Friday, June 1, 2007

The lights were blinking red


One of the most obvious hotspots of corruption in the Rod Blagojevich administration was further exposed by the indictment yesterday of the executive director of the state agency in charge of authorizing multi-million dollar borrowing deals.

You could look at the 2004 Blagojevich consolidation of seven state agencies that previously handled borrowing in one of two ways: good government, or a way for a corrupt administration to tightly control millions of dollars in no-bid consulting contracts under one roof.

The evidence strongly points to the latter. A longtime Tony Rezko-Blagojevich crony, Ali Ata, was installed as executive director of the newly constituted Illinois Finance Authority in early 2004. He left just over a year later under a cloud of scandal. His indictment yesterday alleged he was scheming with Rezko to falsify documents intended to help Rezko secure business loans.

Illinois' auditor general already weighed in on the consolidation and said it was a disaster, including lax oversight over contracts and more than $200,000 in illegal bonuses to employees. Ata left after that audit and the agency was about to give him a sweetheart consulting contract of more than $150,000 when the Chicago Sun-Times revealed the scheme and caused it to be withdrawn.

If I were a reporter or federal investigator I'd be looking very closely at those 2004 actions by the new agency. With Ata as executive director and Tony Rezko's next door neighbor in Wilmette (graphic below), David Gustman, as board chairman, the lights were all blinking red for millions of dollars in insider deals. Gustman, a partner at the law firm Freeborn & Peters, has not been implicated in any of the corruption investigations as far as we can tell. However, his firm at about the same time was getting some nice no-bid work from the Blagojevich administration, including legal work on the aborted sale of the main state government building in Chicago, the James R. Thompson Center.

I guess it's possible that the Freeborn & Peters' state work was coincidental to Gustman's appointment as board chairman. And just another coincidence that the board chairmanship of such a money-laced agency happened to be occupied by a man who lived next door to Rezko, a man already indicted for extracting finder fees from other state agencies.

Just in case these weren't coincidences, I'd keep looking if I were a prosecutor or reporter.

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