Study Says Pensions Backed Blagojevich

A recent study revealed that Illinois Gov. Rod Blagojevich’s political campaign received more than $505,000 in contributions from PE firms that were backed by state pension systems.

For instance, Chicago-based private equity firm Edgewater Funds contributed to the governor’s campaign fund five days after getting a commitment from Illinois Teachers Retirement System.

The contributions are not illegal, but their revelation comes on the heels of speculation over the governor’s involvement in a pension kickback scandal involving Illinois TRS. In that scandal, 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, a former Illinois TRS trustee. 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.

The recent study of campaign contributions, conducted by the Chicago Sun-Times, showed that 21 of the 144 private equity firms, or roughly 15%, backed by the state’s five pension funds made political contributions to Blagojevich.

The contributions are of interest because in his plea agreement with the U.S. Attorney, 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 Blagojevich, and that one of the two associates mentioned is a political fund-raiser for the Democratic governor.