Rezko In Debt $50 Million; How Did He Afford Obama Lot?

Court transcript says indicted fundraiser Rezko relies on family handouts.

ByABC News
March 5, 2008, 11:03 AM

March 5, 2008— -- Accused Illinois fixer Antoin "Tony" Rezko is in debt by $50 million and relies on "family" handouts of $7,500 a month to pay monthly costs, according to a previously sealed court transcript reviewed by ABC News.

Rezko's bleak financial picture raises the question of how the Rezkos were able to buy a vacant lot adjoining the home of Sen. Barack Obama in 2005, at a time Rezko says he was already in deep debt.

Rezko also reveals in the testimony, before Judge Amy St. Eve on Jan. 16, 2007, that he already knew he was under federal investigation at the time of the land purchase and had hired a criminal defense attorney to deal with the "feds."

Obama says he sought Rezko's help because the house he wanted to buy in Chicago's Hyde Park came with an adjoining lot the seller wanted to sell at the same time.

Unable to afford it himself, Obama says Mrs. Rezko bought it for $625,000, and then later sold a strip of the lot back to Obama so he would have a larger yard. Obama says he paid Mrs. Rezko a fair market price.

According to the court transcript, Mrs. Rezko makes $37,500 a year.

Obama has defended Rezko's role as legal but says it was "a bone-headed mistake" to involve him in the deal.

According to the transcript, Mrs. Rezko sold the vacant lot a few weeks before the hearing, with all proceeds going to pay previous debts.

Asked how he was able to pay his lawyer, Joseph Duffy, Rezko said family and some unnamed "friends" were paying his legal bills.

Duffy told the judge, "Mr. Rezko has not provided us any money since his indictment."

Rezko told the judge he had no current source of income, saying his last business deal involving a proposed power plant in Iraq had been cancelled.