AP

AP Exclusive: Indicted Blagojevich fundraiser got loan from Iraqi billionaire
By MIKE ROBINSON | AP Legal Affairs Writer
1:28 PM CST, February 7, 2008
CHICAGO - Gov. Rod Blagojevich's chief fundraiser has arranged to get
a loan from the same Iraqi billionaire whose $3.5 million payment got
another member of the governor's inner circle thrown in jail.
Christopher Kelly, head of Blagojevich's campaign fund in both of his
races for governor and now under federal indictment, pledged all of
his shares in a Nevada land partnership as collateral in exchange for
the loan, according to state records reviewed by The Associated Press.
The loan came from General Mediterranean Holdings, a company based in
Luxembourg and headed by Nadhmi Auchi, a London-based Iraqi who is
currently appealing a fraud conviction in France.
"I don't want to comment," Kelly's defense attorney, Michael D.
Monico, said after conferring with the south suburban roofing
contractor.
Antoin "Tony" Rezko, a major campaign fundraiser for Blagojevich and
Sen. Barack Obama who is facing a federal fraud trial next month, was
jailed Jan. 28 after prosecutors said a $3.5 million payment from
Auchi showed he had access to overseas money that could enable him to
flee.
Records filed with the Illinois secretary of state's office five days
earlier show that Kelly received a loan from Auchi. The records do not
reflect the size or terms of the loan.
According to the records, the loan was secured by all of Kelly's
interest in 640 Across I, a Nevada limited liability company. Kelly is
one of five partners in the company, according to records on file at
the Nevada secretary of state's office. The four others are Nevada
residents.
Kelly and Rezko were two key members of Blagojevich's inner circle who
were with him, raising funds, when he first set out to run for
governor.
Although both Kelly and Rezko are under federal indictment,
Blagojevich has been charged with no wrongdoing. His administration,
however, has been under federal investigation for several years.
Kelly is charged with impeding and obstructing the Internal Revenue
Service. Prosecutors say he made millions of dollars in bets with a
Chicago-area bookie and at Las Vegas casinos, and paid off his losses
with money from his roofing company, booking them as business
expenses.
Kelly was at one time the governor's point man on gambling issues. He
has pleaded not guilty to the charges.
Rezko is charged with scheming to shake down companies seeking money
management business from the Illinois Teachers Retirement System, the
$30 billion fund that pays the pensions of teachers outside Chicago.
Auchi was listed on the last Forbes magazine list as the 279th richest
person in the world, with an estimated net worth of $3.1 billion. He
owns a portion of a 62-acre tract just south of downtown Chicago in
which Rezko also is a shareholder.
Auchi, who visited Chicago in 2004 and posed for a photograph with
Blagojevich, was barred from entering the country in 2005, federal
prosecutors say.
They said in recently filed court papers that Rezko wrote to the State
Department in November 2005 to request that Auchi be allowed to enter
the United States "and, it appears, asked certain Illinois government
officials to do the same."
Alasdair Pepper, a London attorney representing Auchi, said the
magnate's fraud conviction in France is currently on appeal and "he
absolutely denies that he had anything to do with any fraud."
Auchi has been accused of no wrongdoing in connection with his
dealings with Rezko and Kelly. There was no indication that the loan
to Kelly was in any way improper.
General Mediterranean is a holding company with assets around the
world. The $3.5 million to Rezko was wired from an account in Beirut,
Lebanon, to a Chicago bank in April 2007, according to prosecutors.
They said it was disbursed within a week.
"It appears that Rezko has used the approximately $3.5 million for his
benefit without alerting either the government or, as far as the
government knows, the court," prosecutors said in a brief seeking to
have him jailed. U.S. District Judge Amy J. St. Eve then revoked his
bond.
Rezko is being held pending a trial scheduled to begin March 3. There
has been speculation that the government hoped a taste of jail would
persuade Rezko to change his mind and cooperate in its investigation
of state corruption.