As a state senator, Barack Obama wrote letters to city and state officials supporting his political patron Tony Rezko’s successful bid to get more than $14 million from taxpayers to build apartments for senior citizens.
The deal included $855,000 in development fees for Rezko and his partner, Allison S. Davis, Obama’s former boss, according to records from the project, which was four blocks outside Obama’s state Senate district.
Obama’s letters, written nearly nine years ago, for the first time show the Democratic presidential hopeful did a political favor for Rezko — a longtime friend, campaign fund-raiser and client of the law firm where Obama worked — who was indicted last fall on federal charges that accuse him of demanding kickbacks from companies seeking state business under Gov. Blagojevich.
The letters appear to contradict a statement last December from Obama, who told the Chicago Tribune that, in all the years he’s known Rezko, “I’ve never done any favors for him.”
On Tuesday, Bill Burton, press secretary for Obama’s presidential campaign, said the letters Obama wrote in support of the development weren’t intended as a favor to Rezko or Davis.
“This wasn’t done as a favor for anyone,” Burton said in a written statement. “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,” the statement said. “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. . . . They had a wellness clinic and adult day-care services, as well as a series of social services for residents. It’s a successful project. It’s meant a lot to the community, and he’s proud to have supported it.”
The development, called the Cottage View Terrace apartments, opened five years ago at 4801 S. Cottage Grove, providing 97 apartments for low-income senior citizens.
Asked about the Obama letters, Rezko’s attorney, Joseph Duffy, said Tuesday, “Mr. Rezko never spoke with, nor sought a letter from, Senator Obama in connection with that project.”
Davis couldn’t be reached for comment Tuesday.
Further down the article:
While Obama served in the Illinois Senate, he continued to work for the law firm, which Davis left in 1997 to become a developer.
Davis soon went into business with Rezko, creating a company called New Kenwood LLC to build the seven-story apartment building for senior citizens on a vacant stretch of land once occupied by a gas station at 48th and Cottage Grove. The city of Chicago owned the land — nearly two acres tainted by lead, benzene and other toxic chemicals.
Davis is a member of the Chicago Plan Commission. He was originally appointed to the commission in 1991 by his friend, Mayor Daley. Davis, like Rezko, has been a prolific campaign fund-raiser for politicians including Daley and Obama.
Soon after they incorporated New Kenwood in 1998, Davis and Rezko got letters of support from elected officials — Ald. Toni Preckwinkle (4th) and state Rep. Lou Jones (D-Chicago), whose districts included the proposed project.Firm paid city $1 for land
New Kenwood LLC also got letters of support from Obama, who represented a nearby Senate district.”I am writing in support of the New Kenwood LLC’s proposal to build a ninety-seven unit apartment building at 48th and Cottage Grove for senior citizens,” Obama wrote in separate letters, each dated Oct. 28, 1998, to city and state housing officials. “This project will provide much needed housing for Fourth Ward citizens.”
At the time he wrote the letters, Obama was also a lawyer with Miner Barnhill & Galland, the law firm Davis formerly headed. Among the firm’s clients were several companies owned by Davis and Rezko. The firm did not represent New Kenwood.
Davis and Rezko hired Daley & George, the law firm of the mayor’s brother Michael, to help them get $3.1 million from bonds issued by the city of Chicago.
Rezko and Davis paid the city $1 for the land and spent more than $100,000 to clean it up, including the removal of an underground storage tank. Some tainted land was left behind, but state environmental officials approved construction after Rezko and Davis agreed to cover the polluted areas with parking lots, sidewalks or three feet of dirt, records show.
The $14.6 million Cottage View Terrace was funded entirely by city, state and federal taxpayers.
The project included $855,000 in development fees for New Kenwood. Records don’t show how Davis and Rezko split the money. Davis owned 51 percent of New Kenwood, Rezko 49 percent, according to the records.
Letters of support are hardly uncommon and wouldn’t be considered so much a favor, as a part of the job–it’s common for any grant to seek out letters of support from stakeholders in the community.
More interesting is a Chicago Tribune article on the pork Obama did secure for his Senate District in Illinois:
But some of the larger grants Obama sponsored were tied to political allies and show how difficult it is even for politicians advocating reform to avoid the appearance of favoritism as they dole out taxpayer funds. Several non-profit directors, for instance, gave money to Obama’s campaigns soon after their allotments were awarded.
“My philosophy was that, if money was being distributed, then it would be inappropriate for me to not get my share for my district,” Obama, now one of the U.S. Senate Democrats’ leaders on ethics reform, said in an interview. “Did I think it was the best way to prioritize government spending? No.”
The Tribune analyzed 119 grants in which Obama steered more than $6 million for Chicago projects between late 1999 and late 2002, the heart of his Statehouse career and the center of a state government frenzy in which Obama said the pork-barrel process was “wide open.”
Typical of his grants was the $5,000 Obama delivered to the South Shore Public Library for chess equipment, books and knitting supplies, or the $5,000 to help the Sir Miles Davis Academy plaster and paint walls and repair windows.
But other grants reflected politics. In 2001, for example, Obama steered $75,000 to a South Side charity called FORUM Inc., which promised to help churches and community groups get wired to the Internet. Records show five FORUM employees, including one who had declared bankruptcy, had donated $1,000 apiece to Obama’s state Senate campaign.
As the grant dollars were being disbursed to FORUM, the Illinois attorney general filed a civil lawsuit accusing the charity’s founder of engaging in an unrelated kickback scheme. Just days after the suit was filed, Obama quietly returned the $5,000 in donations. “I didn’t want to be associated with money that potentially might have been tainted,” he said.
FORUM founder Yesse Yehudah, who unsuccessfully ran for state Senate against Obama in 1998, denied wrongdoing and, without admitting guilt, settled the attorney general’s lawsuit by paying $10,000 to a charity. He declined to comment.
Obama was not accused of wrongdoing, and he said none of his state grants came about as a quid pro quo.
“It happens that there were major supporters in my district who had been supporters before they got member initiatives,” Obama said, noting that some of his contributors had been his allies for years.
One of those long-time supporters was Rev. Michael Pfleger, the politically active leader of St. Sabina Church. He gave Obama’s campaign $1,500 between 1995 and 2001, including $200 in April 2001, about three months after Obama announced $225,000 in grants to St. Sabina programs.
By Illinois standards, that’s a pretty clean bill of health for Member Inititiatives.