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GOP insider indicted in Rezko-Levine teacher retirement scam
By Rob Olmstead | Daily Herald Staff

William F. Cellini Sr.

 

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Published: 10/30/2008 1:05 PM | Updated: 10/30/2008 6:59 PM

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With the chief fundraiser of Gov. Rod Blagojevich already convicted, a federal grand jury Thursday indicted another longtime Illinois power broker, William Cellini of Springfield.

While Cellini is far from a household name, he has loomed large for decades in state government, and he has had a hand in everything from Illinois casinos and state-subsidized hotels to investing teachers' pension money.

The accusations against Cellini are not new and were aired, in large part, during the trial of Blagojevich's fundraiser Antoin "Tony" Rezko. Rezko was convicted in June of mail and wire fraud, extortion, soliciting bribes and money laundering.

Jurors found that Rezko used his influence with state government in exchange for personal profit and the benefit of friends, and to solicit campaign donations for Blagojevich.

Cellini is charged with conspiracy to commit wire and mail fraud, conspiracy to commit extortion, attempted extortion, and solicitation of bribes.

Blagojevich has said he did nothing wrong in the Rezko case, and he said the same for Cellini's indictment Friday.

"The governor was not involved in the improper activities alleged in the indictment," said Blagojevich spokesman Lucio Guerrero.

But one of the counts Rezko was acquitted of involved the alleged scheme that Cellini now stands accused of. Prosecutors say that Cellini, Rezko, Blagojevich adviser Chris Kelly and Teachers Retirement System board member Stuart Levine conspired to extort campaign donations for Blagojevich from investor Prosecutors say that Cellini, Rezko, Blagojevich adviser Chris Kelly and Teachers Retirement System board member Stuart Levine conspired to extort campaign donations for Blagojevich from investor and moviemaker Thomas Rosenberg.

Rosenberg, producer of "Million Dollar Baby," owned an investment fund that was seeking to manage $220 million in TRS funds.

Cellini lawyer Dan Webb pounced on the acquittal of Rezko regarding that charge as proof of his client's innocence.

Cellini "is completely innocent of these charges, and he will fight this case because he has done absolutely nothing wrong," said Webb in a prepared statement.

But Webb must face one obstacle in defending his client that Rezko's attorneys did not. Cellini is caught on tape repeatedly discussing the scheme with fellow power broker Stuart Levine, whereas Rezko was caught on tape only for brief, largely innocuous conversations.

Cellini is on tape recounting to Levine how he told Rosenberg that Rosenberg had a problem because Kelly and Rezko had become aware of how much business Rosenberg was doing with the state without having made political contributions.

According to the tapes between Cellini and Levine, when Rosenberg felt he was being shaken down for campaign contributions, he went ballistic and vowed to Cellini that he would bring down Rezko and Kelly if they persisted.

With that, a hasty meeting between Kelly, Rezko and Cellini was called in which they discussed how to handle Rosenberg. Cellini discussed with Levine one potential way of diffusing the situation: not asking Rosenberg for a political contribution, but then only giving him $25 million in business, a fraction of his $220 million deal.

Later tapes show that never happened.

Instead, a decision was reached to give Rosenberg the $220 million deal so as not to raise suspicions, but to never give Rosenberg further business with the state.

Webb interprets Cellini's involvement as simply intervening with Rezko and Kelly at the request of Rosenberg in an attempt to help Rosenberg. It was Rosenberg who called Cellini in the first place to ask for help, Webb points out.

Whether Rezko's highly publicized recent talks with federal investigators gave them new information emboldening them to bring the Cellini case to the grand jury is difficult to tell. There is little new in Thursday's indictment, and Rezko's attorney, Joseph Duffy, could not be reached Thursday for comment.

And while Rezko has been engaged in discussions with federal officials and told them some information he knows, no agreement for him to testify or cooperate has been reached, a source close to the talks said.

But there are some new nuggets in Thursday's indictment.

The document alleges that Rezko and Cellini discussed potentially moving TRS executive Jon Bauman to another state job in order to ensure that he would not cooperate with federal investigators.

Bauman is still the head of TRS, and the agency Thursday released a statement saying that it was cooperating in the investigation in the alleged scheme that sought to misuse TRS funds and "attempt the removal of honest public servants from office," a possible reference to the indictment's allegation in regards to Bauman.

Bauman's role was the subject of some dispute during the trial. He is a longtime family friend of Cellini, and a TRS board member criticized Bauman's role during the trial. On the plus side for Bauman, a tape recording of Cellini has Cellini telling Levine that he'd never dealt with anyone like Rosenberg who threatened to go to federal authorities. Cellini then adds, chuckling, "other than Jon Bauman."

Whether or not Cellini is convicted, he already has suffered financially as a result of his damaging tapes aired in the Rezko trial. Cellini was recently booted from a share in handling management of a Crystal Lake tax increment financing district after his involvement became a political issue.