Someone that knows little about the art of sewing leather with a machine probably would not see a problem. That said, you have a problem with the size needle and/or style of needle. Wetting the leather to sew is balder dash. If you wet the leather you may get marks from anything and almost everything you do while sewing. Your machine is okay, the leather is okay, you have a problem with the needle style and size, plain and simple.
ferg
Make sure you study the information enclosed with this post in pdf format.
Sewing Machine Needles.pdf