Prosecutors in Rod Blagojevich Case Probe Kickback in $10B Bond Deal

The afternoon's testimony is under way with prosecutors calling a state financial guru to the stand to discuss the state's 2003 pension-obligation bond deal, which allegedly included an illegal kickback for Rod Blagojevich and his co-conspirators.

David Abel, who called himself a "public-finance quantitative technician," testified that he attended a meeting at Blagojevich's office and found fundraiser Christopher Kelly there along with Blagojevich and his key staffers.

Prosecutors contend Kelly and fellow fundraiser Antoin "Tony" Rezko chose Bear Stearns to lead the bond deal because they had an insider there who kicked back $500,000 when the investment firm was chosen to sell $10 billion in bonds. Rezko allegedly held onto the illicit payment.

It's an afternoon made for math majors at the Blagojevich trial, as the next witness to be called was Vincent Mazzaro, who worked in the municipal bond department at Bear Stearns, the investment firm that led a $10 billion bond deal for Illinois in 2003. The bonds were to be sold and the money distributed to state retirement systems.

Mazzaro has said the manager of his department and their banker in Chicago would have been responsible for hiring Springfield insider Robert Kjellander as a consultant on the Illinois bond deal.

Prosecutors contend "consultant" was a euphemism for "fixer," since Kjellander allegedly kicked back $500,000 to fundraiser Antoin "Tony" Rezko for his help in ensuring Bear Stearns won the backing of the Blagojevich administration.

Joseph Aramanda, a longtime pal of fundraiser Antoin "Tony" Rezko, has made it to the witness stand, recounting his contacts with the Blagojevich administration and a "loan" from a Rezko associate.

It was Aramanda who allegedly received hundreds of thousands of dollars from Robert Kjellander, which Kjellander had taken in from a $10 billion Illinois pension-obligation bond deal in 2003.

Aramanda said Rezko told him Kjellander would be interested in giving him a loan to support Aramanda's floundering pizza businesses, which Aramanda had purchased from Rezko, and that he had no idea the money he got from Kjellander was tied to investment firm Bear Stearns on the bond deal.

Prosecutors at the corruption trial of Rod Blagojevich moved Joseph Aramanda – an associate of Antoin “Tony” Rezko -- on to the topic of the Teachers' Retirement System late this afternoon before testimony ended for the day.

Aramanda said Rezko approached him about being a "middleman" on deals between TRS and investment firms that would receive large allocations from TRS to invest.

Rezko said he could be helpful calling people on Aramanda's behalf and introducing him to decision makers at TRS and members of the TRS board.

Businessman Joseph Aramanda was just called to the witness stand in Rod Blagojevich's trial. He's testifying under immunity, which means he won't be charged with any crimes even if he testifies to being part of criminal wrongdoing.

Here's some background on him:

Aramanda has been in and out of the news since shortly before Blagojevich fund-raiser Tony Rezko's indictment in 2006. Aramanda, however, didn't testify during Rezko's 2008 trial, in which Rezko was found guilty.

Now, he's cooperating with the prosecution, and he's expected to walk jurors through a complicated "follow the money" scenario that shows how a $10 billion state pension borrowing deal was designed to put money in Rezko's pocket -- money that Rezko allegedly had planned to share with Blagojevich and others.