The New York Times-20080129-Onetime Obama Donor Is Ordered Jailed
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Onetime Obama Donor Is Ordered Jailed
Full Text (680 words)A federal judge here revoked bond on Monday and ordered Antoin Rezko, once a major fund-raiser for Senator Barack Obama, held in jail after prosecutors accused him of lying to the court about his finances.
Mr. Rezko, who had been free on bond after being indicted in 2006 on charges of business fraud and influence peddling, was arrested early Monday at his home in Wilmette, a North Shore suburb.
A real-estate developer who was once one of the most powerful men in Illinois, Mr. Rezko had told the court he was nearly broke. But federal prosecutors said Monday that he benefited from $3.7 million in wire transfers from Lebanon and Luxembourg last year. They said his failure to tell the judge about the money suggested he could be a flight risk.
The disclosures about Mr. Rezko could fuel efforts by Mr. Obama's opponents in the presidential race to make Mr. Obama's relationship with him an issue.
Senator Hillary Rodham Clinton, Democrat of New York, has raised questions about Mr. Obama's judgment in dealing with Mr. Rezko, who raised at least $150,000 for him from 1996 to 2004 in races for the Illinois State Senate and the United States Senate. Mr. Obama, Democrat of Illinois, has conceded that a land deal he once had with Mr. Rezko was boneheaded.
Mr. Rezko, a Syrian-American, dropped his head on Monday and rocked slightly as Judge Amy J. St. Eve of Federal District Court here said she was placing him in the custody of United States marshals. Judge St. Eve said she would hold another hearing on the case on Tuesday. But, she said, had I known then what I know now, the bond would have looked different.
In documents unsealed in court on Monday, prosecutors said the $3.7 million had been transferred by a company owned by Nadhmi Auchi, an Iraqi billionaire who was convicted several years ago in France on fraud charges and who is a real estate partner of Mr. Rezko. The money went to an account at a Chicago law firm, Freeborn & Peters, that represents Mr. Rezko in business ventures, prosecutors said.
They said much of the money was then transferred to accounts controlled by Mr. Rezko, his family and associates. He used the money to cover living expenses and pay his lawyers, as well as for other debts, they said.
Prosecutors said Mr. Rezko had also transferred money to five relatives and business associates who had posted property to support his bond, undermining the bond's effectiveness at reducing his risk of flight.
In one instance laid out by prosecutors, $225,000 of the money went to a couple who had posted almost the same amount in equity from two properties to help secure Mr. Rezko's release.
It's clear it's been a shell game from the beginning, said Reid J. Schar, an assistant United States attorney prosecuting the case. Mr. Rezko, Mr. Schar said, simply cannot be trusted.
A lawyer representing Mr. Rezko on criminal questions, Joseph J. Duffy, said that he did not think his client had violated the conditions of his release, but that if there was confusion, the fault lies with me and not Mr. Rezko.
Mr. Duffy said that the money from overseas was a loan and that he did not understand it had to be reported to the court. He emphasized that much of the money went to pay Mr. Rezko's legal bills.
The court documents unsealed on Monday said that at one point, Mr. Rezko asked Illinois government officials to ask the State Department to allow Mr. Auchi, who now lives in Britain, to visit the United States. The officials were not identified.
Former Rezko associates have said Gov. Rod R. Blagojevich of Illinois attended a dinner Mr. Rezko held in Chicago for Mr. Auchi. Mr. Blagojevich's office did not return calls for comment on Monday.
Bill Burton, a spokesman for the Obama campaign, said Mr. Rezko had never asked Mr. Obama for help on the visa request.
[Illustration]PHOTO: Prosecutors described Antoin Rezko as a possible flight risk. (PHOTOGRAPH BY NAM Y. HUH/ASSOCIATED PRESS)