Fundraiser's Kickback Trial Begins

By Peter Slevin
Washington Post Staff Writer
Tuesday, March 4, 2008

CHICAGO, March 3 -- For businessman Antoin "Tony" Rezko, the goal was to get close to politicians who might matter someday. He targeted a raft of up-and-comers, including a young state senator named Barack Obama.

His most questionable alliance, prosecutors will tell a federal jury this week, was with Illinois Gov. Rod Blagojevich (D). When Blagojevich was elected in 2002, Rezko became a member of the governor's "kitchen cabinet," where he allegedly leveraged his role as fundraiser and political patron to seek kickbacks from companies pursuing state business.

Rezko's extortion and money laundering trial, which began Monday with jury selection, is expected to open a window on the dealings of the Blagojevich administration, which took office promising to clean up government after the misdeeds of Gov. George Ryan (R), now serving 6 1/2 years in prison for corruption.

The trial is also expected to fill out the portrait of Rezko, a onetime investor, restaurant owner and Obama fundraiser who contributed to his campaigns and sold the senator from Illinois a piece of property in 2005 on Chicago's South Side.

Obama is expected to be no more than a footnote to the three-month trial -- Rezko allegedly contributed $10,000 in extorted funds to Obama's campaign -- yet Sen. Hillary Rodham Clinton's campaign has bombarded reporters with Web links and word that the proceedings are beginning.

Searching for an advantage after 11 straight primary losses, Clinton strategists said Obama should be questioned more closely about his relationship with Rezko, who faces a separate trial on charges of swindling $10 million from a financial institution.

For his part, Obama has called the 2005 real estate deal with Rezko's wife "boneheaded" and has donated to charity $149,585 in contributions linked to Rezko. The campaign said the money came from Rezko, his family and employees, as well as guests at a fundraiser held at his home.

Rezko sought to hire Obama out of Harvard Law School in the early 1990s and later donated to Obama's successful runs for the Illinois and U.S. senates. They occasionally socialized before Obama first consulted him on the house purchase, but the senator has said he did no favors for Rezko.

Ethics watchdogs in Chicago accept Obama's account, noting that he was instrumental in passing the strongest state ethics law in 25 years as a freshman state senator. But they have called the real estate deal and his failure to distance himself from Rezko a lapse in judgment.

In 2005, Barack and Michelle Obama and Rezko's wife, Rita, bought adjacent properties near the University of Chicago. The Obamas bought a $1.65 million home and Rita Rezko the vacant lot next door for $625,000.

The Obamas, wanting a larger yard, later bought one-sixth of the Rezko lot for one-sixth of the price. Obama said in an interview in December 2006, as he prepared to launch his presidential bid, "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," Obama said of the larger yard.

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