.

Back when the Mole was entangled with the Eastern District of New York, Patrick Fitzgerald was an Assistant U.S. Attorney in the adjacent Southern District.  The two would later rendezvous in Chicago.

So, in February 2002, shortly after Burton-Thomas was relocated to Chicago from the Big Apple, his nefarious past was outed by a Trib reporter, but lacked any hint of his cooperation with the feds, nor reference to his real name.

(So who alerted Corfman to Thomas’s past, since he was arrested in NY under another Burton? And, if Rezko new of Burton-Thomas’ past, what sense did it make to trust him to work in his office?)  

Four years later, Corfman reported again on Burton-Thomas.  His article appearing on November 1, 2006 at ChicagoRealEstateDail.com:

John Thomas, who has done more flips than an acrobat, has tied up another downtown office tower.

A venture managed by the controversial real estate entrepreneur has agreed to buy 20 S. Clark St., an office tower overlooking Chase Plaza in the Central Loop, says Mr. Thomas, who earlier this year formed Chicago-based Morgan Street Properties LLC for his investment activities.

The price is about $54 million, sources say…

In the last two years, Mr. Thomas has bought and quickly resold several other office buildings, including 250 S. Wacker Drive, 105 W. Adams St. and 11 S. LaSalle St. Last year, a Thomas venture bought 318 W. Adams St., a small West Loop office building that is being marketed as office condominiums…

He says he is also negotiating with developer Daniel Mahru, his partner on the 105 W. Adams and 11 S. LaSalle deals., to partner with him on 20 S. Clark.

Daniel Mahru was, as you probably know, a business partner of Tony Rezko.  Eventually, Burton-Thomas went to work in that same office. The Mole was in his designated hole.

Now, jump ahead to February 2008. Sun-Times staff reporter David Roeder elaborated on the Mole’s activity:

But sources said that, for more than two years when he was giving information to agents, Thomas provided a fly-on-the-wall look inside Rezko's real estate operations and his desperate attempts to keep his projects afloat.

Sources said Thomas also logged frequent visits to Rezko from Gov. Blagojevich and U.S. Sen. Barack Obama (D-Ill.).Blagojevich and Obama were among the many politicians for whom Rezko raised campaign cash. Neither has been charged with any wrongdoing.

Thomas had good reason to help. He hopes to get probation for his own felony fraud conviction in a New York case. And he said he wants to redeem himself in the eyes of business associates and his family.

Sources said Thomas helped investigators build a record of repeat visits to the old offices of Rezko and former business partner Daniel Mahru's Rezmar Corp., at 853 N. Elston, by Blagojevich and Obama during 2004 and 2005…

Sources said the government had him wear a hidden wire to record conversations with a Chicago alderman -- but that he did not record Blagojevich or Obama.

Why no recording of Blago and Obama?  Maybe because Blago had notoriously loose lips and might say something that implicated the Protected One, Obama.

One month later, in March 2008, presidential candidate Barack Obama was subjected to an underhand, slow-pitch softball interview by the editorial board of the Sun Times. The transcript of the interview (no longer available on line) includes this exchange:

Q: In November 2006, you and your campaign exchanged with us written interrogatories. So a lot of the quotes I will give you just come out of those. The campaign said that you probably had lunch with Rezko once or twice a year. You sort of added four or five times, something like that.

John Thomas is an FBI mole. He recently told us that he saw you coming and going from Rezko’s office a lot. And three other sources told us that you and Rezko spoke on the phone daily. Is that true?

A: (Obama) No. That’s not accurate

John Thomas aka Bernard Barton

Okay, maybe the Mole misremembered.  A bad memory might explain why he was never called by the USAO as a witness in the Rezko trial. Or, perhaps, there was another reason.

On June 21, U.S. District Judge Elaine Bucklo sentenced John Thomas to three years probation. His court records are sealed. His mission accomplished.  And the extent of his subsequent success in Chicago commercial real estate is displayed on his face today.

Share
26Sep/110

Patrick Fitzgerald: Intrepid Crime Fighter? Or, Politically-Driven Leaker? Saving Jesse Jr. (Part 4)

Share

Hugo Floriani, Investigative Reporter

As the FBI planned the arrest of Blago, most of the serious wantabees lobbying for appointment to Obama’s Senate seat had backed off the pursuit, no doubt realizing that association with Hot Rod was about to become toxic.

But, there was still one candidate with his eyes on the prize.  Right up to the day of Blago’s arrest, Candidate #5’s people were working hard to put a package together to buy their guy the seat. Had Fitzpatrick waited a bit longer to pull the trigger on Blago, Candidate #5 might have been swept up in Fitz’s rush to stop a “corruption crime spree” in progress.

But it wasn’t to be, because the precise timing of the arrest of Blago was really about saving Jesse Jackson Junior’ political career.  And maybe even his freedom.

The Designated Bundler: Raghuveer Nayak

A prominent member of the Chicago Indian business community plays a key role in this story.

Here’s how the Chicago Tribune described Raghuveer Nayak in a December 10, 2008 article:

Nayak, 54, is a political and community leader in Chicago's Indian community who has raised hundreds of thousands of dollars for Blagojevich, including more than $200,000 from Nayak, his wife and his various corporations. Nayak and his wife have donated more than $22,000 to Jackson, federal records show, and raised more for the congressman.

Nayak owns a series of surgery centers on Chicago's North Side. He also founded and until recently retained an ownership stake in a drug testing laboratory with millions of dollars in Illinois public aid contracts.

The Fund Raising Event

According to that same Tribune article, Nayak and Jessie Jackson Junior’s brother, Jonathan Jackson, co-hosted an October 31, 2008 “Blagojevich fundraiser” in Elmhurst. “According to several people who were there, Nayak and Jonathan Jackson go back years and the two even went into business together years ago as part of a land purchase on the South Side.”

So the Jacksons and Nayak were long-time buds.

Joliet pharmacist Harish Bhatt was among those attending the event. More on him later.

The December 10, 2008 Tribune also reported that:

Two businessmen who attended the meeting and spoke to the Tribune on the condition of anonymity said that Nayak and Blagojevich aide Rajinder Bedi {remember his name, too} privately told many of the more than two dozen attendees the fundraising effort was aimed at supporting Jackson's bid for the Senate.

A year-and-a-later, on July 7, 2010, a Chicagobreakingnews.com article reported that:

A supporter of U.S. Rep. Jesse Jackson Jr. told the Democratic congressman in 2008 that he would raise $1 million in return for then-Gov. Rod Blagojevich naming Jackson to the U.S. Senate, a federal prosecutor said today.

The allegation, made on a busy day at Blagojevich's federal corruption trial, was the first time authorities publicly suggested Jackson was aware of efforts by his allies to swap campaign cash for his appointment to the Senate seat vacated by President-elect Barack Obama.

Prosecutors also played a rapid-fire sequence of secret wiretap recordings that show Blagojevich reluctantly warming to Jackson as a Senate pick after first profanely ripping him as a non-starter.”

Nearly three months later after the Chicagobreakingnews.com piece, on September 21, 2010, the Chicago Sun-Times (article available here) followed suit with,

Rep. Jesse Jackson Jr. directed a major political fund-raiser to offer former Gov. Rod Blagojevich millions of dollars in campaign cash in return for an appointment to the U.S. Senate, sources said the fund-raiser has told federal authorities.

The allegation by Oak Brook businessman Raghuveer Nayak counters public statements made as recently as last week by Jackson that he never authorized any deal to attempt to buy the Senate seat.

The FBI interviewed that acquaintance -- a Washington, D.C., restaurant hostess named Giovana Huidobro {with whom JJ Junior was having an affair} -- about a year ago as part of its corruption probe of Blagojevich. Authorities were trying to determine whether Jackson had asked Nayak to offer Blagojevich campaign cash in exchange for the then-governor appointing Jackson to the seat once held by President Obama, according to sources with knowledge of the probe.

Huidobro, Jackson and Nayak all dined together on Oct. 8, 2008 {about three weeks before the Oct 30 Elmhurst fundraiser} -- the same day that Nayak has told authorities he had a key conversation with Jackson about the Senate appointment, sources said. The three then ended up at Ozio, the restaurant and club where Huidobro works and where Jackson has held fund-raisers.

Before he dined with Huidobro and Jackson on Oct. 8, 2008, Nayak said he had a critical conversation with the congressman about the seat while the two were alone. Nayak, also a former Blagojevich fund-raiser, said that Jackson asked him to tell Blagojevich that if the then-governor appointed Jackson to the U.S. Senate, Chicago's Indian community would raise $1 million for Blagojevich and -- after Jackson was appointed -- Jackson would raise $5 million for the then-governor.

Here’s a version of J.J. Junior’s “public statement” mentioned in the second paragraph above:


A concise account of the ramp-up among Blago and his advisors concerning the possibility of appointing J.J. Junior to the Senate also appears in the July 7 Chicagobreakingnews.com piece linked above.

Here’s the setting: During the first Blago trial, Rajinder Bedi was being questioned by Assistant U.S. Attorney Christopher Niewoehner.

Bedi testified he met with Jackson and another important Indian businessman, Raghuveer Nayak, at a Loop restaurant on Oct. 28, 2008, and Jackson expressed his interest in Obama's Senate seat.

At that point, U.S. District Judge James Zagel sent jurors out of the room, then asked Niewoehner to explain where the testimony was headed.

Nayak says to Jackson in Bedi's presence, “I will raise a million if he appoints you to the Senate seat,” Niewoehner explained.

Zagel barred Niewoehner from asking Bedi about that part of the conversation before jurors, but Bedi did testify that both Jackson's interest in the seat and fundraising were discussed with Jackson sitting at the table. Prosecutors then played wiretaps of conversations in which Blagojevich and his brother, Robert, appeared aware of the approach involving Jackson. {one such transcript is below}.

In one, recorded the same day as that restaurant meeting, Robert Blagojevich told the governor that Bedi had filled him in on the details, including Nayak's offer to do "some accelerated fundraising" on the governor's behalf if Jackson got the Senate nod.

Three days later, Gov. Blagojevich was recorded talking about overtures for Jackson in a conversation with one of his deputy governors, Robert Greenlee.

"I'm tellin' ya that guy's shameless," Greenlee said.

"Unbelievable isn't it," responded Blagojevich. "Then I, we were approached, pay to play. That, you know he'd raise me 500 grand, an emissary came, then the other guy would raise a million, if I made him a senator."

In a Dec. 4 telephone call with one of his advisers, Fred Yang, Blagojevich said he was now keeping an open mind on "clearly somethin' I would never have considered and that's Jesse Jr."

The thought was repugnant, Blagojevich said, but "just between you and me, they've offered a whole bunch of different things they wanna do for me." Those things included fundraising, Blagojevich said on the recording, asking Yang to think about the politics of making a pick that was sure to be unpopular with the Washington establishment.

A couple of hours later, the governor was on the phone with his brother, filling him in on the idea that he had elevated Jackson to the top of the list of candidates he was considering to replace Obama. He wasn't going to tolerate making a pick and getting nothing in return, he said on the recording.

"And I can cut a better political deal with these Jacksons and, and most of it you probably can't believe, but some of it can be tangible upfront," Blagojevich said to his brother.

He directed Robert Blagojevich to get in touch with Nayak and explain that Jackson was a realistic pick, but the promised help had to start coming in immediately. And he warned him to be careful how that message was delivered.

Blago wasn’t keen on appointing J.J. Junior to the Senate, but the more the money-talk heated up, the more he warmed to the idea.

On December 6, the Blagojevich brothers had this brief conversation.

Date: 12/6/08

Time: 12:39 pm

Robert Blagojevich Cell Phone

Session: 2615

Speakers:

ROBERT BLAGOJEVICH

ROD BLAGOJEVICH

ROBERT BLAGOJEVICH {The Governor’s brother} Well, here’s one, uh that’s    pending tonight, possibly, with Raghu {Nayak}.  And all I’m thinking, all I’m thinking about saying is, you know, your guy’s meeting with Rod on Monday.  That’s all I’m gonna say, and I’ll leave it at that. Based on what you told me, correct? 

ROD BLAGOJEVICH Yeah, that’s all. You know, if he says, I can do a lot more money, say, that’s you know, you answer that and just say, uh, look one, you know, that’s, that’s your decision…

 ROBERT BLAGOJEVICH One is not tied to the other. One is not tied to the other.  And if you want to, obviously, we want to help you do that.”

 ROD BLAGOJEVICH Yeah, that’s good. I like that. But you..yeah, that’s good.

 ROBERT BLAGOJEVICH Alright, well, I hear your caution, and I’m not being defensive, I’m just trying to be explanatory, that’s all.  Alright, look, I’m freezing my ass off.  I’ve got to get in the shower here.

 ROD BLAGOJEVICH I’ll see you.

 ROBERT BLAGOJEVICH Alright bye.

 ROD BLAGOJEVICH Bye.

On Monday, December 8, JJ Junior and Blago met for 90 minutes during which J.J. Junior said, later, that he merely laid out his qualifications as a potential Senator.  No pay-to-play was discussed, he claimed.

On Tuesday, December 9, the FBI arrested Blago at his home.

Nayak, Harish, and Bedi – What’s become of them?

Raghu has had his own problems with a federal grand jury.

A federal grand jury has subpoenaed dozens of doctors in the Chicago area as part of a probe into a wealthy Indian-American fund-raiser who owns surgical centers — and has ties to U.S. Rep. Jesse Jackson Jr. and former Gov. Rod Blagojevich, sources told the Chicago Sun-Times.

While the FBI and IRS investigation is centered on businessman and political fund-raiser Raghuveer Nayak, who owns surgical centers in Illinois and Indiana, the feds have cast a wide net: Sources said at least 30 doctors received grand jury subpoenas, and more than 10 of Nayak’s employees have also been subpoenaed.

In addition, two of Nayak’s surgery centers in Chicago were hit with search warrants in late January, and at least half a dozen doctors have been offered immunity or been granted immunity for their testimony, sources with knowledge of the investigation say.

Federal authorities are investigating whether Nayak made improper payments to the doctors in order to draw their surgeries to his centers. Under the allegations, while private insurers paid doctors and the centers for surgeries performed, Nayak is under investigation for allegedly separately paying doctors hundreds of dollars for every surgery brought to the centers. Doctors who perform out-patient surgeries, including chiropractors and podiatrists, practice at the centers and can choose to bring their work to the centers rather than a hospital.

Harish was visited by the FBI.

FBI agents on Thursday searched two Joliet drugstores owned by a major fundraiser for Gov. Rod Blagojevich who was the focus of a state investigation into whether campaign donations were made in exchange for regulatory favors.

Agents took records from the Basinger's Pharmacy stores but declined to say what they were investigating. FBI spokesman Ross Rice confirmed search warrants were executed and said no arrests were made.

The pharmacies are owned by Harish M. Bhatt, a prominent Indian businessman who helped the state's top pharmacy regulator win his job. The Tribune reported last year that state pharmacy auditors probing allegations of Medicaid fraud at Basinger’s complained that their bosses thwarted the investigation.

Bhatt denied he exerted any improper influence and said the investigation stalled for lack of evidence. State police and federal corruption investigators reopened the Bhatt investigation after Tribune reports.

And Bedi got arrested for shoplifting.  Back in April 2009, Bedi was fired from his $100K-plus job at the Illinois Department of Commerce and Economic Opportunity, so maybe he was short on cash.

Jesse Jackson Junior – What’s become of him?

Well, nothing so far.  He continues to be a United States Congressman. In the wake of his affair becoming public and lingering doubts surrounding his activities as Candidate #5, he decided not to run for Mayor of Chicago.  Nowadays, he keeps a relatively low profile.

Best of all, for him, is that he didn’t get indicted for trying to buy a seat in the United States Senate. For that he has the U.S. Attorney for the Northeastern District of Illinois to thank.

So why would Patrick Fitzgerald want to step in, at the 11th hour, to stop J.J. Junior from stepping on a political and criminal landmine?

Share