Rezko renovations questioned in Illinois

Chicago Sun-Times:

Federal investigators are zeroing in on whether Tony Rezko paid for all or part of a $90,000 rehab of Gov. Blagojevich's Northwest Side bungalow as the corruption probe of the state's first family accelerates.

Since Rezko's felony conviction in June, the FBI has been investigating how the former top Blagojevich fund-raiser billed the governor and his wife for the work, who paid for it and whether Rezko ever arranged for cash to be passed in envelopes to the Blagojeviches, several sources familiar with the probe told the Chicago Sun-Times.

A grand jury has issued at least one subpoena related to the project, according to the sources, who spoke on condition of anonymity. Agents also have inquired about the governor's wife's real estate dealings with Rezko and whether Rezko might have disguised payments for the work through sham billings at a large housing development he was building.

The work was done in 2003 shortly after Rezko, a prominent developer, had succeeded in placing his friends and associates on state-government boards that controlled lucrative deals. Rezko was convicted of wide-ranging fraud involving those boards.

In recent weeks, Rezko has broken his long-held silence and sat down in a series of meetings with the feds -- a sign he might cooperate in the Blagojevich probe. A spokesman for the U.S. Attorney's office in Chicago declined to comment.

The governor and his wife maintained Friday through a spokesman that they paid for the entire project, though they refused to provide bills, canceled checks, a list of subcontractors or other documentation.

...

During Rezko's corruption trial earlier this year, a former top Blagojevich aide, Ali D. Ata, testified he delivered a plastic bag filled with $25,000 in cash to Rezko to prevent subcontractors from placing a lien on the governor's home because they had not been paid.

No lien was ever filed. Said Guerrero, the governor's spokesman: "The Blagojeviches most certainly did not receive $25,000 or any other cash from anyone concerning the renovations of the room."

...

The governor's spokesman's comments are strange since the allegation is that the bag went to Rezko to pay sub contractors on behalf of the governor. It does not suggest it was given directly to the governor. It appears that the governor may have engaged in what Obama would call a boneheaded transaction with Rezko. Apparently he was the go to guy when it came to upgrading politicians' housing.

Jake Tapper has more on the Obama association problems.