By Peter Slevin
Washington Post Staff Writer
Wednesday, January 30, 2008
CHICAGO, Jan. 29 -- Sen. Barack Obama's political campaign said Tuesday that it has given to charity $72,650 linked to Illinois real estate developer Antoin Rezko, on the same day that a judge ordered Rezko to jail ahead of his scheduled trial on extortion charges.
The campaign said this amount represented contributions to Obama's 2004 Senate campaign by Rezko's relatives, employees of his companies and guests at a fundraising event at Rezko's home.
The development came as U.S. District Judge Amy J. St. Eve declined to reinstate bond for the Syrian-born businessman, who is accused of obtaining kickbacks from companies seeking state business. Federal agents arrested him at his home on Monday after prosecutors said they had evidence that Rezko received millions of dollars from an overseas source, raising the risk that he might flee.
St. Eve was unconvinced by the assertions of Rezko's lawyer that much of the money went to pay legal bills and repay loans. Rezko is due to stand trial on Feb. 25.
Noted locally for cultivating rising political stars, including Gov. Rod Blagojevich (D) and Rep. Luis V. Gutierrez (D-Ill.), Rezko has recently become a weapon in the Democratic presidential race.
During a Democratic debate last week in South Carolina, Sen. Hillary Rodham Clinton (D-N.Y.) turned to Obama and said she was fighting against Republican policies "when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner-city Chicago."
Obama's campaign called this language a significant misrepresentation of the facts. Longtime lawyers at his former public interest law firm said Obama worked perhaps five to seven hours on routine filings for a nonprofit group that teamed with a Rezko company to redevelop run-down property in Chicago.
William Miceli, who was Obama's supervisor, called Clinton's assertion "categorically untrue."
The Obama campaign has responded to the scrutiny by donating Rezko's contributions to charity -- much as Clinton donated contributions from fundraiser Norman Hsu to charity after his criminal conviction came to wide attention. After giving a total of $149,585 in Rezko-linked money to charity since 2006, Obama spokesman Bill Burton said, "the campaign has returned any and all funds that could be reasonably credited to Mr. Rezko's political support."
There have been no allegations that Obama broke the law or violated ethics rules in more than 15 years of informal dealings with Rezko. Local citizen watchdog groups have called Obama's failure to distance himself from Rezko earlier a lapse in judgment.
Rezko supported Obama's campaigns, and the two men occasionally socialized, Obama has said. In 2005, Barack and Michelle Obama and Rezko's wife bought adjacent properties near the University of Chicago. The Obamas bought a $1.65 million house, and Rita Rezko bought a $625,000 vacant lot.
Later, wanting a larger yard, the Obamas purchased one-sixth of the Rezko lot for $104,500 -- or one-sixth of the price Rita Rezko paid.
Questioned about the transaction after the Chicago Tribune first reported it in November 2006, Obama said he had made a "boneheaded" mistake, telling The Washington Post, "There's no doubt I should have seen some red flags in terms of me purchasing a piece of property from him.
"It wasn't something we needed to have. It was something I thought would be nice, if it worked economically for him," Obama said. Referring to himself, he said, "My hope is that people would come away saying, 'He's not perfect, but he owns up to his mistakes and tries to correct them as quickly as possible.' "
A federal grand jury indicted Rezko in October 2006 on charges that he peddled influence in state government as an adviser to Blagojevich. He is accused of shaking down investment firms that sought state business. With Stuart Levine, who has pleaded guilty, he allegedly demanded that one company pay a $2 million fee to a middleman or give $1.5 million to the campaign of "a certain political official," later identified as Blagojevich.
Rezko, who once operated dozens of pizzerias and Chinese eateries, is also due to stand trial on separate charges of swindling $10 million from General Electric Capital Corp.
Staff writer Michael Dobbs in Washington contributed to this report.