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Obama-Rezko ties again at issue 1/23/2008
Bob Secter, David Jackson and Ray Gibson Chicago Tribune

Suddenly, an old friendship forged on the streets of Chicago is threatening to make new waves in the Democratic presidential campaign.Hillary Clinton's charge this week that Barack Obama represented a Chicago "slum landlord" in the 1990s introduced to a national audience one of Obama's potential political vulnerabilities: his long ties to Antoin "Tony" Rezko, the once-highflying developer soon to go on trial in federal court.Obama angrily rejected Clinton's accusation at Monday's Democratic debate. And a Tribune review of land and court documents and law firm files as well as correspondence and other records related to Obama's eight years as an Illinois state lawmaker supports his contention that he did not directly represent Rezko's development firm.

Instead, the records show, he represented non-profit community groups that partnered with Rezko's firm.Beyond the heated sound bites is a story of a more complex relationship that long boosted Obama's political fortunes but now could prove a campaign liability.For years after Rezko befriended Obama in the early 1990s, he helped bankroll the politician's campaigns. Then, after Obama's election to the U.S. Senate, Rezko engaged him in private financial deals to improve their adjoining South Side properties.

Those arrangements became a source of lingering controversy after the Tribune first reported them in November 2006.Now Rezko's federal corruption trial is scheduled to begin Feb. 25. As Obama stumps for votes, coverage of the high-profile proceedings could bring fresh, unwelcome reminders for Obama of Rezko's influence in the same Illinois political world that propelled the senator to a serious run at the presidency.Both men declined to comment on their once-close friendship. Obama has been accused of no wrongdoing involving Rezko and has insisted that he never used his office to benefit Rezko.

Thus far, there is little in the public record to suggest otherwise, and the few exceptions that have come to light appear minor. On Capitol Hill, Obama once gave a summer internship to the son of a Rezko business associate on Rezko's recommendation. Earlier, as a state senator, Obama was one of several South Side political and community leaders who wrote state and city officials urging approval of public funding for a senior housing project involving Rezko.But when Rezko pushed for passage in Springfield of a major gambling measure,

Obama vocally opposed it.Obama publicly apologized for his 2005 property deal with Rezko, calling it "boneheaded" because Rezko was widely reported to be under grand jury investigation at the time. And Obama has given to charities $85,000 in Rezko-linked campaign contributions, including $40,035 last weekend following a published report suggesting that Rezko funneled a $10,000 donation to Obama through a business associate. Aides to Obama say the senator had no knowledge of any such scheme.Clinton eager to make linkStill, the Clinton campaign, fearing an Obama triumph in the South Carolina primary this weekend, is ratcheting up its rhetoric against the Illinois senator, in the process hoping to bring new attention to his relationship with Rezko.It's easy to forget today, but in the years before 2005,

Rezko enjoyed a reputation in Illinois as an up-and-coming, even enlightened entrepreneur with a strong interest in the risky low-income and affordable housing markets that relied on tax credits and other government assistance.He also was a reliable source of campaign cash for an array of politicians from both parties.Obama was a community organizer in the Roseland neighborhood before leaving for Harvard Law School, and on the South Side he saw firsthand a critical need for affordable housing.In 1991, after Obama became the first black president of the Harvard Law Review, Rezko offered him a job. While Obama declined, the two began a friendship that deepened as Obama launched his political career and Rezko became a key fundraiser.The two men and their wives used to socialize, meeting for dinner, Obama has said.

After earning his degree, Obama returned to Chicago, ran a voter registration drive, began work on an autobiography and in 1993 went to work in a small but influential law firm now known as Miner, Barnhill & Galland.The firm had long served non-profits engaged in affordable housing, and several initiatives involved Rezko's Rezmar Corp., according to a mid-1990s document from the firm that Obama attached to his state ethics reports.In addition, one of the law firm's founding partners, Allison Davis, developed personal financial ties to Rezko. Davis later left the firm to become a for-profit developer, sometimes in deals with Rezko.

Davis did not respond to interview requests.Rezko was dramatically expanding his company by partnering with non-profits and community organizations to tap government subsidies and tax credits. By 1994, the company owned or managed more than a dozen Chicago multiunit low-income housing projects, records show.Some projects souredSome of Rezko's ventures eventually went bad and left residents living in poor conditions.

After a published report last year raised questions about the law firm's involvement in representing the Rezko-linked ventures, Obama's campaign said he was unaware of the plight of the properties and was only a bit player in the legal work required to get them off the ground, a contention Obama repeated Monday as he responded to Clinton's charge.Law firm partner Judson Miner said that, over several years, Obama did a total of five to seven hours of billable work on Rezmar-linked projects.

He mainly filed incorporation papers for the non-profit groups under the supervision of more senior attorneys, Miner said.At the Tribune's request, Cook County Circuit Court Chief Judge Timothy Evans produced a list of all 260 civil and criminal cases in which the firm filed appearances, and the Tribune separately examined 1990s lawsuits that Rezmar Corp. listed in applications for government grants.

The paper also examined files from the Illinois Housing Development Authority and the city housing department, as well as the hundreds of clients Obama listed in the unusually frank ethics disclosure reports he filed as a state senator from December 1995 through April 2004.Those and other records disclosed five instances in which Obama did legal work for ventures that included Rezmar Corp. The case of City of Chicago vs. Central Woodlawn Limited Partnership is one example.In 1992, that community group partnered with Rezmar Corp. to rehab the former slum apartment building at 6107-6115 S. Ellis Ave.

As work was ongoing, city officials sued the developers, alleging 16 serious code violations at the property, including a dangerously dilapidated porch.Obama and a co-counsel filed appearances in February 1994, but the court records show they appeared on behalf of Central Woodlawn, Rezko's non-profit partner, not Rezko or his company.A separate attorney, Wayne Muldrow, represented Rezmar in the case. Muldrow, who had no connection to Obama's firm, could not be immediately reached for comment Tuesday.

In September 1994, Central Woodlawn was ordered to arrange for an inspection. Two months later a city inspection found "full compliance" with the building code and the case was dismissed.A letter of supportAs a state senator in 1998, Obama wrote two letters to city and state officials to support a Rezko/Davis senior housing project in his district that received more than $14 million in taxpayer money and netted $885,000 in fees for the two developers.He was one of several political and community leaders who pushed for funding for the project. Among those sending similar letters of support were Ald. Toni Preckwinkle (4th), then-state Rep. Lou Jones (D-Chicago) and Robert Grossman, head of the Hyde Park-Kenwood Conservation Community Council.Obama press secretary

Bill Burton said Rezko never asked Obama to send a letter having anything to do with that project. And Rezko's attorney, Joseph Duffy, said Rezko "never spoke with, nor sought a letter from, Sen. Obama in connection with that project."Whatever the extent of Obama's help for Rezko, the relationship proved a boon to the lawyer's political ambitions.Since 1995, at least $74,500 was donated to Obama campaigns by Rezko, Rezko companies and people who listed themselves as Rezko company employees when they made the donations, the Tribune found. Public records do not quantify how much money Rezko raised from others on Obama's behalf.In 1995, about the time Rezko was partnering with Obama's boss Davis, Obama launched a campaign for the state Senate seat from Hyde Park. His first substantial donations, $2,000, came from companies linked to Rezko.