http://www.suntimes.com/news/metro/353829,CST-NWS-rez23.article Obama and his Rezko ties
DAY ONE OF TWO
April 23, 2007
BY TIM NOVAK Staff Reporter/tnovak@suntimes.com
For more than five weeks during the brutal winter of 1997, tenants shivered without heat in a government-subsidized apartment building on Chicago's South Side.
It was just four years after the landlords -- Antoin "Tony'' Rezko and his partner Daniel Mahru -- had rehabbed the 31-unit building in Englewood with a loan from Chicago taxpayers.
Rezko and Mahru couldn't find money to get the heat back on.
But their company, Rezmar Corp., did come up with $1,000 to give to the political campaign fund of Barack Obama, the newly elected state senator whose district included the unheated building.
Obama has been friends with Rezko for 17 years. Rezko has been a political patron to Obama and many others, helping to raise millions of dollars for them through his own contributions and by hosting fund-raisers in his home.
"Their buildings were falling apart,'' said a former city official. "They just didn't pay attention to the condition of these buildings.''
Eleven of Rezko's buildings were in Obama's state Senate district.
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Much of the criticism has centered on two real estate deals involving Obama's South Side mansion. In the first, Obama paid $300,000 less than the asking price for a doctor's home, while Rezko's wife paid the doctor full price for the vacant lot next door. Then -- a few months before Rezko was indicted -- Obama bought part of that lot from Rezko's wife.
But Obama's ties with Rezko go beyond those two real estate sales and the political support, the Sun-Times found. Obama was an attorney with a small Chicago law firm -- Davis Miner Barnhill & Galland -- that helped Rezmar get more than $43 million in government funding to rehab 15 of their 30 apartment buildings for the poor.
Obama role unclear
Just what legal work -- and how much -- Obama did on those deals is unknown. His campaign staff acknowledges he worked on some of them. But the Rezmar-related work amounted to just five hours over the six years it said Obama was affiliated with the law firm, the staff said in an e-mail in February.
Obama, however, was associated with the firm for more than nine years, his staff acknowledged Sunday in an e-mail response to questions submitted March 14 by the Sun-Times. They didn't say what deals he worked on -- or how much work he did.
"The senator, relatively inexperienced in this kind of work, was assigned to tasks appropriate for a junior lawyer,'' according to an e-mail from Obama spokesman Robert Gibbs. "These tasks would have included reviewing documents, collecting corporate organizational documents, and drafting corporate resolutions.''
In fact, Gibbs wrote, "Senator Obama does not remember having conversations with Tony Rezko about properties that he owned or any specific issues related to those properties.''
For five weeks, the Sun-Times sought to interview Obama about Rezko and the housing deals. His staff wanted written questions. It responded Sunday but left many questions unanswered. Other answers didn't directly address the question.
Among these: When did Obama learn of Rezmar's financial problems? "The senator had no special knowledge of any financial problems,'' Gibbs wrote.
Did the senator ever complain to anyone -- government officials, Rezmar or Rezko -- about the conditions of Rezmar's buildings? "Senator Obama did follow up on constituency complaints about housing as
matter of routine,'' Gibbs wrote.
Did the senator ever discuss Rezmar's financial problems with anyone at his law firm? "The firm advises us that it unaware of any such conversations,'' Gibbs wrote.
The next year, Obama joined Davis Miner Barnhill & Galland, a 12-lawyer firm that specialized in helping develop low-income housing. The firm's top partner, Allison S. Davis, was, and is, a member of the Chicago Plan Commission, appointed by Mayor Daley. Davis was also a friend of Rezko. Davis and Rezko would eventually go into business together, developing homes.
Another firm partner, Judson Miner, ran the city Law Department under Mayor Harold Washington, one of Obama's political idols.
Asked what Rezko cases Obama worked on, Miner told the Sun-Times, "We'll put together a list of the cases he worked on involving Rezko/Rezmar in the next day or two.''
That was March 13. He never provided the information.
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As a U.S. senator, Obama grew closer to Rezko.
Two years ago, Obama bought a mansion on the South Side, in the Kenwood neighborhood, from a doctor. On the same day, Rezko's wife, Rita Rezko, bought the vacant lot next door from the same seller. The doctor had listed the properties for sale together. He sold the house to Obama for $300,000 below the asking price. The doctor got his asking price on the lot from Rezko's wife.
Last year, Rita Rezko sold a strip of that vacant lot to Obama for $104,500 -- a deal Obama later apologized for, acknowledging that people might think he got a favor from Rezko. Obama called the episode "boneheaded'' aancing -- loans from the city or state, federal low-income-housing tax credits and bank loans.
nd a "mistake.''
At the time Obama bought that strip of land, it had been reported that Rezko was under federal investigation for influence-peddling involving the administration of Blagojevich, whose campaign also received Rezko's financial support.