Saga of sleaze

Print edition : January 16, 2009

IN 2007, the Illinois government renamed a major freeway that links the wealthy suburbs of northern Chicago the Jane Addams Memorial Tollway. This roadway runs though the heart of northern Chicagos urban sprawl, the expanse of concrete and glass that makes up corporate headquarters (Motorola and United Airlines) and mega-shopping centres (the Woodfield Mall and the Huntley Prime Outlets). Jane Addams, a famous social reformer, would probably not have taken kindly to her name being tied to these churches of American capitalism. The town of Schaumburg sits in the middle of this Golden Corridor, and in the middle of this town is the India House Restaurant.

On October 31, a Konkani businessman, Raghuveer Nayak, booked India House for a private party. He hosted luminaries of Chicagos business community, people such as pharmacy owners Harish and Renuka Bhatt, hotelier Satish Sonny Gabhawala, and prominent political leaders of the Indian-American community, such as Babu Patel and Iftekhar Shareef (both past presidents of the Federation of Indian Associations). Nayak, also a former head of the Federation of Indian Associations, owns a group of surgical centres. A highly regarded Democratic Party fund-raiser, Nayak is also a friend of another person who attended the lunch, Rajinder Bedi, an aide to Illinois Governor Rod Blagojevich (the Governor calls Bedi My Sikh Warrior). In addition, among the few who are not Indian American, the party included Congressman Jesse Jackson Jr.s brother Jonathan. Governor Blagojevich made a brief appearance.

People who attended the party made it clear, anonymously, that Nayak brought them together to put his friend Congressman Jesse Jackson Jr.s name up for the Senate. It had become clear that Senator Barack Obama would win the presidential contest to be held the next week, and these deep pockets realised that his elevation would open the Senate seat. The Governor of Illinois would have the right to fill the seat until the next election cycle. Nayak, Bedi, Bhatt and others wanted to put in a good word for their friend, Congressman Jackson. Gabhawala told Chicago Tribune that he saw Bedi and Nayak try to convince Babu Patel, a Blagojevich fund-raiser, to use his influence and money on Jacksons behalf.

In a country whose highest court decided that political donations are a form of free speech, it is to be expected that you cannot put in a word for someone without opening your wallet. According to a federal indictment and to reliable sources at the meeting, the fund-raisers promised to raise over a million dollars towards Blagojevich, who would then nominate Jackson to fill Obamas Senate seat. Later that day, a federal government wiretap caught the Governor saying, We were approached pay-to-play, that, you know, hed raise me 500 grand. An emissary came. Then the other guy would raise a million, if I made him a Senator.

On December 4, the Governor met with Advisor B (as he is named in the criminal complaint) and told him that Senate Candidate 5 (Jesse Jackson Jr.) would get greater consideration because of a surety that No. 5 would help Blagojevich raise money and that he would give him some [money] up front, maybe. Blagojevich wanted something tangible now because some of this stuffs gotta start happening now right now and we gotta see it. You understand?

Two days later, a month after Obamas victorious election, the principal fund-raisers from the India House gathering came to a suburban home in Elmhurst, another of the wealthy suburban towns that ring Chicago. Here, according to Chicago Tribune, the Indian-American businessmen discussed raising $1 million to $1.5 million. At the October 31 fund-raiser, Nayak had already made it clear to Bhatt that he could find half a million, but Bhatt and others would have to come up with the other half million. The December 4 meeting apparently made this vision reality.

JESSE JACKSON JR. The fund-raisers apparently promised to raise over a million dollars towards Blagojevich, who would nominate Jackson to fill Obama's Senate seat.-PAUL BEATY/AP

Right after Obamas election, Blagojevich said, I want to make some money. He was agnostic about whom he would nominate to Obamas seat as long as he would get some tangible benefit from the act. Obamas team, by all accounts, refused to barter the seat although questions remain about the contact between Obamas Chief of Staff Rahm Emanuel and the Blagojevich people.

Jackson says that he had limited contact with Blagojevich, and when the scandal broke, he said, I did not initiate nor authorise anyone, at any time, to promise anything to Gov. Blagojevich on my behalf. I never sent a message or an emissary to the Governor to make an offer or to propose a deal about the U.S. Senate seat. Federal officials arrested Blagojevich on December 9 on charges of corruption. He is now out on bail, facing an impeachment motion in the Illinois legislature.

The spotlight turned, briefly, on the Indian-American community in Chicago. These men, Nayak, Bhatt and Bedi, were a sideshow to the greater scandals, which were how much Jackson knew and what kind of contact Obamas transition team had with Blagojevich. Over the years, Blagojevich and Jackson had cultivated the increasingly affluent Indian-American community in Chicago. Blagojevich had a fruitful relationship with the banker Amrish Mahajan and his wife, the businesswoman Anita Mahajan. Uncle Amrish, as many know him, came to prominence through his close ties with the Parrillo family (a political clan that is linked to the Chicago mafia).

Mahajan rose to the head of Mutual Bank, whose well-heeled customers donated money to politicians anointed by the Mahajans. Blagojevich was a major beneficiary, as money entered his campaign war chest, and his wife, Patti, earned huge real estate contracts from the Mahajan circle. In 2007, the government arrested and charged Anita Mahajan with overbilling the State for millions of dollars on her State contract. Harish Bhatts pharmacies are currently under investigation on the grounds that Bhatts fund-raising for Blagojevich turned into phone calls to regulators to lay off from their investigation of fraud.

All of this has frazzled the Indian-American community. Nayak is a well-regarded businessman and a philanthropist. His charity includes setting up hospitals in India and raising funds for tsunami relief. Nayaks closest ties are with the Jackson family.

He won the PUSH Excellence for Public Service award from Jesse Jacksons Operation Push and accompanied Jackson to India in November 2007. (Nayak organised a lecture by Jackson at Jawaharlal Nehru University, Delhi.) In addition, Nayak brought the main Chicago Democrats into the India Caucus and was a booster for the India-U.S. nuclear deal. Nayak, Mahajan, Bedi, Bhatt and others are all close allies who have leveraged their political connections for economic gain and used that money to strengthen their political heft.

Everything that the Indian Americans did is customary. Political campaigns have become overwhelmingly expensive. The 2008 presidential race cost more than $1 billion. In addition, elected officials live within the social confines of the very wealthy and often aspire to their lifestyle. Even as more and more millionaires run for public office, the bulk of the elected officials do not win on the strength of family wealth.

Their jobs do not provide them with the kind of funds to earn the six- or seven-figure salaries that they would need to fulfil their upwardly mobile aspirations.

Scandals are now commonplace. The fallout from the sleazy pay-to-play empire set up by the lobbyist Jack Abramoff continues to resonate through Washington, D.C., notably inside the Republican Party (many of whose elected officials, such as Congressman Randy Cunningham, are now in prison).

Rod Blagojevich (centre) at the Indian Independence Day parade in Chicago on August 16, 2003, with (from left) Harish Bhatt, Raghuveer Nayak and Rajinder Bedi, prominent leaders of the Indian-American community.-CHICAGO TRIBUNE, ALEX GARCIA/AP

Near my town, in western Massachusetts, a contractor goes to see the local Mayor to deliver his regular payment of $5,000. The Mayor, Richard Goyette, stops him. What, no envelope? he asks, stuffing the money into his pockets. In a federal wiretap, Goyette complains about those who had to pay him to earn city contracts, Theyre all greedy. The symbiotic relationship between money and power is evident regardless of the scale, from a small municipal contract to the large no-bid contracts for firms to operate in Iraq (such as Vice-President Dick Cheneys Halliburton).

Sleaze is characteristic of American politics, and it is one of the principal reasons for the lack of faith among the population in their elected officials and in the political process in general. Large numbers of people refuse to vote on election day for precisely the reason that they do not trust the process. Their withdrawal allows the connected and the wealthy to make the system their own, cynically.

Obamas election raised hopes and brought large numbers of people to the polls. Millions hope that it will turn the page on the corruption at all levels of government. The Blagojevich scandal is a reality check, a reminder of how widespread corruption has become. Obamas link to Blagojevich threatens to revive a sense of hopelessness.

Blagojevichs various scandals are quite pedestrian in todays America. One of them is that he wanted a payoff for the expansion of the Jane Addams Tollway. That deal did not happen over samosas and masala tea. But others did. When Obama won, Blagojevich recognised quickly that he had a golden opportunity, a goose that could lay a million eggs in one swoop. The larger the deal, the less the squalor.

Three of the past six Illinois governors spent time in jail for corruption, so the odds were always against Blagojevich. His affinity with the Indian Americans is not just for their money but also because both share the hunger of immigrants (Blagojevich is the son of a Serbian immigrant and a working-class American woman). Just as Bedi, Nayak, Bhatt and Mahajan turned to Blagojevich for their ascent, he was gifted by marriage to the politically connected Mell family. Money, power, family: this is as much a Hollywood as a Bollywood drama.

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