McCain Overstates Obama’s Ties to Indicted Businessman Rezko

by Meagan Gamble

Democratic presidential hopeful Barack Obama has been under fire recently for his alleged ties to indicted Illinois businessman Antoin “Tony” Rezko, who was convicted in June 2008 on 16 charges of corruption related to his ties with Illinois governor, Rod Blagojevich.

A recent political ad from the McCain campaign claims that Obama is “born of the corrupt Chicago political machine”, and calls Rezko Obama’s “money man.” But just how tight are these alleged “ties” between Obama and Rezko?

Not as tangled as McCain would like you think.

Obama and Rezko met in 1990, when Rezko, then a low-income housing developer, offered Obama a job. He turned it down. However, Obama took a job in 1993 at a small law firm in Chicago, Davis Miner Barnhill, that represented the Woodlawn Preservation and Investment Corp., which later partnered with Rezko’s firm in a 1995 deal to convert an abandoned nursing home into low-rent apartments. Reports from Davis Miner Barnhill say that Obama spent a total of 32 hours on the project, only 5 of which came after the partnership. The rest of Obama’s time was spent trying to solidify the deal between WPIC and Rezko’s company, Rezmar Corp. Rezko partnered with other clients of the firm in later deals, but none of them involved Obama.

Then, following Obama’s election to the US Senate, Rezko’s wife Rita bought adjacent lots of property in the Kenwood neighborhood in Chicago. The property was sold to Obama for $1.65 million, about 300 grand below the asking price. Rita Rezko paid the full market price, $625,000, for the property next door. (When questioned why he had not paid the full market price for his property, Obama attributed it to the real estate market and the fact that his property had been on the market for quite some time, which tends to bring down the asking price.) The deals were both made in June 2005. In December 2006, Obama paid Rita Rezko $104,500 for a strip of her property so that he could have a bigger yard. At the time, Rezko was under intense media scrutiny for the federal investigation into his career, and questioned later about the decision, Obama has called it “a mistake”:

“With respect to the purchase of my home, I am confident that everything was handled ethically and above board. But I regret that while I tried to pay close attention to the specific requirements of ethical conduct, I misgauged the appearance presented by my purchase of the additional land from Mr. Rezko. It was simply not good enough that I paid above the appraised value for the strip of land that he sold me. It was a mistake to have been engaged with him at all in this or any other personal business deal that would allow him, or anyone else, to believe that he had done me a favor.”

Since then, Rezko has contributed funds to Obama’s campaign throughout his political career. Obama has said that Rezko raised close to $60,000, and when Rezko was indicted in 2006, the presidential candidate donated about $11,500 to charity, an amount that represents what Rezko contributed personally.

In regards to Obama’s personal relationship with Rezko, in an interview with the Chicago Sun-Times, Obama has clarified that they were far from old friends: “I have probably had lunch with Rezko once or twice a year and our spouses may have gotten together on two to four occasions in the time that I have known him.”

Obama has also asserted that neither he nor his wife, Michelle, have participated in any other transactions of any kind, financial or legal in nature, with Rezko, and maintains that the real estate deal was a lapse in judgment on his part.

Furthermore, the McCain ad was released on September 22, the same day that news broke that Rick Davis, McCain’s campaign manager, was paid $2 million dollars to lobby against tougher regulations for the mortgage empires Fannie Mae and Freddie Mac. The timing of this is a little too convenient to be a coincidence.

Lesson: In any presidential campaign, a candidate will latch on to any hint of a scandal to sling mud at an opponent. McCain took a small connection between Rezko and Obama and tried to blow it out of proportion to cast Obama as having faulty judgment and ethics. In reality Obama and Rezko are just acquaintances. It is up to the public to discern fact from spin and realize when the innuendo is just that – innuendo.