Obama donates $70,000 from fraud suspect

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Sen. Barack Obama yesterday said his presidential campaign is giving to charity $70,000 in contributions from a Chicago restaurateur and real estate developer, who is scheduled to stand trial next month on several federal charges.

The Illinois Democrat's decision to give away donations, the third time that he has done so this year, was made after a further review of contributions received from Antoin "Tony" Rezko. Sen. Hillary Rodham Clinton, New York Democrat, called Mr. Rezko a "slumlord" and questioned Mr. Obama's ties to him during a heated presidential debate last week.

Mr. Obama's campaign already has given to charity about $85,000 that Mr. Rezko personally raised through his employees, associates and family, bringing the total to more than $150,000.

"By refunding these donations, the campaign has returned any and all funds that could be reasonably credited to Mr. Rezko's political support," said Obama spokesman Bill Burton.

On Monday, federal agents arrested Mr. Rezko at his Wilmette, Ill., home after his $2 million bond was revoked. He had pleaded not guilty to federal charges of attempted extortion, money laundering and fraud, and tentatively was scheduled to stand trial on 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 that Mr. Rezko had become a flight risk.

The money was transferred to Mr. Rezko, court records show, from General Mediterranean, which is owned by Britain-based Iraqi billionaire Nadhmi Auchi, who received a 15-month suspended prison 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."

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.

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.

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