Champion News

Posted: February 28, 2008

Any Republican hoping to use the Tony Rezko issue against Barack Obama should just forget it. The GOP's hands on this issue remain just as dirty.

Obama received significant campaign help in the past from Rezko. In fact it's probably not a stretch to suggest that Obama might not be poised to clinch the Democratic presidential nomination today absent the leg-up provided by Rezko early in his political career.

With Rezko going on trial in federal criminal court on Monday, there should be a legitimate issue for Republicans to exploit. The problem is the Republican National Committee (RNC) has continued to drop the ball. Unless Republicans want to be extraordinary hypocrites, the Rezko issue is off the table.

The Republican National Committeeman from Illinois, Bob Kjellander, also has significant ties to Rezko. In fact Kjellander's ties are a notch above being just campaign related. Kjellander and Rezko used to be in business together. Rezko was even listed as a subcontractor in Kjellander's Springfield lobbying business as recently as early 2004. That's a pretty close relationship.

In 2003 it was learned that Kjellander received an $809,000 fee from Bear, Stearns & Co. in connection with helping the firm land the lead underwriting role on the Blagojevich Administration's massive $10 billion state debt deal.

In August of 2005 it was widely reported that federal prosecutors had subpoenaed records related to the $4.5 million in fees Kjellander received from the Carlyle Group in connection with state pension investment funds. That same month the RNC gave Kjellander the additional title of Treasurer.

In October of 2006 Kjellander was identified as the "Individual K" referenced by the U.S. Attorney's office in a federal court filing. Just seven months later the RNC made Kjellander the Vice-Chairman for the Committee on Arrangements for the Republican National Convention this September. Kjellander of course also remains a member of the RNC as the National Committeeman from Illinois.

And then this week there was more news. For the first time we learned what Kjellander did with that $809,000 he received in 2003 for helping Governor Blagojevich nearly double the state's debt burden. Federal prosecutors say Kjellander transferred $600,000 from that payday to another Rezko business associate, Joseph Aramanda. The Feds allege that Aramanda then passed-on a big chunk of that total to four other people designated by Rezko. Kjellander says he did nothing wrong and that he was simply earning interest income via a legal loan to Aramanda.

Kjellander may not play a part in the upcoming trial of Tony Rezko, but the federal government's massive investigation of state pension fraud known as Operation Board Games continues.

This is where I have to note that Kjellander has neither been charged with, nor accused of any crime.

That's wonderful, but the same could also be said of Barack Obama. And at least Obama can say his new nickname isn't a letter assigned by federal law enforcement. That's an honor reserved for a guy who remains one of the most senior officials of both our State and National Republican Party. It's the same guy helping run our National Convention this year.

If that's not absurd enough for you, recall that this is the same Bob Kjellander who recently took a shot at John McCain, stating that many fellow RNC members had a "visceral reaction" against the candidate due to McCain's position on campaign finance reform.

Of course most Republicans have had a visceral reaction to a senior GOP official like Kjellander making millions doing who knows what with a Democrat Administration, while the Illinois Republican Party was allowed to die. But I digress.

Is anyone out there ready to start hammering Obama with the Rezko issue? I'm not. Instead I sent the letter below to the 160-some members of the RNC on Wednesday via e-mail. I think the RNC should do their part to get our Republican house in order first. In other words, clean-up or shut-up.

Dear RNC Members:

Below are just a few of the new stories from the past 24-hours linking indicted felon Tony Rezko to Bob Kjellander, the guy you put in charge of helping run the National GOP Convention. Rezko's federal criminal trial begins Monday here in Chicago.

This is embarrassing beyond belief. Many of us here in Illinois have been sounding the alarm about Kjellander for years now. Not only have you not listened, you've given Kjellander more titles. And keep in mind, while Kjellander is back in the news, the underlying issues here are far from new. The same disturbing questions and many of the same facts have been widely known for over 4 years now. All of the basic background has been publicly available for anyone doing a simple Google search. The only thing new is that the ice is melting quickly under some very dirty feet.

If there has been a more troubling case of shoddy due diligence, I can't think what it would be.

We're now in the middle of an election season where we should be using this Rezko issue against Barack Obama, but of course we can't because Rezko is also joined at the hip to a senior member of your organization.

Our State Party Chair Andy McKenna, Jr. will do nothing. It's hardly a secret that he's been a major disappointment as a leader. McKenna is a pal of Kjellander's in any case.

It's up to you folks. Will you publicly call TODAY for Kjellander's immediate resignation as a member of the RNC? Our County Chairmen and even our 19-member State Central Committee did so over a year ago. Your committee (that of course includes our State Party Chairman Andy McKenna) is the only roadblock to this simplest of reforms.

If you remain unwilling, you might as well issue a statement that the RNC isn't even going to try to keep the White House this year. That's the clear message because all of Obama's own ethical issues involving Rezko are going to be off the table.

Doug Ibendahl

Attorney and former General Counsel of the Illinois Republican Party

Chicago

312/648-0061

U.S. says Rezko paid his way in

[From the article:] In another filing made public Tuesday, the government said for the first time that Rezko shared in a sizable chunk of a controversial $809,000 finder's fee that went to Robert Kjellander, Illinois' Republican national committeeman, as part of a Blagojevich administration bond deal.

The government has said that Kjellander transferred $600,000 of the funds to Joseph Aramanda, a Rezko business associate.

Within a week, the government contended, Rezko received about $250,000 of the money and directed an additional $200,000 to four people, some of whom he owed money.

Corruption case judge: Blagojevich is 'Public Official A'

[From the article:] In another surprise, St. Eve disclosed prosecutors believe that much of $809,000 that went to Springfield Republican consultant Robert Kjellander in connection with the sale of state bonds was funneled through Glenview businessman Joseph Aramanda to four Rezko "assignees."

The money was reported to the Securities and Exchange Commission by the Bear, Stearns investment firm as a fee for Kjellander. But prosecutors said that $600,000 of the money went to the Rezko assignees.

Bear, Stearns handled the sale of $10 million in state bonds. Just what Kjellander's role in the sale was had never been made clear.

Judge reveals Blagojevich is 'Public Official A'

[From the article:] The nine-page ruling was heavy on political names and dealmaking, revealing for the first time what Robert Kjellander, Illinois' Republican national committeeman, allegedly did with a controversial $809,000 finder's fee he got as part of a Blagojevich administration bond deal. Prosecutors contend much of the windfall ended up with Rezko associates, according to St. Eve's ruling. . . . Kjellander has held a similarly prominent role with the national Republican Party, once serving as its treasurer. He still represents Illinois on the GOP national committee. A longtime Springfield insider, Kjellander has insisted it "wasn't clout" that landed him the fees referred to in Monday's ruling. Monday's ruling indicated that prosecutors allege that Kjellander served as a straw man for Rezko in the bond deal. Rezko, the ruling suggested, directed the investment bank Bear Stearns to give the fee to Kjellander, who then transferred $600,000 of the $809,000 fee to Joseph Aramanda, a Rezko business associate. Aramanda then allegedly turned over $450,000 to four other people designated by Rezko.

Rezko the man on hiring, filings say

[From the article:] Kjellander received roughly $800,000 as a commission. Prosecutors say he then gave $600,000 of it to Rezko crony Joseph Aramanda, who then distributed $450,000 of it to four people, many of whom gave much of the money back to Rezko.

St. Eve said the topic would be an unnecessary diversion that would itself become a "mini-trial."

Doug Ibendahl is a Chicago Attorney and a former General Counsel of the Illinois Republican Party. He is Co-Founder of Republican Young Professionals (RYP).