Rezko testimony resumes after break

CHICAGO Secretly recorded phone calls were played in court.

The government went back to trying to convince the jury that businessman Rezko had knowledge of and was a major player in the crooked deals fronted by the prosecution's star witness:

Prosecutors resumed their case with another secretly recorded phone call. This one on took place on the 18th of May, 2004 from witness Stuart Levine to defendant Rezko. Levine, who pleaded guilty in the case and is testifying for the government, said the two men were discussing the appointment of Anthony Abboud to the teacher's retirement system board and whether Abboud, a former lobbyist, could legally serve on the panel that controls $30 billion in pension funds:

"No, no, he resigned but also there was some – Jim told me there was some attorneys in the governor's office said that tony Abboud's firm does business with the TRS, and I asked him to look into it further. They did and they came back and they said they thought it was nothing major, they thought it is okay," Rezko said on the recording.

Rezko is accused of using his influence in the administration of Illinois Governor Rod Blagojevich to stack at two state boards to extort kickbacks from companies trying to do state business.

For one 15- to 30-minute stretch during the questioning, prosecutor Chris Niewoehner asked Levine about his drug use. Levine said during the years before his indictment he used methamphetamine and an animal tranquilizer called ketamine, mostly during the week at parties with male friends in a Lincolnwood hotel. He also testified he did snort crystal meth in his office when he had it left over from parties but never did it at home in order to deceive his family.

Speaking of Levine's family, attorneys for his wife, Shari, are trying to quash a subpoena from Rezko's lawyers. She apparently was subpoenaed by the defense last week. Her lawyers contend she has no relevant information and that any conversations between wife and husband are protected by marital privilege.

Levine is still under direct examination. The cross examination by the defense probably won't begin until later this week.

Rezko, 52, is charged with scheming with Levine to pressure kickbacks out of money management firms seeking to invest assets of the $30 billion Illinois Teachers Retirement System.

Rezko and Levine also allegedly schemed to split a $1 million bribe from a contractor who wanted state approval for construction of a hospital.

Rezko is charged with using his political influence with Blagojevich's administration to launch both of the alleged schemes.

The trial has been closely watched in the political world because Rezko has been a key fundraiser for Gov. Rod Blagojevich and Sen. Barack Obama. Neither of the officials is accused of any wrongdoing in the case.

Levine was known to have engaged in extensive drug use, but his testimony Monday cast a harsh light and provided fresh details of his history.

He testified that he would regularly withdraw cash from the bank for drugs and other expenses and estimated that between 2000 and early 2004 his withdrawals totaled "in excess of $1 million."

One subject that didn't come up was exactly who his friends at these parties were. He did say that all of them were male.

But U.S. District Judge Amy J. St. Eve has barred any testimony concerning Levine's "personal social life," which she said would be too prejudicial if presented to the jury. Defense attorneys have described it as Levine's "secret life."

On another topic, Levine testified that Springfield millionaire businessman William Cellini told him that Rezko was getting a lot of pressure to find a way for Blagojevich's father-in-law, Chicago Alderman Richard Mell, "to make money."

Levine quoted Cellini as saying that if they could help Rezko "solve this problem it would greatly ingratiate them with Mr. Kelly and Mr. Rezko." Christopher Kelly was another key fundraiser for Blagojevich.

"Mr. Kelly and Mr. Rezko were very powerful in the Blagojevich administration," Levine testified. "They had the power to appoint people to boards and that was very important to Mr. Cellini and me," he said.

Levine testified that he hit on a scheme under which businessman Sheldon Pekin, who was trying to land business with the pension board for several investment funds, would share a $375,000 finders fee with Mell.

Levine said Cellini told him there was some initial interest in the idea and Pekin was agreeable but he said Rezko later said that Mell was not to get the money. Pekin told a similar story earlier on the stand.

Mell has said that he knew nothing about any such scheme.

Levine testified that he and Cellini hatched a scheme soon after Blagojevich took office to kill a plan to consolidate three state pension funds under a single board. The plan, championed by Blagojevich budget director John Filan, would have hurt a small group of insiders who had long been controlling the teachers pension fund, Levine testified.

Levine, then a board member, said Cellini proposed to contact Rezko and Kelly and get them to use their influence to kill the plan. He said that in turn he and Cellini would use their influence to give money management firms recommended by Kelly and Rezko preferred treatment.

Levine also testified that when the small coterie of insiders who controlled the fund were in danger of losing their majority on the board in May 2004, Rezko installed two loyal board members willing to vote as their were told on key issues.

Neither Kelly nor Cellini are charged in the case.

The Associated Press contributed to this report.