Ex-Blagojevich aide tells of plans to make money

CHICAGO -- A key government witness painted a picture of subterfuge and greed in Rod Blagojevich's inner circle on Wednesday, including a scheme born as early as 2003 to make secret profits from his power as governor and divide up the spoils after he left office.

In testimony at Blagojevich's corruption trial, his one-time chief of staff Alonzo Monk said the two of them, along with fundraisers Tony Rezko and Christopher Kelly, discussed money-making plans, including an insurance company to do business with the state.

Monk, who was Blagojevich's law school roommate and was by his side through most of his political career, said the group calculated each of the plans would raise at least $100,000.

The biggest deal described by Monk that actually came to pass was the sale of $10 billion in state pension bonds in one day by the now-defunct investment bank Bear Stearns.

State lawmakers and some of Blagojevich's aides had assumed that the bonds would be sold in amounts of $2 billion or $3 billion over a period of time. But Monk testified that after going in a back room at his Thompson Center office with Kelly, Blagojevich decided to sell the whole lot in a single day -- a step that was beneficial to Bear Stearns.

Monk testified that Rezko later told him that Bear Stearns lobbyist Robert Kjellander promised to pay Rezko $500,000.

"I think Kjellander was rewarding Tony for whatever influence he had in getting Rod to sell the $10 billion in bonds," Monk testified. A message was left for Kjellander, a well known Springfield lobbyist, at his office. He received $809,000 in commission from Bear Stearns and passed some of it to a Rezko associate, but has always called it a loan.

Monk told the jury how Rezko, a real estate developer, and Kelly, a roofing contractor, raised millions of dollars for Blagojevich's campaign fund and were rewarded with jobs and contracts for their friends.

Monk has pleaded guilty in the case and took the witness stand in the hopes of getting a lighter sentence. Much of his testimony so far was aimed at the racketeering portion of the charges against Blagojevich.

The former governor has pleaded not guilty to scheming to profit from his power to fill the U.S. Senate seat vacated by President Barack Obama and squeeze people for campaign contributions. If convicted, Blagojevich could receive up to 415 years in prison and fines totaling $6 million.

Monk said the group referred to themselves as "one, two, three, four." He said the first person to talk to him about making money using Blagojevich's power was Kelly, at a meeting in a garage during the 2002 race for governor. Kelly committed suicide in September 2009, days before he was to report to prison for an unrelated tax conviction.

Monk was remarkably frank when asked why he took the idea of making money from the state seriously.

"I was intrigued by the topic and I wanted to make money," he said matter-of-factly.

Monk said Blagojevich wanted to run for president and that Rezko and Kelly wanted him to do it if the opportunity was there.

He also said Blagojevich had a personal tailor and sometimes bought as many as nine suits at a time.

"How was the defendant Blagojevich's taste in suits?" asked prosecutor Chris Niewoehner. Monk seemed flustered.

"Good," he finally said. People in the courtroom laughed, Blagojevich as much as anybody.

In his earlier testimony, Monk talked about how eager Blagojevich was to raise campaign funds, how Kelly and Rezko raised millions for him and how the governor rewarded them by showering them with patronage.

Sounding calm, almost in a monotone, Monk said Kelly and Rezko were in on deciding who got jobs in the Blagojevich administration, recommending heads of several key departments, including insurance, housing and transportation agencies.

When Rezko and Kelly asked him to do something, Monk said, he did "whatever they asked."

Monk portrayed Kelly as especially close to Blagojevich. Niewoehner asked Monk if there was anyone closer to the governor in his first term.

"Other than Patti (Blagojevich's wife), and potentially me, no," Monk said.

Blagojevich and his wife watched Monk intently during his early testimony and the former governor took notes. Patti Blagojevich's sister Deb Mell, a state representative, sat next to her.

In his opening statement on Tuesday, defense attorney Sam Adam Jr. had portrayed Monk as someone who had dazzled and befriended Blagojevich as a younger man, then duped and betrayed him when he was governor.

The former governor's brother, Robert Blagojevich, 54, a Nashville, Tenn., businessman, has pleaded not guilty to taking part in the plot to sell the Senate seat and to scheming to illegally pressure a racetrack owner, who wanted the governor's signature on legislation involving the tracks, for campaign money.