From the Chicago Tribune

Tollway oasis pact rich with links to governor's allies
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Fundraiser, friend tied to restaurants
By Virginia Groark and John Chase, Tribune staff reporters. Tribune political reporter Rick Pearson contributed to this report
February 13, 2005
Gov. Rod Blagojevich long has vowed to purge the Illinois tollway of cronyism, yet two of his closest friends and political advisers have links to food vendors awarded lucrative contracts to operate inside the toll road's sleek new oases, government records show.
The Subway sandwich shops and Panda Express Asian restaurants now being installed in the tollway's seven revamped rest stops are controlled by firms with strong ties to the food-service empire of Antoin "Tony" Rezko, a Blagojevich confidant who has seeded the governor's cabinet with former business underlings.
Christopher G. Kelly, Blagojevich's chief fundraiser, who also recommended the tollway's executive director for his job, is an investor in at least one Rezko-controlled food firm, a spokesman said.
Subway and Panda Express are part of a revamped lineup of restaurants going into oases being rebuilt along the 274-mile toll network, and officials expect the vendors to make millions of dollars each year for both the operators and the tollway. Two of the rebuilt oases already are open and two more are scheduled to open Friday.
The $83 million oases overhaul is being overseen by Los Angeles-based developer Wilton Partners, whose owner delivered a $50,000 personal check to the Blagojevich campaign just weeks after the governor announced with great fanfare the launch of the work.
Wilton was picked by the Illinois State Toll Highway Authority to rebuild the oases and manage them for the next 25 years. Under its contract, Wilton was granted wide discretion to pick food and retail vendors at the oases.
The selection of the Subway and Panda Express restaurants highlights a tangle of overlapping business interests that trace back to Rezko and his investor, Kelly--who already is embroiled in a controversy that prompted prosecutors to investigate charges that he swapped administration appointments for campaign cash.
A spokesman for Kelly and Rezko said neither financially benefit from the Subways and Panda Expresses on the tollway.
The names of Rezko and Kelly appear nowhere in vendor records supplied to the tollway by Wilton, nor do key details about the food establishments that could link them to the two Blagojevich associates.
But other government documents obtained by the Tribune show the Subway franchises are owned by a company run by Abdelhamid Chaib, a La Grange Park businessman who also is an officer, manager and director of three Rezko-controlled food enterprises--including one in which Kelly is an investor. Rezko and Chaib have been friends for three decades and business associates for 10 years, according to a spokesman for Rezko.
What's more, food-service permits filed in Boone and Lake Counties, where two of the oases are, identify the manager of the Subway shops as Rezko's nephew, Rimon Rezko. The nephew lives in Oak Lawn in a home sold to him by Tony Rezko, property records show.
Last month, tollway Executive Director Jack Hartman assured the Tribune that Wilton had supplied his agency with "full disclosure as to who is behind every lease." Last week, however, after the Tribune pointed out gaps in the documentation, tollway officials acknowledged the records were incomplete and gave Wilton 20 days to clarify.
In addition to his Rezko ties, Chaib also has donated $10,000 to the Blagojevich political fund run by Kelly. The governor also appointed Chaib's wife, Lori, to a $15,000-a-year, part-time position on an obscure state board dealing with employment issues.
The connection of the tollway Panda Express restaurants to Rezko and Kelly also is complex.
Panda's corporate parent, based in Southern California, is the sole owner of the tollway restaurants. But it is also a partner with Rezko in most other Panda Express restaurants throughout Illinois and four other Midwestern states.
Revenues from the tollway restaurants, while not directly benefiting Rezko, flow to his business partner, Panda Express Inc.
Kelly enters the picture as an investor in Rezko Concessions Inc., Rezko's portion of the joint venture with Panda Express. Chaib also is a director of that Rezko firm, state records show.
Hartman said he did not believe clout played a part in Wilton's selection of Panda Express and Subway for the oases, despite the developer's failure to fully disclose the ownership makeup of the vendors.
"There doesn't seem to be anything improperly done," he said.
Tollway officials noted that Wilton was selected to be the oases' manager when George Ryan was governor, though no work began on the project until Blagojevich took over.
Similarly, Wilton officials said discussions with Panda Express, Subway and other food chains began before Blagojevich became governor. However, the deals did not become final until about a year ago, according to Wilton Partners president Scott Mayer.
He also said that although Wilton wanted Subway stores at the oases, it didn't select Chaib to be the franchisee. That decision, Mayer said, was made by the Subway chain.
Cheryle Jackson, a spokeswoman for Blagojevich, said the governor has spurred major reforms at the tollway, including a massive road-rebuilding effort, upgrading its I-PASS program and initiating criminal background checks on employees. Jackson said the disclosures about the Subway and Panda Express restaurants do not diminish those accomplishments.
"There shouldn't be anyone financially benefiting from their relationship with the governor, and no one is financially benefiting from their relationship with the governor," Jackson said.
Chaib, Rimon Rezko, and Panda Express' corporate headquarters did not respond to requests for comment.
Cronyism targeted
Repeating the slogan "no more business as usual" like a mantra, Blagojevich has vowed from the day he took office to cleanse state government of cronyism and insider dealing. Near the top of his priority list has been change at the tollway, which for decades was a Republican patronage haven.
But Blagojevich's reform image has been severely tested in recent weeks by a wide array of controversies.
His fundraising has come under increased scrutiny after Tribune reports showed a correlation between contributions to his campaign and the awarding of contracts and positions on state boards and commissions.
More questions were raised after Blagojevich last month got into an embarrassing public feud with his father-in-law and one-time political mentor, Ald. Richard Mell (33rd). Mell accused Kelly of trading plum posts on state panels for contributions to Blagojevich.
Mell later retracted the charge, but it drew the attention of state and local prosecutors, who have launched an investigation.
Critics who question Blagojevich's commitment to reform most often point to his tight relationship with Kelly and Rezko. Of the two, Kelly has been more of a lightning rod.
Kelly, a south suburban roofing contractor who made millions on work at O'Hare International Airport, met Blagojevich when he was running for Congress in 1996. The governor, who now calls Kelly one of his closest friends, has received more than $680,000 in cash and loans from firms either owned by or connected to Kelly.
Shortly after Blagojevich became governor he dispatched Kelly to try to expedite a deal to get an unused gambling license held by the bankrupt Emerald casino up and running. The Emerald investor group, struggling to recoup its losses, included the California chairman of Panda Express.
Kelly, 46, who has no legal or casino regulatory experience, infuriated Atty. Gen. Lisa Madigan by trying to get a lawyer who worked for her bumped from the case.
Kelly's prowess as a fundraiser has proved extremely valuable to Blagojevich. With Kelly as chairman, Blagojevich's campaign operation has raised more than $37 million in a little over four years, almost as much as his predecessor, Ryan, raised during a political career that spanned four decades.
Millions have been collected from contractors who do business with the administration or from Blagojevich appointees.
Recently, a Markham construction firm that shares office space and works with Kelly's company, won a $24.3 million state contract at Chicago State University and received another $164,000 contract from Blagojevich's campaign fund to build a new campaign office.
Kelly's sister was hired last year to a $92,000-a-year job with the Illinois Office of Banks and Real Estate. Agency officials said Chris Kelly played no role in the hiring.
Although Kelly has held a more visible profile in Blagojevich's "Kitchen Cabinet," Rezko, 49, has also proved highly influential with the governor. In addition to his food enterprises, Rezko also operates a development firm with holdings across the city. Former Rezko aides from both wings of his business now lead Blagojevich's Department of Commerce and Economic Opportunity as well as the Illinois Housing Development Authority.
Rezko has boasted of raising more than $500,000 for Blagojevich's campaign.
In January 2004, Rezko and Wilton Partners bankrolled a Blagojevich fundraising trip in California. Wilton paid nearly $35,000 in transportation and entertainment costs during a three-day period for Rezko, Kelly and the governor, records show. Rezko also spent nearly $45,000 on transportation, meals, lodging and entertainment, records show.
Wilton won the tollway job in 2000, but negotiations over a final contract proved rocky and it wasn't signed until two years later. The agreement called for Wilton to finance the project in exchange for the long-term management rights, vendor rent payments and a share of oasis revenues.
No donations to Ryan
Though the negotiations took place while Ryan was in office, Wilton never made a contribution to his campaign fund, state records show.
In fact, Wilton-connected contributions to Illinois politicians were modest until Blagojevich was elected.
That was also around the time that Wilton's managing partner, Jay Wilton, was becoming edgy about project delays that could imperil his contract, according to court documents filed in a legal dispute between Wilton and a former partner in the tollway project.
"We continually push back the start dates with the authority," Wilton wrote. "At some time in the near future, it will become apparent to all that we cannot commence construction as currently projected. At that time, it will take more than simple verbal assurances to keep the authority happy and us out of default."
Despite Wilton's anxiety, his firm remained on the project. When work began in June 2003, Blagojevich held a news conference to highlight the milestone.
A month later, Jay Wilton and his wife, Cheryl, wrote a personal check to the Blagojevich campaign for $50,000. Wilton later explained that his political gift was motivated simply by his admiration for the governor's work.Copyright (c) 2005, Chicago Tribune