Well-Connected Fundraiser Is Key Figure in Ill. Probe

By Carol D. Leonnig
Washington Post Staff Writer
Sunday, January 25, 2009

For years, Indian-born businessman Raghuveer Nayak wrote generous checks to state and federal politicians, became a top fundraiser for Gov. Rod Blagojevich (D) and watched his influence grow in his adopted home of Illinois.

Now, as the governor faces the start of his impeachment trial tomorrow, Nayak is emerging as a critical figure in the investigation, a confidant who allegedly heard the governor and his closest aides discuss the price they hoped to extract for an appointment to the U.S. Senate seat vacated by Barack Obama. The governor was arrested last month and accused by federal prosecutors of trying to sell the seat to the highest bidder.

Nayak was an early Blagojevich supporter, repeatedly tapping his affluent Indian American friends for campaign donations and serving along with then-state Sen. Obama on the governor's health-care transition team. Nayak was close to U.S. Rep. Jesse L. Jackson Jr. (D-Ill.) and was a business partner of Jackson's brother Jonathan.

Nayak, a millionaire owner of several surgery centers, rubbed shoulders with other Washington politicians while helping set up a congressional India caucus to mobilize support for causes in his native land. He raised funds for the presidential campaign of Sen. Hillary Rodham Clinton (D-N.Y.), the caucus's Senate co-chair, and told an Indian newspaper that he had persuaded Obama to join the advocacy group, although the senator never took that step.

Federal investigators are probing whether Nayak scrambled to raise money for Blagojevich to try to ensure that Jackson would be appointed to the seat.

Nayak, 54, was working to raise at least $500,000 for Blagojevich. He has denied impropriety but has declined to discuss specifics. He is believed to be in discussions with U.S. Attorney Patrick J. Fitzgerald.

Federal prosecutors say they have tape recordings of the governor and "Fundraiser A," the governor's brother, Robert Blagojevich, talking about an emissary for Jackson who they believed was willing to raise at least $500,000 to help win the seat for Jackson. The governor asks his brother, according to the filings, to ask the emissary in person for upfront donations.

"Some of this stuff's got to start happening now . . . right now . . . and we got to see it. You understand?" the governor said on Dec. 4, according to the complaint. "You got to be careful how you express that and assume everybody's listening, the whole world is listening. You hear me?"

Some of the secret recordings may soon become public. A federal judge on Friday agreed to release some of the FBI-intercepted calls for the Illinois Senate to use in its investigation and trial of Blagojevich. The trial was triggered by the Illinois House of Representatives' vote on Jan. 9 to impeach the governor as unfit for office.

Nayak is only one of the politically connected people Blagojevich talked to or mentioned in the taped conversations. J. Dennis Hastert, former speaker of the U.S. House of Representatives, and pollster Frederick S. Yang, a longtime consultant to the governor, have been drawn into the case but are not charged with wrongdoing.

Hastert has said he may be "Individual C," whom prosecutors identified only as a former congressman who was helping Blagojevich push for a $25 billion capital bill for new building and paving projects. In one recorded call in October, Blagojevich dropped Individual C's name while talking to a concrete-paving contractor about the bill, then mentioned upcoming changes in state fundraising rules. Hastert has said that he could be the person mentioned, but that he has not been questioned and doesn't know why the governor mentioned him.

Yang, who works with Peter D. Hart Research Associates in Washington, is the adviser captured on FBI wiretaps and referenced in the government affidavit unsealed last month, according to two lawyers involved in the probe.

As "Adviser B," Yang actively participated in political horse-trading phone calls after the Nov. 4 election, including one in which Blagojevich discussed high-paying jobs and other things he could receive in exchange for naming someone to fill the Senate seat.

Geoff Garin, president of Hart Research Associates, said Yang "is cooperating with the U.S. attorney's office, and I have no reason whatsoever to believe that he is a target of the investigation in any way."

Unlike Hastert and Yang, Nayak is little known beyond the Illinois statehouse and Indian American community. He is a driven immigrant who made millions opening medical businesses in Illinois and Indiana. He raised funds for state and federal politicians from both parties as well as charitable causes. He spread his money broadly, donating along with his wife to four 2008 presidential contenders.

Iftekhar Shareef, a Nayak friend, said Nayak is emblematic of many immigrants who see political fundraising as a way to enhance their community profiles. He said Nayak never discussed with him any deal about buying Jackson a Senate seat. Nayak, Shareef said, generously supports Indian American relations and causes, but also boasts about the powerful people he knows.

Nayak, who lives in the well-heeled Chicago suburb of Oak Brook, had long been close to the Jackson family. He joined Jesse Jackson Sr. in civil rights causes, sat on the board of Jackson's Operation PUSH organization and accompanied Jackson on a 2007 trip to New Delhi. Nayak arranged for Jackson to give a civil rights lecture there.

Nayak boasted to associates and Indian news media of his success in wooing Washington to support Indian American causes. In one interview, he said he persuaded Jesse Jackson Jr. and Rep. Luis V. Gutierrez (D-Ill.) to join the Friends of India Caucus. Although Nayak said Obama had agreed to join the group, an Obama spokesman said he joined only a handful of caucuses while in the Senate. Nayak and his wife have donated $17,000 to Obama's campaigns since 2003.

Nayak was most proud of leading a group of Indian businessmen to Capitol Hill, where they sought to persuade lawmakers to approve an India-U.S. civil nuclear agreement. Nayak credits himself and his friends with helping to persuade members of the Congressional Black Caucus and the Congressional Hispanic Caucus, as well as then-Sens. Obama, Joseph R. Biden Jr. (D-Del.) and Sen. John F. Kerry (D-Mass.).

Jackson, the congressman, has acknowledged that he was lobbying for the Senate seat but said he never asked Nayak or anyone else to raise money in exchange for the job. Jackson's office prepared draft recommendation letters this fall for Nayak and others to send to the governor.

"The congressman was keenly aware that Mr. Nayak was a prodigious fundraiser for damn near anyone who was running for public office," said one close Jackson ally. "But he was never expecting any quid pro quo."

Staff writer Carrie Johnson and staff researcher Julie Tate contributed to this report.

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