Trial Begins for Former Obama Fundraiser Rezko

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The corruption trial for a former fundraiser with ties to Barack Obama has begun in Chicago. Businessman Tony Rezko is accused of trying to extort millions of dollars in payoffs and campaign cash from companies seeking to do business with the state of Illinois.


The corruption trial of a former fund raiser with ties to Barack Obama got under way in Chicago today. Tony Rezko is accused of trying to extort millions of dollars in payoffs and campaign cash from companies seeking to do state business with Illinois. The senator's campaign says the Rezko trial should not have any serious effect on the presidential race.

NPR's Cheryl Corley is in Chicago and joins us now. And Cheryl, tell us about Tony Rezko. Who he is and what kind of relationship he had with Barack Obama.

CHERYL CORLEY: Well, Tony Rezko is 52 years old. He has been a Chicago real estate developer for about 20 years or so, converting old buildings to condos and working with nonprofit groups to provide low-income housing. He's also a businessman who's owned a number of pizza and fast food Chinese restaurant franchises. But he's well known in political circles here as a very prolific fund raiser who's donated to both Democrats and Republicans. For instance, he's given money to both President Clinton and to President George W. Bush. But mostly, he donates to Illinois Democrats, including Senator Obama.

As far as their relationship goes, it's a fairly long one. Mr. Rezko first noticed Barack Obama when he was the president of Harvard's Law Review and offered him a job, which the senator declined. Obama's law firm did some legal work for Rezko's development companies. And during most of the senator's political life, Tony Rezko has contributed to his campaigns.

BLOCK: And what are the charges that Tony Rezko is facing in this trial, and is Barack Obama implicated in any way?

CORLEY: Tony Rezko is accused of being involved in what the U.S. attorney here calls a pay-to-play-scheme on steroids. Mr. Rezko helped secure state positions for a number of people in the administration of Illinois Governor Rod Blagojevich, and he's accused of trying to collect, along with others who've been charged in this case, millions of dollars by shaking down firms seeking to do business, particularly with two state boards. Federal officials said they thwarted that plan, with Rezko apparently only able to pocket about a quarter of a million dollars. But the plan called for the money to go to Rezko or to Illinois Governor Rod Blagojevich's campaign coffers.

So Rezko faces a number of charges including attempted extortion and money laundering, charges like that. Senator Obama is not implicated, although his name is likely to come up. The federal judge in this case has ruled that prosecutors could introduce evidence that Tony Rezko used straw donors to get around campaign limits to give money to politicians, and that apparently included Senator Obama.

BLOCK: Now, we've heard that Obama's campaign says that this shouldn't be an issue in the presidential race. But for Senator Clinton's side, they think it is an issue. How is that coming up?

CORLEY: Well, the issue that they've been bringing up, at least the Clinton campaign, is an issue about a land deal that Tony Rezko and a senator were involved in after the senator decided to buy a home after he began collecting royalties from one of his books. Apparently, he and Mr. Rezko looked at that property. Senator Obama bought the home. There was an adjacent lot which Tony Rezko's wife bought, and sold a slice of it to the Obamas to extend their yard. And Hillary Clinton has tried to make that an issue during the campaign.

BLOCK: And this was all taking place at a time when Tony Rezko was under investigation.

CORLEY: Yes, indeed. Senator Obama, I must say, has said that it was a boneheaded mistake, and he's donated more than $160,000 that can be linked to Tony Rezko back to charity.

BLOCK: Now, were any of these issues that the Clinton campaign has raised, are they mentioned in the indictment against Tony Rezko?

CORLEY: No, they're not. They are issues that the Clinton campaign tries to address. I talked to the Obama campaign today, and they say that after much reporting about this land deal, it's clear that this is not a case at all about Senator Obama.

BLOCK: Okay. NPR's Cheryl Corley reporting from Chicago. Thanks very much.

CORLEY: You're quite welcome.

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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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