Witness calls insiders 'stupid'

Published: 4/21/2008 1:17 PM | Updated: 4/21/2008 8:06 PM

The lawyer who drew up bunk contracts to hide bribes tied to a teachers pension investment board testified Monday that he thought the political insiders making the deal were being sloppy.

"How could these people be so stupid?" Steven Loren told jurors Monday at the corruption trial of Antoin "Tony" Rezko, a former fundraiser and confidant to Gov. Rod Blagojevich.

Loren said the outburst came after insider Stuart Levine told him some of the bribe money was to go to Chicago Alderman Dick Mell, Blagojevich's father-in-law, and that the politician's name would appear on one of Loren's "finder's fee" contracts.

Mell's name was later allegedly dropped, and the veteran alderman has not been charged with any wrongdoing.

Loren, a TRS counsel for more than a decade, also outlined for jurors the long history of scandals at TRS under Blagojevich and previous Republican governors. He said insiders Bill Cellini and Levine long had control of key staff members and trustees.

Rezko, a former Blagojevich confidant and prolific fundraiser, is accused of taking part in the kickback plot by steering the governor to appoint Levine-friendly board members.

Much of Monday's testimony centered around the inner workings of the obscure board that managed billions of dollars in pension funds for teachers from across the state. And most of it appeared to underscore Levine's chief role in the scandal.

Levine, a millionaire Highland Park lawyer with a history of drug abuse, has pleaded guilty and will be sentenced after Rezko's trial.

But one prosecution witness, money manager Richard Driehaus, testified Monday that Rezko tried to shake him down at a 2003 North Shore dinner party held by a mutual friend.

"Mr. Rezko was very verbal. He was very strong. He is a very strong personality and he can be, like, very direct. It was uncomfortable," Driehaus told jurors about the basement meeting. "I was upset ... I said, 'I don't pay money to get money.' "

The founder of Driehaus Capital Management didn't detail in court why he came forward to federal investigators in February of this year with the account. But the testimony fit in with the scheme Rezko is accused of helping Levine orchestrate.

Driehaus said he attempted to tell Rezko about his money management firm because he knew the Blagojevich insider was fishing for TRS investments. He said all Rezko wanted to talk about was "finder's fees."

During cross-examination, Rezko's attorneys suggested Driehaus was drunk during the meeting and that the fight was really about Middle East relations.

Prosecutors will continuing questioning Loren today.