Fraud trial testimony: Gov.'s father-in-law hungry for 'spoils'

CHICAGO The allegation was made by 72-year-old retired financier Sheldon Pekin, who suffers from Parkinson's disease. He was wheeled Monday morning into the federal courthouse where he has been granted immunity from prosecution.

Pekin testified that five years ago he represented a company called Glencoe Capital as it sought a $50 million investment from the Illinois Teachers' Retirement System pension fund.

Pekin said in 2003 he agreed to a scheme devised by TRS board member Stuart Levine to kick back half of his $375,000 finders fee and that initially Levine instructed Pekin to make the payoff to 33rd Ward Chicago Alderman Richard Mell, who is the father-in-law of then-newly elected Governor Rod Blagojevich.

Pekin testified that Levine explained, "Mr. Mell was somewhat upset because he was not participating in the spoils. He was not being rewarded for his work in getting Mr. Blagojevich elected." Pekin then testified that Levine later told him the Mell deal was off.

Mell denied Pekin's claim saying, "i've never been offered any money and if I was, I would not have taken it."

In the indictment, prosecutors allege that Pekin eventually paid $250,000 of his $375,000 finder's fee to Joseph Aramanda, a partner in defendant Rezko's restaurant business.

Government lawyers also played audio tape of Pekin on the phone with Levine, who used Rezko's first name as he allegedly pressured Pekin to the make the bribe payment sooner than later.

"If we don't do it today, Tony won't do business anymore," Pekin says on the tape.