The Wall Street Journal-20080129-Politics - Economics- Obama Supporter Is Jailed
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Politics & Economics: Obama Supporter Is Jailed
Full Text (708 words)Antoin Rezko, a Chicago developer and a longtime contributor of Democratic presidential candidate Sen. Barack Obama, was jailed yesterday in Chicago after a judge decided he posed a flight risk and revoked his $2 million bond.
At a hearing in federal court, prosecutors said Mr. Rezko, who is under indictment for extortion, had received almost $3.5 million in secret payments from an Iraqi-born British billionaire.
Mr. Obama is facing mounting questions about having received thousands of dollars in campaign contributions from Mr. Rezko even as he gains momentum from a fresh primary win and a string of high- profile endorsements.
Mr. Rezko, a key figure in the Illinois political establishment, faces a two-month trial beginning Feb. 25 that is expected to plumb his dealings with various state politicians as the final Democratic primary contests play out.
The case took a twist yesterday with allegations by prosecutors that the Syrian-born Mr. Rezko might be preparing to flee and had received $3.5 million from a Lebanese bank account held by General Mediterranean Holding SA, a Luxembourg-registered vehicle for billionaire London investor Nadhmi Auchi.
Mr. Auchi was convicted in France of fraud in 2003. Efforts to reach Mr. Auchi for comment were unsuccessful.
Prosecutors also alleged Mr. Rezko in 2005 asked unnamed Illinois politicians to lobby the State Department to grant a visa to Mr. Auchi.
Bill Burton, spokesman for the Obama presidential campaign, said the senator didn't ask the State Department to provide Mr. Auchi with a visa.
Mr. Obama received more than $150,000 in contributions donated or raised by Mr. Rezko during his political career. The senator also purchased property from the developer's wife. While federal prosecutors in Chicago are mainly focused on Mr. Rezko's ties to the governor of Illinois, they claim in court papers that Mr. Rezko illegally reimbursed another donor for a $10,000 contribution to Mr. Obama's 2004 Senate campaign. Mr. Rezko has denied any wrongdoing.
The Obama campaign had no comment yesterday on the latest developments in the Rezko investigation. The senator has denied any impropriety in his dealings with the developer. The Obama campaign has said it would return any contributions raised by Mr. Rezko because they might be deemed inappropriate.
The Rezko inquiry has become a regular feature in the Democratic primary since a Jan. 21 debate in South Carolina when Sen. Hillary Clinton blasted Mr. Obama for his ties to Mr. Rezko, whom she called a "slum landlord."
Mr. Rezko was a major donor to the Democratic Party in the 1990s, and a photograph has circulated of Mr. Rezko with then-President Bill Clinton and the first lady. Mrs. Clinton says there is no indication Mr. Rezko has ever donated to her campaigns.
Mr. Obama has returned more than $85,000 in contributions associated with Mr. Rezko, including $40,000 earlier this month.
State and federal campaign records indicate Mr. Rezko may have helped raise an additional $80,000 or more. Among the contributions Mr. Obama hasn't returned, for example, is $4,500 from Mr. Rezko's real-estate attorney, Michael Sreenan. Mr. Sreenan didn't return calls yesterday.
The Obama campaign says it is still trying to determine which contributions came from Mr. Rezko. "We are constantly reviewing our donations and we are sure we will have an even more full review done by the end of the month," Mr. Burton said.
In U.S. District Court for the Northern District of Illinois yesterday, prosecutors said Mr. Rezko had claimed "he had no access to significant sums of money," a Justice Department brief states.
In April 2007, the Federal Bureau of Investigation now says, a firm controlled by Mr. Rezko received the $3.5 million from General Mediterranean, an investor in one of the developer's Chicago real- estate projects. The funds were allegedly used by Mr. Rezko to pay his lawyers and for various debts.
Mr. Rezko is under indictment for fraud, extortion and money laundering related to an alleged scheme to pressure businesses for payments in exchange for contracts managing funds from the state Teachers' Retirement System and Health Facilities Planning Board. He has pleaded not guilty.
Prosecutors also alleged that Mr. Rezko has provided more than $500,000 to federal fugitive Alber Najjar, who is believed to be hiding in Lebanon since his 2004 indictment in Chicago on gambling charges.
