The Teddy-Blago connection

I'm sure Illinois Governor Rod Blagojevich will dismiss this with another checkmark in the "coincidence" category.

ITEM: On the same day last June Illinois was losing a Honda plant to Indiana, Blagojevich was cavorting on the East Coast. One of his stops was a fundraiser for him hosted by U.S. Senator Ted Kennedy of Massachusetts, according to the Sun-Times' Lynn Sweet.

ITEM: A recently released audit by the Illinois Auditor General revealed that Ted's son, Ted Kennedy Jr., received a $183,954 "marketing fee" (page 32) for his "work" in FY 2006 promoting a hedge fund to the Blagojevich-run State Board of Investments.

Two years ago the Boston Globe wrote about another fundraising-fee situation that had people wondering out loud what Kennedy's firm, The Marwood Group, did for its $200,000 marketing fee.

In Illinois, the State Board of Investments is the smaller of the two pension agencies. The larger one, the Teacher Retirement System, is at the epicenter of U.S. Attorney Patrick Fitzgerald's Operation Board Games investigation, which already has produced indictments of top Blagojevich cronies Tony Rezko, Stu Levine, Nick Hurtgen, Joe Cari and Ali Ata. Hurtgen's indictment was thrown out by a federal judge but Fitzgerald's office is seeking to reinstate it. The feds have described the investigation as a "gathering storm."

The SBI has no need to hire companies who pay third party marketers. The board hired a politically connected investment management firm, the Marquette Group, which is supposed to survey the investment world for investment recommendations to bring to the board. In other words, SBI already has a middle man.

Oh, and by the way, SBI underperformed its investment goals in 2006 according to the audit.

Here are some other reasons to look closely at SBI:

--Soon after Blagojevich became governor, SBI invested money for the first time with Fifth Third Bank, a company that was employing Rod's brother, Robert Blagojevich, at the time in a high ranking investment position.

--Hurtgen was "called out" by the Milwaukee newspaper after trying to insert the Marquette Group as an investment manager to the Milwaukee County Board. The insertion was criticized by board members as a recipe for corruption because the investment manager as great power in screening the thousands of investment firms to bring to the board.

--SBI withdrew underperforming investments in Ariel Capital Management, then reinstated some of them under heavy political pressure from Democratic insiders, according to Crain's Chicago Business. Ariel, headed by John W. Rogers Jr., has contributed more than $100,000 to Blagojevich's campaign fund.

There are more tentacles here. I'll explain in a future post.

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