PE Firms Gave To Illinois Governor –

Fresh on the heels of speculation over his involvement in a pension kickback scandal, a study revealed that Illinois Governor Rod Blagojevich’s political campaign received more than $505,000 in contributions from private equity firms that were backed by state pension systems. The study, conducted by the Chicago Sun-Times, shows that 21 of the 144 private equity firms, backed by Illinois’ five pension funds, made political contribution to Blagojevich.

The contributions are not illegal, but are sure to become the focus of increased scrutiny in light of allegations made by at least one figure who has pleaded guilty in a scandal involving the Illinois Teachers Retirement System (TRS). Joseph Cari pleaded guilty to one count of attempting to commit extortion, agreeing with government claims that he acted as a liaison for Stuart Levine, the former TRS trustee at the center of the controversy. Levine has pleaded not guilty to multiple charges.

The governor’s office did not respond to calls for comment, but Blagojevich has consistently denied any wrongdoing connected with the scandal.

In his plea agreement with the United States Attorney’s office, Cari claims that Levine told him that a “high ranking Illinois public official” was selecting consultants for private equity funds that would appear before state pension boards and that this was a part of that official’s political fund raising strategy. The Associated Press and Chicago Daily Herald cited two anonymous sources as saying that the high ranking public official is Gov. Blagojevich and that one of the two associates mentioned is a political fund raiser for the Democratic governor.

The report cites cases in which the Governor’s campaign war chest received donations close to when the donors received commitments from state pension funds. Chicago-based private equity firm Edgewater Funds contributed to the Governor’s campaign fund five days after getting a commitment from TRS President Louis Holland.