Blagojevich insider tells tale of greed, secrecy

By MIKE ROBINSON and MICHAEL TARM Associated Press Writers

CHICAGO (AP) - Jurors at the corruption trial of Rod Blagojevich have begun hearing about what prosecutors say was a scheme to use his power as governor to generate illegal profits and hide them in a secret bank account to be divided with members of his inner circle after he left office.

"Any money earned would be held in separate accounts that would be hard to locate," Alonzo Monk, a trusted Blagojevich friend and former chief of staff, said on the first day of testimony Wednesday as he told jurors his tale of subterfuge and greed.

Monk is due back on the stand Thursday to answer questions from federal prosecutors, and may be there again next week before defense attorneys are able to cross-examine him.

Among other things, he is all but guaranteed to tell how racetrack owner John Johnson was allegedly pressured to deliver a hefty contribution to the Friends of Blagojevich.

Prosecutors say Johnson was eager for legislation that would have required Illinois casinos to pay his tracks millions of dollars in subsidies, but Blagojevich was threatening not to sign it until Johnson came up with a sizable campaign contribution.

Monk has pleaded guilty to scheming to illegally pressure Johnson for a campaign contribution and took the witness stand in the hopes of getting a lighter sentence.

Blagojevich 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 testified that he and Blagojevich, along with fundraisers Tony Rezko and Christopher Kelly, discussed various ways of making money by leveraging state actions.

In dramatic testimony Wednesday, Monk described Blagojevich's decision to sell $10 billion in state bonds in a single day, largely through the investment bank Bear Stearns.

Some of Blagojevich's aides as well as state lawmakers 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 described it as a loan.

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

The four men referred to themselves as "one, two, three, four," Monk said. 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 said he was glad to be part of the plan.

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

He 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.

Blagojevich and his wife watched Monk intently during his early testimony and the former governor took notes.

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.