Feds probe Rezko's Iraq contract

CHICAGO, ILLINOIS - Federal authorities are investigating an Iraqi power plant deal involving Antoin "Tony" Rezko, a former top fund-raiser for Gov. Blagojevich charged with defrauding Illinois taxpayers.

Investigators want to talk to Iraq's jailed former electricity minister, Aiham Alsammarae, about how Rezko landed the potentially lucrative contract, a source familiar with the probe told the Chicago Sun-Times.

Alsammarae, who holds dual U.S.-Iraqi citizenship and has a house in Oak Brook, helped Rezko get the deal, another source said.

Rezko and others in the venture were to own the plant and sell electricity back to the Iraqis, but the Iraqi government still was to pay a substantial portion of construction costs, that source added.

The contract, negotiated in 2004, no longer is in effect. It is unknown how much money, if any, Rezko made.

Alsammarae, 55, attended the Illinois Institute of Technology with Rezko in the late 1970s and early 1980s and went on to own an engineering firm in Downers Grove.

In 2003, Alsammarae returned to his native Iraq to lead efforts to help rebuild its war-torn power grid. By January 2005, Rezko's Rezmar Corp. had secured its contract to build a 200- to 300-megawatt plant in the northern Iraqi city of Chamchamal.

Since then, Alsammarae has been arrested and convicted of corruption by Iraq's Commission on Public Integrity. He and his family have vehemently denied that he has done anything wrong and fear he'll be killed if he remains in Iraqi custody, according to news reports.

Rezko, 51, was indicted in October on fraud charges allegedly tied to his influence within the Blagojevich administration. Among other things, the feds are accusing Rezko of bilking Illinois taxpayers out of $250,000 through an alleged kickback scheme that involved a state pension fund. Blagojevich has not been accused of wrongdoing and has denied he knew anything about what Rezko allegedly was doing.

The Iraq deal is of interest to authorities here because Rezko and Alsammarae know each other and each is facing corruption charges. Attempts to reach Alsammarae's family and Rezko's lawyer were unsuccessful.

Authorities have yet to talk to Alsammarae, who left his Iraqi Cabinet post in early 2005 but remained active in Iraqi politics before being arrested in August, the source familiar with the probe said.

An Iraqi newspaper reported in October that the charges against Alsammarae stem from "fake contracts and financial corruption" during his tenure as electricity minister. The Associated Press reported that Alsammarae stood accused of contracting irregularities and "misappropriating millions of dollars."

The U.S. State Department declined to discuss specifics of Alsammarae's case, other than to confirm Alsammarae is in Iraqi custody after being convicted in October by the Central Criminal Court of Iraq.

A spokesman for the Iraqi Embassy in Washington, D.C., declined to comment, and attempts to reach the commission that convicted Alsammarae were unsuccessful.

During a Sun-Times interview in summer 2005, Rezko's point man on the power plant, former Peoples Energy executive Michael Rumman, said Rezko used his "formidable overseas network of business relationships" to join energy consulting companies and win the contract.

Rumman already had been to Jordan, where "most of the negotiations and deal structures are done." He had hoped to begin construction on the Chamchamal plant in January of this year.

Up to 30 companies were to be involved in the $200 million project, Rumman said. "It's a tremendous opportunity to get in early on the rebuilding of Iraq," Rumman said. "As you know, much of the instability is that the average person's life hasn't been improved, with electricity being one of the major challenges. The urgency to get this and other plants built is overwhelming."

When reached again, Rumman declined to discuss the plant or Alsammarae. The U.S. Army Corps of Engineers confirmed that the contract for the Chamchamal project no longer is in effect.