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Obama donor arrested by FBI

- The Washington Times - Tuesday, January 29, 2008

Federal agents yesterday arrested former Barack Obama political fundraiser Antoin "Tony" Rezko after his $2 million bond was revoked — a week after Sen. Hillary Rodham Clinton called him a "slumlord" during a slugfest Democratic presidential debate.

FBI agents took the Chicago restaurateur and real estate developer into custody at his Wilmette, Ill., home. He had pleaded not guilty to federal charges of attempted extortion, money laundering and fraud and was scheduled to stand trial Feb. 25.

Prosecutors sought an arrest warrant from U.S. District Judge Amy J. St. Eve in Chicago after noting what they described as suspicious transactions involving Mr. Rezko's finances. Judge St. Eve said she also was concerned about the transfer of $3.5 million to Mr. Rezko from a company in Lebanon after he said he had no income.

The judge said she feared Mr. Rezko had become a flight risk.

The money was transferred to Mr. Rezko from General Mediterranean, court records show, which is owned by Britain-based Iraqi billionaire Nadhmi Auchi, who received a 15-month suspended jail sentence in 2003 for improper business dealings in France.

Assistant U.S. Attorney Reid J. Schar said the money was distributed to various funds and persons, arguing that Mr. Rezko had more cash than he had led the court to believe. He said the Chicago businessman had "played a shell game, and I think misled the court about what his assets are."

Judge St. Eve scheduled a hearing for today to give Mr. Rezko's attorneys a chance to argue for a bond reduction.

The Obama campaign declined to comment on Mr. Rezko's arrest.

In October 2006, Mr. Rezko was indicted on suspicions of extorting of businesses that were seeking to do business with the Illinois Teachers Retirement System Board and the Illinois Health Facilities Planning Board. He also was accused of wire fraud for staging what authorities described as false transactions of pizza stores to secure $10 million in loans.

Mr. Rezko, 52, was injected into the 2008 Democratic presidential race after his indictment. He had been associated with Mr. Obama throughout the senator's political career, and more than $85,000 in campaign contributions linked to Mr. Rezko has been given to charity by the Obama campaign.

Mr. Obama has not been accused of any wrongdoing. He told reporters that he had no knowledge of any problems with Mr. Rezko when he accepted campaign donations from him. During an appearance on ABC's "This Week" with host George Stephanopoulos, he said he would return all of the money raised by Mr. Rezko.

"What we've done is we've traced any funds that we know of that we think were connected to him, and if there are other funds that were connected to him that we're not aware of, then we will certainly return them. It's in our interest to do so," Mr. Obama said.

In November 2006, Mr. Obama's name was tied to Mr. Rezko because he had purchased a house in 2005 on the same day Mr. Rezko bought an adjoining empty lot. Mr. Obama later bought from Mr. Rezko an adjoining strip of land.

According to the Chicago Sun-Times, Mr. Obama's purchase of the land from Mr. Rezko may have created an increased value to Mr. Obama's property beyond the actual purchase price by making the adjacent property difficult to develop.