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Blagojevich fundraiser now target of federal probe

Posted December 12, 2007 10:00 pm

Bruce Rushton

Federal prosecutors have taken over a state investigation into allegations of influence peddling involving a fundraiser for Gov. Rod Blagojevich.

In 2005, Illinois State Police closed a case against Harish M. Bhatt, a Joliet pharmacist and major fundraiser for the governor, who had been accused of offering to help derail a fraud investigation into a Chicago pharmacist in exchange for a $25,000 campaign contribution to Blagojevich. Jatin Patel, who stopped payment on a $25,000 check he gave to the governor's campaign shortly after writing it, has denied any wrongdoing.

The state has ordered Patel to repay $1.5 million in alleged Medicaid overbillings.

Bhatt, who was also subject of a fraud investigation, has not been sanctioned by the state and says he did nothing wrong. Patel has told the Chicago Tribune that Bhatt offered to help in Patel's fraud probe in exchange for a campaign contribution, an assertion Bhatt denies.

State police officials have said they recently reopened the investigation after the Tribune raised questions about the thoroughness of the probe into whether Bhatt offered to help Patel in exchange for a campaign contribution. State police refused a Freedom of Information Act request for investigative files involving Bhatt and Patel, so the Tribune on Monday sued state police in Sangamon County Circuit Court.

Now, the U.S. attorney's office in Chicago is subpoenaing state police files and taking over the investigation, The State Journal-Register has learned.

Randall Samborn, spokesman for the U.S. attorney's office in Chicago, would neither confirm nor deny that federal prosecutors are taking over.

However, a source close to the investigation confirmed that the U.S. attorney's office has assumed jurisdiction. The source, who spoke on condition of anonymity, said federal officials initially declined a state police invitation to take over the probe. Only within the past week, the source said, did the U.S. attorney's office reverse that decision and take on the case.

The renewed probe is the latest in a series of corruption investigations aimed at people with ties to Blagojevich, who has not been accused of wrongdoing.

Last year, federal prosecutors indicted Antoin "Tony" Rezko, a Blagojevich fundraiser, for allegedly demanding kickbacks from private equity firms seeking to do business with the state. Stuart Levine, a Blagojevich fundraiser who sat on the Teachers Retirement Systems and the state Health Facilities Planning boards, has pleaded guilty to fraud charges in the same kickback case.

Last spring, Cook County prosecutors charged the wife of a Blagojevich fundraiser with collecting more than $2 million from the Department of Children and Family Services for urinalysis tests that were never performed. Prosecutors also have investigated the Blagojevich administration's hiring practices, but no charges related to inappropriate hiring have been filed.

Blagojevich spokeswoman Abby Ottenhoff said Wednesday she wasn't aware that federal prosecutors had taken up the Patel-Bhatt investigation.

In denying the Tribune's FOIA request for investigative files, state police said the documents couldn't be disclosed because investigations were pending. According to the Sangamon County lawsuit, state police had previously told the newspaper that the investigation was closed.

Regardless of whether an investigation is open, files must be disclosed unless making them public would hinder investigators, said Don Craven, who is representing the Tribune in the suit. Craven noted that police refused to turn over the records after the newspaper printed stories that revealed investigations. Bhatt and a state pharmacy regulator told the newspaper that investigators never interviewed them.

"Just because there's an ongoing investigation, that's only hurdle one," Craven said. "Hurdle two is, how would release interfere with that investigation? Apparently, they have reopened this only because of information that they got from the Tribune story. They didn't talk to any of the principals. There's a lot they didn't do.

"This is Democracy 101. And since Thomas Jefferson, the most important element in this form of government is an educated electorate. The only way we can educate ourselves is if we have a free flow of information from our government."

Scott Compton, state police spokesman, said the agency got a copy of the lawsuit either Monday or Tuesday.

"It is being reviewed by our legal office," Compton said. "I don't know that they've completely read through it."

The state attorney general's office, which presumably would defend state police in court, is also reviewing the suit, said Robyn Ziegler, spokeswoman for Attorney General Lisa Madigan.

Bruce Rushton can be reached at (217) 788-1542 or bruce.rushton@sj-r.com.

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