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Culture of corruption: Blago’s dead fundraiser and Team Obama

By Michelle Malkin  •  September 14, 2009 11:00 AM

You know about Six Degrees of Kevin Bacon.

But have you ever played Six Degrees of Roddy Blago?

Take any Blago corruption story, and you can link it to Team Obama in six easy steps or less.


Over the weekend, Rod Blagojevich’s former chief fundraiser, Christopher Kelly, died after his girlfriend found him over his car wheel in a lumberyard.

Kelly was about to check in to the Graybar Hotel before his death:

“An admitted high-stakes gambler who once haunted Las Vegas’ card tables, Kelly was facing at least eight years in prison after pleading guilty to fraud charges in two separate cases, and he was scheduled to start serving his time on Friday. Kelly was part of the former governor’s inner circle, and as chairman of Blagojevich’s campaign fund, he presided over a political war chest of millions of dollars. But at the time of his death, Kelly had run up thousands of dollars in personal debts was believed to be strapped for cash. He was facing three years in prison for hiding $1.3 million in income, including company money he used to pay gambling debts that he wrote off as business expenses. He was facing five additional years for taking part in an $8.5 million fraud involving roofing work on United Air Lines and American Airlines hangars at O’Hare International Airport. And still to come was a trial in a sweeping indictment that charged Blagojevich, Kelly and four other men with planning several fraudulent deals involving state government and millions of dollars in kickbacks. The trial is set for June 3 and could have added years to Kelly’s sentence.”

The Chicago Tribune profiled Kelly after his indictment here. Kelly served as part of Blago’s wheeler-dealer Kitchen Cabinet along with convicted fraudster Tony Rezko.

Rezko had loaned money to his business partner and fellow Blago confidante Kelly, who had schemed to evade the IRS by using ill-gotten gains to pay off his massive debts:

He pleaded guilty to tax fraud charges earlier this year. That scheme was tied, in part, to Kelly’s known gambling addiction. He admitted that he converted business funds to pay off gambling debts but did not report it properly to the Internal Revenue Service. Some of the illicit funds out of the O’Hare fraud also went to pay gambling debt, along with other debt Kelly had incurred, including a loan from convicted businessman Tony Rezko.

Rezko, of course, served as an ardent fund-raiser for Saint Obama and cooked up his sweetheart real estate trade in Chicago, land of coincidences.

And that’s not all. As I recount in Culture of Corruption, now-Attorney General Eric Holder signed up to assist Blago in a casino license battle in 2004. The state’s gaming board had approved the construction of a disputed casino, overruling the recommendation of the board’s staff. Rank-and-file investigators had qualms over the casino developer’s alleged mob ties and over Blago’s appointment of a crony fund-raiser to oversee the state’s deal-making with the casino. The fund-raiser was…

…Christopher Kelly.

The Chicago Sun-Times reported that Rezko “held an option to lease a hotel site next to the proposed casino site.” Holder held a public press conference with Blago to announce his role as a special “independent” investigator into the matter. The dog-and-pony show produced no report, but Holder and his law firm had contracted to conduct the probe for a tidy $300,000. Somehow, the foul-smelling case slipped Holder’s mind; he failed to mention it in his Senate Judiciary Committee questionnaire.

I’m reminded of the diagnosis from one of Obama’s hometown observers, who told ABC News in February 2008:

“We have a sick political culture,” said Jay Stewart, the executive director of the Chicago Better Government Association, “and that’s the environment that Barack Obama came from. Stewart says he does not understand why Obama has lectured others about corruption in Washington and Kenya but “been noticeably silent on the issue of corruption here in his home state, including at this point, mostly Democratic politicians.”

The corrupt Chicago way is always just a hop, skip, and jump away.

Posted in: Corruption

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Categories: Corruption, Democrats, Hillary Clinton