Saturday, January 31, 2009

Blagojevich tried to shake down track owner


by Neil Milbert

Illinois Governor Rod Blagojevich, who the Illinois Senate removed from office on January 29, tried to shake down Balmoral Park President John Johnston for a $100,000 campaign contribution in return for signing pro-racing legislation, according to an FBI wiretap recording released during Blagojevich’s impeachment trial.

The legislation extends for three years the impact subsidy fee levied on four Northern Illinois casinos to compensate the state’s horsemen and racetracks. Blagojevich signed it on December 15, six days after he was arrested on an assortment of political corruption charges—the most serious being his alleged attempt to sell the United States Senate seat vacated by President Barack Obama.

The legislation requires two casinos in Joliet, one in Elgin, and one in Aurora to pay an impacted fee surcharge of 3% of their adjusted gross revenue. Of this amount, 60% is allocated to Thoroughbred and harness track purse accounts and 40% is earmarked for marketing and improvements by the tracks.

Johnston is not a target in the Blagojevich probe. His attorney, Daniel Reinberg, said the harness track president did not make the contribution Blagojevich sought in the recordings. According to Reinberg, Johnston made several donations dating back to 2002, the last coming in December '07.

Lobbyist Lon Monk, formerly Blagojevich’s chief of staff, and Robert Blagojevich, the impeached governor’s brother, were go-betweens in the alleged attempt to coerce Johnston to make the $100,000 contribution before January 1 when a new ethics law took effect, putting a cap on contributions.

During a taped conversation on November 13, Robert Blagojevich told his brother, “Talked to Lon, and he says Johnny Johnston is good for it.”

During a December 4 recording, Monk encouraged Rod Blagojevich to follow up with a direct appeal to Johnston and imply that the contribution would determine the fate of the impact subsidy bill.

The then-governor agreed, “Yeah, good; I’ll call him.”

Monk said, “I’m telling you he’s going to be good for it. I got in his face.”

Johnston is a former jockey who rode on the Chicago circuit and at the Miami tracks in the mid-1970s. His father, long-time Chicago harness mogul Billy Johnston, heads the hierarchy of both Balmoral and Maywood Park, Chicago’s other Standardbred track. The Johnston family and the family of New York Yankees principal owner George Steinbrenner have a controlling interest in both tracks.

The racetracks and horsemen still have not received any money from the original impact fee legislation that passed in June 2005 and expired in June ‘08. The four casinos charged that it was unconstitutional and won their case in Circuit Court, but the Illinois Supreme Court overturned the decision by a 7-0 vote. The casinos then appealed to the U.S. Supreme Court, which will not decide whether to consider the case until summer.

Meanwhile, about $80-million has accumulated in an escrow account, pending a final verdict.