News Column

Blagojevich Book Says Rezko Channeled $25,000 to Obama

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A coming book about Rod Blagojevich says undercover tape-recordings caught the former governor saying he had heard that convicted influence peddler Antoin "Tony" Rezko secretly channeled $25,000 in cash to Barack Obama, but federal authorities did not deem the claim credible.

The book, "Golden: How Rod Blagojevich Talked Himself Out of the Governor's Office and into Prison," suggests Blagojevich was talking about an undisclosed payment to help Obama with his 2004 campaign for the U.S. Senate.

The book says that federal investigators pursued the claim, but ultimately gave it little credence. "Never was Blagojevich seen as a credible threat to the incoming president," says the book, an outside project by two Chicago Tribune reporters.

The White House referred questions about the matter to the Obama campaign. Ben LaBolt, a campaign spokesman, said the claim "is preposterous and it is false. No such payment was ever offered or made, and there never has been any suggestion or question of it from anyone, except apparently by Rod Blagojevich."

Federal authorities declined to comment to the Tribune about the investigation.

An attorney for the now-imprisoned Rezko dismissed the allegation, saying that Blagojevich's claim is "simply a fabrication and not true."

"You must keep in mind that the source of this allegation is inherently unreliable and not credible," said the attorney, Joseph J. Duffy.

Blagojevich's lawyer, Sheldon Sorosky, did not return calls. Another of his other attorneys, Lauren Kaeseberg, declined to comment.

The disclosure of Blagojevich's comments comes as the president is locked in a tight re-election campaign with Republican Mitt Romney, the former Massachusetts governor, who has sought to link Obama's Chicago connections to the city's culture of political corruption.

Obama's ties to Rezko were a nagging issue in the 2008 campaign. Rezko and Obama were friends, and Rezko raised as much as $250,000 for Obama for the first three political offices he sought. Obama also engaged in a real estate deal with Rezko in which Rezko's wife purchased the lot next to the home in the Kenwood neighborhood that the Obamas bought in 2005, then sold the lot to the Obamas for less than she paid.

Obama later acknowledged that the real estate dealings were a lapse in judgment.

Blagojevich's claim about the money was caught on a government recording that was not made public during either of Blagojevich's trials, according to the book. The book, by Jeff Coen and John Chase, does not say who gave the recordings to the authors.

The accusation of money paid indirectly to Obama is among many musings by Blagojevich that the FBI secretly recorded. Among the others: that Blagojevich mentioned naming Oscar-winning actress Halle Berry to Obama's vacant Senate seat so he could "have a shot" at having sex with her. Blagojevich, a Democrat, also told a staffer he voted for Republican George H.W. Bush for president and then gave the staffer a warning: "If you ever repeat this, first I'll deny it, secondly I'll wait a little bit, then I'll fire you."

The book portrays Blagojevich as being envious that Obama's political fortunes had risen so high when the governor thought the incoming president had bigger Rezko problems than he did.

According to the book, Blagojevich was repeating "a story that (he) had heard that he believed" when he spoke of the $25,000 cash from Rezko. Talking to his then chief of staff John Harris soon after Obama's election, Blagojevich said he had heard Rezko had given the cash to Bruce Washington, who has held jobs with the state, Cook County and the city school district.

"The cash was for Obama. Not for me," Blagojevich told Harris, according to the book.

"Right," Harris replied.

"You understand?" the governor asked.

At one point, in a conversation with his wife Patti, Blagojevich even tossed out the idea of naming Washington to Obama's Senate seat.

"How about I make him the (expletive) senator?" Blagojevich asked his wife, according to the book.

The Tribune began seeking comment from Washington, 60, late last week after learning of Blagojevich's claims. He did not respond to letters the Tribune left at his home or to phone messages.

In 2003, Washington was acting chief operating officer for the city school district.

In 2005, when Blagojevich was governor, he served as the deputy director for property management in the state Central Management Services office, earning $110,000 a year. An audit at the time found that Washington billed the state to be reimbursed for meals he had with officials from a property management company even though the company also billed the state for the meals. He was placed on administrative leave without pay, sources told the Tribune at the time.

The following year, Washington served as campaign manager for then Cook County Board President John Stroger. He later became the county's capital planning director, earning $142,000 a year, according to county payroll records.

In February 2010, he submitted his name to then-Mayor Richard Daley seeking appointment as 29th Ward alderman, a post that became vacant after Alderman Isaac Carothers pleaded guilty in federal court to bribery charges. State Rep. Deborah Graham was selected.

The book says that Washington and Rezko were interviewed by investigators, "but not enough detail was gathered to make much of it." Rezko had spoken of giving money to various politicians in the form of what commonly is called "walking-around money" -- money meant to handle various expenses during a campaign and on Election Day.

Obama, according to previous reports, was interviewed by federal agents as part of their investigation into Blagojevich's attempt to sell the president-elect's Senate seat in exchange for a job. LaBolt said the investigators did not question Obama regarding Blagojevich's claim about the $25,000.

Randall Samborn, spokesman for the U.S. attorney's office in Chicago, declined to say whether authorities investigated Blagojevich's musings. Samborn said the two authors wrote "something they claim is from the investigation that never made it into the public record. We have no comment."

Joan Hyde, a spokeswoman for the FBI in Chicago, also declined to comment.

Rezko, who was convicted in federal court of using his clout with Blagojevich to scheme to extort millions of dollars from firms seeking state business or regulatory approval, complained to his federal trial judge shortly before he went to trial that prosecutors were pressing him to implicate Obama as well as Blagojevich, suggesting authorities were interested in Obama as he was campaigning for the Democratic presidential nomination.

Rezko is serving a 10 {-year sentence.

During the transition after Obama's election, the White House said it examined whether Obama and Blagojevich negotiated over the selection of a senator and found no wrongdoing by Obama. Indeed, the review, by general counsel Greg Craig, said it found that Obama had no conversations with Blagojevich or his staff about the Senate post. He was keenly interested in who would succeed him but reportedly took a hands-off approach on the matter.

Blagojevich, convicted of trying to sell Obama's Senate seat as well as perjury, is serving a 14-year sentence in a federal prison.

The book, from Chicago Review Press, is scheduled to be published in September.

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