Published: October 18, 2008
RNC: (Obama) What We Learned
WASHINGTON, Oct. 18 /PRNewswire-USNewswire/ -- The following was released
today by the Republican National Committee:
(Logo: http://www.newscom.com/cgi-bin/prnh/20080519/RNCLOGO )
In A Complaint Filed In Cook County Circuit Court, A Bank Official Stated
That An Appraisal Of The Property Rita Rezko Purchased Next To The Obamas Had
Been Replaced With A Higher One:
Kenneth Conner, A Former Illinois Bank Official, Filed A Complaint Stating
That Bank Officials Replaced A Loan Reappraisal Prepared By Conner For
Property Purchased By Rita Rezko, Tony Rezko's Wife, With A Higher One And
That Conner Was Fired When He Questioned The Document. "A formerIllinois bank
official, now claiming whistleblower status, says bank officials replaced a
loan reappraisal that he prepared for aChicago property that was purchased by
the wife of now-convicted felon Tony Rezko, part of which was later sold to
next-door neighbor Barack Obama. In a complaint filed Thursday in the Circuit
Court of Cookme County, Kenneth J. Connor said that his reappraisal of Rita
Rezko's property was replaced with a higher one and that he was fired when he
questioned the document." (Jerry Seper, "Complaint Hits Rezko Land Deal," The
Washington Times, 10/18/08)
-- Conner Reviewed The Appraisal Of The Rezko Property, Which Set The
Value At $625,000, And Told His Bosses That The Property Had Been Overvalued
By At Least $125,000. "According to the complaint, Mr. Connor reviewed the
appraisal of the Rezko property by another firm, Adams Appraisal, which had
set the value at $625,000. Mr. Connor's complaint said that he told his bosses
in a report that 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." (Jerry Seper, "Complaint Hits Rezko Land Deal," The Washington
Times, 10/18/08)
-- Later, Conner Observed That His Lower Appraisal Was Not In The Rezko
File, Which Had Been Reviewed By The FBI. "Later, the complaint states, Mr.
Connor observed that his lower appraisal was not in the Rezko file and that he
notified his supervisors that it had been replaced. He said, according to the
complaint, the new file had been reviewed by the FBI and 'if the FBI were to
ask me about such matters, I would tell them the truth. I never rescinded my
original findings.'" (Jerry Seper, "Complaint Hits Rezko Land Deal," The
Washington Times, 10/18/08)
The Complaint Also Noted That The Bank Received A Grand Jury Subpoena
Requiring It To Produce Files Relating To Mrs. Rezko's Purchase And Finances.
"Mr. Connor, a real estate and commercial credit analyst at the Mutual Bank
Corp. inChicago, also noted in the complaint that the bank received a grand
jury subpoena in October 2006 requiring it to produce information concerning
Mrs. Rezko's purchase, including the bank's files on the property. The
complaint also said that the grand jury wanted information on Mrs. Rezko's
checking account and loan file and that the Federal Deposit Insurance Corp.
(FDIC) had audited the Rezko file - although Mr. Conner's lower reappraisal
had been replaced with a higher amount." (Jerry Seper, "Complaint Hits Rezko
Land Deal," The Washington Times, 10/18/08)
WHAT WE KNOW
Obama Engaged In A "Boneheaded" Land Deal With Rezko:
Obama Paid $300,000 Less Than The Asking Price For His Chicago Mansion,
While Rezko's Wife Paid Full Price For A Vacant Lot Next Door On The Very Same
Day. "Two years ago, Obama bought a mansion on the South Side, in the Kenwood
neighborhood, from a doctor. On the same day, Rezko's wife, Rita Rezko, bought
the vacant lot next door from the same seller. The doctor had listed the
properties for sale together. He sold the house to Obama for $300,000 below
the asking price. The doctor got his asking price on the lot from Rezko's
wife."(Tim Novak, "Obama And His Rezko Ties," Chicago Sun-Times, 4/23/07)
-- The Seller Of Obama's Home "Wanted To Sell Both Properties At The Same
Time." "On the same day Obama closed on his house, Rezko's wife bought the
adjacent empty lot, meeting the condition of the seller who wanted to sell
both properties at the same time." (Brian Ross and Rhonda Schwartz, "The Rezko
Connection," ABC News' "The Blotter" Blog, abcnews.go.com, 1/10/08)
-- But Obama Could Not Afford To Purchase The Parcel Of Land Rezko's Wife
Purchased. "The parcel included an adjacent lot which Obama told the Chicago
Tribune he could not afford because 'it was already a stretch to buy the
house.'" (Brian Ross and Rhonda Schwartz, "The Rezko Connection," ABC News'
"The Blotter" Blog, abcnews.go.com, 1/10/08)
Obama Originally Downplayed His Interactions With Rezko Prior To The
Purchase, But Later Admitted He Also Walked The Property With Rezko Before
Purchasing It. "When the transactions were first reported, Mr. Obama said only
that he had asked Mr. Rezko, as a developer, whether he thought the house was
worth buying. But last month, Mr. Obama's campaign staff said the senator also
recalled walking around the house and the adjacent lot with Mr. Rezko." (Mike
McIntire and Christopher Drew, "As Developer Heads To Trial, Questions Linger
Over A Deal With Obama," The New York Times, 3/2/08)
"Then - A Few Months Before Rezko Was Indicted - Obama Bought Part Of That
Lot From Rezko's Wife."(Tim Novak, "Obama And His Rezko Ties," Chicago Sun-
Times, 4/23/07)
-- Though The Strip Purchased By Obama Was Valued At $40,500, He Paid
$104,500 For It. "Later, the Obamas bought a 10-foot-by-150-foot piece of the
lot for $104,500. An appraisal put the value of the strip at $40,500, a
spokesman said, but Obama considered it fair to pay one-sixth of the original
price for one-sixth of the lot. 'It wasn't something we needed to have,' Obama
said. 'It was something I thought would be nice, if it worked economically for
him.'" (Peter Slevin, "Obama Says He Regrets Land Deal With Fundraiser," The
Washington Post, 12/17/06)
At The Time Of Obama's Purchase, Rezko Was Also Under Investigation For
Influence-Peddling In Gov. Blagojevich's Administration. "At the time Obama
bought that strip of land, it had been reported that Rezko was under federal
investigation for influence-peddling involving the administration of
Blagojevich, whose campaign also received Rezko's financial support. Rezko has
since been indicted for allegedly demanding kickbacks from companies seeking
state business under Blagojevich." (Tim Novak, "Obama And His Rezko Ties,"
Chicago Sun-Times, 4/23/07)
-- "When The Property Was Sold, Mr. Obama Knew Rezko Was Under
Investigation On Fraud Charges." (Jerry Seper, "Complaint hits Rezko land
deal," The Washington Times, 10/18/08)
Obama Called His Purchase Of The Land "A Boneheaded Move" Because Rezko
"Was Already Under A Cloud Of Concern." "'I am the first one to acknowledge
that it was a boneheaded move for me to purchase this 10-foot strip from
Rezko, given that he was already under a cloud of concern,' Obama said. 'I
will also acknowledge that from his perspective, he no doubt believed that by
buying the piece of property next to me that he would, if not be doing me a
favor, it would help strengthen our relationship.'" (Rick Pearson, "Obama
Believes Himself A 'Viable Candidate' For Presidency," Chicago Tribune,
12/14/06)
Obama: "There's No Doubt I Should Have Seen Some Red Flags In Terms Of Me
Purchasing A Piece Of Property From Him."(Peter Slevin, "Obama Says He Regrets
Land Deal With Fundraiser," The Washington Post, 12/17/06)
Mutual Bank Has Lent More Than $3.4 Million To Tony Rezko:
Since 2002, Mutual Bank Has Lent More Than $3.4 Million To Rezko. "Mahajan
and his bank also have had business dealings with Rezko, who pleaded not
guilty this month to federal charges he tried to squeeze millions in kickbacks
and campaign contributions from firms seeking approval from two state boards.
Since 2002, Mutual Bank has lent more than $3.4 million to Rezko and his
partners in three deals, according to a review of public records." (David
Kidwell, Ray Long And Rick Pearson, "Governor's Wife's Deals Questioned,"
Chicago Tribune, 10/27/06)
-- In One Deal, Mutual Bank Lent Rezko $1.32 Million. "In one, Mahajan's
bank lent $1.32 million to Rezko on several pieces of property that were
deeded back and forth between Rezko partners both before and after the loan
was secured. Banking experts said such moves raise questions about who owned
the property used as collateral for the loan." (David Kidwell, Ray Long And
Rick Pearson, "Governor's Wife's Deals Questioned," Chicago Tribune, 10/27/06)
-- President And CEO Amrish Mahajan Said He Did Not Know The Property Was
Transferred In The $1.32 Million Deal. "Mahajan said Thursday he had no idea
Rezko and his partners had transferred the property used to secure the loan
and said that would be a violation of the mortgage contract." (David Kidwell,
Ray Long And Rick Pearson, "Governor's Wife's Deals Questioned," Chicago
Tribune, 10/27/06)
-- Amrish Mahajan: "We do not go checking on every loan. ... The mortgage
was paid on time, and if I remember correctly it has been satisfied." (David
Kidwell, Ray Long And Rick Pearson, "Governor's Wife's Deals Questioned,"
Chicago Tribune, 10/27/06)
In 2005 Records Show That Amrish Mahajan Signed Renegotiated Loan Papers
Between Rezko And Rezko's Partner Abdelhamid Chaib. "In 2005, records show,
the Rezko partner who took out the loan with Rezko--Abdelhamid Chaib--paid off
most of the loan and renegotiated a smaller loan of $156,000. Mahajan signed
the renegotiated loan papers." (David Kidwell, Ray Long and Rick Pearson,
"Governor's Wife's Deals Questioned," Chicago Tribune, 10/27/06)
Mutual Bank Also Held The Mortgage On A Lot Next To Obama's House That
Rezko's Wife, Rita, Bought. "Mutual Bank, records show, has loaned money to
Rezko. In 2005, Mutual Bank held the mortgage on a lot that Rezko's wife,
Rita, bought next to U.S. Sen. Barack Obama's south side house. Rita Rezko
later sold Obama a 10-foot-wide strip of her lot, which enabled his family to
expand their side yard."(Chris Fusco, Carol Marin and Eric Herman, "Woman With
Ties To Gov's Wife Charged: Accused Of Bilking Taxpayers Out Of Thousands,"
Chicago Sun-Times, 3/8/07)
Amrish Mahajan Was Among Nine Other Individuals Involved With Allegations
Of Corruption In The Rezko Trial.
"A month before opening arguments were made in Antoin Rezko's federal
corruption trial, Gov. Rod Blagojevich's top lawyer issued a memo to the
governor's senior aides. The Feb. 8 directive called on staff members to
search their computers, calendars and files for any information relating to
Rezko and eight other notable people whose names have found their way into
allegations of corruption within state government. ... Others on Quinlan's
list include ... Amrish Mahajan, aChicago banker who has raised money for
Blagojevich..." (Kurt Erickson, "Memo Issued On Rezko Month Before Trial," The
[Illinois] Pantagraph, 5/14/08)
Former CEO Of Fannie Mae And Former Obama Adviser Jim Johnson Resigned
Under Criticism:
Jim Johnson Is The Former CEO Of Fannie Mae. (David A. Vise, "Fannie Mae
Lobbies Hard To Protect Its Tax Break," The Washington Post, 1/16/95)
"Jim Johnson, The Former Chairman Of Fannie Mae Who Was One Of Three
Advisors Tapped By Democrat Barack Obama To Vet Vice Presidential Candidates,
Resigned Today After Questions Were Raised About Favoritism He May Have
Received From Countrywide Financial Corp."(Johanna Neuman, "Barack Obama
Advisor Jim Johnson Quits Under Fire," Los Angeles Times, 6/12/08)
Johnson Remains A Bundler For Obama's Presidential Campaign And Has
Committed To Raising $100,000 To $200,000. (Obama For America Website,
www.barackobama.com, Accessed 5/19/08)
In 1998, Fannie Mae's Earnings Were Manipulated, Which Resulted In
"Maximum Payouts" To Executives Including CEO Jim Johnson. "As CEO of Fannie
Mae, Johnson, a former chief of staff to Vice President Walter F. Mondale and
chairman of the board of the Kennedy Center, was the beneficiary of accounting
in which Fannie Mae's earnings were manipulated so that executives could earn
larger bonuses. The accounting manipulation for 1998 resulted in the maximum
payouts to Fannie Mae's senior executives -- $1.9 million in Johnson's case --
when the company's performance that year would have otherwise resulted in no
bonuses at all, according to reports in 2004 and 2006 by the Office of Federal
Housing Enterprise Oversight." (Jonathan Weisman and David S. Hilzenrath,
"Obama's Choice Of Insider Draws Fire," The Washington Post, 6/11/08)
The Manipulation Resulted In Johnson Receiving A Bonus Of Over $1.9
Million When He Otherwise Would Not Have Earned A Bonus. "An Office of Federal
Housing Enterprise Oversight report in September accused the company of
improperly deferring $200 million of estimated expenses in 1998, which allowed
management to receive full annual bonuses. Had the expenses been recorded that
year, no bonuses would have be en paid, the report said. Fannie Mae reported
paying bonuses in 1998 to Johnson, who received $1.932 million; Raines, who
then was chairman-designate, $1.11 million; Chief Operating Officer Lawrence
M. Small, $1.108 million; Vice Chairman Jamie S. Gorelick, a former deputy
attorney general, $779,625; Chief Financial Officer J. Timothy Howard,
$493,750; and Robert J. Levin, who was executive vice president for housing
and community development, $493,750." (Albert B. Crenshaw, "High Pay At Fannie
Mae For The Well-Connected," The Washington Post, 12/23/04)
Johnson Also Received Fees And Compensation From Fannie Mae Worth $3.3
Million Between 2001 And 2006. "Johnson left the company before it was swept
up in an accounting scandal that tarred its reputation, but even during the
years of scandal, Johnson was reaping hundreds of thousands of dollars in
consulting fees and other compensation, $3.3 million in all between 2001 and
2006." (Jonathan Weisman and David S. Hilzenrath, "Obama's Choice Of Insider
Draws Fire," The Washington Post, 6/11/08)
In 1998, Fannie Mae Improperly Deferred $200 Million Dollars In Expenses,
Which Allowed Johnson To Receive Nearly $2 Million In Bonuses; Johnson Would
Not Have Received A Bonus If The Money Had Been Properly Expensed. "An Office
of Federal Housing Enterprise Oversight report in September accused the
company of improperly deferring $200 million of estimated expenses in 1998,
which allowed management to receive full annual bonuses. Had the expenses been
recorded that year, no bonuses would have been paid, the report said. Fannie
Mae reported paying bonuses in 1998 to Johnson, who received $1.932 million;
Raines, who then was chairman-designate, $1.11 million; Chief Operating
Officer Lawrence M. Small, $1.108 million; Vice Chairman Jamie S. Gorelick, a
former deputy attorney general, $779,625; Chief Financial Officer J. Timothy
Howard, $493,750; and Robert J. Levin, who was executive vice president for
housing an d community development, $493,750." (Albert B. Crenshaw, "High Pay
At Fannie Mae For The Well-Connected," The Washington Post, 12/23/04)
In 1998, Johnson, Then-CEO Of Fannie Mae, Hosted The Opening Ceremony Of A
Lobbying Office In Oklahoma. "The concern is whether such efforts were made to
bolster Fannie's business more than to advance philanthropic goals. Critics
say the foundation helped to reinforce ties with various congressional groups
forged by Fannie's in-house lobbyists. At times the two seemed
indistinguishable: They often sponsored events in tandem. Both were big donors
to the CBCF's annual awards gala in 2003 and a similar black-tie event for the
Congressional Hispanic Caucus Institute in 2002. In 1998, then-CEO Jim Johnson
hosted the opening ceremony of a lobbying and public relations office in
Oklahoma, an event attended by formerOklahoma Governor Frank Keating and
then-Senator Don Nickles (R-Okla.). But wearing his other hat as the
foundation's chairman, Johnson also took the opportunity to announce $125,000
worth of grants to local charities." (Dawn Kopecki, "Philanthropy, Fannie Mae
Style," Business Week, 4/2/07)
Obama Solicits Advice From Former Fannie Mae CEO Franklin Raines, Who Was
"Under The Shadow Of A $6.3 Billion Accounting Scandal":
The Obama Campaign Has Solicited Franklin Raines, Who "Stepped Down As
Fannie Mae's Chief Executive Under The Shadow Of A $6.3 Billion Accounting
Scandal," For Advice On Mortgage And Housing Policy. "In the four years since
he stepped down as Fannie Mae's chief executive under the shadow of a $6.3
billion accounting scandal, Franklin D. Raines has been quietly constructing a
new life for himself. He has shaved eight points off his golf handicap, taken
a corner office in Steve Case's D.C. conglomeration of finance, entertainment
and health-care companies and more recently, taken calls from Barack Obama's
presidential campaign seeking his advice on mortgage and housing policy
matters." (Anita Huslin, "On The Outside Now, Watching Fannie Falter," The
Washington Post, 7/16/08)
Like Jim Johnson, Raines Received Low-Rate Home Loans From Countrywide, A
Major Seller To Fannie Mae. "Fannie Mae's former CEO, Jim Johnson, resigned
Wednesday as the leader of likely Democratic presidential nominee Barack
Obama's search for a running mate after The Wall Street Journal reported that
he and another former CEO, Franklin Raines, received low-rate home loans from
troubled mortgage lender Countrywide Financial Corp. a major seller of home
loans to Fannie Mae." (Alan Zibel, "Fannie Mae CEO Says Ethics Policy Bans
Discounts," The Associated Press, 6/12/08)
Former Fannie Mae Chairman Frank Raines Was Accused Of Manipulating The
Company's Earnings. "Former Fannie Mae chairman and chief executive Franklin
D. Raines, accused of manipulating the housing finance company's earnings, is
challenging regulators to make their case against him beginning Feb. 16
instead of waiting until the end of the year." (David S. Hilzenrath, "Fannie
Mae's Former Chief Wants Earlier Hearing Date," The Washington Post, 2/6/07)
Raines Was Forced Out As Fannie Mae's CEO In December 2004. "Former chief
executive Franklin D. Raines and chief financial officer J. Timothy Howard
were forced out Tuesday night after accounting mistakes that could cost Fannie
$9 billion in reported profit." (David S. Hilzenrath, "Fannie Mae Exit
Packages Face Review," The Washington Post, 12/23/04)
Under Raines' Leadership, Fannie Mae Committed "Extensive Financial Fraud"
And Was Forced To Pay A $400 Million Civil Penalty. "In a May report, the
Securities and Exchange Commission and the Office of Federal Housing
Enterprise Oversight found that Fannie Mae under Raines perpetrated 'extensive
financial fraud' so that executives could collect big bonuses. There have been
no criminal charges, but the conduct of Raines and other senior Fannie
executives 'was inconsistent with the values of responsibility,
accountability, and integrity,' the agencies said. Fannie paid a $400 million
civil penalty this year to the SEC and OFHEO." (Jay Hancock, Op-Ed, "Raines
Claiming Accountability Isn't Enough," The [Baltimore] Sun, 12/10/06)
Penny Pritzker, Obama's National Finance Chairman And Hyatt Heiress, Co-
Owned Superior Bank FSB, A Subprime Mortgage Lender:
Penny Pritzker Is The National Finance Chairman For Barack Obama. "And
Penny Pritzker, aChicago philanthropist, serves as Mr. Obama's national
finance chairman even as her brother, Jay Robert, holds fund-raisers across
town for Mrs. Clinton." (Jodi Kantor, "In Democratic Families, Politics Makes
For Estranged Bedfellows," The New York Times, 2/4/08)
Penny Pritzker Is An Heiress To Hyatt Hotel Fortune. "As billionaire Penny
Pritzker stood in the kitchen of her Lincoln Park home in early January, she
and her husband debated whether her schedule could take on another massive
challenge. The Hyatt hotel heiress was running multiple businesses, trying to
spend time with her two teenage children and dealing with numerous civic and
philanthropic responsibilities." (John McCormick, "Pritzker Blazes Campaign
Trail," Chicago Tribune, 9/30/07)
The Pritzker Family Owns Ticketmaster. "Ticketmaster first became a center
of controversy in the music world 13 years ago, when alternative rockers Pearl
Jam declared war on what they called an unjust monopoly -- and it all started
inChicago. Though Ticketmaster was founded in 1978, its rise to prominence in
the concert world really began in 1982, when it was purchased for $4 million
byChicago investor Jay Pritzker, head of the billionaire family that owns the
Hyatt hotel chain. From that point on, its headquarters were based inLos
Angeles, and it quickly became the dominant force in ticket sales nationwide."
(Jim DeRogatis, "Chicago And Ticketmaster: The History," Chicago Sun-Times,
6/17/07)
The Pritzker Family Co-Owned Superior Bank FSB. "Ms. Pritzker, who
declined to be interviewed, has confronted other challenges, including the
2001 collapse of Superior Bank FSB, which the Pritzker family co-owned,
resulting in a $460-million payment to federal regulators, and a rift over
family assets that settled out of court in 2005. She oversees the Pritzker
family's non-hotel real estate interests and chairs its TransUnion LLC credit
bureau." (Steven R. Strahler, "Penny Pritzker," Chicago Crain's Business,
5/7/07)
Superior Bank Was A "Subprime Lender That Made Risky Mortgage And Auto
Loans To People With Poor Credit Histories." "Auditors Ernst & Young...agreed
to pay the FDIC $40 million in restitution in connection with the collapse of
the bank, a subprime lender that made risky mortgage and auto loans to people
with poor credit histories. It had about $2 billion in assets when it was
shuttered." (Kathy Bergen, "Millions For Pritzkers In Settlement," Chicago
Tribune, 12/28/04)
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