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Rezko Witness Leaves New Questions about Obama Real Estate Deal Unanswered

The star witness at the Tony Rezko fraud trial in Chicago may have gotten Barack Obama in hot water again over his long term relationship with the Chicago “fixer,” as well as his connection to a shady billionaire who may have played a key role in the real estate deal involving Obama’s home.

Stuart Levine testified that Senator Obama and his wife were guests at Tony Rezko’s house at a party honoring Iraqi-born British billionaire Nadhmi Auchi in early April 2004, according to press reports. This was the second event attended by Obama where Auchi, convicted of fraud in Europe, was the guest of honor. Earlier that month on April 3, Obama met with a group of “Middle East bankers” including Auchi at a reception sponsored by Illinois governor Rod Blagojevich.

The problem for Obama is that he first said, through campaign spokesman Bill Burton in an email to the news site Raw Story back in January, that “[h]e has no recollection of ever meeting him [Auchi].” Then, in an interview with the Chicago Sun Times, Obama let on that he “may” have met Auchi at the Four Seasons reception sponsored by Blagojevich.

The question will almost certainly be asked how Obama could forget meeting his longtime friend’s very important business partner twice in such a short period of time.

This is especially true since Auchi apparently attended at least one Obama fundraiser. Joseph Cacciatore, whose family once owned a 62-acre plot of land bought by Rezko and was in the process of developing with Auchi, says he met Auchi a few years ago:

Cacciatore can’t suppress at least a touch of admiration for the dapper, sophisticated Auchi. He said they met at an Obama fundraising party that Rezko gave at his home several years ago.

“He was well dressed,” Cacciatore said. “He seemed distinguished.”

Both men say they don’t know each other.

And Obama isn’t the only one who wished to downplay this relationship with Auchi. Raw Story reported that shortly after rumors began circulating that Obama met with Auchi, two websites connected to Auchi’s holding company, General Mediterranean Holding, were scrubbed of any mention of his trip to Illinois.

Obama himself has been extraordinarily vague about any possible meetings, saying that while he very well may have met Auchi, he doesn’t recall it.

Why is this so important? Establishing a previous relationship between Obama and Auchi opens a fresh line of questions about the real estate deal on his home involving Rezko and Obama –questions about the source of money that Rezko used to buy a side lot to Obama’s mansion at a time when he told a court he was flat broke and heavily in debt.

According to a story in the TimesOnline, another holding company belonging to Auchi, Fintrade Services SA, loaned Mr. Rezko $3.5 million dollars just three weeks before Obama and Rezko closed the sale on the property simultaneously –a stipulation by the previous owners that both the lot and house be sold at the same time– thus allowing Obama to purchase his dream house.

Over the years, Auchi loaned Rezko a considerable amount of money: more than $27 million, according to prosecutors. To pay off the debt, Rezko gave Auchi a bigger stake in that showpiece 62-acre land development on the south side of Chicago. In return, Auchi kept Rezko’s head above water as his numerous business ventures including real estate, pizza resturants, and property management were in various stages of failure. There is also the fact that Rezko was facing several lawsuits in connection with these enterprises.

It was another $3.5 million loan from Auchi late last year that caused a federal judge to revoke Rezko’s bail and send him to jail. Given Rezko’s numerous contacts in the Middle East, including his friendship with the Emir of Qatar, it worried the judge that Rezko might leave Chicago for friendlier climes and not return.

Auchi has a reputation in Great Britain of collecting politicians “the way that other people collect stamps.” The list of current and former British politicians working for one of Mr. Auchi’s numerous enterprises is an eye opener.

Norman Lamont retired from government to a seat on the board of the financial arm of General Mediterranean Holding, which runs Auchi’s many businesses. Lord Steel, the former leader of the Liberal Democrats and the current presiding officer of the Scottish Parliament, is also on the board. Lady Falkender, Harold Wilson’s former secretary, has worked for Auchi, as has Gerald Malone, a former Tory Minister you’ve probably forgotten about. Keith Vaz, the former New Labour Foreign Office Minister once accepted a directorship from Auchi.

Given Auchi’s checkered past, it’s amazing that politicians with any integrity would have anything to do with him. First, there is Auchi’s conviction in the notorious Elf case in France, where company directors and officers of the state owned oil company used the firm as “a private bank for executives who spent £200 million on political favors, mistresses, jewelery, fine art, villas and apartments.”

Beyond Elf, there is Auchi’s involvement in the Oil-for-Food scandal through his ownership of the the PNB Paribas bank, where the money for the program was held in an escrow account. BNP Paribas “was the sole bank administering the $64 billion UN programme. An investigation by the US House Committee on International Relations found that BNP Paribas made payments without proof that goods were delivered and sanctioned payments to third parties not identified as authorized recipients.”

The scheme earned BNP and Auchi $700 million in fees. It also earned his old friend Saddam Hussein more than $10 billion. Auchi acted as a conduit for arms during the Saddam years and was also involved in several oil deals with western nations at that time and bribing several Iraqi officials in the process, according to a court in Milan. “The name Nadhmi Auchi was just another name for Saddam’s intelligence service, or so we thought,” said Nibras Kazimi, a former Iraqi dissident who is now a visiting scholar at the Hudson Institute in Washington D.C.

So Auchi –friend of Saddam, international fraudster, and business partner to one of Chicago’s premiere fixers– gave Rezko the money that allowed Obama to purchase his house. Without the loan, Rezko would not have been able to afford the $125,000 downpayment on the lot and Obama would not have been able to meet the terms set by the sellers.

Did Auchi know that part of that money would be used to help Obama purchase his house? Did Obama know where Rezko’s money came from?

This is important to know because about the time of the loan to Rezko, Auchi was put on the State Department’s “undesirable alien” list and was prevented from getting a visa to the United States. Rezko told prosecutors that he tried to intervene on Auchi’s behalf with the State Department to get the ban lifted. Running into a stone wall at State, the prosecutors say that Rezko turned to “certain Illinois politicians to do the same.” Who would Rezko have turned to except Obama (and probably Governor Blagojevich)?

The fact that Obama knew Auchi from his trip to Chicago a year before alters what we had previously known about the billionaire’s visa problems. The question arises if any quid pro quo was given with regard to the Rezko loan, involving Obama’s possible intercession with the State Department on Auchi’s behalf. Going to bat for your patron’s business partner to solve a little thing like a visa problem is not a mortal sin. But connecting it to a loan that made it possible for Obama to purchase his house would be a little more serious and could involve the Senate Ethics Committee.

Obama denies helping Auchi in any way with his visa but can’t vouch for his staff:

Q: Did you ever help Auchi enter the country?

A: No

Q: Or your office?

A: “Not that I know of.”

That would seem to leave an “out” for the lawyerly senator but is inconclusive otherwise.

There will be many who say this just doesn’t matter: that Obama’s relationship with Auchi, like his relationship with bigoted preacher Jeremiah Wright, like his relationship with Pentagon bombers and domestic terrorists William Ayers and Bernadine Dorhn, like his relationship with some of the more unsavory elements of the Chicago political machine including Tony Rezko, is all guilt by association and an unfair attack on the candidate.

But the average voter might be asking right about now where does “guilt by association” end and the candidate being guilty of having monumentally bad judgment in picking his associates begin?

Rick Moran is PJM Chicago editor; his own blog is Right Wing Nut House.