The Blagosphere - The Honest Services Mail Fraud Charges
O.K., so remember you heard it here first – a new portmanteau word, the combining of two words into one, Blagojevich and blogosphere. All future posts dealing with the former Governor of Illinois will be known as the Blagosphere.
One curious thing we noticed about this indictment – it is captioned as a “Superseding Indictment,” or second indictment, but the Court’s docket does not show an earlier Indictment. The press release states, however, that the indictment supersedes one brought on October 30, 2008 against Defendant William Cellini alone for allegedly conspiring to obtain campaign funds for Blagojevich by shaking down an investment firm that was seeking an allocation of monies from the Teachers' Retirement System (TRS).
Here is our take on the indictment's honest services allegations: one of the Defendant’s, John Harris, Blagojevich’s former Chief of Staff, is charged with a single count of wire fraud, and is cooperating with the government. I can hear the tom toms beating and see the smoke on the horizon for Blagojevich. By the way, this guy is the definition of chutzpah, I even saw him on Letterman one night, and knowing he is going to be indicted any day, he apparently takes his family to Disney World, which I always thought you did after a victory.
Back to the indictment - it alleges a racketeering conspiracy from 2002 through the day before his arrest, December 8, 2008. As mentioned before, the racketeering enterprise is, the Office of the Governor of Illinois and Friends of Blagojevich, the fundraising vehicle for Blagojevich. The predicate offenses for the racketeering conspiracy are alleged to be mail fraud, wire fraud, Hobbs Act extortion (18 U.S.C. 1951) and bribery.
The indictment details an honest services mail fraud claim that brings together all of the factual allegations regarding Blagojevich's schemes.
They are:
- That Blagojevich and others agreed that they would use the Governor's position with the State of Illinois for financial gain to be distributed after he left public office;
- That the defendants and others agreed to direct state business related to the refinancing of billions of dollars in Illinois Pension bonds to a company whose lobbyist agreed to pay hundreds of thousands of dollars to previously convicted co-schemer Tony Rezko, who would in turn, split the money with Blagojevich;
- That certain defendants agreed to use their influence with the Teachers' Retirement System to cause it to invest in funds and use the services of law firms selected by Kelly and Rezko, in exchange for campaign contributions;
- That Ali Ata, an Illinois businessman made 2 $25,000 campaign contributions to Blagojevich and in return was appointed as executive director of the Illinois Finance Authority;
- That Joseph Cari, a national Democratic fundraiser was told that if he helped Blagojevich with fundraising he could have whatever he wanted, if he agreed to help;
- That "Lobbyist A" was told by Kelly that it would require a $50,000 campaign contribution to get a firm on the TRS list of fund managers;
- That the Defendants informed Capri Capital that as a condition for it to receive TRS funds it had to make a campaign contribution, but that Capri Capital refused to be extorted and threatened to take the extortion attempt public;
- That Rezko gave Blagojevich's wife $12,000 a month and commissions for real estate sales, even though she had done little or no work related to those sales;
- That Blagojevich attempted to use his position as Governor to find his wife employment on a State board;
- That Blagojevich attempted to extort United States Congressmen "A" regarding a fundraiser the Congressman's brother needed to have for the Governor;
- That Blagojevich attempted to extort a $50,000 (a recurring number here) campaign contribution from the CEO of Children's Memorial Hospital in return for a rate increase for the Illinois Medicaid reimbursement rate for specialty care pediatric physicians;
- That Blagojevich told his brother that he wanted campaign contributions from a racetrack executive in return for the signing of a bill that would financially benefit from a bill then pending before the State of Illinois legislature;
- That Blagojevich attempted to extort $500,000 in campaign contributions from a highway contractor in return for the possible authorization of State monies for highway construction; and
- That Blagojevich conspired to sell to the highest bidder, the Illinois' Senate seat previously held by President Obama.
It is clear from the quotes used in the latter portions of these alleged schemes that Blagojevich was recorded in some conversations that will be exceedingly difficult to explain in the context of a Governor performing his duties, supposedly, for the benefit of the people of the State of Illinois.
