Giannoulias donors appear in Blagojevich court documents 

Two political contributors to Alexi Giannoulias, the Democratic nominee for Senate in Illinois, appear in the government’s evidentiary documents against former Democratic Gov. Rod Blagojevich filed earlier this month.

One of the two men, Myron Cherry, recently contributed $2,300 to Giannoulias’s Senate campaign. Cherry, an attorney, gave to Giannoulias in August. He has also donated $68,000 to a bevy of Democratic candidates during this cycle, including Sens. Al Franken, Minn. and Harry Reid, Nev., and Senate candidates Paul Hodes, N.H., and Jack Conway, Ky.

The other man, Michael Winter, was the office-mate of convicted fundraiser Tony Rezko. In 2006, Illinois’ Capitol Fax blog reported that Winter gave at least $14,000 to Giannoulias’s race for state Treasurer, and that he had received a $2 million loan from the Giannoulias family’s Broadway Bank.

Neither Cherry nor Winter has been charged with any crime.

The government’s evidentiary proffer against Blagojevich says that Winter and Cherry were alleged front-men for a conspiracy by a gang of Blagojevich cronies that included Democratic fundraisers Rezko and Chris Kelly, and Republican fundraiser Stuart Levine. Kelly recently committed suicide, and the other two were convicted on corruption charges.

Using Levine’s position on a state board, Rezko plotted to steer pension fund investments from the Illinois Teachers’ Retirement System (TRS) toward certain firms, from which they would collect kickbacks. In the case involving Winter and Cherry, Rezko planned to steer TRS investments to Sterling Financial, with whom Winter went and secured a “finder’s fee” agreement.

Rezko eventually decided he couldn’t use Winter’s name because the two were too closely connected. Instead, they agreed to put Cherry’s name on the papers and have him serve as their front-man in collecting the finder’s fee. According to Winter’s testimony in Tony Rezko’s trial, Cherry agreed to the arrangement.

The Winter-Cherry-Rezko connection is already well-known in Chicago. In 2007, then-Sen. Barack Obama, D-Ill., gave back donations that Winter and Cherry had given his presidential campaign.

Here is the relevant section of the Blagojevich trial document, on pages 31 and 32:

iv. Sterling Financial Kickback

Rezko and Levine also tried to help an investment firm called Sterling Financial receive an investment from TRS so that Rezko and his designees could receive a finder’s fee from Sterling Financial. Levine learned about Sterling Financial from Michael Winter, who was a close business associate of Rezko’s. Rezko had originally approached Winter in about late Spring 2003 and gave him a detailed explanation of TRS and other state pension boards. Rezko explained that Levine controlled the TRS Board and that Rezko wanted Winter to act as a finder of funds to invest with TRS and other state pension boards.

Winter located Sterling Financial and eventually made an arrangement where Winter would receive a finder’s fee if Sterling Financial received an investment from TRS. As Sterling Financial looked like a promising investment, Winter met with Rezko and Daniel Mahru, who was Rezko’s business partner, to discuss the financial arrangement. Winter, Rezko, and Mahru talked about splitting the finder’s fees they expected to get from investment firms 1/3 apiece, but Rezko said that he should get more because he had to take care of other people, including Kelly.

Levine put pressure on TRS staff to approve Sterling Financial’s proposed investment. Levine understood from Rezko that Levine was not going to share in any fee that Sterling Financial paid. Levine agreed to help anyway because he wanted to ingratiate himself with Rezko….Levine was subsequently indicted on related charges of fraud relating to TRS and the Illinois Health Facilities Planning Board and has since cooperated with the government after pleading guilty.

Levine put pressure on the TRS staff to help Sterling Financial, TRS staff approved a $25 million investment in Sterling Financial, which was to be presented to the TRS Board for approval at a board meeting in May 2004.

Several weeks before the May 2004 TRS Board meeting, Winter talked with Kelly and Rezko about the potential TRS investment with Sterling Financial. Kelly said that Winter could not be named as the consultant for Sterling Financial who would receive a finder’s fee because Winter shared an office with Rezko and because of Rezko’s relationship with Blagojevich. Winter suggested that they name Myron Cherry, an associate of Winter’s, as the person to receive the fee, and Kelly and Rezko agreed to this arrangement. As a result, about two weeks before the May 2004 TRS Board meeting, Winter told Sterling Financial that they should disclose Cherry’s law firm as the entity that would receive a finder’s fee from Sterling Financial for the TRS investment.

TRS staff raised concerns with Levine when they learned that Cherry’s law firm had been disclosed as a finder by Sterling Financial even though Cherry had not had any role in helping Sterling Financial get the TRS investment. Levine, however, was not able to help Sterling Financial further because on May 20, 2004, FBI agents confronted Levine about his activities on various state boards.

About The Author

David Freddoso

David Freddoso came to the Washington Examiner in June 2009, after serving for nearly two years as a Capitol Hill-based staff reporter for National Review Online. Before writing his New York Times bestselling book, The Case Against Barack Obama, he spent three years assisting Robert Novak, the legendary Washington... more
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