WATCHDOGS: Chicago Obama donors tried to strike it rich in Africa

Shortly after taking office, President Barack Obama made it clear to Zimbabwe that he would keep America’s economic sanctions against the nation’s leaders in place until they reformed their government’s repressive policies.

Around the same time, a cadre of Obama political supporters from Chicago began exploring an array of potentially lucrative ventures in the African nation, everything from manufacturing medical supplies to mining diamonds.

Despite the U.S. sanctions, Americans can legally do business in Zimbabwe as long as their deals don’t involve specific people, including President Robert Mugabe, and companies targeted by the sanctions in place since 2003.

But it’s a tricky road to navigate. So the Obama supporters turned to Mel Reynolds — a former congressman and twice-convicted felon — to seek business opportunities for them starting in 2009. That ended by 2014, when he was arrested in Zimbabwe for possessing pornography, which is a crime in that country. The case was later dropped.

Reynolds is now fighting misdemeanor charges in Chicago accusing him of failing to file federal income-tax returns in the United States reflecting money he received from two Chicago businessmen looking to strike it big in Zimbabwe, Elzie Higginbottom and Willie Wilson. Reynolds says the payments were reimbursements for business expenses, not income. He has battled in court to get Higginbottom’s tax returns, which he says will prove him right.

Higginbottom, a major political contributor to Obama and other Democrats, and Reynolds founded a company in Chicago called Sub-Sahara Inc. as the former congressman was meeting with government and business leaders in Zimbabwe, prospecting for deals.

“I would be the leg man, and he would be the money man,” Reynolds says of the hoped-for deals. “He would get 60 percent, and I would get 40 percent.”

Sub-Sahara’s African arm worked with Wilson, who later ran for mayor of Chicago and for president of the United States, as he teamed up with Medline Industries, Inc., a Chicago-area medical supply company, hoping to set up a manufacturing or distribution plant in Zimbabwe. Medline’s owners have been major political contributors to Obama, Mayor Rahm Emanuel and other Democrats.

Higginbottom, who made a fortune managing government-subsidized apartments in Chicago, also pursued his own deals, including housing construction and diamond mining.

But all of those eventually fell apart. And Higginbottom and Wilson ended up testifying before the federal grand jury that indicted Reynolds in 2015 for failing to file tax returns for four years, according to records and interviews. Both businessmen might be called to testify if Reynolds stands trial, possibly later this year.

Their dealings in Zimbabwe are now central to the U.S. government’s case against Reynolds, which is likely to give a behind-the-scenes look at the connections between some high-profile Chicagoans and Mugabe, one of Africa’s longest-serving rulers who Obama once described as a dictator.

Mugabe met with Higginbottom and Reynolds at a hotel in New York when he was attending meetings at the United Nations in September 2011. Higginbottom and the Rev. Jesse Jackson met with Mugabe at his offices in Zimbabwe in May 2013.

Higginbottom won’t talk about the meetings.

“I don’t owe you an explanation as to why I meet with one person or another,” he says. “The U.S. government didn’t have any issues with what happened.”

Regarding Reynolds, Higginbottom says: “He was trying to uncover business opportunities for American businessmen. I paid him as a consultant to see if he could find business opportunities for us over there.”

Higginbottom declines to say how much he paid Reynolds: “You’ll find out when we go to trial.”

Wilson won’t talk about his Zimbabwe dreams, either, except to say, “We tried to make some things happen . . . It didn’t turn out right at all. . . . It’s a bad nightmare.”

Reynolds was an up-and-coming member of Congress, representing parts of Chicago’s South Side and south suburbs, until his 1995 sexual assault conviction for having sex with an underage campaign volunteer. While in prison, he was charged with federal bank fraud and campaign-finance violations and convicted, but President Bill Clinton commuted his sentence.

Higginbottom owns and manages thousands of apartments subsidized by the Chicago Housing Authority and the U.S. Department of Housing and Urban Development. He collected more than $44 million in rent subsidies from HUD in 2015, records show.

Higginbottom also became a prolific campaign contributor and fund-raiser for former Mayor Richard M. Daley and other Democrats.

It’s unclear how Higginbottom connected with Reynolds, but he says the relationship ended in 2013, the year before Reynolds was arrested in Zimbabwe.

“Everybody’s entitled to a second chance,” Higginbottom says. “I have a lot of second-chance people working for me.”

Wilson — a businessman who ran for Chicago mayor in 2015 and then president last year — made much of his money investing in McDonald’s franchises and also created a nationally syndicated gospel TV show.

Twenty years ago, Wilson started Omar Inc., a company that distributes surgical gloves and other products. He teamed with Medline — a family-owned business run by brothers Charlie and Andy Mills and Jim Abrams, who’s married to their sister, Wendy Mills Abrams — and a group of investors in Zimbabwe, according to a Medline news release in April 2010 when Zimbabwe’s deputy prime minister, Arthur Mutambara, visited its headquarters in Mundelein.

Medline’s owners are friends of Emanuel, who was Obama’s chief of staff when the company was looking into doing business in Zimbabwe. The family has given more than $200,000 to Emanuel’s campaigns over the years, records show. Medline’s owners and employees gave more than $100,000 to Obama campaigns.

Medline owned the former site of Michael Reese Hospital at 29th and Ellis, which Daley agreed to have the city buy for $91 million as part of his failed plan to win the 2016 Summer Olympics. Chicago taxpayers have paid Medline more than $50 million but still owe $73 million in principal and millions more in interest. Emanuel has twice renegotiated the loan with Medline, lowering the interest rate, while City Hall looks for someone to buy the 37-acre site.

Wilson’s deal with Medline ended in 2010 when he sued Reynolds in Cook County, saying he’d been “maligned, defamed and damaged” by an email Reynolds sent to 11 Zimbabwe officials and businessmen in which he wrote that he and Higginbottom were no longer working with Wilson because Wilson’s company had limited products and was significantly smaller than Medline.

In the June 23, 2010, email, Reynolds told the Zimbabweans he and Higginbottom had formed a partnership with Medline.

“Mr. Higginbottom . . . has direct access to more than a billion dollars of investment dollars,” Reynolds wrote, laying out their plans for a distribution and manufacturing plant that never came to fruition.

In his lawsuit, which he dropped two years later, Wilson said he invested more than $100,000 before the deal fell apart.

Medline and Higginbottom declined to comment on their deal.

Higginbottom made a few trips to Zimbabwe with his family and business partners, according to Charles Ray, who served under Obama as U.S. ambassador to Zimbabwe between 2009 and 2012. Ray also accompanied Zimbabwe officials to meet with Higginbottom in Chicago.

“They were looking at a broad range of opportunities to include the minerals market, diamonds, even gold,” Ray says.

Higginbottom won’t discuss the ventures he was looking at in Zimbabwe with partners including John Girzadas, who’s vice president of Burling Builders and president of B. Coleman Aviation — both owned by Higginbottom. Girzadas says there were discussions about diamond mining but, “There’s never been any serious pursuit of that.”

Higginbottom says he never had any interest in diamonds despite reports in African newspapers, including a June 2013 report in the Guardian & Mail in neighboring South Africa that quoted him saying: “We are no longer pursuing any diamond interests. The Zimbabwe state diamond entities engaged in the diamond trade are sanctioned and thus we have eliminated this area from our potential ventures. We are and will remain in full compliance with U.S. policy and laws.”

Though Jackson and Higginbottom met with Mugabe in Zimbabwe in the spring of 2013, Jackson says he didn’t “know much about” Higginbottom’s interests there.

Jackson, who says he’s known Mugabe for 30 years, says the U.S. should have better relations with Zimbabwe, with its abundance of natural resources.

“It seems the sanctions aren’t working. The result of the sanctions is the people grew to resent us,” Jackson says, likening U.S. policy in Zimbabwe to what was applied to Cuba under Fidel Castro. “My impression . . . is we’re waiting for Mugabe to leave. It’s like waiting for Castro to leave.”

Mugabe is a 93-year-old former teacher who embraced Marxism and came to power with other revolutionaries in 1980. Until then, the majority-black nation was known as Rhodesia, and whites ruled.

Mugabe, who’d spent years in prison because of his activism, was elected prime minister in 1980 and became president seven years later.

In March 2003, amid violence, food shortages and allegations of election-rigging in Zimbabwe, President George W. Bush imposed economic sanctions targeting Mugabe and 76 other officials.

Obama extended the sanctions in 2009 and again in January, days before leaving office. Today, the sanctions target Mugabe and 84 others, plus 56 entities, including farms, mining companies and a steel company.

“I’m heartbroken when I see what’s happened in Zimbabwe,” Obama said at a forum in August 2010. “I think Mugabe is an example of a leader who came in as a liberation fighter and — I’m just going to be very blunt — I do not see him serving his people well. And the abuses — the human rights abuses, the violence that’s been perpetrated against opposition leaders — I think is terrible.”

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THE WATCHDOGS: Ex-county housing chairman cashing in, Jan. 22, 2017

Judge: Mel Reynolds gets to see Elzie Higginbottom’s tax records, Sept. 9, 2016

Ex-Congressman Mel Reynolds, facing tax charges, gets locked up, April 21, 2016

Mel Reynolds tax case entangles two high-profile businessmen, July 30, 2015

Federal tax charges latest chapter in the Mel Reynolds saga, June 27, 2015