Skip to comments.Barack Obama embarrassed by billionaire link to home deal (just a boneheaded mistake)
Posted on 02/25/2008 2:25:58 PM PST by Libloather
Barack Obama embarrassed by billionaire link to home deal
James Bone in New York and Dominic Kennedy in London
February 25, 2008
Barack Obama now admits his involvement in this land deal was a ?boneheaded mistake? (Charles Rex Arbogast/Pool/EPA)
A British-Iraqi billionaire lent millions of dollars to Barack Obama's fundraiser just weeks before an imprudent land deal that has returned to haunt the presidential contender, an investigation by The Times discloses.
The money transfer raises the question of whether funds from Nadhmi Auchi, one of Britains wealthiest men, helped Mr Obama buy his mock Georgian mansion in Chicago.
A company related to Mr Auchi, who has a conviction for corruption in France, registered the loan to Mr Obama's bagman Antoin "Tony" Rezko on May 23 2005. Mr Auchi says the loan, through the Panamanian company Fintrade Services SA, was for $3.5 million.
Three weeks later, Mr Obama bought a house on the city's South Side while Mr Rezko's wife bought the garden plot next door from the same seller on the same day, June 15.
Mr Obama says he never used Mrs Rezko's still-empty lot, which could only be accessed through his property. But he admits he paid his gardener to mow the lawn.
Mrs Rezko, whose husband was widely known to be under investigation at the time, went on to sell a 10-foot strip of her property to Mr Obama seven months later so he could enjoy a bigger garden.
Mr Obama now admits his involvement in this land deal was a boneheaded mistake.
Mrs Rezkos purchase and sale of the land to Mr Obama raises many unanswered questions.
It is unclear how Mrs Rezko could have afforded the downpayment of $125,000 and a $500,000 mortgage for the original $625,000 purchase of the garden plot at 5050 South Greenwood Ave.
In a sworn statement a year later, Mrs Rezko said she got by on a salary of $37,000 and had $35,000 assets. Mr Rezko told a court he had "no income, negative cash flow, no liquid assets, no unencumbered assets [and] is significantly in arrears on many of his obligations."
Mrs Rezko, whose husband goes on trial on unrelated corruption charges in Chicago on March 3, refused to answer questions about the case when she spoke by telephone to The Times.
Asked if she used money from her husband to buy the land next to Mr Obama's house, she said: "I can't answer these questions, I'm sorry."
Asked how long she and her husband had known Mr Auchi, she replied: "I will not be able to answer this question."
Mr Auchi's lawyer, asked whether the Fintrade Services loan was used to buy the land which became Mr Obama's garden, stated: "No, not as far as my client is aware."
Mr Auchi's links with Mr Rezko are a new political headache for Mr Obama, the charismatic Illinois senator vying to become Americas first African-American president.
Hillary Clinton has sought to make Mr Rezko, who has bankrolled Mr Obama's political career since his first run for the Illinois state senate in the mid-1990s, into an election issue by calling him a "slum landlord" in a televised debate. She has repeatedly suggested that Mr Obama has effectively not been "vetted" by media scrutiny and will not withstand "the Republican attack machine".
Bill Burton, a spokesman for Mr Obama, told The Times: The bottom line is Obama does not recall ever meeting him [Mr Auchi].
The house-and-garden deal raised questions about whether Mr Rezko, a property developer and fast-food restauranteur, made it possible for the Obamas to purchase a mansion they could otherwise not afford.
Mrs Rezko paid the asking price for the garden but the Obamas bought the house for $1.65 million, - $300,000 less than the asking price. The sellers deny they offered the Obamas a discount on the house because the garden had fetched full price from Mrs Rezko.
Mr Rezko has since been indicted for allegedly scheming to pressure companies seeking business with the state of Illinois for kickbacks and contributions to the governor Rod Blagojevich's campaign. He goes on trial on March 3.
A prosecution document filed last month alleged that a "political candidate" - identified by the Chicago Sun-Times as Mr Obama - received a $10,000 campaign contribution from what is said to be a $250,000 kickback in the corruption case. That means Mr Obama's name could figure in Mr Rezko's trial, although he is not accused of any wrongdoing.
Mr Obama insists he never used his office to do favours for Mr Rezko but admits that, as an Illinois state senator, he once wrote letters to housing officials urging them to provide money in support of a proposed apartment building for elderly people which Mr Rezko wanted to build.
Mr Obama has publicly sought to atone for his closeness to Mr Rezko, paying $150,000 to charity to distance himself from a man accused of political corruption.
The spotlight fell on Mr Rezko's ties to Mr Auchi last month when the Chicago businessman was thrown in jail for violating his bail terms by failing to declare a different $3.5 million loan from the British billionaire, made in April 2007. Prosecutors feared Mr Rezko, who travels widely in the Middle East, might flee to a country without an extradition treaty such as his birthplace of Syria.
Mr Auchi was convicted of corruption, given a suspended sentence and fined £1.4 million in France in 2003 for his part in the Elf affair, described as the biggest political and corporate scandal in post-war Europe. He, in a statement from his media lawyers, claims he is appealing against the sentence.
Mr Auchi founded his Luxembourg-based General Mediterranean Holding (GMH) in 1979, a year before he left Iraq. He says that he did business with his native country when it was considered a friend of the West but ceased to trade with the late Saddam Hussein's regime once sanctions were imposed after the invasion of Kuwait.
Mr Rezko has told a court that Mr Auchi is a "close friend." Mr Auchi's lawyer told The Times: "It is untrue that my client and Mr Rezko are 'close friends'. Mr Auchi first met Mr Rezko after the 2003 Iraq war and they have a business relationship."
Mr Rezko and Mr Auchi have been partners in a pizzeria business in the Mid-West and a major 62-acre land development in Riverside Park in Chicago.
According to court documents, Mr Rezko's lawyer said his client had "longstanding indebtedness" to Mr Auchi's GMH. By June 2007 he owed it $27.9 million.
Under a Loan Forgiveness Agreement described in court, Mr Auchi lent Mr Rezko $3.5 million in April 2005 and $11 million in September 2005, as well as the $3.5 million transferred in April 2007.
That agreement provided for the outstanding loans to be "forgiven" in return for a stake in the 62-acre Riverside Park development.
A posting last week on a GMH-owned website, middle-east-online.com, portrayed Mr Auchi as a Middle Eastern "Donald Trump" with a global business construction empire.
Mr Auchi visited the United States in 2004. Pictures show him meeting Emil Jones, the president of the Illinois state senate, an ally of Mr Obama, a former state senator.
Both Mr Auchi and Mr Obama say they have no memory of meeting each other. But, according to a source, the two may have had a brief encounter at the Four Seasons Hotel in Chicago where Mr Auchis visit was being honoured with a dinner attended by the Governor when Mr Obama, coincidentally in the hotel, dropped in.
An aide to Mr Obama said he did attend an event at the Four Seasons at which Mr Rezko was present but does not remember meeting Mr Auchi. "He shook a lot of hands and met a lot of people," the aide said. "We do not remember individual people."
Prosecutors say that, after Mr Auchi was unable to enter the United States in 2005, Mr Rezko approached the US State Department to get him a visa and apparently asked "certain Illinois government officials to do the same." Mr Obama denies he was approached. Mr Auchi's lawyer has emphasised to The Times that it would be entirely false to imply that money had been lent by GMH to Mr Rezko in return for Mr Rezko seeking to assist Mr Auchi to obtain a visa. The two men's relationship, the lawyer stressed, was a busines s one.
Mr Auchi's lawyer said the purpose of the Fintrade Services loan was to "assist the financial position" of a pizzeria company called AR Pizza, in which GMH held a shareholding. He said the loan had since been repaid in the form of a greater stake in the Chicago 62-acre land project.
AR Pizza has since become a defendant in a civil lawsuit by the Papa John's pizzeria chain, which alleges that it continued to operate a string of former Papa John's franchises under the name "Papa Tony's" without permission.
Mr Auchi's lawyer said: "My client played no part in the management and/or day to day running of AR Pizza, the GMH Group being an entirely passive investor in the company. Further, there was no need as a mimimum return on the investment was guaranteed. As to the court proceedings, my client is not a party to these. He denies any wrongdoing in relation to his involvement in AR Pizza."
Mr Rezko was also a major fundraiser for Governor Blagojevich. The governor's chief fundraiser Christopher Kelly, who also served as his gambling adviser, is fighting tax charges related to betting losses. The Associated Press reported that last month Mr Auchi's conglomerate also gave a loan to Mr Kelly secured on a Nevada land deal which the governors bagman was involved in.
Democrat race marred by tribal turban picture
Clinton mocks Obama's 'celestial' message
Timeline: British billionaire and Barack Obama
Nadhmi Auchi: the 18th richest Briton with £2.575 billion. Traded with Iraq before the Kuwait invasion but Saddam regime executed his brother. Honoured by Pope John Paul II
Antoin Tony Rezko: friend of Barack Obama from 1990 and fundraiser since earliest local campaigns. Facing criminal charges for corruption and fraud and civil action over his Papa Tony pizza parlours
Rita Rezko: some of the millions of dollars wired from Mr Auchis conglomerate went through her accounts
Christopher Kelly: former gambling adviser to Illinois governor. Now charged with claiming his betting losses as business expenses, which he denies
Rod Blagojevich: Democratic Illinois Governor whose administration is under federal investigation. Although his fundraisers Mr Rezko and Mr Kelly have been indicted, he has not been charged with any wrongdoing
Barack Obama: member of Illinois State Senate since 1996, elected to Capitol Hill as Senator in 2004
Sources: The Sunday Times Rich List; US court documents; Associated Press
This is the change everybody, not just we, can believe in.
I hate it when that happens.
Move along. They all do it. Didn't the Clintons have Tyson, and Bernard Schwarz of Loral, and the Chinese? Even McCain married up, which helped fund his political career, and he played footsie with Keating during the S&L crisis days.
“The money transfer raises the question of whether funds from Nadhmi Auchi, one of Britains wealthiest men, helped Mr Obama buy his mock Georgian mansion in Chicago.”
It’s either that money, or the money the white Rezko made by defrauding govt. money set aside for black contractors...
In fact, since money is fungible, it’s both!
now if some wall street guy said, “whoops, silly me!” you can bet spitzer would be dining on his spleen.
Added info here.
So how many “bone headed mistakes” must this country endure if he’s elected?
Now that we know who the puppet master is, what do we know about him?
"I will not be able to answer this question."
"No, not as far as my client is aware."
The bottom line is Obama does not recall ever meeting him [Mr Auchi].
"We do not remember individual people."
Here we go again. More of that "most honest administration in history" crap.
I can't recall. I can't remember, my brain's in a blender, it's Jello!
And how much coverage will this get in the drive-by press?
My guess is it won’t be covered or glossed over.
...and this will make the front page of the New York Times...when?????
Where can I sign up for a gubmint job like that?
Bawhahhaha...I get a kick outta that pic. She is one SCARY man looking dudette!!
“Bawhahhaha...I get a kick outta that pic. She is one SCARY man looking dudette!!”
Judging from that pic, I wonder if she gives Barack an occasional “smack” with that left hand of hers...
An Anglo-Iraqi billionaire ... built his financial empire on peddling his influence with Saddam Hussein's Baathist regime - the Observer can reveal.
Nadhmi Auchi, who is one of Britain's richest men, will appear in court this Tuesday(2003) after his arrest in London last week. He faces extradition to France on fraud charges connected with a multi-million pound corruption scandal involving the French oil giant Elf-Aquitaine.
In a series of astonishing new developments in a story first broken by this newspaper two years ago, a fresh Observer investigation has discovered that Auchi:
· Was tried alongside Saddam Hussein for his involvement in a conspiracy to assassinate an Iraqi prime minister in Baghdad in the 1950s;
· Used money from military contracts in Iraq to establish a business and banking empire in Britain and Luxembourg; and
· Was employed to pay alleged bribes from Italian companies to win oil contracts in Iraq because of his close links to the regime.
Nadhmi Auchi's influence stretches to the highest levels of the British political establishment and he counts princes and presidents among his personal friends. The wealth of the Iraqi billionaire outstrips the Queen and Sir Richard Branson and has given him access to the rich and powerful from Crown Prince Abdullah of Jordan to Lord Sainsbury. He collects prominent former politicians from across Europe as directors of his companies.