Tony Rezko

Antoin "Tony" Rezko (born 1955 in Aleppo, Syria) is an American restaurateur and real estate developer in Chicago, Illinois. Rezko is currently facing federal charges of attempted extortion, money laundering, and fraud. On January 28, 2008, Rezko was arrested at his Wilmette, Illinois home for an alleged bond violation.

Early life and education

Rezko was born in 1955 in Aleppo, Syria to a Christian family. After graduating from high school there, Rezko moved to Chicago and earned an engineering and construction degree from the Illinois Institute of Technology in the late 1970's. He joined an engineering company, designing nuclear power plants, then left to design roads for the state Transportation Department, making $21,590 in his one year there.

Business history

Rezko's career as a civil engineer was soon replaced by managing successful investments in real estate, and fast-food restaurants, many in downscale black neighborhoods. Then, meeting Jabir Herbert Muhammad, former manager of heavyweight champion Muhammad Ali and son of the late Nation of Islam leader, Elijah Muhammad, he was asked in 1983 to support the successful mayoral candidacy of Harold Washington. J. H. Muhammad's company, Crucial Concessions, which Rezko went to work for in 1984, won a food contract at the Lake Michigan beaches and in many South Side parks after Washington became the first black mayor of Chicago. Rezko put together endorsement deals Ali and became the executive director of the Muhammad Ali Foundation. In 1997, Crucial opened two Panda Express Restaurants at O'Hare, under the city's minority set-aside program. It lost those franchises in 2005, on the grounds that J. H. Muhammad was merely a front for Rezko, who had been appointed trustee of J.H. Muhammad's affairs in the early 1990s because of the latter's failing health. In March 2008 Muhammad sued Rezko, alleging that he had been swindled out of his home and business interests.

In January 1989, Rezko and Daniel Mahru, CEO of a firm which leased ice makers to bars, hotels and restaurants and a former attorney, founded a real-estate development and restaurant holding corporation called Rezmar Corporation. Six days after Richard M. Daley won his first term as mayor in 1989, having campaigned on a promise to build more housing for the poor, they applied for a $629,000 loan to help fix up an abandoned apartment building. Rezmar stopped making monthly payments after just three years, then renegotiated a payment of less than 16% of the original, after after missing 16 payments. They were meanwhile given two more loans for other projects, both of which ended in foreclosure. The last loan was advanced in 1998, and the deal included three of Mayor Daley's top African-American allies: Bishop Arthur Brazier, Leon Finney Jr. and Allison Davis (senior partner in Barack Obama's law firm). Between 1989 and 1998, Rezmar made deals to rehab 30 buildings, a total of 1,025 apartments, expending more than $100 million from the city, state and federal governments and in bank loans. Rezko and Mahru weren't responsible for any government or bank loans or the $50 million in federal tax credits they got to rehab the buildings. Rezmar put just $100 into each project and got a 1 percent stake as the general partner in charge of hiring the architect, contractor, and the company that would manage the buildings, screen tenants and make repairs, Chicago Property Management, also owned by Rezko and Mahru. It also got upfront development fees of at least $6.9 million in all. Under its deals with the Chicago Equity Fund, Rezmar promised to cover all operating losses in any building for seven years, but had no obligation after that, although the tax credits they sold could be recovered by the Federal government from the holders if the projects did not survive for fifteen years or more. By 1998 the company had a net worth of US$34 million, and it then turned to purchasing old factories and parcels of land in gentrifying areas of Chicago and turning them into upscale condominium complexes.

Rezko was named "Entrepreneur of the Decade" by the Arab-American Business and Professional Association.

Rezko's investment in restaurant food chains had started with a chain of Panda Express Chinese restaurants. In 1998, Rezko opened his first chain of Papa John's Pizza restaurants in Chicago and by 2002, he had twenty-six stores in Chicago, at least fifteen in Wisconsin, and seven in Detroit, part of the financing for these stores was through GE Capital. By 2001, Rezko began to fall behind on his franchise payments and loans and he transfered the franchises to several business associates. In 2006, during a lawsuit with Papa John's over his franchise fees, Rezko renamed his Papa John's restaurants to Papa Tony's. Rezko also had a lien filed against his home after losing a civil lawsuit to GE Capital.

Fraud and extortion charges

In October 2006, Rezko was indicted on charges of wire fraud, bribery, money laundering, and attempted extortion. The charges stem from attempting to extort millions of dollars from businesses seeking to do business with the Illinois Teachers Retirement System Board and the Illinois Health Facilities Planning Board from 2002 to 2004. In addition, he has been charged with defrauding General Electric Capital Corp. out of $10.5 million in loans to a pizza restaurant business and bilking a group of investors. The case is being prosecuted by Patrick Fitzgerald who prosecuted the case against Scooter Libby arising from the CIA leak scandal.

Ties to politicians

Tony Rezko first significant political act was hosting a fund-raiser for Harold Washington during Washington's successful campaign to become Chicago's first black mayor. He has since raised funds for many other politicians, both Democrats and Republicans. Prominent Democrats that Rezko and his company, Rezmar, have contributed money to, or fund-raised for, are Illinois Governor Rod Blagojevich, Comptroller Dan Hynes, Attorney General Lisa Madigan, U.S. Senator and Presidential candidate Barack Obama, Lieutenant Governor Pat Quinn, former Chicago Mayors Daley and Washington, former Cook County Board President John Stroger, and Cook County Board President Todd Stroger. Rezko has also raised money for Republicans: former Illinois Governor Jim Edgar, the late Rosemont Mayor Don Stephens and he co-chaired a megamillion-dollar fund-raiser for President George W. Bush in 2003.

Hillary Clinton has attempted to downplay the effects of a picture taken of her as First Lady, posing with Rezko and the then-president. She commented "I probably have taken hundreds of thousands of pictures. I wouldn’t know him if he walked in the door."

Rezko's closest ties have been to Governor Blagojevich and his family. Rezko has donated $117,652 to Blagojevich's campaigns. Since 1997, Blagojevich's wife, Patricia, has made at least $38,000 acting as Rezko's real-estate agent on several of his company's property acquisitions. Rezko has reportedly raised millions of dollars for Blagojevich's campaigns and when Blagojevich won the Illinois gubernatorial election in 2002, Rezko assisted Blagojevich in setting up the state's first Democratic administration in twenty years. Rezko recommended many of his business associates and their relatives for positions within the state government, three of which were appointed to the state board that oversees hospital projects and the state's development board was run by a former Rezko business associate. In federal indictment charges, Rezko and Republican fundraiser, Stuart Levine, are accused of using Rezko's influence with public officials to demand millions of dollars in kickbacks from companies that want to do business with the state.

The indictment of Rezko on federal charges has drawn attention to his relationship with Illinois Senator Barack Obama, though Obama has not been charged with wrongdoing. In 1990, after Obama was named head of the Harvard Law Review, Rezmar Corp. offered him a job should he decide to return to Chicago, and although Obama turned that offer down he later did take a job, which he held from 1993 to 2002, with Davis Miner Barnhill & Galland , a law firm representing Rezko, Rezmar, and community groups in partnership with Rezmar, that helped Rezmar get more than $43 million in government funding. The firm's then senior partner, Allison S. Davis, was a member of the Chicago Plan Commission and went into business with Rezko, developing homes. On July 31, 1995 the first ever political contributions to Obama were $300 from a lawyer, a $5,000 loan from a car dealer, and $2,000 from two food companies owned by Rezko. Starting in 2003 Rezko was on Obama's U.S. Senate campaign finance committee, which raised more than $14 million. Obama has since identified over $250,000 in campaign contributions to various Obama campaigns as coming from Rezko or close associates, and has in consequence donated almost two thirds of that amount to charity. Also, in 2005 Obama purchased a new home in the Kenwood District of Chicago for $1.65M ($300,000 below the original price) on the same day that Tony Rezko's wife, Rita Rezko, purchased the adjoining empty lot from the same sellers for the full asking price. Obama acknowledged bringing his interest in the property to Rezko's attention, but denied any coordination of offers. According to Obama, while the properties had originally been a single property, the previous owners decided to sell the land as two separate lots, but made it a condition of the sales that they be closed on the same date. Obama's said that the properties had been on the market for months, that his offer was the best of two bids, and that Ms. Rezko's bid was matched by another offer, also of $625,000, so that she could not have purchased the property for less. It had been reported that Rezko was under federal investigation for influence-peddling, before Obama bought a 10 foot (3.0 m) wide strip of Ms. Rezko's property for $104,500, $60,000 above the assessed value, in 2006. According to Chicago Sun-Times columnist, Mark Brown, "Rezko definitely did Obama a favor by selling him the 10-foot strip of land, making his own parcel less attractive for development." Obama acknowledges that the exchange may have created the appearance of impropriety, and stated "I consider this a mistake on my part and I regret it."

On December 28, 2006, Ms. Rezko sold the resulting narrower property to a company owned by her husband's former business attorney. That sale of $575,000, combined with the earlier $104,500 sale to the Obamas, amounted to a net profit of $54,500 over her original purchase, less $14,000 for a fence along the property line and other expenses. In October 2007, the new owners put the still vacant land up for sale again, this time for $1.5 million.

In June 2007, the Sun-Times published a story about letters Obama had written in 1997 to city and state officials in support of a low-income senior citizen development project headed by Rezko and partner Allison Davis. The project received more than $14 million in taxpayer funds, including $885,000 in development fees for Rezko and Davis. Of Obama's letters in support of the Cottage View Terrace apartments development, Obama spokesman Bill Burton said, "This wasn't done as a favor for anyone, 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. 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." Rezko's attorney responded that "Mr. Rezko never spoke with, nor sought a letter from, Senator Obama in connection with that project. In an interview with the Sun-Times editorial board, Obama said that Rezko has raised $250,000 in campaign donations for him, of which, Obama has returned or donated to charity more than $84,000.

In the South Carolina Democratic Party presidential debate on January 21, 2008, Senator Hillary Clinton said that Obama had represented Rezko, who she referred to as a slum landlord. Obama responded that he had never represented Rezko and had done only about five hours work, indirectly, for Rezko's firm.

Rezko headed the 2002 campaign finance committee of former Cook County Board President John Stroger. Stroger in turn appointed Rezko's wife, Rita, to the Cook County Employee Appeals Board, which hears cases brought by fired or disciplined workers. The part-time post pays $37,000 a year.

External link

DOJ announcement and summary of indictment, Oct 11 2006
only post-indictment interview of Rezko