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Newsweek (and the U.S. Attorney) Find The Obama-Rezko House Deal Interesting

Sunday, October 26, 2008  |  posted by Hugh Hewitt

From Newsweek:

Two years ago, the Chicago Tribune disclosed that Obama and Rezko purchased adjoining properties from a single seller on the same day in June 2005. The seller, Dr. Fredric Wondisford, now a professor at Johns Hopkins Medical School in Baltimore, had insisted that both properties close at the same time. Obama paid $1.3 million-$300,000 less than the original asking price-for the Georgian mansion on his property. Rezko paid nearly the full price, $625,000, for the vacant lot next door. Obama has acknowledged in several press interviews that he alerted Rezko to the availability of the adjoining property, but said that Rezko made the decision to buy the lot on his own without coordinating his offer with Obama. The Obama campaign says that Obama’s offer of $1.3 million was the highest bid on the home. Rezko, who has faced legal troubles ever since the issue arose, has never addressed the matter.

Seven months later, on Jan. 4, 2006, Obama paid Rezko $104,000 for a strip of the developer’s land so he could expand his side yard. Obama has conceded this later deal was a “boneheaded” mistake on his part, given that the Chicago news media had run multiple stories by that time reporting that Rezko was under scrutiny as part of a wide-ranging political corruption probe being conducted by U.S. Attorney Patrick Fitzgerald. One such story, in the Chicago Sun-Times, appeared on Dec. 31, 2005-the week before Obama bought the side strip from Rezko. The article reported that federal prosecutors had subpoenaed Rezko-related businesses as part of an investigation into the awarding of Illinois State Toll Highway Authority leases….

Rezko, who was indicted in October 2006, was convicted last June on 16 felony charges of fraud, money laundering and aiding and abetting a bribery scheme involving businesses seeking Illinois state business. His sentencing, at first scheduled for Oct. 28, was recently postponed to give his lawyers time to work out a cooperation agreement with federal prosecutors in their ongoing corruption probe, which is primarily focused on Democratic Illinois Gov. Rod Blagojevich. Blagojevich has not been charged and has denied any wrongdoing.

A recent lawsuit filed by Kenneth J. Conner, a former real estate analyst, against Mutual Bank of Harvey, Ill., for wrongful termination, includes an exhibit indicating for the first time that loan records of the Rezkos’ purchase of the vacant lot next door to Obama has come up in Fitzgerald’s investigation. The exhibit is an Oct. 19, 2006, e-mail distributed among bank executives referring to a “grand jury subpoena” for “Rita Rezko‘s loan” for the property at 5050 S. Greenwood Avenue-the lot adjacent to the Obamas. There is nothing in the lawsuit that indicates why federal prosecutors subpoenaed the records. But the subpoena was issued at a time when they were intensely examining all of Rezko’s business dealings. A spokesman for the U.S. attorney’s office declined comment. LaBolt, the Obama spokesman, told NEWSWEEK that Obama has never been contacted by Fitzgerald’s prosecutors.

In the lawsuit, filed in Cook County Circuit Court last week, Conner claims that he was asked to review the bank’s appraisal of the property purchased by Rezko after the bank learned that he was selling a slice of it to Obama. Conner says he concluded that the bank’s appraisal of the property was “overvalued” by $125,000 and that, based on comparable prices of nearby properties, the vacant lot that the Rezkos paid $625,000 for was worth no more than $500,000. To back up his own conclusion, he included as an exhibit an appraisal that Obama paid for in November 2005, which assessed Rezko’s property to be worth $490,860-about the same as Conner’s assessment and also far less than Rezko and his wife paid for it. The president of Mutual, Amrish Mahajan, personally approved the loan to Rezko’s wife and had an “established relationship” with Rezko, according to the lawsuit.

Read the whole thing. You can be certain that everyone on Team Obama has.

The Newsweek story is by Michael Isikoff, one the nation’s premier investigative journalists. If Obama wins in nine days, we should begin a story count of how many scandal-related stories flow from Isikoff. Given the Chicago connections and the ongoing Rezko investigation, an Obama Administration could easily be the Second Golden Age of Isikoff.

The question of Patrick Fitzgerald’s future also grows more relevant. It should be an enormous scandal if a President Obama were to fire him, but the Chicago team knows this is a big threat and not just to their political ambitions. Perhaps in the closing sprint of the campaign some intrepid journalist will bother to ask about Patrick Fitzgerald’s future?

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