Patterico's Pontifications


More on Obama’s “Housing Problem”

Filed under: 2008 Election — DRJ @ 2:47 pm

[Guest post by DRJ]

NK, our resident Chicago expert on Obama, brought to my attention these January 2008 MSNBC and MyDD stories on why Barack Obama’s land deal with Tony Rezko may be a problem.

Here’s a link from MyDD along with a January 28, 2008, MSNBC video that makes the issues easier to understand if you are a visual person like me.

[NOTE: The video embed doesn’t work here so please click on the MyDD link to see the MSNBC video or use the link in NK’s comment 2 below.]

There’s related speculation at this MyDD link regarding potential real estate tax issues.


20 Responses to “More on Obama’s “Housing Problem””

  1. Doesn’t seem to work at MyDD either.

    Kevin Murphy (0b2493)

  2. Thanks again, NK. Kevin, you may want to try the MyDD link again. It seems to be working now but it’s apparently a sporadic link.

    DRJ (a431ca)

  3. The money quote from the MyDD link:

    Why is this important? Obama has long suggested that voters should ignore his lack of experience and consider only his superior “judgement”. The entire rationale for his qualification to be President is his “judgement”. Does this sham property purchase, regardless of its legality, seem like good “judgement” to you?

    I have to agree. The purchase may be entirely legal, but it does call Senator Obama’s judgement into question, and makes me wonder what other unusual “judgements” we yet don’t know about.

    Paul (d4926e)

  4. Wow. Just saw nk’s link in the other thread: Rezko In Debt $50 Million; How Did He Afford Obama Lot?

    Accused Illinois fixer Antoin “Tony” Rezko is in debt by $50 million and relies on “family” handouts of $7,500 a month to pay monthly costs, according to a previously sealed court transcript reviewed by ABC News.

    Rezko’s bleak financial picture raises the question of how the Rezkos were able to buy a vacant lot adjoining the home of Sen. Barack Obama in 2005, at a time Rezko says he was already in deep debt.

    Rezko also reveals in the testimony, before Judge Amy St. Eve on Jan. 16, 2007, that he already knew he was under federal investigation at the time of the land purchase and had hired a criminal defense attorney to deal with the “feds.”

    Obama says he sought Rezko’s help because the house he wanted to buy in Chicago’s Hyde Park came with an adjoining lot the seller wanted to sell at the same time.

    Unable to afford it himself, Obama says Mrs. Rezko bought it for $625,000, and then later sold a strip of the lot back to Obama so he would have a larger yard. Obama says he paid Mrs. Rezko a fair market price.

    According to the court transcript, Mrs. Rezko makes $37,500 a year.

    Obama has defended Rezko’s role as legal but says it was “a bone-headed mistake” to involve him in the deal.

    Like I said: Wow.

    Wonder if she got an adjustable-rate mortgage? :)

    Thought I’d add it over here since this post is specifically about the Obama-Rezko property.

    Paul (d4926e)

  5. Since this is a breaking scandal: Rezkorama.

    Paul (d4926e)

  6. Good additions, Paul. Thanks.

    DRJ (a431ca)

  7. No problem, DRJ. Happy to help!

    Paul (d4926e)

  8. How did Mrs. Rezko afford a $625,000 vacant (as in not “income producing”) lot on $37,500 annual salary and no other assets? Here’s how:, first the background on how it came to light:

    “U.S. District Judge Amy J. St. Eve jailed Rezko…saying he had disobeyed her order to keep her posted on his financial status. Among other things, he failed to tell her about a $3.5 million loan from London-based Iraqi billionaire Nadhmi Auchi — a loan that was later forgiven in exchange for shares in a prime slice of Chicago real estate. Rezko gave $700,000 of the money to his wife and used the rest to pay legal bills and funnel cash to various supporters.”

    Funds from Auchi’s loan may have helped finance a complex series of transactions between Rezko and Democratic Presidential candidate Illinois Senator Barack Obama involving the 2005 purchase of Obama’s Chicago mansion and Rezko’s purchase of an adjoining landlocked parcel.

    The Times of London reports:

    “A company related to Mr. Auchi, who has a conviction for corruption in France, registered the loan to Mr. Obama’s bagman Antoin ‘Tony’ Rezko on May, 23 2005. Mr. Auchi says the loan, through the Panamanian company Fintrade Services SA, was for $3.5 million.

    Three weeks later, Mr. Obama bought a house on the city’s South Side while Mr Rezko’s wife bought the garden plot next door from the same seller on the same day, June 15. Mr. Obama says he never used Mrs. Rezko’s still-empty lot, which could only be accessed through his property. But he admits he paid his gardener to mow the lawn.”

    So who’s Nadhmi Auchi? Well besides Rezko’s “partner,” he’s an Iraqi convicted felon, with ties to the Oil-for-Food scandal under Saddam Hussein…and he has a history of bribing public officials. Read the rest of the American thinker article linked and quoted above.

    capitano (03e5ec)

  9. Boy, you aren’t kidding, capitano. Here’s the spicy parts from your link:

    The sudden emergence of Auchi into this story indicates Rezko’s deals may include a money trail leading back to dead Iraqi dictator Saddam Hussein. Auchi’s Saddam links trace back to a failed 1959 assassination attempt on the life of then-Iraqi-prime-minister Abdul Karim Qasim.

    Auchi’s General Mediterranean Holdings company was also the largest private shareholder in Banque Nationale de Paris which later merged with Paribas to become BNP Paribas. At Saddam’s insistence, billions of dollars of Oil for Food transactions passed through BNP from its 1995 inception until 2001.

    In January 2004, Iraqi newspaper Al-Mada published a list of 270 Oil for Food beneficiaries. The list was translated and published on line by The Middle East Media Research Institute. Hundreds of millions of dollars of Oil for Food money was illegally diverted to buy Saddam favor from the United Nations, possibly reaching as high as Secretary general Kofi Annan’s son. Also receiving million’s from Saddam’s slush fund were heads of state and their associates from Russia, France, China, and numerous Islamic countries.

    The Auchi-Obama links go beyond the mansion deal. The Times of London February 1 reports uncovering, “state documents in Illinois recording that Fintrade Services, a Panamanian company, lent money to (an) Obama fundraiser in May 2005. Fintrade’s directors include Ibtisam Auchi, the name of Mr. Auchi’s wife.”

    Auchi, a Chaldean Christian, was later pardoned by Qasim. As Saddam’s Baath party took power, Auchi prospered. He went to work for the Iraqi Ministry of Oil in 1967. He rose to be Oil Ministry Director of Planning and Development before leaving Iraq in 1979. His brother was apparently killed by Saddam’s regime as were family of many high-ranking Baathists. But there are also claims that Auchi continued secretly working for Saddam’s intelligence services, a kind of dual reality not uncommon in the twisted world of Saddam’s upper echelons.

    If half of this is true, the money quote from the MyDD link becomes even more important:

    Why is this important? Obama has long suggested that voters should ignore his lack of experience and consider only his superior “judgement”. The entire rationale for his qualification to be President is his “judgement”. Does this sham property purchase, regardless of its legality, seem like good “judgement” to you?

    Paul (d4926e)

  10. If Obama’s great qualification is his judgment, we’re going to see a media-frenzy soon. They’re already starting to turn on him and between this, the info in that FARC computer down in South America, and the statements coming from his campaign staff (including his wife), it’s going to be too juicy for the media to resist.

    Kind of like sharks who go after one of their own injured during a feeding-frenzy. Great time to be in the MSM I guess… they have a “target-rich environment”.

    Stashiu3 (460dc1)

  11. The sudden emergence of Auchi into this story indicates Rezko’s deals may include a money trail leading back to dead Iraqi dictator Saddam Hussein.

    This is a tidbit that a more cynical man might suggest as a reason Senator Obama was so against going to war…

    Scott Jacobs (d3a6ec)

  12. To quote Tommy Lee Jones from The Fugitive: “Cosmo, this guy’s dirty.”

    Paul (d4926e)

  13. These comments were the best and most interesting part of this post. Everyone made a good point in a clear and succinct manner with supporting links. The comments flowed from one point to the next, culminating in a powerful conclusion and a great Tommy Lee Jones’ quote.

    Well done, guys.

    DRJ (a431ca)

  14. Well done, guys.

    Amazing how smoothly a thread flows when there’s no troll infestation!

    Paul (d4926e)

  15. I don’t know if you previously linked to this site (called Right Wing Nuthouse) that puts the RE deal into perspective of the cess pool called Chicago politics, which as all of us know is as corrupt as any politburo or Sodom and Gomorrah reference. The post is called “The Chicago Way” and the writer, Moran, has a terrific news reporting bio. The deal looks bad but so did Whitewater, but like Whitewater, the deal is so twisted and convoluted that the public will shine it.

    Howard (cc8b85)

  16. Howard, Rick Moran’s been linked here numerous times, plus he’s commented here on occasion.

    Paul (d4926e)

  17. I’ll quote this again:

    Why is this important? Obama has long suggested that voters should ignore his lack of experience and consider only his superior “judgement”. The entire rationale for his qualification to be President is his “judgement”. Does this sham property purchase, regardless of its legality, seem like good “judgement” to you?

    to which I responded:

    The purchase may be entirely legal, but it does call Senator Obama’s judgement into question, and makes me wonder what other unusual “judgements” we yet don’t know about.

    In that light, here’s Chicago Tribune story dug up by Little Green Footballs: The not-so-simple story of Barack Obama’s youth. Apparently he’s been embellishing his life stories.

    Meanwhile, Howard’s Rick Moran link makes this whole Rezko story even juicier:

    Maybe you folks at ABC News could start by looking into those letters Obama wrote to city and state officials on behalf of his now indicted patron, friend, and fund raiser Tony Rezko to get a $14 million contract to build senior housing – a development located outside of his senate district:
    The deal included $855,000 in development fees for Rezko and his partner, Allison S. Davis, Obama’s former boss, according to records from the project, which was four blocks outside Obama’s state Senate district.

    Obama’s letters, written nearly nine years ago, for the first time show the Democratic presidential hopeful did a political favor for Rezko—a longtime friend, campaign fund-raiser and client of the law firm where Obama worked—who was indicted last fall on federal charges that accuse him of demanding kickbacks from companies seeking state business under Gov. Blagojevich.

    The letters appear to contradict a statement last December from Obama, who told the Chicago Tribune that, in all the years he’s known Rezko, “I’ve never done any favors for him.’‘

    And lest there be any doubt CBS News, here’s Obama’s “Chicago Way” response:

    On Tuesday, Bill Burton, press secretary for Obama’s presidential campaign, said the letters Obama wrote in support of the development weren’t intended as a favor to Rezko or Davis.

    “This wasn’t done as a favor for anyone,” Burton said in a written statement. “It was done in the interests of the people in the community who have benefited from the project.
    “I don’t know that anyone specifically asked him to write this letter nine years ago,” the statement said. “There was a consensus in the community about the positive impact the project would make and Obama supported it because it was going to help people in his district. . . .

    Um, no Boston Herald, the project was not benefiting people in Obama’s district. It was benefiting his buddy Rezko to the tune of $855,000. But hey! It sure sounds good when you can say that you don’t know “that anyone specifically asked” Obama to write the letters. That’s the key to any “Chicago Way” denial; be as vague as possible so just in case evidence surfaces later that you’re lying through your teeth, you have an out.

    The same goes for the shady deal on the house, Philadelphia Inquirer:

    Naturally, there are some squares who don’t think taxpayers should pave the Chicago Way to make it easy for Rezko to help purchase the senator’s dream house in a kinky deal exposed by the Tribune and still not fully explained.

    “It’s really the Old Chicago Way,” said Jay Stewart, executive director of the Better Government Association. “In the old days they would pretty much admit it up front, and now they deny it. It’s essentially about power, access to government jobs, government contracts and taking care of your own.”

    “Taking care of your own” was something Obama was very good at. How good we probably won’t know for a while. That’s because it’s not only what Obama did for Rezko and vice versa that should be occupying the press as they write about the potential next President of the United States. It’s what he did for Rezko’s cronies and other contributors that should also be examined. And the candidate himself isn’t volunteering any information. That, too is “The Chicago Way.” Be smart and keep your mouth shut.

    Moran writes and quotes all this after establishing how Obama got his first senate seat by elimination quoting the Chicago Tribune:

    The day after New Year’s 1996, operatives for Barack Obama filed into a barren hearing room of the Chicago Board of Election Commissioners.

    There they began the tedious process of challenging hundreds of signatures on the nominating petitions of state Sen. Alice Palmer, the longtime progressive activist from the city’s South Side. And they kept challenging petitions until every one of Obama’s four Democratic primary rivals was forced off the ballot.

    Love this part…

    Fresh from his work as a civil rights lawyer and head of a voter registration project that expanded access to the ballot box, Obama launched his first campaign for the Illinois Senate saying he wanted to empower disenfranchised citizens.

    …in light of this part:

    But in that initial bid for political office, Obama quickly mastered the bare-knuckle arts of Chicago electoral politics. His overwhelming legal onslaught signaled his impatience to gain office, even if that meant elbowing aside an elder stateswoman like Palmer.

    A close examination of Obama’s first campaign clouds the image he has cultivated throughout his political career: The man now running for president on a message of giving a voice to the voiceless first entered public office not by leveling the playing field, but by clearing it.

    “Cosmo, this guy’s dirty.”

    Paul (d4926e)

  18. Patterico, I have viewed the video, which I can’t access any longer, a number of times. It appears that the driveway to Obama’s home comes from the side street, on the left side of the video with the Obama home sitting on the right. The fence down the property line seems to end at the driveway. And there is another property fence at the back of the house that shows where the property line would be in the back.

    Now, I would assume the driveway was built by the original owner who owned both pieces of property so it would not have violated any property codes. But once the property was split into two sections, as it was, there would have to be easements given to Obama or he would not have been able to access his home from the driveway. Granting an easement, in most cases, is a very simple procedure. Since the driveway would have been questionable by splitting the property at sale time, there still has to be some favors going on here.

    It is not unusal for homes to sit on two lots. And in most cases, both lots are sold to the same buyer when the property changes hands. But Barack could not afford the reported $2.2 mil the owner was asking so Rezko stepped in and solved the problem. If he did give Obama an easement to the home, then that is considered a “favor” and simple title searches should reveal that information as all easements are given on propety titles.

    I don’t understand Obama purchasing the 10 foot strip right down the center of the property except for the fact that from what I can see on the video, it would have put the property line right next to his home’s outside wall. If he wanted to purchase a ten foot strip, he could have purchased the land the driveway sat on, giving him legal access without an easement. Instead, he chose to purchase from front to back, not right to left in the back.

    retire05 (0a371b)

  19. I managed to review the video again. There is clearly a fence around the entire property that has been there for a long time. There is a gap in the fence in the back on the portion that Obama purchased that allows the SUV to park horizonical to the house. The driveway can be seen clearly. It is the part that has no snow on it and appears as a dark strip behind the Rezko lot.

    The two properties were clearly treated as one by the original owner. And yes, this was a sweetheart deal.

    retire05 (0a371b)

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