Jailed political fundraiser Antoin "Tony" Rezko, the Chicago real estate developer who helped launch Barack Obama on his political career, is whispering secrets to federal prosecutors about corruption in Illinois and the political fallout could be explosive.
Rezko could have a lot to tell.
Rezko also was friendly with Obama - offering him a job when he finished law school, funding his earliest political campaigns and purchasing a lot next to his house. But based on the known facts, charges so far and testimony at Rezko’s trial, there’s no indication there’ll be an October surprise that could hurt the Democratic presidential nominee - even though Rezko says prosecutors are pressing him for dirt about Obama.
He has raised millions of dollars in campaign money for many Illinois politicians and according to federal prosecutors used his clout to control appointments to state boards.
Obama has sent to charity $159,000 that Rezko raised for his campaigns for the state legislature, the House and the Senate. Rezko raised nothing for Obama’s White House run.
Obama’s name came up in testimony at the trial four times, twice in connection with an obscure legislative memo, as a guest at a Rezko party and when defense attorney Joseph Duffy told jurors his client was a friend of the senator.
A brief history of Obama and Rezko
In 1990, after Barack Obama was elected president of the Harvard Law Review, Rezmar Corp. offered him a job, which Obama turned down. Obama did end up taking a job with law firm Davis, Miner, Barnhill & Galland, which primarily worked civil rights cases, but also represented Rezmar and helped the company get more than $43 million in government funding and whose former senior partner, Allison S. Davis, later went into business with Rezko and, in 2003, was appointed to Illinois State Board of Investment by Governor Blagojevich at Rezko’s request. On July 31, 1995 the first ever political contributions to Obama were $300 from a lawyer, a $5,000 loan from a car dealer, and $2,000 from two food companies owned by Rezko. Starting in 2003, Rezko was one of the people on Obama’s U.S. Senate campaign finance committee, which raised more than $14 million. Rezko threw an early fundraiser for Obama, which Chicago Tribune reporter David Mendelland claims was instrumental in providing Obama with seed money for his U.S. Senate race. Obama has since identified over $250,000 in campaign contributions to various Obama campaigns as coming from Rezko or close associates, and has claimed to have donated almost two thirds of that amount to unspecified nonprofit groups.
Also, in 2005 Obama purchased a new home in the Kenwood District of Chicago for $1.65 million (which was $300,000 below the asking price but represented the highest offer on the property) on the same day that Rezko’s wife, Rita Rezko, purchased the adjoining empty lot from the same sellers for the full asking price. Obama acknowledged bringing his interest in the property to Rezko’s attention, but denied any coordination of offers. According to Obama, while the properties had originally been a single property, the previous owners decided to sell the land as two separate lots, but made it a condition of the sales that they be closed on the same date. Obama also claimed that the properties had been on the market for months, that his offer was the best of two bids, and that Ms. Rezko’s bid was matched by another offer, also of $625,000, so that she could not have purchased the property for less. Obama’s description of the purchase was later confirmed by the previous owner of the house.
After it had been reported in 2006 that Rezko was under federal investigation for influence-peddling, Obama purchased a 10 foot (3.0 m) wide strip of Ms. Rezko’s property for $104,500, $60,000 above the assessed value. According to Chicago Sun-Times columnist, Mark Brown, "Rezko definitely did Obama a favor by selling him the 10-foot strip of land, making his own parcel less attractive for development."
On December 28, 2006, Ms. Rezko sold the property to a company owned by her husband’s former business attorney. That sale of $575,000, combined with the earlier $104,500 sale to the Obamas, amounted to a net profit of $54,500 over her original purchase, less $14,000 for a fence along the property line and other expenses. In October 2007, the new owners put the still vacant land up for sale again, this time for $1.5 million.
In June 2007, the Sun-Times published a story about letters Obama had written in 1997 to city and state officials in support of a low-income senior citizen development project headed by Rezko and partner Allison Davis. The project received more than $14 million in taxpayer funds, including $885,000 in development fees for Rezko and Davis. Of Obama’s letters in support of the Cottage View Terrace apartments development, Obama spokesman Bill Burton said, "This wasn’t done as a favor for anyone, it was done in the interests of the people in the community who have benefited from the project. I don’t know that anyone specifically asked him to write this letter nine years ago. There was a consensus in the community about the positive impact the project would make and Obama supported it because it was going to help people in his district." Rezko’s attorney responded that "Mr. Rezko never spoke with, nor sought a letter from, Senator Obama in connection with that project.
In the South Carolina Democratic Party presidential debate on January 21, 2008, Senator Hillary Clinton said that Obama had represented Rezko, who she referred to as a slum landlord. Obama responded that he had never represented Rezko and had done only about five hours work, indirectly, for Rezko’s firm.
