Back on October 18, a blog for the NY Daily News (via Kausfiles) reported that a Chicago real estate appraiser was claiming in his wrongful termination suit that his ex-employer had inflated the appraisal of the strip of land which Tony Rezko's wife bought at the same June 2005 closing at which Sen. Obama bought his stately home. The blog said:
We have no idea of the merits of the case ... But the fact that the suit has been filed brings back yet another item that Team Obama would rather not have to deal with in the closing days of the contest.
Of course, Team Obama didn't have to deal with it, just as they didn't have to deal with much of anything.
The Washington Times reported on Election Day:
A former Illinois real estate specialist says FBI agents have questioned him about a Chicago property that had been bought by convicted felon Tony Rezko's wife and later sold to the couple's next-door neighbor, Sen. Barack Obama.
The real estate specialist, Kenneth J. Conner, said bank officials replaced an appraisal review he prepared on the property and FBI agents were investigating in late 2007 whether the Rezko-Obama deal was proper.
”Agents and I talked about payoff, bribe, kickback for a long time, though it took them only a short number of minutes of talking with me while looking at the appraisal to acknowledge what they already seemed to know: The Rezko lot was grossly overvalued,” Mr. Conner told The Washington Times Monday.
”Rezko paid the asking price on the same day Obama paid $300,000 less than the asking price to the same seller for his adjacent mansion,” he said. ”This begs the question of payoff, bribe, kickback.”
To be pedantic, it raises the question ...
According to his complaint, Mr. Conner reviewed the appraisal of the Rezko property by another firm, Adams Appraisal, which had set the value at $625,000. The complaint said he told his bosses the property had been overvalued by at least $125,000 and that a ”reasonable and fair evaluation” should have been no greater than $500,000.
Mr. Conner said the removal of his appraisal ”seemed understood as a crime with respect to the subpoena” of the Rezko property and the FDIC audit.
Well, who knows? There was a housing bubble going on and appraisers were doing a lot of screwy things in 2005.
But Blagogate has reminded the country that they just elected a Chicago politician to the White House.
And the appraiser's contention that his bosses inflated the value of the land Rezko purchased adjoining Obama's house at the same closing fits in with the low-level general fishiness of the deal.
As you'll recall, the Obamas got $300,000 knocked off the asking price of the house, while the Rezkos paid the full $625,000 asking price for their adjoining property. Think about it from your point of view. You see a house that you want to buy, but the price is steep. The sellers own both the house and a big side yard, which might be big enough to build another house on (or might not, depending on a complicated web of development rules in this historic district). They are willing to sell the two pieces of land separately and have published separate prices for them.
You call up an old friend and have him come look at the property with you. On closing day, his wife shows up and buys the side lot while you buy the big house, meaning that the sellers unload everything, which is obviously of interest to the sellers.
The sellers wind up with $300,000 less than their asking price for the two pieces of land together.
Question: How do you and your old buddy divvy up the $300,000 discount? I would assume that most friends would split it pro-rata based on the asking prices, which means that Rezko would have gotten about $70,000 off. If the discount was split unevenly, the normal thing would be for the person doing the favor to get more. And clearly, Obama was asking a favor of Rezko — he called Rezko about the property, not the other way around. So, if you aren't going to split it pro rata, then Rezko should get more.
Instead, Rezko got none of the $300,000 and Obama got all of it.
The Chicago papers had reported back in March 2005, several months before Rezko and Obama bought the land at the same closing, that Rezko had illegally gotten the Panda Express franchises at O'Hare by claiming they were actually minority-owned and operated, that minority being Jabir Muhammad, the son of the notorious Black Muslim leader Elijah Muhammad. So, Obama would have known about Rezko being a crook just from reading the newspapers.
Of course, no doubt Obama knew far more about Rezko's Rezkoness than what was making the papers. But, still he went ahead with the deal. It's the Chicago Way.
This $70,000 isn't the biggest deal in the world. Bill Clinton doesn't get out of bed for $70,000. It's precisely its yuppie size that makes it interesting: What would you do for $70,000?
That's an interesting amount of money... It's not one of these hypothetical questions — "Would you do something immoral for $100 million?" — that sophomores like like to discuss. Instead, it's the kind of money that you can imagine having dangled before you at some point.
Did Rezko owe Obama a favor? Sure, Obama had been chairman of the Illinois Senate committe on Health and Human Services for the past two years, during which time Rezko had come to corruptly control the Illinois Health Facilities Planning Board, which picked winners in the contest to build big hospitals. Obama played a helpful role in Rezko's gang getting picked to build a hospital. See, Rezko owned 5 of the 15 board members, so he wanted the board "streamlined" from 15 to 9 in the interests of "efficiency," which gave him a majority of 5 of 9. RezkoWatch pointed out:
A review of senate records shows Obama played a major role in pushing through Senate Bill 1332, that led to the "Illinois Health Facilities Planning Act," which reduced the number of members on the Board from 15 to 9, making the votes much easier to rig.
Democratic Senator Susan Garrett sponsored the bill, and the co-sponsor was Republican Senator Dale Righter. These two senators were also on the Human Services Committee with Obama. The bill was assigned to the Committee for review on February 27, 2003. As chairman, Obama sent word to the full senate that the bill should be passed on March 13.
Blagojevich made the effective date June 27, 2003, and the co-schemers already had the people lined up to stack the Board and rig the votes with full approval from Obama.
A June 2003 email exchange produced in the trial shows Obama received the names of the nominees for the Board ahead of time, from the office of David Wilhelm, who headed Blagojevich's 2002 campaign. Rezko's attorney made the point to the jury that the email was from Blagojevich's general counsel and Wilhelm's office, and indicated the appointees were recommended by Wilhelm and supported by those who received the memo.
The new Senate bill said, the ”Board shall be appointed by the Governor, with the advice and consent of the Senate." But the Senate Confirmation Hearings were a joke. For instance, the Feds recorded Levine talking to co-schemer, Jon Bauman, the day Levine learned he was approved by the Senate from the executive secretary of the Board.
He told Levine Senate President, Emil Jones [Obama's godfather in the Senate], only allowed 2 members to be approved and "that was you and the other person he just put in."
"Isn't that hysterical 'cause you know they had this big battle going on," Levine told Bauman, "don't you just love it."
"I'm one of those independents and not part of the block."
"Well, good, you know it's good to be just a true independent civil servant," Bauman said laughing along with Levine.
"Is, is that a good thing," Levine replied, "I've never been that."
The corrupt new appointees were all contributors to the presidential hopeful, Rod Blagojevich, and the US senate hopeful Obama. The Board’s then sitting-chairman, Thomas Beck, appointed by a Republican governor, testified under a grant of immunity that he brought a $1,000 check to Rezko on July 15, 2003, to make sure Blagojevich reappointed him.
Beck also testified that Rezko told him Blagojevich was set to appoint Rezko’s three doctor friends to complete the rigged voting bloc.
Dr Michel Malek gave Obama $10,000 a little over a month before the first Board meeting on June 30, 2003. He also donated $25,000 to Blagojevich three weeks later on July 25, 2003, and gave Obama another $500 in September 2003.
Dr Fortunee Massuda donated $25,000 to Blagojevich on July 25, 2003, and gave a total of $2,000 to Obama on different dates. Massuda's husband, Charles Hannon, is a co-schemer in the pension fund case and testified against Rezko in the trial.
Dr Imad Almanaseer contributed a total of $3,000 to Obama after he landed the appointment. On March 13, 2008, Almanaseer testified against Rezko and told the jury he was an investor in Rezko's fast-food businesses.
You'll notice the Middle Eastern flavor to Rezko's flunkies. In Chicago, Arab operators like Rezko don't control enough votes to matter, so they have to pay to play.
We're not used to thinking of health as a corrupt field. Yet, as bankrobber Willie Sutton answered when asked why he robs banks: That's where the money is. The health industry is, what, $2 trillion per year. So, it naturally attracts operators like Tony Rezko ... and politicians like Barack Obama.
You can read more about what attracted Obama to Chicago — of all places — to make his political career in my new book, a reader's guide to Barack Obama's autobiography, America's Half-Blood Prince: Barack Obama's "Story of Race and Inheritance," which you can buy here.