Feds probe teacher pension fund July 26, 2005 BY CAROL MARIN AND CHRIS FUSCO Sun Times Staff Reporters The federal government has launched a criminal probe into several investments made by the state's $34 billion pension fund for 330,000 suburban and Downstate educators, the Chicago Sun-Times has learned. Investigators five weeks ago began issuing subpoenas to the state Teachers' Retirement System regarding more than $1 billion that TRS board members invested in about a half-dozen private-equity investment firms, including one with strong ties to Democratic power broker Joseph A. Cari Jr., sources familiar with the probe said. The investigation also is looking into consulting fees and possible kickbacks related to at least one of those investments, sources said. Cari, 52, a former Democratic National Committee finance chairman for the 2000 Gore-Lieberman presidential campaign and partner in the Chicago law firm of Ungaretti & Harris, failed to show Monday at Chicago meet-and-greet events where U.S. Sen. Joe Biden (D-Del.) was gauging support for a possible presidential run in 2008. Cari, who was to host one of those events, has been a key Biden backer. Besides Cari, the feds are seeking information on two former TRS board members who were indicted this year in connection with a kickback scheme involving hospital and medical-school construction projects in the Chicago area. Subpoenas were issued for TRS records pertaining to Stuart P. Levine, the campaign finance chairman for 2002 Republican gubernatorial nominee Jim Ryan, and John Glennon, a top adviser to former GOP Gov. George Ryan. Kickback schemes alleged Richard A. Ungaretti, one of Cari's partners at Ungaretti & Harris, confirmed Cari's involvement in the federal probe and said Cari has agreed to take a leave of absence. Calls to Cari were not returned. "Mr. Cari informed us he was under investigation by the U.S. attorney's office regarding any relationships he may have had with Mr. Levine," Ungaretti said. Cari was a managing partner and served on the board of HealthPoint Capital, a New York investment firm focusing on the rapidly growing orthopedic-device sector of the health-care industry. TRS has invested $35 million with the firm starting in April 2003, when both Levine and Glennon were on the teachers' pension board. Attorneys for Levine and Glennon could not be reached. Levine was indicted in May after being accused of helping orchestrate kickback schemes that included his position on another state panel, the Illinois Health Facilities Planning Board. Glennon was indicted last week for overseeing a sham marketing contract at the Chicago Medical School, where Levine also was a board member. Both men have denied wrongdoing. Levine resigned from the TRS board last year and Glennon did so in late 2003. Levine was named to the board in 1996 by former GOP Gov. Jim Edgar; Glennon came on in 2001 under George Ryan's administration. Both continued to serve briefly under Gov. Blagojevich. Cari -- despite his relationships with powerful Democrats including Bill Clinton -- knew GOP power broker Levine and supported Jim Ryan in his failed 2002 campaign against Gov. Blagojevich. Cari was said to be inspired by Ryan's battle with cancer, a disease that claimed Cari's wife's life. Cari, sources said, is being represented by former U.S. Attorney Scott Lassar, who declined to comment. Biden gave his friend of nearly 30 years a vote of confidence at an event Monday night after being told of the federal investigation. "All I know is Joe Cari is a friend and he's an honorable guy but I don't know anything beyond that," Biden said. Contributing: Lori Rackl http://www.suntimes.com/output/news/cst-nws-pension26.html Back To Guvment Skool Page 7 COPYRIGHT "DUHMAG.COM" 2005