AP via SJ-R: 
 
Is Blagojevich implicated? 
Pension probe sources say he's the official prosecutors cite 
 
By MIKE ROBINSON 
 THE ASSOCIATED PRESS 
 
Published Friday, September 16, 2005 
 
 CHICAGO - Campaign donors working to benefit a "high-ranking public official" may have been rewarded with a share of fees paid by firms doing business with the state teachers pension fund, prosecutors said in court filings Thursday. 
 
While the filings did not name the official, sources familiar with the investigation said it was Gov. Rod Blagojevich. The sources spoke only on condition of anonymity because of the sensitivity of the ongoing case. 
 
 A spokeswoman for the governor, Abby Ottenhoff, said she did not know who the official was and called the statements in the court documents hearsay and "speculation based on testimony from an admitted extortionist." 
 
 References to an unnamed official came in two separate but closely related plea agreements in the federal government's investigation of alleged corruption involving the Illinois Teachers' Retirement System, the $30 billion fund that pays the pensions of thousands of downstate and suburban school teachers. 
 
 One of the plea agreements says the official may have played a role in picking consultants to be hired by private equity firms doing business with state pension funds. 
 
 A spokesman for the U.S. attorney’s office, Randall Samborn, declined to comment on the allegations contained in plea agreements filed on behalf of two defendants in the investigation. 
 
 Steven Loren, the Chicago-based former outside attorney for the pension fund, pleaded guilty Thursday to attempting to obstruct the Internal Revenue Service. 
 
 His plea came minutes before Joseph A. Cari, a former finance director of the Democratic National Committee, pleaded guilty to attempting to extort money from an investment firm seeking business with the fund by pressuring it to sign a contract with a consultant that he dictated. 
 
 A former fund trustee, Stuart Levine, a Chicago entrepreneur and millionaire campaign donor, has been charged with engineering corruption at the pension fund and has pleaded not guilty. 
 
 Loren said that companies wanting to do business with the fund and who were 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.” 
 
 The sources familiar with the investigation identified the two associates named in the court papers as businessmen Chris Kelly and Antoin “Tony” Rezko, both key contributors to Blagojevich. 
 
 A separate state government source confirmed Thursday that the teachers pension fund had received a subpoena from a federal grand jury seeking any records or other information it had concerning Rezko. 
 
 The source, who also spoke only on condition of anonymity because of the pending investigation, said the subpoena also asked for material on Rezko business associates. 
 
 Rezko attorney Joseph Duffy and Kelly attorney Michael Monaco did not immediately return phone calls Thursday. A message was also left for Rezko at his office. 
 
 The governor, Rezko and Kelly have not been accused of any wrongdoing in the investigation. 
 
 In Cari’s plea agreement, he quoted Levine as saying that a “high-ranking Illinois public official,” described only as “Public Official A,” played a role in picking consultants. 
 
 He said the public official, “acting through two close associates, was selecting consultants for the private equity funds that appeared before the state pension funds.” 
 
 “Levine said that this was part of a fundraising strategy,” the plea agreement said. 
 
 Noting that Cari had pleaded guilty to attempted extortion and Levine is currently facing two extortion charges, Ottenhoff said that speculation about who might be the high-ranking public official could not be trusted. 
 
 “This is speculation based on testimony from an admitted extortionist who was told this by a person who was twice accused of extortion himself,” she said. 
 
 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. 
 
 U.S. District Judge Amy St. Eve deferred sentencing until the end of the investigation, which attorneys said is likely to be a long one. 
 
Correspondent Christopher Wills in Springfield and newswoman Maura Kelly Lannan in Chicago contributed to this report.