Holder omitted Blagojevich link from questionnaire/Announced as a ‘special investigator to the Illinois Gaming Board’ in 2004

Before Eric Holder was President-elect Barack Obama’s choice to be attorney general, he was Gov. Blagojevich’s pick to sort out a mess involving Illinois’ long-dormant casino license.

Blagojevich and Holder appeared together at a March 24, 2004, news conference to announce Holder’s role as “special investigator to the Illinois Gaming Board” — a post that was to pay Holder and his Washington, D.C. law firm up to $300,000.

Holder, however, omitted that event from his 47-page response to a Senate Judiciary Committee questionnaire made public this week — an oversight he plans to correct after a Chicago Sun-Times inquiry, Obama’s transition team indicated late Tuesday.

“Eric Holder has given hundreds of press interviews,” Obama transition spokeswoman Stephanie Cutter said in a statement. “He did his best to report them all to the committee, but as he noted in the questionnaire itself, some were undoubtedly missed in the effort to reconstruct a list of them.”

Holder signed the questionnaire on Sunday — five days after Blagojevich’s arrest for allegedly putting Obama’s U.S. Senate seat up for sale. The Judiciary Committee asked him to provide lists and “copies of transcripts or tape recordings of all speeches or talks delivered by you” and “all interviews you have given to newspapers, magazines or other publications.”

The March 2004 Chicago news conference where Holder and Blagojevich spoke was widely covered because of a controversial 4-1 Gaming Board vote earlier that month to allow a casino to be built in Rosemont. That vote defied the recommendation of the board’s staff, which had raised concerns about alleged organized-crime links to the Rosemont casino’s developer.

Besides that, the Gaming Board’s staff had been concerned that the governor had named his close friend and fund-raiser, Christopher G. Kelly, as a “special government agent” to be involved in official state negotiations about the casino. Kelly, the Sun-Times later learned, was a business partner of Tony Rezko, another Blagojevich fund-raiser who had held an option to lease a hotel site next to the proposed casino site in Rosemont.

Rezko, also a former Obama fund-raiser, and Kelly both have denied any wrongdoing related to the casino, though both have been charged in separate, unrelated criminal cases since 2004.

The Sun-Times disclosed Rezko’s interest in the Rosemont hotel site about three weeks before the news conference announcing Holder would be involved in the casino case. Holder was not aware of the story when he opted to get involved, a source said.

In an interview Tuesday, the Gaming Board’s chief investigator in 2004 said the timing of Blagojevich’s appointment of Holder raised the staff’s suspicions.

“The concern was Holder had a bias to do whatever Blagojevich wanted, which was to give the casino to Rosemont,” said Jim Wagner, who was a top Chicago FBI agent before he joined the Gaming Board, from which he retired in December 2005. “We all believed the only reason Holder was coming in was to fashion an investigation that would manipulate the casino into Rosemont.”

Wagner also said the matter should be explored by the Senate Judiciary Committee. “It ought be brought up and vetted totally as to what motivated him to leave it off” the questionnaire, Wagner said.

At the 2004 press conference, Holder stressed he would be independent.

“The governor’s made quite clear to me that he has no preconceived notions as to how this should turn out, that we should follow the facts, let them lead us to wherever they take us and then report to him and to the people of the state with regard to our findings,” he said.

Despite the concerns of the Gaming Board’s staff, Holder ended up a non-factor in the casino matter. The board — this time listening to its staff’s concerns — refused to hire him, and Blagojevich on May 18, 2004, said he was scrapping Holder’s probe.

“Holder and his firm did some preliminary work in anticipation of the engagement, but did not undertake the investigation itself before it was canceled,” said Cutter, the Obama transition team spokeswoman. “Holder and his firm received no compensation from the state for this preparatory work.

“The 2004 press conference,” she said, “was not memorable because Holder’s legal work for the State of Illinois never materialized.”

The state gaming license once slated to be located in Rosemont has been in limbo since Holder’s brief involvement in it. A process to award the license to one of three bidders is expected to wrap up soon. Rosemont — whose officials long have denied organized crime somehow taints their suburb — again is a finalist to become home to a casino, along with Waukegan and Des Plaines.

A former Deputy Attorney General, Holder has faced criticism about his role in President Bill Clinton’s controversial pardon of fugitive Marc Rich. His confirmation hearing is to begin Jan. 15.