Corruption trial threatens frontrunner [Obama's intern scandal]

The Times ^ | 3/2/2008 | Tony Allen-Mills

[bruinbirdman]

IN THE summer of 2005, a 20-year-old Chicago student named John Aramanda arrived at the Washington office of Senator Barack Obama to begin a coveted summer internship. He was one of about 100 bright young Illinois students who passed through the senator’s office that year, gaining invaluable experience in the front line of a future presidential candidate’s national operations.

This week Aramanda’s name may return to haunt Obama. The student’s father, Joseph, has emerged as a central figure in the trial beginning on Tuesday of Antoin “Tony” Rezko, a prominent Chicago political broker accused of a long list of fraud and corruption offences.

As a former friend and neighbour of Rezko, Obama was also a political beneficiary of the Syrian-born millionaire’s extensive fundraising operations. Central to the prosecution’s case against Rezko is a $375,000 (£187,500) payoff - called a “finder’s fee” - that is alleged to have been skimmed illegally from investment fees paid by the Illinois state teachers’ pension fund.

At least $10,000 of that money turned up in Obama’s campaign account through a donation by Joseph Aramanda, who according to prosecutors received $250,000 from the pension fund payoff and directed it to others at Rezko’s behest.

The payment to Obama was made a year before Aramanda’s son was awarded his internship. Obama’s aides have denied any connection between the donation and the internship, and Joseph Aramanda has not been accused of any crime. Rezko has pleaded not guilty to all the charges against him.

Yet even before the first state witnesses begin to explain the complex financial dealings that federal investigators claim were corrupt, it is clear the Rezko trial could scarcely have come at a worse moment for the Illinois senator who has built his presidential challenge on promises of hope, integrity and change.

Republican operatives are hovering gleefully at the margins of the Rezko trial, keen to gather ammunition against Obama for their White House campaign. While there is no suggestion that the senator has broken any law, the Republicans intend to call his political judgment into question.

They will also focus on evidence that he developed his political career in Chicago with the help of some controversial friends.

Illinois, the home of Al Capone, has never been a state for the politically fainthearted. One former governor, George Ryan, is currently serving a 6½year jail sentence for steering state contracts to cronies and accepting payoffs in return. The current governor, Rod Blagojevich, is clinging to office amid claims by federal agents that he was the main beneficiary of Rezko’s allegedly illegal schemes.

“In the old days it started with newly arrived immigrants going to precinct political bosses for jobs,” said Cynthia Canary, director of the Illinois Campaign for Political Reform, an independent watchdog. “It was about trading political favours, about you scratch my back and I’ll scratch yours.”

For years the inside trading of the state’s largely Democratic political machines was known as “pay to play”. It has since morphed into something more sinister: government jobs and contracts were effectively put up for sale in exchange for politicians’ campaign contributions.

“It used to be relatively small-scale stuff,” Canary said. “It was, ‘Put my cousin Vinnie on the payroll and here’s a hundred bucks’. But today the price of admission has escalated tremendously.”

The roots of the Rezko investigation appear to lie in a remarkable outburst in 2005 by Blagojevich’s father-in-law, a powerful Chicago alderman named Dick Mell. After a public falling-out with his daughter’s husband, Mell alleged that state government posts were being sold to the highest bidder, prompting prosecutors to launch a grand jury investigation.

As long ago as 2002, there were suggestions that officials in Springfield, the state capital, had been coerced by FBI agents into wearing wires to record evidence of payoffs and bribes to local politicians.

It was into this festering swamp that Obama launched his political career, first as a local official and from 2004 as an Illinois senator. “I knew Obama when he worked in Springfield, and in my experience he led a pretty straight and narrow path,” said Canary.

But no politician can survive in Illinois without access to the campaign funds controlled by the state’s principal power brokers, Canary added. “There are very few other routes you can take to power. You just have to hold your nose and work your way through the system.”

Obama fell in with Rezko, who owned a string of restaurant and property businesses. Rezko organised fundraisers for the state’s newest African-American star; and when Obama made national headlines after his spellbinding performance at the 2004 Democratic convention, Rezko helped him to acquire a piece of land next to a $1.65m mansion the Obamas were buying in a historic neighbourhood close to the University of Chicago.

That property deal, completed in June 2005, has caused Obama no end of grief, not least because on the day that the house was sold at a discount of $300,000, Rezko’s wife Rita bought from the same vendor the vacant plot next door at the full asking price of $625,000. Part of the plot was then sold to Obama.

No evidence has surfaced that the deal was in any way improper, and last week the vendors emerged at the behest of the Obama campaign to confirm that the senator’s bid was the highest they received.

Yet the deal has tied Obama irrevocably to Rezko. The senator has since admitted that his dealings with Rezko were “bone-headed”. His campaign has donated to charity more than $85,000 of donations linked to Rezko.

Aramanda, a businessman who once took over several Rezko-owned pizza restaurants in Wisconsin, could not be contacted last week. He has previously told the Chicago Tribune that there was nothing untoward about his son’s internship.

Last week the judge in charge of the Rezko trial ruled that prosecutors could introduce detailed evidence regarding the $375,000 payoff. Judge Amy St Eve declared that the tracing of the “finder’s fee” was “integral to the indictment”.

[Ernest_at_the_Beach]

Blast from the past!

[potlatch]

Thanks Ernest. Anything corrupt I would believe of Obama.