Court case makes life difficult for Barack ObamaJames Bone in Chicago
Buried on page 59 of the indictment is a reference to one of many alleged kickbacks on a state contract that appears to have ended up as a $10,000 donation to an unnamed “political candidate”.
The kickback was allegedly arranged by Antoin “Tony” Rezko, a Syrian immigrant who became a powerful political fixer in Chicago. The “political candidate” who benefited from the $10,000 has been identified as Barack Obama, the Democratic contender calling for “change we can believe in” in the presidential race, who is said to be a longtime friend of Mr Rezko.
Mr Rezko goes on trial for money-laundering, fraud, aiding bribery and attempted extortion in Chicago today in a closely watched case that could pose an uncomfortable three months for Mr Obama as prosecutors probe the political culture of Chicago.
Mr Obama has not been accused of any wrongdoing and will not necessarily have known how donations were raised. But the testimony is likely to link his campaign funds to the political underworld of the city.
Mr Rezko is an old friend of Mr Obama who donated to his political career since his first campaign for the Illinois state senate in 1995. The two were so close that Mr Rezko’s wife helped the Obamas to buy their Chicago house by purchasing the adjoining garden from the same seller on the same day in 2005, a year after Mr Obama won a US Senate seat.
Mr Rezko also has business contacts with Nadhmi Auchi, a British-Iraqi billionaire who was convicted of corruption in the Elf scandal in France in 2003. Mr Auchi’s lawyers say he is appealing against the conviction to the European Court of Human Rights. Mr Rezko says that the two are close friends, but Mr Auchi denies this.
Mr Rezko, a property developer and fast-food entrepreneur, was remanded in prison in January for violating his bail by failing to report $3.7 million (£1.9 million) in money transfers from Mr Auchi’s companies. Mr Auchi says that the payments were a business loan. In an effort to distance himself from the scandal and what may be tainted money, Mr Obama has given $157,835 in political contributions that he received from Mr Rezko and associates to charity. But his relationship with Mr Rezko has become a hot issue in the presidential race. Hillary Clinton’s campaign accuses Mr Obama of ducking questions about their ties.
“Now the trial is beginning, and I think it will be more difficult for him to avoid these various serious questions,” Howard Wolfson, Mrs Clinton’s communications director, told reporters. “I can guarantee you that if, again, if the shoe were on the other foot, I would be getting those questions, and I’d be having to answer them to people who are very serious investigative reporters . . . who know the right questions to ask and don’t take ‘no comment’ for an answer.”
The Rezko trial threatens to engulf Illinois in a new political scandal only months after George Ryan, the previous Illinois governor, was sent to jail for 6½ years for corruption while in office. In all, four former Illinois governors have been indicted for whitecollar crime since 1960 and three of them — Otto Kerner, Dan Walker and Ryan — were convicted. Mr Rezko is one of at least 11 people linked to the current governor, Rod Blagojevic, who have been charged with crimes.
Mr Blagojevic himself has been identified by the judge as the unnamed “Public Official A” in the indictment whose campaign fund stood to gain a $1.5 million donation that Mr Rezko allegedly tried to extort from an investment firm. Governor Blagojevic responded: “What was described there doesn’t describe me or how I do things.” Mr Rezko is accused of demanding kickbacks from companies seeking to do business with two state boards that were controlled by his friends, the Teachers’ Retirement System, which manages Illinois teachers’ $30 billion pension fund, and the Illinois Health Facilities Planning Board, which must approve all building permits involving hospitals.
“Rezko parlayed his success in raising significant sums of money for Mr Blagojevich into power by gaining access to high-ranking Illinois officials, being given deference in filling board and job positions, and by influencing how certain boards conducted business,” prosecutors said last week.
The star witness will be Stuart Levine, a member of both state boards, who has pleaded guilty and agreed to testify against his alleged accomplice, Mr Rezko. Defence lawyers, however, plan to assail Mr Levine as a man who is said to be a heavy user of drugs who led a “secret life”. The court is also expected to hear from John Thomas, an FBI mole, who reportedly witnessed Mr Obama and Mr Blagojevich making frequent visits to Mr Rezko. Judge Amy St Eve has said that she will allow prosecutors to offer evidence that Mr Rezko directed two associates to make two $10,000 contributions to Mr Obama’s 2004 senate campaign because he had already donated the legal maximum.