Former Obama fundraiser on trial for money-laundering

US: FOR businessman Antoin "Tony" Rezko, the goal was to get close to politicians who might matter some day

US:FOR businessman Antoin "Tony" Rezko, the goal was to get close to politicians who might matter some day. He targeted a raft of up-and-comers, including a young state senator named Barack Obama.

His most questionable alliance, prosecutors will tell a federal jury this week, was with Illinois governor Rod Blagojevich, a Democrat.

When Mr Blagojevich was elected in 2002, Mr Rezko became a member of the governor's "kitchen cabinet", where he allegedly leveraged his role as fundraiser and political patron to seek kickbacks from companies pursuing state business.

Mr Rezko's extortion and money-laundering trial, which began on Monday with jury selection, is expected to open a window on the dealings of the Blagojevich administration, which took office promising to clean up government after the misdeeds of former governor George Ryan, now serving 6½ years in prison for corruption.

READ MORE

The trial is also expected to fill out the portrait of Mr Rezko, a one-time investor, restaurant owner and Obama fundraiser, who contributed to his campaigns and sold the Illinois senator a piece of property in 2005 on Chicago's South Side.

Mr Obama is expected to be no more than a footnote to the three-month trial - Mr Rezko allegedly contributed $10,000 (about €6,600) in extorted funds to his campaign - yet Hillary Clinton's campaign has bombarded reporters with web links and word that proceedings are beginning.

Searching for an advantage after 11 straight primary losses, Clinton strategists said Mr Obama should be questioned more closely about his relationship with Mr Rezko, who faces a separate trial on charges of swindling $10 million from a financial institution.

For his part, Mr Obama has called the 2005 property deal with Mr Rezko's wife "boneheaded" and has donated to charity $149,585 (about €98,400) in contributions linked to Mr Rezko. The campaign said the money came from Mr Rezko, his family and employees, as well as guests at a fundraiser held at his home.

Mr Rezko sought to hire Mr Obama out of Harvard Law School in the early 1990s and later donated to his successful runs for the Illinois and US senates. They occasionally socialised before Mr Obama first consulted him on the house purchase, but he has said he did no favours for Mr Rezko.

Ethics watchdogs in Chicago accept Mr Obama's account, noting that he was instrumental in passing the strongest state ethics law in 25 years as a senator, but they have called the real estate deal and his failure to distance himself from Mr Rezko a lapse in judgment.

In 2005, Mr Obama and his wife, Michelle, and Mr Rezko's wife, Rita, bought adjacent properties near the University of Chicago. The Obamas bought a $1.65 million home and Ms Rezko the vacant site next door for $625,000.

The Obamas, wanting a larger garden, later bought one-sixth of the Rezko site for one-sixth of the price. Mr Obama said in an interview in December 2006, as he prepared to launch his presidential bid: "There's no doubt I should have seen some red flags in terms of me purchasing a piece of property from him."

Illinois has a long and sordid history of political corruption. In just the past two years, the office of US attorney Patrick Fitzgerald, who prosecuted Lewis "Scooter" Libby, formerly chief of staff of vice president Dick Cheney in the CIA leaks case, has won convictions of Ryan and Robert Sorich, a close aide to Chicago mayor Richard Daley, in separate investigations.

Neither Mr Blagojevich nor Mr Obama was among the 40 potential witnesses whose names the judge read to prospective jurors.

The list does include Chicago businessman Stuart Levine, a former member of two Illinois boards, who is expected to be the government's principal witness. Levine pleaded guilty to collaborating with Mr Rezko to extort almost $6 million from companies seeking state business. Also on the list is Democratic fundraiser Joseph Cari, who has pleaded guilty.