AP via Sun-Times: 
 
Feds probe fees paid to donors 
 
September 15, 2005 
 
BY MIKE ROBINSON ASSOCIATED PRESS 
 
Campaign donors to a "high-ranking public official" may have been rewarded with a share of fees paid by firms doing business with the state pension fund for downstate and suburban teachers, federal prosecutors said in a court filing Thursday. 
 
 The public official was not named in a 20-page, signed agreement with prosecutors under which Steven Loren, the Illinois Teachers Retirement System's former outside attorney, pleaded guilty to attempting to obstruct the Internal Revenue Service. 
 
 His guilty plea came minutes before another Chicago attorney, Joseph A. Cari, a former finance director of the Democratic National Committee, pleaded guilty to attempted extortion in connection with alleged corruption at the $30 billion pension fund. 
 
 A former fund trustee, Stuart Levine, a Chicago entrepreneur and millionaire campaign donor, has been charged with masterminding corruption at the pension fund and has pleaded not guilty. 
 
 Loren, 50, pleaded guilty at a hearing before U.S. District Judge Amy St. Eve. 
 
 He said that companies wanting to do business with the fund and introduced to it by an unnamed Individual A customarily paid placement fees to Individual A. He said that Individual A would split the fees with "certain individuals" at the direction of Levine and his associates. 
 
 "Based on his conversations with Levine, it was Loren's understanding that Levine's associates, who were close to a high-ranking public official, would use those placement fees as an incentive or reward to those who made campaign contributions that would benefit the high-ranking public official," the plea agreement said. 
 
 It said that "those people would get money without providing any services." 
 
 Published reports at the time of the indictment said that one firm paid a fee to businessman Sheldon Pekin as a way of getting business with the board. 
 
 Pekin's attorney, Andrew Staes, issued a statement Aug. 3 which confirmed "Mr. Pekin's participation in the Teachers Retirement System transaction." 
 
 "Mr. Pekin sought and relied upon the advice of a major Chicago law firm, as he customarily does, before engaging in significant matters," the statement said. "He also errantly believed at the time as did the national community that Stuart Levine was an honorable public figure." 
 
 "Mr. Pekin is not charged with any wrongdoing and will not be," Staes said in the statement. Reached by phone on Thursday, Staes declined to comment further. 
 
 A U.S. attorney's spokesman, Randall Samborn, declined to comment on the plea agreement. 
 
 Cari acknowledged that he had pressured an investment firm to sign a contract with a consultant that had been faxed to it from a Caribbean island. 
 
 According to his plea agreement, Cari telephoned the unnamed company and said that its proposal for doing business with the pension fund would be taken off the agenda of the fund's board unless the contract were signed immediately. 
 
 He said he pressured the company at the urging of Levine. 
 
 Under their plea agreements, the two attorneys agreed to cooperate with the government in its investigation of corruption involving the pension fund. 
 
 Loren would ordinarily face a sentence of 12 to 18 months under federal sentencing guidelines. But prosecutors have agreed to recommend a break in exchange for his cooperation. Cari would face 37 to 46 months but would also get a break for cooperating. 
 
 St. Eve deferred setting a sentencing date until the end of the investigation, which attorneys said was likely to be a long one.