Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (34 page)

The conniving governor contemplated an SEIU position for his wife, Patty, as well:

100. . . . Also, ROD BLAGOJEVICH wanted to know whether SEIU could do something to get his wife a position at Change to Win until ROD BLAGOJEVICH could take a position at Change to Win.

Harris mapped out a “three-way deal” to give the White House a “buffer” obscuring the obvious quid pro quo. SEIU would assist Obama with Blago’s appointment of a union-friendly candidate, Blago would get his cushy union job, and SEIU would be rewarded down the road with favors from the White House:

[101](c): ROD BLAGOJEVICH said that the consultants (Advisor B and another consultant are believed to be on the call at that time) are telling him that he has to “suck it up” for two years and do nothing and give this “mother f###er [the President-elect] his senator. f### him. For nothing? f### him.” ROD BLAGOJEVICH states that he will put “[Senate Candidate 4]” in the Senate “before I just give f###ing [Senate Candidate 1] a f###ing Senate seat and I don’t get anything.” (Senate Candidate 4 is a Deputy Governor of the State of Illinois). ROD BLAGOJEVICH stated that he needs to find a way to take the “financial stress” off of his family and that his wife is as qualified or more qualified than another specifically named individual to sit on corporate boards. According to ROD BLAGOJEVICH, “the immediate challenge [is] how do we take some of the financial pressure off of our family.” Later in the phone call, ROD BLAGOJEVICH stated that absent getting something back, ROD BLAGOJEVICH will not pick Senate Candidate 1. HARRIS re-stated ROD BLAGOJEVICH’s thoughts that they should ask the President-elect for something for ROD BLAGOJEVICH’s financial security as well as maintain his political viability. HARRIS said they could work out a three-way deal with SEIU and the President-elect where SEIU could help the President-elect with ROD BLAGOJEVICH’s appointment of Senate Candidate 1 to the vacant Senate seat, ROD BLAGOJEVICH would obtain a position as the National Director of the Change to Win campaign, and SEIU would get something favorable from the President-elect in the future.

(d). One of ROD BLAGOJEVICH’s advisors said he likes the idea, it sounds like a good idea, but advised ROD BLAGOJEVICH to be leery of promises for something two years from now. ROD BLAGOJEVICH’s wife said they would take the job now. Thereafter, ROD BLAGOJEVICH and others on the phone call discussed various ways ROD BLAGOJEVICH can “monetize” the relationships he is making as Governor to make money after ROD BLAGOJEVICH is no longer Governor.

A few days later, Team Blago reached out to the SEIU. An unnamed SEIU official agreed to float their plan and “see where it goes”:

109. On November 12, 2008, ROD BLAGOJEVICH spoke with SEIU Official, who was in Washington, D.C. Prior intercepted phone conversations indicate that approximately a week before this call, ROD BLAGOJEVICH met with SEIU Official to discuss the vacant Senate seat, and ROD BLAGOJEVICH understood that SEIU Official was an emissary to discuss Senate Candidate 1’s interest in the Senate seat. During the conversation with SEIU Official on November 12, 2008, ROD BLAGOJEVICH informed SEIU Official that he had heard the President-elect wanted persons other than Senate Candidate 1 to be considered for the Senate seat. SEIU Official stated that he would find out if Senate Candidate 1 wanted SEIU Official to keep pushing her for Senator with ROD BLAGOJEVICH. ROD BLAGOJEVICH said that “one thing I’d be interested in” is a 501(c)(4) organization. ROD BLAGOJEVICH explained the 501(c)(4) idea to SEIU Official and said that the 501(c)(4) could help “our new Senator [Senate Candidate 1].” SEIU Official agreed to “put that flag up and see where it goes.”

110. On November 12, 2008, ROD BLAGOJEVICH talked with Advisor B. ROD BLAGOJEVICH told Advisor B that he told SEIU Official, “I said go back to [Senate Candidate 1], and, and say hey, look, if you still want to be a Senator don’t rule this out and then broach the idea of this 501(c)(4) with her.”

“Senate Candidate 1” was top Obama adviser and Chicago political godmother Valerie Jarrett, who removed herself from the running when she took a top White House adviser post instead. Who was the “SEIU official” Team Blago spoke with and met? The
Wall Street Journal
obtained an internal communication in December 2008 fingering President Obama’s homeboy, SEIU Local 1 president Tom Balanoff.
³⁹
The
New York Times
then followed up with a report that several union officials in Chicago and Washington also identified Balanoff as the official who spoke to Blago .
⁴⁰
Balanoff, not coincidentally, had been appointed by Blago to the Illinois Health Facilities Planning Board.

Two days before Christmas 2008, legal counsel Greg Craig released an official report outlining contacts between Team Obama and Team Blago. Balanoff, it turns out, had spoken with Jarrett:

On November 7, 2008—at a time when she was still a potential candidate for the Senate seat—Ms. Jarrett spoke with Mr. Tom Balanoff, the head of the Illinois chapter of the Service Employees International Union (SEIU). Mr. Balanoff is not a member of the Governor’s staff and did not purport to speak for the Governor on that occasion. But because the subject of the Governor’s interest in a cabinet appointment came up in that conversation, I am including a description of that meeting. Mr. Balanoff told Ms. Jarrett that he had spoken to the Governor about the possibility of selecting Valerie Jarrett to replace the President-Elect. He told her that Lisa Madigan’s name also came up. Ms. Jarrett recalls that Mr. Balanoff also told her that the Governor had raised with him the question of whether the Governor might be considered as a possible candidate to head up the Department of Health and Human Services in the new administration. Mr. Balanoff told Ms. Jarrett that he told the Governor that it would never happen. Jarrett concurred. Mr. Balanoff did not suggest that the Governor, in talking about HHS, was linking a position for himself in the Obama cabinet to the selection of the President-Elect’s successor in the Senate, and Ms. Jarrett did not understand the conversation to suggest that the Governor wanted the cabinet seat as a quid pro quo for selecting any specific candidate to be the President-Elect’s replacement. At no time did Balanoff say anything to her about offering Blagojevich a union position.
⁴¹

It strains credulity to believe that a seasoned Chicago pol such as Jarrett “did not understand” that a gobsmackingly obvious quid pro quo was being suggested to her at the behest of Blagojevich. Jarrett claims complete ignorance of any scheming, but note from the criminal complaint cited above that Blagojevich “understood that [the] SEIU Official was an emissary to discuss Senate Candidate 1’s [Valerie Jarrett’s] interest in the Senate seat” and that the “SEIU Official stated that he would find out if Senate Candidate 1 wanted [the] SEIU Official to keep pushing her for Senator with” Blagojevich.

Obama counsel Greg Craig stuck to the story in a media conference call discussing the Obama administration’s self-exonerating report:

Q Okay. And then why did Valerie Jarrett characterize this as a ridiculous proposition?

MR. CRAIG: This was—she thought it was ridiculous for the governor of Illinois to be talking about being appointed to Barack Obama’s Cabinet at a time when he was under investigation, widely reported in the newspapers—under investigation for a variety of problems. And the reason that I believe that she thought it was ridiculous and said so was because that’s what she told her counsel, and that’s what her counsel told me.

Q And did she at that point or did anyone else in the course of their communications with, you know, folks perceived to be communicating for Blagojevich raise a red flag and say, “Hey, you know, guess what. Balanoff just told me that, you know, this ridiculous thing, that Blagojevich wanted to be HHS secretary”?

MR. CRAIG: Well, she did not perceive Balanoff to be communicating as an emissary of Governor Blagojevich.

She conceived of him as being a union official who had met with the governor. And this topic came up. But it was not presented to her as a quid pro quo.
⁴²

In January 2009, the Associated Press,
Wall Street Journal
, and other news organizations reported that SEIU president Andy Stern and Balanoff had met personally with Blagojevich on November 3—right around the time the feds allege the governor was hatching his pay-for-play schemes.
⁴³
Balanoff spoke with Blago a total of three times—on November 3, November 6 (the day before Balanoff met with Jarrett), and November 12. Balanoff announced in mid-February 2009 that he was cooperating with the feds.
⁴⁴

SEIU flacks have taken pains to emphasize that no one has yet alleged any illegality on the union’s part. Defiantly standing by his union’s past support of the impeached governor, Stern insisted he had “no reason to believe anyone did anything wrong.”
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But blanket denials can’t cover the cesspool stench.

Does the SEIU deserve the benefit of the doubt? A review of the union’s sordid history of corruption over the past few years suggests otherwise. Stern has been responsible for installing a cabal of hand-chosen officers who exploited their cash-infused fiefdoms for personal gain and presided over rigged elections—in the process, becoming all that they had professed to stand against as representatives of the downtrodden worker.

LIVING LARGE IN L . A .

Andy Stern rallied the Illinois delegation to the 2008 Democratic National Convention in August 2008 with an impassioned salute to the working man. Flanking Stern on stage at the Denver celebration: Chicago political machine kingpins Rahm Emanuel and Richard Daley. Stern roared about “rebalancing power between wealth and work” to “make sure everyone shares in the wealth of a growing economy.”
⁴⁶
Echoing Obama’s 2007 speech to the SEIU political action conference, union boss Stern condemned the old way of doing business and called on America to “turn the page” on behalf of hard-working Americans and their families.

But just two weeks before Stern and company gathered in the Mile High City to celebrate Obama’s coronation, the
Los Angeles Times
published an explosive investigative series about the SEIU. Although the series got surprisingly little attention from national news organizations,
L.A. Times
reporters exposed how one of Stern’s top protégés “shared in the wealth”—by siphoning off hundreds of thousands of dollars in dues money for his personal enrichment and pleasure. Moreover, the paper alleged, Stern helped cover up the scandal. No wonder they keep urging us to “turn the page.”

The
L.A. Times
investigation zeroed in on Tyrone Freeman who, like Barack Obama, began his career as an urban community organizer. In Atlanta, Freeman quickly ascended the SEIU ladder. In 1994, Stern found him at a small Georgia chapter of the union, Local 1985, and brought him westward. Stern set his loyalist Freeman up as head of Local 6434, the sprawling home care workers’ chapter in southern California that represents an estimated 160,000 workers who make about nine dollars an hour caring for the elderly and disabled. Stern chose Freeman as part of his administration slate at the SEIU convention in 2008 and named him a national vice president in addition to the L.A. appointment. The move wasn’t an altruistic act of affirmative action. It was part of Stern’s grander plan to consolidate power by merging locals into statewide chapters.

With bigger membership rolls came bigger coffers, and with bigger coffers came irresistible temptations.

Freeman, the
L.A. Times
discovered, had piped $600,000 in union contracts to his wife’s video production and entertainment ventures. The local also paid his mother-in-law $8,000 a month to babysit his daughter and other union employees’ children, footed a $13,000 bill for membership at a Beverly Hills cigar club, covered $12,500 in tabs at upscale Morton’s restaurant in Bur-bank, and forked over $8,000 in union dues to cover expenses for Freeman’s Hawaiian wedding. Freeman’s spending orgy didn’t end there.

Stern’s protégé created a non-profit training shop called the “Homecare Workers Training Center”—ostensibly to provide educational opportunities for nurses. In practice, the non-profit served as a conduit to subsidize a childcare business operated by Freeman’s mother-in-law. “Her business had been receiving more than $90,000 annually for the past several years from the training center that Freeman founded as a separate nonprofit and chairs, according to IRS filings and interviews,” as reported by the
L.A. Times
. The funding from her son-in-law constituted more than 10 percent of the nonprofit’s total yearly expenditures. Freeman’s wife, Pilar, and brother-in-law, Hernando Planells Jr., are listed in state documents as officers in the mother-in-law’s business.
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Freeman’s ransacking of Local 6434’s treasury didn’t end with nepotistic favoritism. The
Times
also reported:

• A housing corporation that Freeman helped found as a nonprofit has not been granted the IRS tax-exempt status it sought and was suspended from doing business in California. It also has claimed on its website to have a “strong relationship” with the prominent California Community Foundation, which says it has no such relationship.

• The union spent at least $123,000 more on a fund-raising tournament at the Four Seasons Resort in Carlsbad than it received in reimbursements, according to Labor Department filings and interviews. Freeman said the event made money for the charity. The union’s expenditures included $100,000 in payments to entities associated with former professional football star Eric Dickerson, which have been suspended from doing business in California. The payments were listed as donations to nonprofits, not as fund-raising expenses.