|In the news
Arabs in Chicago discover political clout and controversy
June 8, 2005, Arab American Media Services
By Ray Hanania
For many years, Arab Americans in Chicago were relegated to behind-the-scenes fundraising, helping others to gain higher office while sitting on the sidelines waiting their turn.
Several ran for public office as "Arab American candidates" beginning in 1992, including this author, but all of the candidates lost. In one case, Miriam Zayed, a Democratic precinct captain and worker, ran for a prominent southwest suburban school district that included three high schools with the largest concentration of Arab students in the region.
Each year as she re-campaigned for office, her vote totals declined as her Arab heritage more and more became an issue.
This experience in Chicago contrasted from downstate Peoria, Illinois where mainly Lebanese Arabs have been able to win public office from municipal trustees to mayors, legislators and congressman. One of those, Congressman Ray LaHood, aid to former House Speaker Bob Michel, is now considered a strong possibility to challenge Illinois Gov. Rod Blagojevich next year.
Quietly, though, a group of wealthy Arab American businessmen based in Chicago forged alliances with key officials in state government in the mid-1990s. They locked in contracts and secured some low level jobs as state government changed from Republican to Democratic control.
In recent months, what was a quiet, deliberate assent to the top of Chicago and Illinois clout has exploded in front page newspaper controversies involving favoritism, poor job performance and allegations of wrongdoing.
The names and faces of these Arab American businessmen who have made it to the top include several nationally known players, such as Antoin Rezko and many more local players including the former head of the Chicago Chapter of the ADC, Ali Ata. Part of the challenge is the media bias against Arab Americans. Part of it is the lack of support Arab Americans get from their community. In the end, Arab American businessmen make easy targets for criticism and attacks.
Here's a look at the recent news reports:
For years, Antoin "Tony" Rezko was a strong advocate of grassroots Arab American activism in Chicago, providing funds for election campaigns and community outreach from profits he earned from an inner-city rehab program and from his growing food franchise business.
Born in Aleppo, Syria. Rezko moved to Chicago after graduating from high school. He holds a bachelors and a masters degree from the Illinois Institute of Technology in civil engineering and construction management.
Rezko was often the largest contributor to Arab American campaigns for political office. Rezko once said that he felt proud to be able to contribute to his community.
Rezko is a member of the St. Jude’s Children’s Hospital, which was founded by Lebanese American Danny Thomas and has many Arab American members, and also other philanthropic organizations around the country, many that serve Arab American interests.
But several years ago, Rezko’s generosity began to appear on campaign disclosure forms for prominent politicians in Chicago, Cook County and Illinois.
Today, those ties have made him the focus of an intense investigation surrounding allegations he profited from political favoritism and is involved in an abuse of set-aside programs that give minorities a preference in winning state, county and city contracts.
Rezko is a co-owner of Rezmar which rehabs buildings in the inner city. With his Jewish American partner, Dan Mahru, Rezmar has transformed abandoned eyesores into livable residences.
As Rezmar grew, Rezko entered the food service business and today holds franchise rights for the Panda Express Asian fast-food chain in five Midwestern states, including Illinois, and in Papa John’s, the nation’s third largest pizza chain.
Last year, in a dispute with Papa Johns, Rezko renamed his 30 Chicago-based pizza franchises "Pappa Tony’s." Today, Rezko reportedly owns more than 125 restaurants around the Midwest and employs more than 3,000 people.
Illinois is divided into three levels of political clout, beginning with Chicago, Cook County and the state of Illinois. Chicago and Cook County have always been Democratic controlled. The state was Republican controlled under Governors Jim Edgar and George Ryan, and now is under Democratic control under Blagojevich.
With the blessing of Chicago Mayor Daley, Rezko’s restaurant ventures included several exclusive franchises along the city’s beachfronts, on Chicago Park District property.
When Cook County Board President John Stroger ran for election, Rezko made the single largest campaign contribution to his campaign, more than $90,000. In October 2000, Stroger introduced a resolution praising Rezko’s commitment to the county.
Stroger, the county’s first African American county board president, is enjoying his second term in office. He has named Rezko as honorary chairman of his upcoming re-election campaign.
Rezko also became an adviser to former Gov. George Ryan, who was later indicted on unrelated government corruption charges, and to Blagojevich. Rezko was introduced to state politics and Ryan’s predecessor, Jim Edgar, by Talat Othman, a longtime fundraiser for state and city government officials. Edgar is now an associate of the PR firm Rezko hired to represent him.
Rezko raised more than $500,000 for Blagojevich.
Under Blagojevich, Rezko’s role changed expanding from fundraising to helping to name individuals to head key state offices and commissions including several Rezko colleagues.
But controversy soon erupted.
In 1997, Panda Express won the right to open a lucrative concession at O’Hare International Airport under the city’s Minority Set-Aside program which directs large contracts to companies owned by Women, African Americans or Hispanics.
The city awarded a 10-year contract for O’Hare Airport to Crucial Inc. in 1999, which the city believed was owned by an African American, Jabir Herbert Muhammad, the son of the late Elijah Mohammad.
Crucial Inc.’s annual revenues skyrocketed from under $200,000 in each year before opening at O'Hare, to nearly $6 million in 2002, according to recently published reports. Crucial Inc. has earned nearly $16 million in its first four years at the airport.
Last March, Chicago officials charged that Jabir Herbert Muhammad had acted as a front for the real owner, Rezko, who is of Syrian Arab heritage and does not qualify for minority set-asides.
According to Mayor Daley, Jabir Muhammad founded Crucial Inc. in 1976. It was certified as a minority business in 1989. Rezko had been involved with the company since 1983, serving as a vice president and general manager. In July 1997, the company’s minority status lapsed but the forms were not renewed.
Although Muhammad said he ran Crucial Inc., city officials said the company was run by Abdelhamid "Al" Chaib, and longtime friend and Rezko business associate.
Rezko later told the Chicago Tribune that he did not do anything wrong and is surprised by all the attention. Daley said the city’s investigation showed that Crucial Inc. should never have received the contract and should be stripped off its minority business certification.
Rezko’s clout grows
Crucial Inc. was also hired as a subcontractor to telephone giant SBC Communications, which received an exclusive deal to provide 1,000 pay phones for Cook County Government.
A spokesman for Stroger said County officials are investigating to determine whether or not Crucial Inc. still meets the county’s minority business criteria. Six of Rezko’s relatives have been placed on the Cook County payroll, according to published reports.
In state government, Rezko’s ties resulted in a prize greater that lucrative financial contracts. At least three of his associates were appointed to influential positions overseeing hiring, contracts and policy.
Abdelhamid "Al" Chaib, vice president of Crucial Inc., is the sole owner of the Subway sandwich shops that have secured the rights to operate at seven of the State’s Tollway oases. Chaib also is a director of Rezko Concessions Inc., which is Rezko's portion of the joint venture with Panda Express, state records show.
Already Rezko has become a target in the upcoming election campaign, Illinois State Treasurer Judy Baar Topinka has alleged that Rezko is a part of a "shadow government" pulling the strings in the Blagojevich administration.
Rezko has a long history of supporting Arab American causes. He made a significant donation to help establish the Ibn Rushd Lectureship in Arabic in 2002 at the University of Chicago. Rezko served as a former Executive Director to the Muhammad Ali Foundation. And, he was named "Entrepreneur of the Decade" by the Arab-American Business and Professional Association. The president and founder of ABPA is a generous and successful Chicago Arab American businessman and political adviser, Talat Othman.
Another Arab Americans targeted
Recently, Ali Ata, the former president of the Chicago Chapter of the American Arab Anti-Discrimination Committee, and a close associate of Othman, also came under scrutiny, this time by Chicago’s other newspaper, the Chicago Sun-Times.
Ata was a major contributor to the candidacy of Blagojevich, who served as a congressman before becoming governor. Ata reportedly donated more than $60,000 to Blagojevich. Ata has been active in supporting Arab American causes and was instrumental in helping to make ADC active in Chicago.
But Ata’s ties to the state date back to Edgar and Ryan. He and three partners received more than $3.2 million when they convinced the state to lease a building they owned at 3500 W. Grand Avenue on Chicago’s poverty-stricken West Side in the early 1990s.
Yet, the group, which included Faisal Mohammad, a prominent member and executive director of the the nearby al-Aqsa School which is located across from the Mosque Foundation/Bridgeview Mosque, reportedly defaulted on the property but failed to inform the state, according to the Chicago Sun-Times news reports.
In January 2004, Ata was appointed to a $127,000-a-year job as executive director of the Illinois Finance Authority, one of Blagojevich's showpiece government streamlining initiatives, even though he had no finance experience and held a degree in engineering. Ata left the post in March 2005 following a state audit of his agency that criticized its performance and practices.
A month later, Ata was offered a three-year contract worth a total of $165,600 to be a consultant to the Illinois Finance Authority on a coal-related energy initiative downstate. He declined the contract, according to the Sun-Times, after the newspaper began inquiring about his employment and the building lease.
State Auditor General William Holland criticized the Finance Authority's accounting and financial reporting practices during Ata's first six months at the helm. Ata told the newspaper he was not surprised because he faced "the herculean task of consolidating five state financial offices into one."
Blagojevich aides praised Ata’s performance.
But apparently, Ata may have violated state law by failing to disclose in annual state economic interest forms his interest and ownership in the 29,000 square foot, west Grand Avenue property.
Ata said he was not trying to hide anything. The building defaulted in 2003 and he took the job in January 2004. The form he would have completed in 2004 would have covered any interests in state contracts in the prior year.
A marketing executive with a water treatment chemical company in Naperville called Nalco, Ata is also an investor in several real estate ventures, including redevelopment project in Chicago at Roosevelt and Clark in which has a $50,000 stake.
He redevelopment is being led by Rezko’s firm, Rezmar Corp. Other investors in the Roosevelt and Clark development, according to the Chicago Sun-Times, include Michael Rumman, the outgoing director of Blagojevich's Central Management Services Department, and powerful state lobbyist William Filan, the cousin of Blagojevich's budget chief, John Filan.
In published reports, Ata insisted Rezko did not land him the post, claiming he has known Blagojevich longer than Rezko. Ata’s political ties date back to the Edgar administration. He served as a co-chair on fundraisers organized on behalf of Edgar, Ryan and Blagojevich.
Ata acknowledged that a Rezko nephew received a paid internship with the Finance Authority last summer while he was at the helm.
(Ray Hanania is an award winning Chicago journalist and nationally syndicated columnist. He can be reached at email@example.com.)
Clout-heavy restaurant firms didn't pay property taxes: suit
By Steve Patterson & Chris Fusco, Staff Reporters
Restaurant companies linked to political insider Antoin "Tony" Rezko that shut down three eateries at O'Hare Airport after being accused of minority-business fraud now have another problem: A lawsuit alleges they didn't pay their property taxes.
Crucial Inc. and the Panda Express restaurant chain allegedly owe $216,884 for back taxes and other fees to Host International Inc., which runs concessions for Chicago's airports. Host's lawsuit claims Host picked up the six-figure tab for Crucial and Panda and is now owed the sum by the two firms and their insurer, Washington International of Itasca.
The total owed to Host includes tax bills going back nearly three years, as well as costs that Host bore to remove signs and other "miscellaneous equipment" from three Panda Express storefronts at O'Hare.
O'Hare sites closed last year
City officials last year alleged Crucial was a phony minority "front" for Panda and Rezko, a top fund-raiser for Gov. Blagojevich and other politicians. Crucial, which had an operating agreement with Panda, won the O'Hare concessions in part because it was certified as a minority-owned business. Crucial's largest shareholder was listed as Jabir Herbert Muhammad, son of late Nation of Islam founder Elijah Muhammad. Rezko's ownership stake was smaller.
But city officials concluded Muhammad, 77, was not running the day-to-day operations of the restaurants as required by the city. Rather than fight City Hall, the companies agreed to move out of O'Hare in July.
Reached last week, Muhammad said he was unaware of any problems regarding Crucial tax payments and "you know as much as I do about it all."
Court records show neither Rezko, who could not be reached for comment, nor Muhammad have had lawyers file responses to Host's charges. The next court hearing in the case is set for October. Lawyers for Panda and Washington International could not be reached.
While the Host lawsuit adds to Rezko's food-related legal troubles -- firms linked to him also have been sued by a pizza chain -- Rezko recently won an apparent victory in court. A suit last month by LaSalle Bank that claimed that Rezko owed $325,000 on a loan it gave him was dismissed shortly after being filed.
Illinois Gov. Rod Blagojevich has rolled out a new super-bonding authority, which, he said, will save the state money. Blagojevich dissolved five state bonding authorities into the IFA. The entity has the power to allocate $5 billion in bonding authority for a variety of projects, including school construction, agricultural loans and economic development.
While the Blagojevich administration says the newly created Illinois Finance Authority, or IFA, is not political in nature, a majority of the current appointees and the entity’s executive director have donated money to Democrats.
Blagojevich dissolved five state bonding authorities into the IFA. The entity has the power to allocate $5 billion in bonding authority for a variety of projects, including school construction, agricultural loans and economic development.
“The new IFA is another example of how we are bringing change to state government, change that will help us to make smarter choices, be more efficient and more accountable to the people of Illinois,” he said. The move is part of the governor’s attempts to streamline state government.
The IFA eliminates the Illinois Development Finance Authority, Illinois Health Facilities Authority, Illinois educational Facilities Authority, Illinois Farm Development Authority and the Illinois Rural Bond Bank.
Becky Carroll, a spokeswoman for the Governor’s Office of Management and Budget, said the downsizing will save the state more than $2 million, in part by eliminating 22 jobs from the previous combined 40-person payroll.
So far, Blagojevich has appointed nine of the board’s 15 members. There are no rules requiring the authority have a certain number of Democrats or Republicans, unlike some of the organizations being dissolved such as Illinois Development Finance Authority. However, the unpaid board members still must receive Senate approval.
Cindi Canary, the executive director of the Illinois Campaign for Political Reform, said partisan divisions on a board can help provide different viewpoints.
“It’s a good way of having checks and balances,” she said. “It doesn’t mean that appointing all Democrats means that you won’t have a division of opinion.”
While there are no prohibitions regarding party affiliation, six of the nine members appointed have given money to the Democrats over the years. And the newly appointed director, Ali D. Ata, 51, a Chicago-area resident, has donated at least $35,000 to Blagojevich’s campaign committee.
Ata’s appointment may be appropriate, Canary said, but the amount of giving does raise questions.
“When we see someone giving $35,000, it raises a red flag,” she said. “The person may be the best person for the job, but it does beg for a second look.”
Ata most recently served as the chief executive officer of Aaim LLC, a real estate investment and management firm. Ata also worked for more than two decades at Ondeo-Nalco, the world’s largest specialty water treatment company.
He also served as chairman of the building committee and vice chairman of the finance committee of the board of directors of St. Jude Children’s Hospital, where he managed $500 million in construction projects.
Carroll said political considerations are not part of the selection process.
“No political considerations have been made here,” she said. “The most important consideration is their expertise.”
Three IFA members have not given any money to state campaigns, according to the state. They are David Gustman, a Chicago-area resident and senior partner at the powerful law firm of Freeborn and Peters LLP; Timothy Ozark, a Chicago-area resident and founder of Aim Financial Corp. and chief executive officer of TKO Finance Corp.; and Andrew Rice, a Chicago-area resident and vice president at Jordan Industries, Inc.
• Joseph Alford, a Girard resident and member of the Illinois Farm Development Authority, who has given $1,350 to Blagojevich since the Chicago Democrat first sought the governorship. Alford also sat on Blagojevich’s advisory committee on farms and farm families.
• Michael Goetz, a Springfield resident and executive director of the Laborer’s Home Development Corporation, has donated $1,950 to various Democrat candidates since 1998.
• Niantic resident Edward Leonard’s family-run Leonard Farms donated $200 to Blagojevich’s campaign fund.
• Talat Othman, a Chicago-area resident and chairman and chief executive officer of Grove Financial Inc., has donated $4,000 to the Blagojevich campaign and another $250 to the governor’s father-in-law, Chicago Alderman Richard Mell. But Othman has also given $2,774.53 to Republican Jim Ryan’s campaign.
• Joseph Valenti, a Chicago-area resident and former banker, contributed $400 to former gubernatorial candidate Paul Vallas.
• Jill Rendleman York, a Fairfield resident and president and chief executive officer of Peoples National Bank, has contributed $2,000 to Blagojevich and another $1,500 to Jesse White.
NEWS STORIES &
Rezko Trial Exhibits
June 15, 2008: In defense of Tony Rezko -- exploited by sleaze bags in the Arab community and caught in a media war to defend Obama and undermine Blagojevich. Read column?
June 5, 2008: Bad week for Arab Americans with Rezko conviction and Obam's stupid declarations on Jerusalem. Read Column?
June 4, 2008: Rezko convicted and sentenced. Read story?
May 12, 2008: Tribune discloses more secret deals with Ali Ata and other Arab American community leaders. Read story?
May 1, 2008: Rezko trial exposes failed leadership of Arab American community. Read column?
April 28, 2008: "Witness" Tom Rosenberg, the creep factor and "ugly truth" in the Rezko Trial. Read column?
April 26, 2008: Former ADC National Board members bails out Rezko
APRIL 23, 2008: Rezko trial exposes false community leadership in Chicago. Read column?
April 23, 2008: Ali Ata pleads guilty, implicates Gov. Blagojevich and impacts Tony Rezko trial.
April 23, 2008: Ali Ata's plea agreement with the U.S. Justice Department
March 3, 2008: Can Tony Rezko get a fair trial? I doubt it. Read column?
March 3, 2008: Rezko Donation Chart from US Justice Department. View Document?
May 31, 2007: FBI indicts Ali Ata. Read FBI press release?
Oct. 19, 2006: Hanania column on Rezko indictment
June 26, 2006: Lawsuit alleges Rezko restaurants avoided paying property taxes. Go there?
JAN. 13, 2006: Pseudoephedrine Trafficker Sentenced: On January 13, 2006, in Chicago, IL, Khaldon Esawi was sentenced to 12 years in prison, followed by three years supervised release. Esawi along with his twin brother and others were indicted on drug conspiracy and money laundering charges. In March of 2004, Khaldon Esawi pleaded guilty to a drug conspiracy count and a money laundering count. Esawi's operated a pseudoephedrine ring that moved pseudoephedrine that was smuggled into the US from Canada to Chicago and then moved to California or Nevada where it was sold to others in the pseudoephedrine trafficking and methamphetamine ring. In total, Esawi and others were responsible for the illegal importation of more than 215,000,000 pseudoephedrine tablets. During the year 2001, Esawi earned approximately $1,500,000. In addition to the pseudoephedrine trafficking, Esawi and others owned and operated Harlem Motors, a luxury car dealership, from April, 2000 until August, 2001. The dealership was used extensively as a mechanism to launder the proceeds of their illegal pseudoephedrine sales. (From the Chicago IRS Web Site)
July 9, 2005: Chicago decertifies Crucial Inc., stripping three Panda Express concessions from Rezko. A Rezko said he willing agreed to concede the three concession contracts rather than continue to fight City Hall. Rezko, according to a spokesman, refused to concede any wrongdoing, however.
June 8, 2005: Chicago Arabs Get Clout and Controversy, . Philanthropists and businessmen Antoin Rezko and Ali Ata are targeted in newspaper investigations involving political clout and controversy in business dealings with Illinois, Cook County and Chicago political leaders and government agencies.
June 12, 2003: NBC TV Report on Jaffa Candy Products (now Jenin Distributors) including KKK kids tatoos in candy wrappers. Read report?
Jan. 13, 2002: FBI arrests Khaldon Esawi and Khaled Esawi, who also goes by Khaled Obeid, charged with traffickeing more than 100 million tablets of pseudoephedrine worth millions since 1999. Read story?
Jan. 2002: Jaffa Candy of Bedford Park named as target in Methamphetamine ring. The company is owned by Ali Ata.
Other members of the Illinois Finance Authority:
• Joseph Alford, a Girard resident and member of the Illinois Farm Development Authority
• Michael Goetz, a Springfield resident and executive director of the Laborer’s Home Development Corporation
• Edward Leonard’s associated with family-run Leonard Farms
• Talat Othman (Read reference/bio)? A Chicago-area resident and chairman and chief executive officer of Grove Financial Inc. He is a close associate of Ali Ata and also served on the Illinois Finance Authority board ... Bio?
• Joseph Valenti, a Chicago-area resident and former banker, and current member of the Illinois Finance Authority board.
• Jill Rendleman (succeeded Ata is acting executive director in March 2005)
In January 2004, Talat Othman was named by Gov. Rod Blagojevich to be a member of the Illinois Finance Authority for a term commencing January 1, 2004 and ending July 17, 2006.
Click to view info on Illinois FInance Authority members who donated to the Blagojevich administration. Go there?
Barack Obama contributions returned because of ties to Rezko:
Rezko, Antoin 9/1/1999 $1,000
Individuals not officially named in the Rezko indictment but that are named by other sources.
Allison Davis is reportedly, according published report, listed as Individual B.
Guy Chipparoni is reportedly, according published report, listed as Individual H. Chipparoni is president of Res Publica, whose company include Jim Edgar and managed public relations for Rezko's businesses.
Individual G is suspected to be an Illinois politician, possibly a former Chicago governor.
Bio of Talat Othman from Signature Group web site:
Talat M. Othman is a member of the advisory board of Signature Advisors International Limited (Signature Group). Talat M. Othman is President of Grove Financial, Inc., an international investment management firm located in Long Grove, Illinois, specializing in managing investment funds and U.S.-Middle East business. Mr. Othman is also Chairman of the Board of Trustees of Amana Mutual Funds, Bellingham, Washington and President of Crescent Capital Management, LLC. Chicago, Illinois. From 1983 to 1995, he served as Chairman and Chief Executive Officer of Dearborn Financial
Photograph of Aihame al-Sammarae and former U.S. Senator Peter Fitzgerald at a dinner meeting of the Arab American Business and Professional Association.