December 12, 2008

New info on the Rezko-Obama land deal

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.


Anonymous said...

Ali Baba.

Anonymous said...

Obama's press conference yesterday went truly hilarious when he waxed tragic on the two kinds of politicians in the world: The Crooked (like Blago) and The Pure (like Obama).

Barack Obama is a sociopathic liar. Another lowlife in the Clinton, Nixon, Johnson, JFK mold. Other human beings register as objects to this sort of personality.

The evidence is disturbing: Televised democracy produces a critical mass of sociopathic leaders.

Anonymous said...

I don't know much about wheeling and dealing, but it does say that Rezko paid too much, not that Obama paid too little: "[t]he Rezko lot was grossly overvalued." Isn't it possible that Rezko was bribing the seller, without Obama being involved?

togo said...

I seem to recall stories about the Russian Mob being involved in medicaid/medicare fraud in NYC and/or FL. The Chicago "Outfit" (through the old First Ward Dem Org)
got control of the City Health Dept during the Jane Byrne administration.

The above, no doubt, just the tip of the iceberg.

Anonymous said...

How are sales going of the book? Pretty slow, I'd guess, from the number of times you keep plugging it.

Anonymous said...

If Rezko's intent following purchase was never to build on the land, and Obama continued to own the home into the indefinite future, the Rezko purchase would be indistinguishable from a gift for the whole $300,000 amount.

As a sidenote, the typical 8 yard wide or so rectangular shoebox size lot in nicer Chicago neighborhoods, ideal for a 4,500 square foot tri- or quad-level home) goes (or recently went) for about $500,000.

Anonymous said...

I call the health care biz the "Medical-Industrial Complex."

Don't get me wrong, they do a lot of great things. If I were broken into a million pieces in a car wreck or stricken with cancer, I'd want these talented folks to put me back together again. Having said that...

I think we've become a nation of over-medicated hypochondriacs. People love going to the doctor. It gives lonely people something to do and someone to talk to, it gives boring people something to talk about, it gets them "medicine" which makes them feel good, it gets them excused from work, it gives them an excuse for all their short-comings ("I'm not fat because I over-eat, I have a medical disorder!)," and frequently provides support for legal claims and applications for government or private "disability" benefits. Americans LOVE those MRIs! "See, I have a hermniated disc!"

Of course, for profit medical care is more than happy to oblige these people, and charge ever higher rates as more and more people resort to Medicare and Medicaid, which pay a small percentage of the actual bill.

And who is willing to say "No?" Health care providers like getting paid, people like going to the doctor, the pharmaceutical firms who advertise non-stop are down with it... Win! Win! The problem is, the opportunity for scamming is immense.

Anonymous said...

Obama's methodology of keeping the rot just below the liberal MSM radar screen would of course not work if he were white or a Republican. But even for this Dem the "scandal-standard" must be very low indeed.

Anonymous said...

Ali Baba - at least there would be a cap on the number of thieves, a maximum of 40.

Anonymous said...

"In Chicago, Arab operators like Rezko don't control enough votes to matter, so they have to pay to play."

Looks like Indians in Chicago have to pay to play, as well. I just want out of a union with such people. Not much has changed since 1860.

Anonymous said...

I would imagine that the last thing the One, the Messiah and the President Elect wants is for all this old dirt to be raked over again and again.

It's distracting!

Anonymous said...

Watching MSNBC and CNN, I'm not certain which is the more important story: Blagojevich's scheming or the fact that Obama had nothing to do with it.

Obama's methodology of keeping the rot just below the liberal MSM radar screen would of course not work if he were white or a Republican. But even for this Dem the "scandal-standard" must be very low indeed.

No, that isn't correct. I'm certain the likes of Chris Matthews would be just as fair and impartial if this were a Republican. I'm positive.

Anonymous said...

>How are sales going of the book? >Pretty slow, I'd guess, from the >number of times you keep plugging >it.

I have a feeling that wen the new administration gets going on all 12, interest in the real Obama will be picking up, major like.

Anonymous said...

After reading story after story like this, do any of you Euro-descended folks out there ever get the feeling you're yesterday's news?

Anonymous said...

I'd like to know what Michelle did for the University of Chicago Hospitals for the huge salary she was getting.

Anonymous said...

One thing Michelle Obama did at the University of Chicago was to tell the medical researchers that asking for the cooperation of locals in testing the vaccine against the cervical cancer causing virus was the same thing as when the government “gave” syphilis to those black men in the Tuskegee experiment. The source for that is the New York Times.

Note also that the notion that the government “gave” syphilis to those black men is in line with the statements of Rev. Dr. Jeremiah Wright, Jr., and his comments on the Tuskegee syphilis experiment and the government role in AIDs.

Anonymous said...

See more articles from Daily Herald (Arlington Heights, IL)

Governor's remarks on his ACT raise eyebrows.(News)

Article from:
Daily Herald (Arlington Heights, IL)
Article date:
April 22, 2005
Patterson, John
More results for:
ACT score blagojevich 18

Byline: John Patterson Daily Herald State Government Editor

SPRINGFIELD - As a candidate, Rod Blagojevich joked about getting a D in algebra, and since becoming governor his tales of academic malaise have included a C in constitutional law and, most recently, a middling ACT score.

"I had an 18 on my ACT score. I'm told that's kind of in the middle, maybe just a little bit below. If I can be governor of Illinois," Blagojevich told Mihan Lee, an award-winning high school student, during the nationally televised opening ceremonies for the Abraham Lincoln Presidential Museum, "Mihan, you can be president of the United States."

But his long-running comments about scholastic shortcomings continue even as he's demanding tougher graduation standards, telling students, "You can't get ahead without a good education."

The combination provides fodder for critics who question exactly what he's telling today's youth.

"It's a horrible message. He basically is celebrating his underachievement," said state Sen. Dan Cronin, an Elmhurst Republican and member of the Senate Education Committee. "I don't want to be too serious about it, but it's just stupid. ...If it's true, we may lose confidence in his abilities. And if it's not true, it's just stupid to say."

Cronin, a self-described "solid B" student, recalls getting a 28 or 29 on his ACT.

A spokeswoman for the governor said his self-deprecating comments are meant to show that those who don't score well on standardized tests can succeed. The governor's office would not release a copy of his academic transcripts to confirm his test scores or grades.

"He doesn't take himself too seriously. And now, the governor's in a position to give hope to kids, who, like him, didn't have everything handed to them," said spokeswoman Abby Ottenhoff. "The lesson here is no matter where you come from or what your standardized test scores might be, don't give up. Believe in yourself and don't let others discourage you from pursuing your dreams."

After attending Foreman High School in Chicago, Blagojevich, now 48, received a bachelor's degree from Northwestern University in 1979.

Many Northwestern alumni at the statehouse were abuzz over how he could have possibly gotten into the school with an 18 on the ACT. Last year, only five students were admitted with scores below 20.

Blagojevich did not go straight to Northwestern. After high school, he attended the University of Tampa and then transferred. He later received a law degree from Pepperdine University in Malibu, Calif.

As for his 18, it was roughly the average score in the mid- 1970s. The test was substantially revised in 1989 and a spokesman for the ACT said scores before and after are not directly comparable. The average national score did increase two points under the new test. Last year, the national average score was 20.9.

Anonymous said...

You didn't mention where Rezko ('s wife) got the money for all of this. That is pretty funny too.

Anonymous said...

This is a fun post.

Here's an interesting detail Steve might like to know.

Over the summer, American Airlines and United Airlines both started direct flights from Chicago to Moscow.

Who wanted this? Mayor Daley.

There's business before the Governor's office and the State legislature right now. They're debating a "suburban Chicago" casino license. The Chicago Crime Commission continues to lobby to keep Rosemont, IL out of the running for the license.

Where's Rosemont, IL? It's right next to O'hare Airport.

About that Chicago 2016 Olympic some call options while they're cheap.

albertosaurus said...

Obama seems destined to be the last black President.

There a good chance that in future generations people will say, "Black President? Are you crazy! We tried that and look where it got us."

It may very well be like trying to run as a peanut farmer.

albertosaurus said...

You can investigate the Tuskegee syphilis experiment yourself on Google. The racial aspects are interesting and may surprise you.

Almost all of the experimenters and administrators were black. The black medical establishment was proud of their participation. A white doctor was the first to see the continuance of the study as inappropriate. When the study began no one understood syphilis very well. Years later the disease was largely controlable and the long term Tuskegee experiment should have been stopped. The white doctor tried to shut it down. That shut down was opposed by a black nurse with the support of the black medical establishment.

Blacks weren't chosen because they were easier to exploit. They were chosen because there were so many blacks with syphilis. The experiment should have been terminated when syphilis better understood. However there was no pressure then to stop from blacks, just from whites.

Anonymous said...

"Anonymous said...

I think we've become a nation of over-medicated hypochondriacs."

I agree. Americans have little sense of the tragic nature of life - that we are all going to die, no matter how much "access" we have to "health care". (Why do libs always harp so much on giving people "access to health care" rather than actual "health care" - I don't get it).

The desire that people have developed to traipse off to the local hospital or doctors office at the drop of a hat may in future be tempered by the rise of MRSA, antibiotic resistant TB, and the like.

BTW: the word verification code for this entry is "fines"

Anonymous said...

Americans have little sense of the tragic nature of life - that we are all going to die...

To see that you don't have to go further than, where various callow commenters fantasize about the possibility of eternal life through technology.

Anonymous said...

" albertosaurus said...

There a good chance that in future generations people will say, "Black President? Are you crazy! We tried that and look where it got us."

And us white South Africans thought we were of substandard intelligence because the Brits and the Americans told us so. Shit, we figured this out even before the US and allies foisted Mandela on us. Xcept this knowledge won't help us cause WE are the minority.

matt williams said...

Note also that the notion that the government “gave” syphilis to those black men is in line with the statements of Rev. Dr. Jeremiah Wright, Jr., and his comments on the Tuskegee syphilis experiment and the government role in AIDs.


Not true. IINM, the government has owned up to this. The Black nurse who worked on the study admitted that she was well aware of the study's goal.

Anonymous said...

This sounds about right as a plausible worse case scenario. There pretty clearly was something fishy going on. The extent of it is more ambiguous.

Rezko might have made the generous offer on the expectation of future favors. This would be bad obviously, but less bad. Obama would have known that something was up, but turned a blind eye to it.

The health care board thing is not
I don't really understand how the overvaluing of the side lot has anything to do with Obama though, and it seems like the timing of complaint was suspiciously politically motivated.

The hospital thing is incredibly murky. It isn't as though there were 10 upstanding civil servants, and 5 of Rezko's crooks. It's likely more complex than that. There are plenty of good reasons to cut the number of board seats. In fact reducing the amount of government officials is an atypical method of corruption. I think as a categorical imperative type rule, cutting the amount of government officials is generally going to reduce corruption as less pigs are around the trough. That said any change is going to have the opportunity to have corruption and in Chicago politics that's almost inevitable. Obama's no saint, that's for sure, but I wouldn't characterize him as particularly lacking in integrity either compared to other politicians or even human beings.