Blagojevich indictment outlines more pay-to-play schemes

Federal indictments handed down Thursday against former Illinois Gov. Rod Blagojevich and five associates present a picture of an administration that, at its very inception, sought to trade official actions for personal enrichment – in direct opposition to Mr. Blagojevich's campaign promise to clean up government corruption.

The indictments by a federal grand jury point to a "wide-ranging scheme to deprive the people of Illinois of honest government," according to a statement from the US Attorney’s office in Chicago. Government prosecutors did not make any public appearances upon the return of the indictments, which are part of an extensive government corruption probe.

The indictment charges Blagojevich with 11 counts of wire fraud, two counts of extortion conspiracy, and one each of racketeering conspiracy, attempted extortion, and making false statements to federal agents, dating back to 2002. Collectively, the counts against Blagojevich amount to a maximum of 305 years in prison. Charged with Blagojevich were five associates, including his brother, Robert Blagojevich, for a total count of 19 indictments.

Power politics

Alleging “pervasive fraud,” the indictments present a detailed picture of the pay-to-play politics that have long been associated with Illinois state politics and that sent George Ryan, Blagojevich’s immediate predecessor, to prison in 2008. According to the indictment, Blagojevich sought to leverage state political appointments, contracts, legislation, and pension fund investments in exchange for campaign contributions and jobs for himself and others. This includes allegedly conspiring to sell or trade the US Senate seat vacated by President Obama and allegedly pressuring the Chicago Tribune to fire editorial board members critical of the former governor in exchange for state assistance to the Tribune Company’s plan to sell Wrigley Field.

The former governor released a statement that said he was “saddened and hurt but I am not surprised by the indictment. I am innocent. I now will fight in the courts to clear my name. I would ask the good people of Illinois to wait for the trial and afford me the presumption of innocence that they would give to all their friends and neighbors.”

That the indictment dates back to before Blagojevich became governor is not a surprise to those who have tracked Illinois politics.

The corruption has "been true since he’s been running for governor. It’s pay-to-play politics, which was mostly created by his need to raise enormous sums of money in order to be able to run,” says Dick Simpson, a political scientist at the University of Illinois at Chicago who has researched and written about state corruption for more than 20 years.

“He has done some things that are good for the little guy, as he would put it, but overall where he really became corrupt was when he had to raise major sums of money," says Dr. Simpson. "You have to have $20 million minimum to run; he’s been amassing $30 [million] to $50 million. He could not conceivably do it legally,” said Mr. Simpson.

A hospital shakedown?

The indictment details allegations of attempted extortion against an unnamed congressman, bribe solicitations from individual businessmen and companies, as well as pressure against state contractors to grant Blagojevich’s wife a job. Another charge alleges that Blagojevich attempted to extort Children’s Memorial Hospital in Chicago for $50,000 in campaign contributions with the threat that the state would increase the amount the hospital would have to pay for Medicaid reimbursement for specialty-care pediatric physicians.

The children’s hospital shakedown “is the most egregious in many people’s minds,” says Simpson.

While the charges involving the Chicago Tribune and Obama's Senate seat were brought to light in early December, when Blagojevich was arrested outside his Chicago home, Thursday’s indictments include new charges. Among them is an alleged scheme to raid the state pension funds by redirecting state business relating to the refinancing of billions of dollars in state bonds to a company run by a lobbyist who would then collect and split the money with Blagojevich and his associates.

Blagojevich is the marquee name among the six named in the indictment. Besides his brother, the others are former Blagojevich chief of staff John Harris, former Blagojevich campaign chairman Alonzo Monk, and businessmen and fundraisers Christopher Kelly and William Cellini Sr. Blagojevich was impeached and removed from office on Jan. 29.

Date of arraignments is not known.

Chicago's image problem

The Blagojevich indictment comes at a critical time for Illinois. The International Olympic Committee arrived in Chicago Thursday to judge potential venue sites contained in the city’s bid to host the 2016 Olympics. The indictment has no direct bearing on the IOC's decision, of course, but it draws attention to the state’s legacy of corruption, something the committee might take into consideration.

Ethics reform has become a primary focus of new Gov. Pat Quinn, whose nascent ethics commission is expected to roll out reform proposals this month.

The public appears ready for change. Fifty-eight percent of Illinois residents believe that Blagojevich’s alleged behavior is common among state officials, and 78 percent say a ban on campaign contributions by corporations is essential to make a difference, according to a recent survey conducted by the Joyce Foundation, a Chicago-based public policy group. Seventy-eight percent of residents also say the state is on the wrong track.

Illinois is the most corrupt state in the nation, asserts Simpson. In a recent study of government corruption in Illinois, he reported that 1,000 officials and businessmen have been convicted of public corruption in Illinois since 1970.

The Blagojevich indictment “will give an impetus to force the legislature to pass some major reforms,” Simpson says. “It shows immense change already."

Blagojevich’s chief worry should be the record of US Attorney Patrick Fitzgerald, who has won almost all of his cases, says Simpson.

Though the US Justice Department is under scrutiny this week for dropping its ethics case against former Sen. Ted Stevens (R) of Alaska, due to prosecutorial misconduct, that should not have any bearing on the Blagojevich case, says Evan McKenzie, former San Diego County prosecutor and now a professor at the John Marshall Law School here.

"Mr. Fitzgerald is very particular, he’s scrupulous, [and] he’s not going to jeopardize the prosecution of this case,” says Mr. McKenzie. “That’s just not going to happen.”

Fitzgerald has already prosecuted an Illinois governor. Blagojevich won the seat from former Governor Ryan, who was sent to jail by Fitzgerald on corruption charges.