Obama’s Shifting Positions on Iraq: A Rezko Connection?

Richard Fernandez (Wretchard at Belmont Club) has discovered a fascinating coincidence:

Barack Obama’s position on Iraq has shifted significantly over the last six years. What is interesting is how his position on Iraq matches up with developments in Chicago. Specifically, there appears to be a direct correlation between the rising and falling prospects of his longtime friend and fundraiser Tony Rezko’s attempts to secure multi-million-dollar contracts to build and operate a power plant in Kurdish Iraq and the senator’s Iraq flip-flops.

On October 2, 2002, Obama gave a speech categorically opposing an invasion of Iraq. He said:

I know that even a successful war against Iraq will require a U.S. occupation of undetermined length, at undetermined cost, with undetermined consequences. I know that an invasion of Iraq without a clear rationale and without strong international support will only fan the flames of the Middle East, and encourage the worst, rather than best, impulses of the Arab world, and strengthen the recruitment arm of al-Qaeda.

I am not opposed to all wars. I’m opposed to dumb wars.

So for those of us who seek a more just and secure world for our children, let us send a clear message to the president today. You want a fight, President Bush? Let’s finish the fight with bin Laden and al-Qaeda, through effective, coordinated intelligence, and a shutting down of the financial networks that support terrorism, and a homeland security program that involves more than color-coded warnings.

But on April 5, 2004, Barack Obama appeared to significantly alter his position on Iraq. A YouTube video of Obama shows the incredulity on the interviewer’s face as Obama unexpectedly sounded almost like President Bush on the subject of retaining troops in Iraq.

Interviewer: But you said that troops should be withdrawn.

Obama: No, no. I’ve never said that troops should be withdrawn. What I’ve said is that we’ve got to make sure that we secure and execute the rebuilding and reconstruction process effectively and properly and I don’t think we should have an artificial deadline when to do that. What’s important is that we have a long-term plan in process and short-term security strategy.

It’s been suggested that that change in the senator’s position from opposition to a stern refusal to leave until the job had been finished can be explained by the unexpected ease with which the campaign had gone up till that time. But that doesn’t quite square with the facts. April 2004 was in fact the bloodiest month in the Iraq campaign till then and the start of the Sunni insurgency and Moqtada al-Sadr’s uprising. On March 31, 2004, Iraqi insurgents in Fallujah ambushed a Blackwater convoy and hung the mutilated bodies of the Americans on the bridge. Wikipedia recounts the rush of bloody events which followed:

On April 3, the 1st Marine Expeditionary Force received a written command from the Joint Task Force, ordering offensive operations against Fallujah. This order went against the wishes of the Marine commanders on the ground who wanted to conduct surgical strikes and raids against those suspected of involvement in the Blackwater deaths.

On the night of April 4, the U.S. forces launched a major assault in an attempt to “re-establish security in Fallujah” by encircling it with around 2,000 troops. At least four homes were hit in aerial strikes, and there was sporadic gunfire throughout the night.

By the morning of April 5, headed by the 1st Marine Expeditionary Force, American units had surrounded the city with an aim towards retaking it. American troops blockaded roads leading into the city, with Humvees and concertina wire, and took over a local radio station, and handed out leaflets urging residents to remain inside their homes, and help American forces identify insurgents and any Fallujans who were involved in the Blackwater deaths.

Obama’s change of tone in 2004 was so noticeable that Howard Kurtz couldn’t help but notice how striking the Illinois senator’s position was in mid-2004. Obama was quoted as saying:

There’s not that much difference between my position and George Bush’s position at this stage. The difference, in my mind, is who’s in a position to execute.

But Rezko Watch, a blog following the trial of the Chicago political operative and Obama’s close friend and contributor Tony Rezko, remembered that something else took place in April 2004. Obama was at a party on April 3 — two days before the video– with Nadhmi Auchi, a London-based Iraqi billionaire who attended a Tony Rezko party in Chicago. The Chicago Tribune blog covered Obama’s recollection of the party in depth.

Late last week, Sen. Barack Obama said he didn’t recall meeting a controversial Iraqi-born billionaire at a party held at the home of his former friend and fundraiser, Antoin “Tony” Rezko, on April 3, 2004, because it was in the midst of his campaign for the U.S. Senate seat from Illinois.

But a check on the senator’s calendar showed he had no campaign activities on the day of the Auchi party. The Chicago Sun-Times reported that despite Obama’s inability to recall meeting Mr. Auchi, two sources said the senator was present.

According to two sources familiar with the gathering, the Obamas attended the Wilmette reception, which came less than a month after Obama’s Democratic primary win for his U.S. Senate seat.

The meeting with Auchi takes on a special suggestiveness in light of later revelations that Rezko planned to build a $150 million Chamchamal Power Plant in Kurdish Iraq despite the fact he had no resources to do it with. According to John Batchelor, the former Obama supporter’s straitened circumstances at the time he was bidding for the project came up during the discovery proceedings at his recent trial:

[In] January 16, 2007, ex parte proceedings before Federal District Judge Amy J. St. Eve, in the case of the United States v. Antoin Rezko, in the discovery of Mr. Rezko’s resources in order to set his bail awaiting trial. … The judge asked about Mr. Rezko’s creation, Rezmar International LLC.

Mr. Rezko answered, “Rezmar International entered into contract with the Ministry of Electricity in — of — Iraq, to build a power plant and sell power to the government. And we were negotiating for over, now, I guess, two years.” Mr. Rezko added that the deal, for the never-built, $150 million Chamchamal power plant in Kurdistan Region, Iraq, was finally canceled November 6 or 7, 2006.

When the judge pressed for details Mr. Joseph Duffy, of Stetler & Duffy, spoke for his client, “there was a request for purchase by the Iraqi government. Mr. Rezko and an engineering firm here in the state of Illinois put together a bid, along with other entities; and, then, they won the bid for the contract. The company has no assets. They were just going to — if the contract was given, as I understand the financing was going to be a letter of credit — letter of credit from the Iraqi government and other financing; and then, they were going to put together someone to build or supply the electricity.”

But if Rezko had no money to build or finance the Chamchamal Power Project, how could he convince the Iraqi government to give him a letter of credit and where would the “other financing” come from? Subsequent events suggest the letter of credit would be arranged by another local connection, a Chicago Iraqi-American named Aiham Alsammarae, who is a one-time classmate of Tony Rezko and had been appointed as Iraq’s Minister of Electricity by L. Paul Bremer in July 2003. With Alsammarae at the head of the ministry, a letter of credit was possible. The money (”other financing”) would likely come from Nahdmi Auchi, who according to the Times Online, practically owned Tony Rezko.

According to court documents, Mr. Rezko’s lawyer said his client had “longstanding indebtedness” to Mr. Auchi’s GMH. By June 2007 he owed it $27.9 million.

Under a Loan Forgiveness Agreement described in court, Mr. Auchi lent Mr. Rezko $3.5 million in April 2005 and $11 million in September 2005, as well as the $3.5 million transferred in April 2007. …

A posting last week on a GMH-owned website, middle-east-online.com, portrayed Mr. Auchi as a Middle Eastern “Donald Trump” with a global business construction empire.

Mr. Auchi visited the United States in 2004. Pictures show him meeting Emil Jones, the president of the Illinois state senate, an ally of Mr. Obama, a former state senator.

Both Mr. Auchi and Mr. Obama say they have no memory of meeting each other. But, according to a source, the two may have had a brief encounter at the Four Seasons Hotel in Chicago where Mr. Auchi’s visit was being honored with a dinner attended by the governor when Mr. Obama, coincidentally in the hotel, dropped in.

Rezko was very heavily involved in Chamchamal. In addition to bidding for building the power plant itself, Rezko apparently bid to provide security for the installation. John Batchelor again:

The third bidder on the Chamchamal deal was most likely Companion Security of Illinois. Companion Security was an Illinois company, concocted by Mr. Rezko along with his long-time Rezmar partner Daniel Mahru and an ex-Chicago policeman Donald Frawley, that proposed to train 150 Iraqis to be a security force at the new Chamchamal plant; and it included the novel concept to fly the Iraqis to Illinois for this training. Companion Security signed a contract April 18, 2005, with CPA Minister of Electricity Alsammarae — for which, it is alleged by now cooperating government witness Mr. Mahru, Mr. Alsammarae was paid a $1.5 million bribe.

From April 2004 onward, Barack Obama’s position on Iraq remained remarkably constant. The Illinois senator believed it was important not to abandon Iraq until it was stable enough to fend for itself. In November 2005, he said:

I believe that U.S. forces are still a part of the solution in Iraq. The strategic goals should be to allow for a limited drawdown of U.S. troops, coupled with a shift to a more effective counter-insurgency strategy that puts the Iraqi security forces in the lead and intensifies our efforts to train Iraqi forces.

At the same time, sufficient numbers of U.S. troops should be left in place to prevent Iraq from exploding into civil war, ethnic cleansing, and a haven for terrorism.

We must find the right balance — offering enough security to serve as a buffer and carry out a targeted, effective counter-insurgency strategy, but not so much of a presence that we serve as an aggravation. It is this balance that will be critical to finding our way forward.

Second, we need not a time-table, in the sense of a precise date for U.S. troop pull-outs, but a time-frame for such a phased withdrawal. More specifically, we need to be very clear about key issues, such as bases and the level of troops in Iraq. We need to say that there will be no bases in Iraq a decade from now and the United States armed forces cannot stand up and support an Iraqi government in perpetuity — pushing the Iraqis to take ownership over the situation and placing pressure on various factions to reach the broad-based political settlement that is so essential to defeating the insurgency.

In June 2006, despite the counterinsurgency troubles being encountered at that time, Obama reiterated his desire to keep American troops in Iraq until it stabilized. The senator said following a visit:

But having visited Iraq, I’m also acutely aware that a precipitous withdrawal of our troops, driven by Congressional edict rather than the realities on the ground, will not undo the mistakes made by this administration. It could compound them.

It could compound them by plunging Iraq into an even deeper and, perhaps, irreparable crisis.

We must exit Iraq, but not in a way that leaves behind a security vacuum filled with terrorism, chaos, ethnic cleansing, and genocide that could engulf large swaths of the Middle East and endanger America. We have both moral and national security reasons to manage our exit in a responsible way.

But on Nov 20, 2006, Obama suddenly changed his mind on Iraq. He believed it had become unwinnable. There was no point in going on and a withdrawal had to begin within a few months. CNN reported:

Sen. Barack Obama called Monday for U.S. troops to start leaving Iraq in 2007, arguing that the threat of an American pullout is the best leverage Washington has left in the conflict.

“The time for waiting in Iraq is over. It is time to change our policy,” said Obama, a freshman Democrat from Illinois touted as a possible national candidate in 2008.

“It is time to give Iraqis their country back, and it is time to refocus America’s efforts on the wider struggle yet to be won.”

Obama’s speech to the Chicago Council on Global Affairs came as the debate over Iraq policy has heated up in Washington, with policy makers making proposals that range from a phased withdrawal that begins in four to six months to an increase in troop strength.

What had changed between June and November 2006 to alter Obama’s position? Possibly the situation on the ground. But one circumstance that had also changed was that the Rezko Chamchamal contract had been finally and irrevocably canceled only two weeks before. John Batchelor reports what Rezko told the judge during the discovery proceedings:

We had, for whatever it’s worth, sometime in June received a letter saying the contract was canceled. We protested the cancellation. And, then, we received this [the November cancellation] letter.

Batchelor describes some of the last-minute efforts to bring the Rezko power plant project back from the dead.

The Chamchamal construction plan was canceled in June 2006, and this not only ended the power plant deal for Rezko’s Rezmar International and Alsammarae’s KCI Engineering Consultants, but also it ended the Companion Security deal. Companion was nested inside Chamchamal. The security guards to be trained in Illinois were for Chamchamal. This is important to understand. The same men controlled all three bids.

Mr. Rezko said, “We protested the cancellation.” How did they protest? It appears that part of the protest was to send Mr. Frawley to Senator Obama in August 2006 to seek help reviving the deal.

Senator Obama declined to help, though not right away. According to Obama staff spokesman Tim LaBolt in mid-2007: “The Senate staff had two meetings, one conference call, and sporadically emailed with representatives of Companion Security about their request for Senator Obama to write a letter introducing the company to senior officials in the Iraqi government. That is not the kind of action Senator Obama usually takes for individual companies, and our staff concluded on that basis to decline the requested assistance.”

Also, according to a report by the Chicago Sun-Times, Mr. Frawley negotiated over a six-month period with Senator Obama’s staffer Seamus Ahern at the Moline, Illinois, office. The explanation at the time was that the senator regarded Companion Security as an employment opportunity for the troubled Quad Cities area around Moline.

The deal was definitely dead in August 2006, when Aiham Alsammarae came under investigation for corrupt practices. The New York Times reported that the case against Alsammarae began “with investigations by the Commission on Public Integrity, an Iraqi organization independent of the government that was created by the United States.” A New York Times reporter, visiting him in jail, wryly noted, “Mr. Alsammarae, an American citizen who lived in the Chicago area and built a thriving engineering firm there, is the only cabinet-level Iraqi official to be convicted and jailed for misusing money during his time in office.”

On December 16, 2006, Alsammarae successfully escaped from his Baghdad jail in mysterious circumstances, flew to Jordan, and from there returned to his home in Oak Brook, Illinois, without any apparent trouble. He did not take the trouble to hide. On April 27, 2008, Alsammarae demonstrated his affection for Tony Rezko when the Chicago Sun-Times reported that the “former Iraqi official and ex-international fugitive helped spring Tony Rezko from jail earlier this month, putting up homes that comprise nearly one-third of the $8.5 million in property and cash securing Rezko’s bail.” Tony Rezko may have been broke but Alsammarae was not:

Alsammarae put up $1.9 million in equity in his Oak Brook mansion, along with $840,000 in equity from two South Loop condominiums, according to court records. In recent days, he appeared in the downtown federal courthouse to pledge his property and signed papers related to Rezko’s bail. That proceeding, however, was conducted in a private session with U.S. District Judge Amy J. St. Eve and lawyers. Records from the proceeding weren’t immediately released.

The shifts in Barack Obama’s policy toward Iraq show a remarkable correlation with the rise and fall of Tony Rezko’s business prospects in the Chamchamal Power Plant. As the story of the Rezko syndicate is exposed in his Chicago trial, the subject of its Iraqi commercial interests will come under a brighter light. Barack Obama has already said of his convicted ex-fundraiser, “this is not the Tony Rezko I used to know.”

What remains to be seen is whether new developments will see the same cognitive dissonance apply to Obama’s policy in Iraq.