Rezko Primer III. Legal work on projects Rezko was involved

Updated 3/17/2008 after Chicago Tribune and Sun-Times interviewed him at length.

Central to Hillary Clinton’s charge that Obama was representing and taking donations from a slumlords in Rezko and Allison Davis.

Davis was a name partner in the law firm Obama worked for and eventually left the firm to work with Rezko on development deals. The reason Rezko was involved in the deals at all is that he partnered with three non-profits in Chicago to build affordable housing:

Obama said he joined the firm now known as Miner, Barnhill & Galland, which specializes in affordable housing partnerships, in January 1993. He said he was a full-time associate until he entered the state legislature in January 1997, when he went on “of counsel” status, occasionally working on matters for the law firm.

During his time with the law firm, he said his five hours of Rezko-related work consisted of “basically filing incorporation papers” and similar tasks for not-for-profit groups that partnered with Rezmar.

Asked if he had intervened on behalf of Rezko or Rezmar with any government entity, Obama replied, “Never. No.”

In a statement released Monday, the law firm said there were four instances in which it represented the interests of not-for-profit groups in ventures where Rezmar had a partial interest: Central Woodlawn Limited Partnership II, Woodlawn Partners Limited Partnership, KRMB Limited Partnership and Woodlawn Drexel Limited Partnership.

The law firm said Obama’s role was limited to “conducting due diligence under the supervision of more senior attorneys, assisting in documentation of loans, grants and tax credit investments in which the ventures had an interest and providing general legal assistance in land acquisition.

“The firm also assisted the Rezmar Corp. in its acquisition of a general partner interest in an Illinois limited partnership, but Obama had no involvement in the transaction,” the law firm said.

The firm’s senior partner, Judson Miner, said thenon-profits had been clients of the firm before Obama came aboard. “In these transactions, Barack was a young associate doing the kind of work young associates are assigned to do,” Miner said. He said Obama “was always as ethical and reliable as anyone.”

Sun Times April 24, 2007

More from the previous day:

Rezko became Obama’s political patron. Obama got his first campaign contributions on July 31, 1995: $300 from a Loop lawyer, a $5,000 loan from a car dealer, and $2,000 from two food companies owned by Rezko.

Around that time, Rezmar began developing low-income apartments in partnerships with the Chicago Urban League and two other not-for-profit community groups, both founded and run by Bishop Arthur Brazier, pastor of the Apostolic Church of God and a powerful ally of the mayor — the Woodlawn Preservation and Investment Corp., known as WPIC, and the Fund for Community Redevelopment and Revitalization.

All three community groups were clients of the Davis law firm. Davis himself was treasurer of WPIC when it went into business with Rezmar.

Why go into business with Rezmar? “We thought they were successful,” Davis said, noting that little development was taking place in Woodlawn.

At the time, Rezmar had been in business for six years and had become one of City Hall’s favored developers of low-income housing, managing 600 apartments in 15 buildings it rehabbed with government funding. Teaming now with community development groups, Rezmar rehabbed another 15 buildings, with 400 apartments, between 1995 and 1998. Each deal involved a mix of public and private financing — loans from the city or state, federal low-income-housing tax credits and bank loans.

By the time Rezmar started working with those community groups, at least two of its earlier buildings were falling into disrepair — including the Englewood apartment building at 7000 S. Sangamon where the tenants were without heat for five weeks.

The tenants there had no heat from Dec. 27, 1996, until at least Feb. 3, 1997, when the city of Chicago sued to turn the heat on. The case was settled later that month with a $100 fine.

It was during that time that the area’s new state senator, Barack Obama, got a $1,000 campaign donation from Rezmar. The date: Jan. 14, 1997.

Obama works on Rezmar deals

Obama spent the next eight years serving in the Illinois Senate and continued to work for the Davis law firm.Through its partnerships, Rezmar remained a client of the firm, according to ethics statements Obama filed while a state senator.

Davis said he didn’t remember Obama working on the Rezmar projects.

“I don’t recall Barack having any involvement in real estate transactions,” Davis said. “Barack was a litigator. His area of focus was litigation, class-action suits.”

But Obama did legal work on real estate deals while at Davis’ firm, according to biographical information he submitted to the Sun-Times in 1998. Obama specialized “in civil rights litigation, real estate financing, acquisition, construction and/or redevelopment of low-and moderate income housing,” according to his “biographical sketch.”

And he did legal work on Rezko’s deals, according to an e-mail his presidential campaign staff sent the Sun-Times on Feb. 16, in response to earlier inquiries. The staff didn’t specify which Rezmar projects Obama worked on, or his role. But it drew a distinction between working for Rezko and working on projects involving his company.

“Senator Obama did not directly represent Mr. Rezko or his firms. He did represent on a very limited basis ventures in which Mr. Rezko’s entities participated along with others,” according to the e-mail from Obama’s staff.

The Tribune searched multiple records to determine where Obama had done work on behalf of the entities involved:

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.

By the point that the degree of the problems had begun to be realized in 1997, Obama had gone to ‘of counsel status’ after winning a seat in the Illinois State Senate:

The Sun-Times reported that Rezko donated to Obama at the same time residents were without heat at one of the troubled properties operated by Rezko’s firm, Rezmar Corp. The firm received taxpayer help to rehab 30 buildings, including 11 in Obama’s state legislative district on the South Side.

Obama said in the interview Monday that he was unaware of the scope of properties owned by Rezmar or the problems surrounding them. He said none of the affected residents personally sought his help and that aides at his state Senate district office did not recall any inquiries. Still, he said it was “possible” that during his tenure in the legislature that a constituent may have written or called his office “saying, ‘We’re in a building, and we’re unhappy with the service here.'”

Such problems, he said, would normally be brought to the attention of an alderman or the city’s Housing Department. “Had I known that there were buildings that were in deteriorating or poor condition, that certainly would have given me pause. But I didn’t” know, Obama said.

Obama said he joined the firm now known as Miner, Barnhill & Galland, which specializes in affordable housing partnerships, in January 1993. He said he was a full-time associate until he entered the state legislature in January 1997, when he went on “of counsel” status, occasionally working on matters for the law firm.

Sun Times April 24, 2007

Sun Times list of projects worked on by Obama’s law firm which included Rezmar

Sun-Times interview:

I was practicing law for the next four years and . . . our paths would cross at times because they were doing development work. And my firm, which was mostly a litigation firm, had a small transactional practice that represented not for profits that were doing affordable housing work. And that’s where I wound up doing five hours worth or six hours worth of legal work on a partnership, a joint venture between the – I forget what the name of it was – but it was a community development group based in Woodlawn that Arthur Brazier had started and Rezmar. So we were representing the not for profit.

But at that time, I wasn’t particularly close with Tony, although I was familiar with him and I would see him on occasion.

 Tribune:

Fast-forward a little bit, I did not have a lot of interactions with Tony at that point. I was working as an associate at a law firm. There may have been interactions with my law firm and some of the development partners of Rezmar because they would often partner with not-for-profits and we had a small transactional practice in the law firm that specialized in representing not-for-profits—you know, church-based organizations that were doing community development.

I don’t recall exactly how many times at that point I had met Tony Rezko, but I don’t think at that point I would have considered him a friend. He was an acquaintance.