Winds of Change has a link to a report by the Inspector General into Mobile Telecommunications Licenses in Iraq dated May 11, 2004. The preliminary report (PDF here) contains fresh detail into the background and activities of Nadhmi Auchi. Wikileak repeats much of the speculation about Auchi in open source: he “has been tied to illegal activities in Iraq and France, and Democratic presidential candidate Sen. Barack Obama.” However that may be, while the report prepared for the International Armament and Technology Trade Directorate, Office of Deputy Undersecretary of Defense (International Technology Security), of the US Department of Defense contains no information on the connection, if any between Auchi and Obama, it contains plenty of information about the modus operandi of Nadhmi Auchi. The report said their investigation had:
brought to the surface, among many other things, the name of Nadhmi Auchi, an Iraqi billionaire who has played a role in the Iraqi-European arms trade for over two decades, and who, behind the facade of legitimate business, served as Saddam Hussein’s principal international financial manipulator and bag man. (page 3/146)
Auchi was suspected of trying to “bribe foreign governments and individuals prior to Operation Iraqi Freedom to turn opinion against the American-led mission to remove Saddam Hussein”; “arrange for significant theft from the UN Oil-for-Food Program to smuggle weapons and dual-use technology into Iraq” and “organize an elaborate scheme to take over and control the post-war cellular phone system in Iraq.”
It was no surprise that the Auchi “set off instant alarms in IATT when it was discovered that he had managed to manipulate the U.S.- and British-sponsored cellular telephone tender under the auspices of the Coalition Provisional Authority (CPA) by having nominal or beneficial ownership of a major part of the equity in two of the winning licenses, and through a complex arrangement, a controlling interest in all three licenses. The investigation which underlay this report was triggered by universal complaints that the tender process had been rigged and that the process lacked transparency. ”
The Inspector General’s report describes how Auchi fixed the the tender. It fleshes out the sketchy portrait of the man who may have provided the backing for Tony Rezko’s ill-fated bid to construct the “a $150 million Chamchamal Power Plant in Kurdish Iraq”, a relationship described in greater detail my article Obama’s Shifting Positions in Iraq: a Rezko Connection? In that piece, I noted that Rezko’s statements to the court during his recent trial admitted that he had no money to undertake the project. His only source of ready funds appeared to Auchi.
When the judge pressed for details Mr. Joseph Duffy, of Stetler & Duffy, spoke for his client, “there was a request for purchase by the Iraqi government. Mr. Rezko and an engineering firm here in the state of Illinois put together a bid, along with other entities; and, then, they won the bid for the contract. The company has no assets. They were just going to — if the contract was given, as I understand the financing was going to be a letter of credit — letter of credit from the Iraqi government and other financing; and then, they were going to put together someone to build or supply the electricity. …
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. … 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.
Wikileak says, “Auchi has denied accusations over the cell phone contract. The London Times reported that Auchi gave a $3.5 million loan to Mr. Rezko in May 2005 through a Panamanian company linked to the Iraqi expatriate called Fintrade Services SA. Several weeks after the loan, Mr. Obama purchased a house on Chicago’s South Side and Mr. Rezko’s wife bought an expensive plot of land next to the house from the same seller on the same day. Mr. Rezko’s wife later sold a 10-foot section of the property to Mr. Obama, to add to the Illinois Democrat’s garden. Mr. Obama has called the land purchase a mistake”
The Inspector General’s report makes the fairly persuasive case that Auchi was bad company. The person who constituted the single degree of separation between Auchi and the man who is possibly the next President of the United States was Tony Rezko. After the Chicago businessman’s conviction on corruption charges, Obama expressed shock at his former friend’s secret life.
Rezko’s guilty verdict on 16 of 24 corruption counts could have broad repercussions for Blagojevich, who made Rezko a central player in his kitchen cabinet. It could also prove a political liability for U.S. Sen. Barack Obama, who once counted Rezko as a friend and fundraiser, as the likely Democratic presidential nominee heads into the general election campaign against Republican John McCain.
“I’m saddened by today’s verdict,” Obama said Wednesday. “This isn’t the Tony Rezko I knew, but now he has been convicted by a jury on multiple charges that once again shine a spotlight on the need for reform. I encourage the General Assembly to take whatever steps are necessary to prevent these kinds of abuses in the future.”
Despite his evil reputation among those who followed international crime, Mr. Auchi moved in exalted circles. Wikipedia‘s entry reveals him as a banker, educational philathrophist, and student of Chicago politics. He seemed equally at home in Paris, London, the Middle East and in the best social circles in America.
From 1996 to 2000 he served on an advisory committee to the Institute for Social and Economic Policy in the Middle East at Harvard’s Kennedy School of Government. He has been president of the Anglo-Arab Organisation since its founding in 2002.
Auchi was a member of the Baath Party in Iraq before Saddam Hussein came to power. While he denies any ties to Hussein’s government, British media reports indicate he sold naval ships to Hussein’s government in the 1980s. He is of the largest shareholders in BNP Paribas, a French bank involved in the United Nations Oil-for-Food Programme for Iraq. In 2003, Auchi was convicted of fraud, and given a 15 month suspended sentence and a £1.5m fine for taking illegal payments from French oil company Elf Aquitaine. Following the verdict, Elf (by now merged with TotalFina and re-named Total) decided to take legal action against Auchi in France; Auchi responded by suing Total for £200m in turn, this time in the UK.
In recent years he has entered into several partnerships with Chicago-area businessman Tony Rezko, effectively coming to his rescue as his various investment schemes began collapsing. Auchi bought about 15 of Rezko’s pizzeria’s in Wisconsin, according to court records. In 2005 he took a stake in Rezko’s South Loop development at Roosevelt Road and Clark Street, a deal estimated by observers familiar with the details at $170 million. In 2008 Stuart Levine, the government’s star witness in the corruption trial against Rezko, asserted that Barack Obama and his wife, Michelle, were among the guests at party in Auchi’s honor that took place at Rezko’s residence on 3 April 2004. While Obama has acknowledged his ties to Rezko, a spokesman said that the senator responed that “Sen. Obama does not recall meeting Nadhmi Auchi at any time or on any occasion, and this includes any event that may have been held for Mr. Auchi.”
In 2008 The Times of London reported the discovery of state documents in Illinois recording that a Panamanian company by the name of Fintrade Services lent money to a funderaiser for Obama in 2005. Fintrade’s directors included Ibtisam Auchi, the name of Mr Auchi’s wife. Spoksespeople declined to answer when questioned about whether he was linked to this business. The Times also reported that Auchi’s company loaned Tony Rezko $3.5 million three weeks before Rezko’s lot and Obama’s new home were purchased in 2005.
What brought Auchi to Chicago? And what brought Rezko to Iraq? There are still lots and lots of places besides Sarah Palin’s tanning bed where the spotlight needs to shine.