Rezko-Obama 1-20-07 "OBAMA SURFACES CORRUPTION CASE"

Obama surfaces in Rekzo's federal corruption case
Source confirmed Obama is the unnamed "political candidate" referred to in document which outlines case against Rezko
January 20, 2008
BY DAVE MCKINNEY, NATASHA KORECKI, CHRIS FUSCO AND TIM NOVAK Staff Reporters
For the first time, Democratic White House hopeful Barack Obama has surfaced in the federal corrupton case against his longtime campaign fund-raiser, Tony Rezko, the Chicago Sun-Times has learned.
The Illinois senator isn’t accused of any wrongdoing. And there’s no evidence Obama knew contributions to his 2004 U.S. Senate campaign came from schemes Rezko is accused of orchestrating.
The allegations against Rezko that involve Obama are contained in one paragraph of a 78-page document filed last month in which prosecutors outline their corruption and fraud case against Rezko, who was also a key money man for Gov. Blagojevich and other politicians.
Rezko is set to go to trial Feb. 25. The revelation that Obama’s name could come up in court is a political headache he doesn’t need as he heads into a round of primaries that are likely to determine his party’s nomination for president.
Obama is not named in the Dec. 21 court document. But a source familiar with the case confirmed that Obama is the unnamed “political candidate” referred to in a section of the document that accuses Rezko of orchestrating a scheme in which a firm hired to handle state teacher pension investments first had to pay $250,000 in “sham” finder’s fees. From that money, $10,000 was donated to Obama’s successful run for the Senate in the name of a Rezko business associate, according to the court filing and the source.
Rezko, who was part of Obama’s senatorial finance committee, also is accused of directing “at least one other individual” to donate money to Obama and then reimbursing that individual — in possible violation of federal election law.
A spokesman for U.S. Attorney Patrick Fitzgerald declined to comment.
Obama — a state senator when he got the contributions in 2004 — has moved to distance himself from Rezko since his longtime friend and supporter was indicted in October 2006. After news reports that Obama had engaged in a real estate transaction with Rezko’s wife at a time Tony Rezko was known to be under investigation, the senator called the episode “boneheaded” and “a mistake.”
‘No way of knowing’
Obama campaign aides said Friday he was unaware Rezko was behind the contributions cited in last month’s court filing or that the document referred to the senator.
“We have no way of knowing he is the politician named here,” spokesman Bill Burton said, “but we returned this money months ago for other reasons.”
Obama donated more than $44,000 in Rezko-linked contributions to charity last year, including the $10,000 donation mentioned in the court filing.
That money was donated to Obama by Joseph Aramanda, a Glenview businessman and Rezko associate who, sources have said, is the “Individual D” prosecutors say received the $250,000 in finder’s fees demanded by Rezko. Individual D did nothing to earn those fees, according to prosecutors.
The $10,000 contribution to Obama was given in Aramanda’s name on March 5, 2004, records show. While Obama’s camp has said the senator did not know Aramanda, Obama’s office hired Aramanda’s son as an intern in 2005, at Rezko’s urging.
Repeated attempts to reach Aramanda, who was involved in pizza franchises Rezko owned, were unsuccessful. He has not been charged with any wrongdoing.
A longstanding relationship
Rezko is one of Obama’s earliest political patrons. Long known as a prolific fund-raiser, the Syrian-born businessman helped raise money for Obama’s political campaigns beginning in 1995, when Obama was running for the Illinois Senate.
In 13 years in politics, Obama has gotten at least $168,000 in campaign donations from Rezko, his family and business associates. The Sun-Times reported that figure last June. Obama’s “best estimate” seven months earlier had been that Rezko had raised no more than $60,000 for him.
When Obama ran for the U.S. Senate, Rezko held a June 27, 2003, cocktail party in Rezko’s Wilmette mansion, picking up the tab for the lavish event. Obama’s campaign staff has said it has no records to show who attended that party, or how much it cost.
Obama’s relationship with Rezko dates to 1990, when Obama, then a Harvard law student, interviewed for a job with Rezko’s development company, Rezmar Corp. Obama turned down the job, instead going to work for a small Chicago law firm — Davis Miner Barnhill. That firm did work on more than a dozen low-income housing projects Rezmar rehabbed with government funds.
Eleven Rezmar buildings were in the state Senate district Obama represented between 1996 and 2004. Many of the buildings ended up in foreclosure, with tenants living in squalid conditions, the Sun-Times reported last year. In one instance, Rezko’s company left tenants without heat for five weeks. Obama said he was unaware of problems with the buildings and minimized the legal work he’d done.
Obama’s relationship with Rezko grew closer in June 2005, when Obama and Rezko’s wife bought adjoining real estate parcels from a doctor in the South Side Kenwood neighborhood. Obama paid $1.65 million for the doctor’s mansion, while Rezko’s wife paid $625,000 for the vacant lot next door. Obama’s purchase price was $300,000 below the asking price; Rezko’s wife paid full price.
Six months later, Obama paid Rita Rezko $104,500 for one-sixth of the vacant lot, which he bought to expand his yard. In November 2006, he expressed regret about the transaction.
“It was a mistake to have been engaged with him at all in this or any other personal business dealing that would allow him, or anyone else,” Obama said, “to believe that he had done me a favor.”
Sen. Obama Presidential Campaign Q&A
A Chicago Sun-Times Exclusive: Sen. Barack Obama’s presidential campaign gave the following written responses to these questions about the Rezko court filing.
Q. What is Sen. Obama’s reaction to being referred to in the Rezko evidentiary proffer?
A. We have no way of knowing he is the politician named here but we returned this money months ago for other reasons.
Q. Was Sen. Obama aware that Rezko allegedly had directed at least one person to donate to the senator’s campaign and later reimbursed that person, possibly violating federal election law?
A. No.
Q. Has the Federal Election Commission or the U.S. attorney’s office in Chicago contacted the senator or any of his representatives about these matters?
A. No.
Q. Why has the senator donated to charity campaign contributions from Rezko and Rezko-linked people?
A. In keeping with our practice of donating to charity donations from people who have been called into question through the legal process, when he was named in documents as potentially engaging in wrongdoing we thought it was appropriate to return his donation to charity.
Q. Does the senator think this development will have any impact on the presidential campaign or undercut the senator’s message that he is an agent of change?
A. No. In fact, Sen. Obama has been a champion of reforms that have made campaign finance laws more transparent so that the public can more closely follow the source of contributions to campaigns. As with any campaign, occasionally individual contributions are called into question. Sen. Obama’s policy in such instances is to donate that money to charity which is what he did in this case seven months ago when questions first surfaced.