Article: Pension scandal raising questions

January 8, 2006 Quad-City Times By Associated Press SPRINGFIELD (AP) — Gov. Rod Blagojevich’s challenger in the Democratic primary have called for the governor to scrutinize his campaign fund and let voters know whether any of the money is linked to a scandal at the Teachers’ Retirement System. Edwin Eisendrath said that if he were governor, he would have begun a review of his campaign fund “at the first hint of impropriety.” But a spokesman said the Blagojevich campaign has done nothing wrong and has already returned donations from the three people charged in the scandal. “We have done everything appropriately,” said campaign spokesman Doug Scofield. It was the first exchange between the two campaigns on what promises to be a central issue in the primary: Blagojevich’s fundraising. The first-term governor has raised record amounts of political money, much of it from people and companies wanting to do business with the state. Eisendrath, a former Chicago alderman, argues Blagojevich has put politics ahead of good government. “The governor’s fundraising scandals continue to undermine trust in the pension system and erode confidence in government,” Eisendrath said. The scheme targeted investment firms who wanted to do business with the Teachers’ Retirement System, which serves teachers and school administrators outside of Chicago. Federal prosecutors say the firms were told by then-Trustee Stuart Levine that they could not get the contracts without paying consulting fees to certain people. The firms paid the fees, which were then split up among Levine and other politically connected individuals, prosecutors say. Two people — Steven Loren and Joseph Cari — have pleaded guilty. Levine has pleaded not guilty. The pension system announced Thursday that it is suing all three. Loren and Cari say they were told that a high-ranking government official was involved in choosing the consultants and that some of the fees were used to reward the official’s campaign donors. Prosecutors have not identified the official, but sources familiar with the investigation have said it is Blagojevich. The governor has not been charged, and he denies any wrongdoing. Scofield said the campaign has reviewed donations and found nothing amiss, aside from contributions from Loren, Cari and Levine, which have either been returned or donated to charity. Even if the campaign unknowingly accepted money from someone else involved in the kickback scheme, there is no way to search for it unless more names surface in the federal investigation, Scofield said.