Obama Fundraiser Rezko Accused of Being Mastermind of $7M Scheme, as Trial Begins

A federal prosecutor launched the trial Thursday of a businessman who bankrolled campaigns for Barack Obama and others, denouncing Antoin "Tony" Rezko as the behind-the-scenes mastermind of a $7 million fraud scheme.

"Defendant Rezko was the man behind the curtain, pulling the strings," Assistant U.S. Attorney Carrie E. Hamilton said in an hour-long opening statement that included numerous references to Gov. Rod Blagojevich.

Rezko, 52, accused of scheming to shake down companies wanting to do business with two big-money state boards, sat placidly listening as Hamilton described how his prolific fundraising gave him power.

"When Rod Blagojevich was running for governor in 2002, the defendant was one of his biggest fundraisers," Hamilton said. "After he was elected, the defendant Rezko was one of his advisers."

By contrast, no references were made to Obama, whose presidential campaign has been plagued with questions about Rezko's campaign donations.

Obama has sent to charity $150,000 in Rezko-related campaign money to date but has been accused of no wrongdoing in the case. His name is expected to come up briefly, if at all, in testimony.

Opening statements following three days of jury selection were delayed two hours Thursday while the court waited for a tardy juror.

Once the trial got under way, Hamilton promised jurors an inside glimpse into the brand of corruption that has long plagued state politics.

She said Rezko used his clout "at the highest level" of the Blagojevich administration to place five people eager to do his bidding on the powerful Illinois Health Facilities Planning Board.

She said he schemed with a board member, millionaire attorney Stuart Levine, to share in a bribe to be paid in exchange for approval from the planning board for a Mercy Hospital expansion in Crystal Lake.

"Defendant Rezko controlled the planning board," she said. "Stuart Levine offered Rezko a part of the bribe. Defendant Rezko lined up his bloc, he gave (board Chairman) Tom Beck his marching orders."

Levine has pleaded guilty in the case and Hamilton said he would take the witness stand to divulge the details of the alleged scheme.

When chief defense counsel Joseph J. Duffy gets his turn, he is expected to try to wreck Levine's credibility as a drug user with a $9,000-a -month habit and thus someone whose memory cannot be trusted.

Hamilton mentioned Levine's drug use briefly and moved on.

She told jurors Rezko and Levine expanded their alleged corrupt operations to the Illinois Teachers Retirement System board of trustees, where Levine also was a member. The system is the $30 million nest egg that pays the pensions of retired downstate and suburban school teachers.

Those wanting to invest money on behalf of the pension fund were going to have to pay a fee or see their proposal shelved, Hamilton said.

"No fee, no fund," she told jurors.

She outlined a scheme in which Rezko alone was to more than $3 million in such fees from five funds hoping for state business.

Rezko and Levine never collected their $7 million because the FBI had been watching Levine and stepped in before the plan could be completed, Hamilton said. She said, however, that FBI wiretaps captured some of the plotters as they were scheming to make the plan work.

Hamilton warned jurors they wouldn't hear much of Rezko's voice on the FBI tapes made from taps on Levine's home telephone.

But she urged the jurors to listen to what the parties to the conversations said about Rezko.

In an April 17, 2004, conversation, Levine says Rezko asked him "what do you need to proceed and I said, 'Your permission."'

Ten days earlier, Levine told a caller: "If Tom feels that he'd rather walk away from the money than deal with Tony, then there it is."

In an April 21 conversation, Levine, speaking of Rezko, says: "I need his people to get stuff done."

Hamilton told the jurors the repeated references to Rezko illustrated his role in the alleged scheme.

"The defendants Stuart Levine and Tony Rezko were working together to corrupt two state boards," she said.