A former associate for Tony Rezko said the convicted influence peddler paid Patti Blagojevich $40,000 at a time when the family's bills were piling up.
Robert Williams, the chief financial officer at Rezko's development company, Rezmar, said he wrote Patti's real estate company, River Realty, the $40,000 check in January 2004 at Rezko's behest. He was immediately skeptical of the order, he told jurors on Thursday during the federal corruption trial of former Illinois Gov. Rod Blagojevich.
Williams said Rezko asked him to deposit a check of the same amount into a Rezmar account before transferring the money to River Realty. Rezko said the money was earned through a project at Lake and Aberdeen—a project which Williams had never hear of.
William said he took particular notice of the dollar amount associated with the check. He was aware that the Blagojevich's were in the process of renovating their home and had fallen behind on their payments to the builders—who were subcontractors for Rezko.
Still, he signed the check.
IRS agent Shari Schindler testified that the check was immediately transferred to the family's personal account. By January 23, the $38,000 was sent to the subcontractors.
Williams said he was first ordered to draft an allegedly phantom check for the former first lady in August 2003 for a real estate transaction. He testified that he soon discovered Patti was not a party to any Rezmar transaction. Williams let his boss know what he thought of the payment, refusing to sign the $14,000 check.
"I told him I didn't believe it was appropriate to sign the check," he said.
But the $14,000 check was small potatoes compared to what he said was to come.
Within two months, Williams said he was sending $12,000 monthly consulting fees to Patti until May 2004.
Former Rezmar consultant Mike Winter said the payment plan was an odd one, since Patti's role was largely limited to brokerage. She helped to identify potential realtors for one deal, which later fell through during the spring of 2004. Rezko still issued her a check.
"They are generally only compensated after sales events...instead of taxing the company on a monthly basis," he began before an objection cut short his response.
The Blagojevich's salary peaked in 2004—the year Rezko's checks flowed in—at nearly $400,000, though Patti and Rod's combined salary never dipped below $226,000—in 2008, the year prosecutors allege Blagojevich attempted to sell President Barack Obama's U.S. Senate seat.
And the prosecution believes they know why.
Blagojevich often complained that his $170,000 salary created financial troubles for him, all the while spending more on clothing than on his mortgage.
Rod and Patti spent more than $400,000 on clothing—nearly $10,000 more than the mortgage for their north Chicago home— in the six years the governor was in office.
Blagojevich often spoke of the financial wellbeing of his family and his daughters' ability to attend college on FBI wiretaps, typical worries for any parent.
"I don't wanna be in government after two years," he told adviser Bill Knapp in a conversation about filling Obama's senate seat. "It's screwing my family...we're struggling financially."
But Blagojevich's financial troubles apparently were largely of his own doing.
IRS agent Shari Schindler read off a list of the who's who among clothiers and retail outlets. The governor spent $205,000 on suits from Tom James Clothing/Oxxford — a custom clothing, custom suit maker. But that was just one component of his well kept wardrobe. The governor spent $2,000 for custom shirts and once left Sak's Fifth Avenue with four ties worth $773.
The credit card statements also showed a lengthy list of returns shortly after some shopping sprees. One $763 trip to Bloomingdale's for ties was followed with a $359 return.
If Patti was behind the return trip, her frugality only went so far. Patti paid around $3,000 for Maximilian Furs at a time. Maximilian salons are located in Bloomingdale's stores and offer premiere designer furs.
Schindler testified that by August 2008, the Blagojevich family owed more than $90,000 in credit-card debt, as well as $220,000 on a home equity loan.
The spending left the Blagojevich family with serious money issues despite the governor's six figure income. The first family managed to consistently spend more money than they were bringing in, leaving them with six-figure debt levels at the time of his arrest.
The prosecution is trying to paint a picture of a desperate man, willing to risk corruption to preserve his financial well being and exorbitant lifestyle.
Lead defense attorney Sam Adam Jr. challenged Williams' claim that the money was unearned. The former Rezmar executive admitted that he had not discussed the agreement with Patti, nor did he check with Rezko about consulting updates provided by the former first lady.
"Were you privy to Patti and Mr. Rezko's conversations?" he asked.
"No," Williams replied.
"Is it fair to say that only two people, Rezko and Patti, can tell what was said," he followed up.
Williams affirmed the defense attorney's assumption.
Rezko was convicted on a bevy of corruption charges in 2008. He became the face of political corruption in Illinois, especially tainting Blagojevich. The businessman had been one of the governor's chief fundraisers and key advisers.
Blagojevich now faces more than 400 years in prison if convicted of a slew of corruption charges of his own.
The prosecution's case is winding down and the government has called many of its star witnesses. U.S. Attorney Reid Schar said the prosecution will likely rest within two weeks. The judge has given the defense until Wednesday to submit transcripts for audio recordings, which it plans to use.
The defense has previously motioned to have all of the FBI wiretaps played for the court. Federal Judge James Zagel rebuked the request.