Prosecutors move to delay Rezko sentencing

[October 07, 2008]  CHICAGO (AP) -- Federal prosecutors moved Monday to delay indefinitely the sentencing of convicted fundraiser Antoin "Tony" Rezko, sending their strongest hint yet that he is ready to spill his political secrets.

The filing asks for a postponement while prosecutors and defense attorneys "engage in discussions that could affect their sentencing postures."

Speculation has simmered for weeks that the key fundraiser for Gov. Rod Blagojevich and Sen. Barack Obama was whispering what he knows about corruption in Illinois government to federal prosecutors in hopes of getting a lighter sentence.

Rezko raised more than $1 million for Blagojevich's campaign fund and was one of the governor's key advisers. He was frequently by the governor's side in the early days of his administration and could be in a position to shed considerable light on federal investigations into patronage hiring and a host of other issues involving Blagojevich.

The governor has not been charged with wrongdoing. A spokesman did not immediately respond to an e-mail message after business hours seeking comment.

U.S. District Judge Amy J. St. Eve had set Sept. 3 as a firm date for sentencing Rezko on his conviction for launching a $7 million scheme to use his clout with the Blagojevich administration to squeeze kickbacks out of a contractor and seven money management firms wanting to do business with the state. Then she postponed the sentencing date to Oct. 28.

Federal prosecutors filed a three-paragraph brief late Monday asking for that date to be stricken and the sentencing postponed indefinitely. The wording left little doubt that Rezko offered enough to make the government consider some sort of sentencing break.

Federal spokesman Randall Samborn declined to comment on the latest development. Defense attorneys Joseph Duffy and William Ziegelmueller did not immediately respond to office voicemails left late Monday.

Two attorneys familiar with the investigation, speaking only on condition of anonymity because grand jury matters are secret, said last week that federal prosecutors were contacting the lawyers of a number of campaign contributors and others with information that only Rezko could have given them. One of the lawyers said it was plain the prosecutors were laying the groundwork for questioning Rezko further.

One of the matters that prosecutors have been interested in learning is who paid for the renovation of Blagojevich's Chicago home. Rezko's now defunct Chicago Construction Services was the contractor on the project. One person familiar with the renovation contacted Monday afternoon, speaking only on condition of anonymity because of grand jury secrecy, said he was subpoenaed by federal prosecutors and asked about the project.

"They were looking for basic business dealings: who paid, how much, that sort of thing," he said. He said the governor's wife, Patti, paid the bill.

At Rezko's trial in May, former state employee Ali Ata, who got his job as head of the Illinois Finance Authority from Blagojevich through Rezko, testified as the government's surprise witness that he had to provide $25,000 to Rezko to pay contractors who were threatening to put a lien on the house if the bill was not paid. Ata earlier pleaded guilty to tax fraud and lying to the FBI about how Rezko got him his job.

Besides bankrolling a large portion of Blagojevich's campaign, Rezko raised substantial funds for Obama's past campaigns in Illinois -- although none for his current presidential run.

Obama's campaign says it has sent to charity $159,000 traceable to Rezko's past fundraising.

While Blagojevich was frequently mentioned at Rezko's trial, the testimony rarely touched on Obama, who has been accused of no wrongdoing.

Unmentioned at the trial was a purchase by Rezko's wife, Rita, of property adjacent to the Obama home near the University of Chicago on the city's South Side. Obama and his wife, Michelle, purchased their home the same day that Rezko's wife closed on her property. And she later sold some of her property to the Obamas to enlarge their lot. Obama later said that allowing Rezko to do what appeared to be a favor was a "bonehead" move.

Rezko was convicted in June of mail fraud, wire fraud, attempted extortion and money laundering. Several of the charges carry 20-year maximum sentences and while Rezko would not be expected to served that much time for a first offense he is still looking at the possibility of years in federal prison. A deal with prosecutors could reduce his time considerably.

Moreover, Rezko faces the prospect of a second trial early next year on federal charges of swindling the General Electrical Capital Corp. out of $10 million in the sale of a group of pizza restaurants.

And beyond that, by his own account his is running out of money and an arrest warrant has been issued in Las Vegas accusing him of failing to pay hundreds of thousands of dollars in casino bills.

[Associated Press; By MIKE ROBINSON]

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