Obama Contributor on Trial for Corruption

Jury selection begins Monday in the trial of a Chicago real-estate developer who once raised campaign funds for numerous politicians, including Illinois Sen. Barack Obama.

Antoin "Tony" Rezko is accused of trying to muscle millions of dollars in payoffs and campaign money out of companies seeking to do business with Illinois. It is expected to be the biggest political corruption case in the state since the former governor was sent to prison.

But Rezko has not always been perceived this way. He used to be a man politicians liked to see coming.

As a real-estate developer and fast food tycoon, he had a reputation of being a gracious guy, as well as a great fundraiser, whose contributions went to both Republicans and Democrats. In Illinois, it was primarily Democrats — including current Gov. Rod Blagojevich and Sen. Barack Obama — who benefited from his generosity.

Sen. Hillary Clinton has blasted Obama for purchasing a piece of land, adjacent to his home, from Rezko. At the time of the sale, it had been widely reported that the developer was being investigated.

Obama has called the land deal a "boneheaded" mistake. Clinton appeared in a photograph with Rezko but received no donations from him.

Cindy Canary, the head of the Illinois Campaign for Political Reform, says the Rezko trial puts the Obama-Rezko relationship back in the spotlight.

"There are no links that we know of that say there was any kind of quid pro quo with Obama and Rezko, but this can't help the senator," she said.

Rezko stands accused of using his political clout to run a multimillion-dollar extortion scheme in the spring of 2004. Prosecutors say his goal was to collect bogus fees from companies hoping to handle investments from a teachers pension fund and other state boards.

When U.S. Attorney Patrick Fitzgerald announced the indictment more than a year ago, he said Rezko was a leader in a "pay-to-play scheme on steroids."

"People are talking about getting $1.3 million each out of one deal, $250,000 out of another deal, they're going to get a $1 million bribe out of another deal. The amounts of money being shaken down in eight weeks' span was in the millions," he said.

Fitzgerald says those extortion plans were thwarted by federal investigators, adding that Rezko pocketed no more than $250,000.

In court papers, an anonymous beneficiary of the alleged scheme is listed as only Public Official A. But federal judge Amy St. Eve, who will hear the Rezko case, recently identified Public Official A as Illinois Gov. Rod Blagojevich.

Prosecutors say Rezko became a powerful operative in state government because he raised hundreds of thousands of dollars for the governor. Blagojevich has not been charged with any wrongdoing, and this past week, he had little to say about the case.

"I don't know much about it. I have a job to do as governor. I have a full-time job, and I don't think its fair for me to comment on a pending court case," he said.

Canary notes that it was just three months ago that the state's former governor, George Ryan, began serving a six-and-a-half year term for his conviction on corruption charges. In the meantime, Obama gave to charity the nearly $150,000 of Rezko-linked contributions that he received.

Canary says she does not expect to see anything from this trial that will slander Obama. "This is very much a case about Illinois and about the executive administration and the governor of Illinois," she said.

But, Canary says, in a hot political presidential race, anything can be damaging.

Q&A: The Tony Rezko Case

Who is Tony Rezko? New York Sen. Hillary Clinton called him a "slum landlord." Federal prosecutors call him a corrupt political insider. Illinois Sen. Barack Obama once thought of him as a friend. Now Rezko faces federal corruption charges in Illinois. Here, an overview of the Rezko case.

How did Rezko rise to prominence in Chicago?

For more than two decades, Rezko, 52, has been a real estate developer and fast food entrepreneur in the city. He purchased old factories and parcels in gentrifying neighborhoods and converted them into condominium developments, which earned him millions. He also bought older buildings in poorer neighborhoods, renovated them and rented the apartments to public housing tenants, often in partnership with nonprofit groups. Several of his buildings fell into disrepair, earning Rezko the "slum landlord" title from Clinton. Both of those types of projects require political clout and connections in Chicago.

Rezko also owned a number of Papa John's Pizza franchises and was an investor in the Panda Express chain of fast food Chinese restaurants. He helped both chains land lucrative spots in Illinois Toll Highway rest stops.

What is Rezko's connection to Illinois politicians?

Rezko has been very active in raising money for and contributing to politicians — Republicans and Democrats — at the local, state and federal level. He contributed to President Clinton in the 1990s and served as a co-chair for a multimillion-dollar fundraiser for President George W. Bush in 2003. That most of his activities have been on behalf of Illinois Democrats is probably more a function of political realities than ideology: Democrats hold every statewide office in Illinois and have majorities in both chambers of the state Legislature.

Which politicians have benefited from Rezko's fundraising efforts?

Rezko has contributed to, or raised money for, current Illinois Comptroller Dan Hynes, Illinois Attorney General Lisa Madigan, Illinois Lt. Gov. Pat Quinn and Illinois U.S. Sen. Barack Obama, all Democrats. But his most notable fundraising efforts have been on behalf of Democratic Illinois Gov. Rod Blagojevich, which earned Rezko a spot within Blagojevich's inner circle.

What are the charges against Rezko?

Rezko is accused of using his position on two state boards in an extortion scheme that would enrich him and his co-conspirators, while also adding to Gov. Blagojevich's campaign coffers. He is charged with eight counts, including fraud, attempted extortion, money laundering and aiding bribery.

After he took office in 2003, Blagojevich appointed Rezko to the board that controls the permitting of hospital expansion and construction projects, and to the board that oversees the $30 billion teachers' pension fund. Prosecutors allege that Rezko used his clout to try to collect bogus fees from companies that wanted investments from the pension fund and permits from the hospital board.

One insider who allegedly helped craft the deals, Stuart Levine, has pleaded guilty and will be the government's star witness against Rezko. Blagojevich has not been charged with wrongdoing, but two other members of his inner circle are under indictment. U.S. District Judge Amy J. St. Eve has publicly named the governor as the anonymous "Public Official A" who appears in court papers as a beneficiary of the alleged scheme.

What is the nature of Rezko's relationship to Obama?

Back when Obama was at Harvard Law School, Rezko offered him a job with his development company in Chicago. Obama declined. But the relationship grew while Obama worked as a Chicago community organizer and then for a small Chicago law firm. Obama's firm did legal work for some of Rezko's development companies. Obama himself billed five hours for work on behalf of one of Rezko's nonprofit partners in an inner-city redevelopment project.

When Obama first ran for the Illinois state senate in 1996, Rezko was one of his first campaign contributors. He has remained a significant contributor to and fundraiser for Obama's subsequent campaigns.

What was Obama's land transaction with Rezko?

In 2004, the Obama family wanted to buy a mansion in Chicago's Kenwood neighborhood, on the city's South Side. The asking price was too high, so the owners agreed to split the house and an adjacent lot into two parcels.

The Obamas purchased the house in June 2005; Rezko, through his wife, Rita, purchased the side lot. About a half-year later, Obama purchased a 10-foot-wide strip of that side lot to increase his yard. Obama landscaped the Rezko parcel in exchange for Rezko paying for a security fence around it. At the time, news reports suggested Rezko was already under federal investigation. While there is no indication that there was anything illegal about the yard deal, even Obama now admits the transaction was "boneheaded."

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