The defense on Thursday attempted to distinguish the demands of Stuart Levine, the former Teachers Retirement System board member under Rod Blagojevich, from the wishes of Blagojevich himself.
Joseph Cari continued on the stand Thursday morning, describing how Blagojevich’s aides continued to press him to help with fundraising, even after he told Blagojevich personally that he was not interested. Then the story moved to financial dealings between TRS and a private equity firm, HealthPoint Captial, that Cari had started, and a Virginia-based private equity firm, JER Partners.
In a phone conversation in 2004, Levine spoke to Cari about JER, mentioning that a partner of Cari’s at HealthPoint, the former New York State Comptroller Carl McCall, had asked him if the TRS would provide a loan to JER Partners. In May 2004, Levine discussed with Cari the need to put a certain, yet-unnamed, consultant in place to handle the deal. The loan would ultimately be $80 million, but Levine insisted that it would only go through if his choice for consultant were selected.
Defense lawyer Michael Gillespie repeatedly asked Cari if Blagojevich had ever participated in any discussions about JER, and Cari said it was only Levine who he spoke with about the allocation. The clear intention for the defense was to draw a bright line between the governor and Levine, but Cari pushed back against this notion in his testimony.
“It was very clear to me,” Cari said, “based on conversations with [Chris] Kelly, [Tony] Rezko, and the governor, that if you did not play ball the way they wanted, there were repercussions.”
In its direct examination of Cari, the prosecution played a phone call taped on May 6, 2004, between Cari and Levine, in which Levine says “I’m getting a little nervous” that his choice for consultant had yet to be approved by JER. Levine made it “crystal clear” that if the consultant was not hired, the deal wouldn’t go through, and put increasing pressure on Cari to clarify this with JER Partners CEO Debbie Harmon.
Harmon comes from a politically well-connected family and last June was appointed by President Barack Obama to serve as a commissioner for the White House Fellows program. Her father served as chairman of the import/export bank during Bill Clinton’s administration.
As a TRS board meeting at which the JER Partners loan was to be discussed neared, Cari said that “Stuart kept impressing on me with increasing energy how important it was to have this consultant hired.” Even though the consultant was to get a large fee for the transaction, Cari said it was his understanding that the individual had done “nothing.”
Nonetheless, he got in touch with Harmon, and explained the terms as he understood them.
According to his testimony, Cari told her: “In Illinois, the governor and top people around him – I am talking specifically about governor Blagojevich – that they pick the investment bankers, the law firms, the consultants, and that’s the way it was done in Illinois.” Harmon said she was looking into it; Cari pressed on.
He convened a conference call for the various lawyers representing sides of the TRS allocation, but got the sense that the other parties weren’t comfortable with the consultant, who had faxed a contract form to them that day from the Caribbean.
“We’re all lawyers,” Cari testified he said on the phone at the time. “You do what you got to do to protect your client.”
He then hung up.
Like they did with Lon Monk, the defense tried to portray Cari as a man desperate to satisfy the claims of his plea agreement in order to lessen the time he’ll spend in jail.
“You would lie to stay out of jail,” Gillespie said. “No,” Cari replied.
Gillespie finally huddled with Blagojevich before asking Cari whether HealthPoint got money from the TRS fund, even though he declined the overtures from Rezko, Kelly and Blagojevich to raise money for the governor. Apparently satisfied at getting the last word in, the defense concluded and Cari stepped off the stand, shortly before the lunch break.
Jill Hayden, the former director of boards and commissions in the Blagojevich administration, is now testifying on the ways in which board positions were doled out. Hayden, 34, is now director of governmental affairs at the Illinois Primary Health Care Association, where she lobbies the state primarily on medicaid issues. Ali Ata, a key government witness, is expected to testify afterwards. The defense is hoping to stall out Hayden’s testimony, so they jury won’t hear from Ata until Monday.