Q&A: Barack Obama and Tony Rezko

The London Times reports:

Who is Tony Rezko?
Antoin “Tony” Rezko, 52, a long-time friend and fundraiser for Barack Obama, is a Syrian-born property developer, pizzeria entrepreneur and political fixer in Chicago. Hillary Clinton has made him a campaign issue by denouncing him as a “slum landlord”. Mr Rezko faces two criminal trials as well as dozens of civil lawsuits.

How does he know Barack Obama?
Mr Rezko approached Mr Obama in 1990 after reading that he had become the first African-American president of the Harvard Law Review. Mr Rezko and two real estate partners offered Mr Obama a job building inner-city homes in Chicago. Mr Obama declined, but remained friendly with Mr Rezko, who became one of his earliest and biggest fundraisers. Mr Obama says that he met Mr Rezko “once or twice a year” for lunch and the Rezkos and Obamas have dined together as couples perhaps “two to four times” since they have known each other. As a lawyer, Mr Obama did six hours’ work for partners of Mr Rezko’s company in state-subsidised apartment rehabilitation projects.

Why are they linked in a property deal?
The Obamas bought a mock Georgian mansion in Chicago in June 2005, after he was elected to the US Senate. Mr Rezko’s wife, Rita, bought the adjacent garden on the same day from the same seller. The sellers say that Mr Obama and Mr Rezko toured the property together before the transaction. At the time, it was already known that Mr Rezko was under criminal investigation. Mrs Rezko paid the full asking price of $625,000 (£315,000) for the garden. The Obamas paid $1.65 million for the house – $300,000 below asking price. The garden could be accessed only through the Obamas’ property, and Mr Obama’s gardener mowed the lawn. In January 2006, Mrs Rezko sold a 10ft strip of her garden to the Obamas for $104,500 and a fence was erected between the two lots. Mrs Rezko has since sold the remainder of the garden to a lawyer for her husband’s business.

Why is Mr Rezko on trial?
Mr Rezko went on trial in Chicago this week for money laundering, fraud, aiding bribery and attempted extortion. He is accused of demanding kickbacks from companies seeking to do business with two Illinois state boards controlled by his friends – the Teachers Retirement System, which manages a $30 billion pension fund, and the Illinois Health Facilities Planning Board, which must approve all building permits involving hospitals.

Is Mr Obama involved in the case?
Mr Obama is not accused of any wrongdoing. However, money from one of the many alleged kickbacks appears to have ended up as a $10,000 donation to his campaign. There is speculation that Mr Obama could be called as a defence witness at the three-month trial. Mr Obama has donated to charity $150,000 in political contributions linked to Mr Rezko.

Where does Nadhmi Auchi fit in?
Mr Rezko ended up in prison in January for violating bail by failing to declare a $3.5 million loan from Nadhmi Auchi, a British-Iraqi billionaire who was convicted of corruption in the Elf scandal in France in 2003. Mr Auchi was involved with Mr Rezko in a pizzeria business in the Midwest as well as a 62 acre property development in Chicago, and had lent millions of dollars to him.

An earlier $3.5 million dollar loan to Mr Rezko was made only weeks before Mrs Rezko bought the garden next to the Obamas’ new house. Mr Auchi says the loan was for business reasons.

Obama and the Chicago Way.