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    Barack Buys a House With Tony Rezko

    Posted:
    10/18/08
    Tony Rezko, Barack Obama. Dirty Chicago deals are back in the news. Why? Didn't we cover this before? Yes, we did, but that was before a whistleblower filed a federal lawsuit complaining about bad appraisals to cover what could have been a gift to Obama of up to $1 million dollars toward his nice house in Chicago.


    Washington Times
    A former Illinois bank official, now claiming whistleblower status, says bank officials replaced a loan reappraisal that he prepared for a Chicago property that was purchased by the wife of now-convicted felon Tony Rezko, part of which was later sold to next-door neighbor Barack Obama.

    In a complaint filed Thursday in the Circuit Court of Cook County, Kenneth J. Connor said that his reappraisal of Rita Rezko's property was replaced with a higher one and that he was fired when he questioned the document.

    ...

    The complaint said Mutual Bank officials could be guilty of making false statements, willfully overvaluing property, bank fraud, witness retaliation, willful violation of a lawful subpoena, FDIC violations, and state banking regulations.


    I think Joe the Plumber knows how you feel, Mr. Connor. You may have been one of the first working stiff to get run over by the Obama bus, but you certainly weren't the last.

    So far Obama has admitted only that this was a mistake of appearance only and as far as he knows, everything was above board and ethical.

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    Here's timeline based on the TPMMuckraker from March.
    Back in 2004, the home's owner put both parcels on the market. There was no fence between the two properties, since the undeveloped land served as the house's side yard, but the properties were listed separately.

    In January of 2005, the Obamas made three successive bids on the home, which had been listed at $1.95 million. ...Obama has said that he didn't purchase the side yard because he could not afford it.

    About how Rezko came to own the sideyard...

    ...Last month, an Obama spokesman divulged more: that at some point before the purchase, which closed in June of 2005, Obama and Rezko had toured the property together "because Rezko was a real-estate developer in the area" and Obama wanted his opinion. The spokesman could not specify when, exactly, this tour had occurred -- before Obama had made successive bids on the home in January of 2005, or after.

    It's not clear when Rezko bid on the property, but Obama has said that the seller accepted Rezko's bid on the yard before accepting Obama's bid on the house.

    Both Obama and Michael Sreenan, Rezko's former attorney who now owns the adjoining lot, have said that at least one other party bid on the yard, as an explanation for why Rezko ultimately paid the seller's asking price, $625,000. The burning question, of course, is whether Rezko was doing Obama a favor by buying the side lot at the asking price. Though the seller, via the campaign, has corroborated other details about the purchase, he has not confirmed that there were other bids on the lot.

    ...

    By June of 2005, when the purchases did close, Rezko's ethical and legal troubles had begun unraveling on the pages of the city's major newspapers. Just a month before, The Chicago Tribune had run a major profile of Rezko and his many entanglements, including the fact that he'd been subpoenaed as part of a sprawling corruption probe of the state government.

    ...

    Obama has said that he approached Rezko personally in January of 2006 about buying some of the adjacent lot. To set the price for the 1,500-square-foot strip, which was one-sixth of the entire lot, Obama hired a firm to appraise its value. When that appraisal came in at $40,500, Obama says he judged it too low for appearance's sake and instead set the price at $104,500, which was one-sixth of the price Rezko had paid for the entire lot. There's been no suggestion that Rezko actually negotiated with Obama on the price. In any case, he accepted.

    Ed. Note, New information from the Washington Times article above, we now know that it was at this point that Ken Connor called the $625,000 price overvalued, and that's where the $40k low appraisal came from.

    Rezko's rapidly deteriorating situation might explain Obama's extra caution. Since its profile of Rezko the previous May, the Tribune had also brought word (as you can see on our timeline) that Rezko had been subpoenaed on a number of other matters, all pertaining to U.S. Attorney Patrick Fitzgerald's investigation of influence-buying, cronyism, and extortion in Gov. Rod Blagojevich's (D) government. It was increasingly clear that he was of central interest to prosecutors. He was finally indicted in October of 2006.

    Ed. Note: October of 2006 matches up with this in the Washington Times article:

    Later, the complaint states, Mr. Connor observed that his lower appraisal was not in the Rezko file and that he notified his supervisors that it had been replaced. He said, according to the complaint, the new file had been reviewed by the FBI and "if the FBI were to ask me about such matters, I would tell them the truth. I never rescinded my original findings."


    Though Obama's name may come up at the trial, since Rezko allegedly made illegal "straw" contributions (via intermediaries) to Obama in addition to a number of other politicians, he is expected to be only a peripheral player. As The Los Angeles Times puts it this morning, Obama will be in "the background." But unfortunately for Obama, Rezko is also certain to be in the background of his campaign through November.

    You bet it will. Again my acid test on October surprises is why didn't this come up when Hillary needed it to? The answer here is that Hillary tried, but she didn't have the whistleblower. Obviously this could not come at a worse time for the senator from Illinois.

    The worst case scenario here for Obama is that this appears to be a favor or gift from Rezko of up to at least $300k but possibly up to a cool million in that he gets a house for that much less than the original asking price. This favor circumvents campaign finance laws, federal gift taxes, etc. If it is a gift, it is likely illegal and definitely unethical. Note that the side lot that Obama does not own is currently still vacant and possibly unbuildable.

    And what could Rezko have possibly gotten from Obama in return. Well, possibly quite a lot, including $14 million for a senior citizens center project. (long before the house deal). Caution is warranted, full proof and links to Obama are not definite. But this deal has always smelled like there was a rat somewhere, and now an ordinary appraiser says so too. In a federal lawsuit. As Drudge says, developing...




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    Dave

    David Stacy is a network administrator from Cincinnati, OH. Dave has been blogging at nixguy.com since 2004, and AOL's political blogs since 2006. more

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