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The Real Story of Rezko and Obama: 10 Myths Debunked by JohnKWilson
Tue Jan 29, 2008 at 02:20:40 PM PST
Note: I'm the author of a new book, Barack Obama: This Improbable Quest, but I'm not part of the Obama campaign.
There’s been a huge amount of misinformation and rumor about Barack Obama’s dealings with Tony Rezko. This is not a new story. At the first Democratic debate in 2007, Brian Williams of NBC asked Obama about his connections to Rezko. The same thing happened on ABC’s This Week with George Stephanopoulos. But it’s a complex set of charges, and a lot of details have been falsely reported on blogs and in the mainstream press.
Here are 10 myths debunked about Obama and Rezko:
JohnKWilson's diary :: ::
Myth #1: Obama did legal work for Rezko
Claim: Hillary Clinton during a debate denounced Obama for "representing your contributor, Rezko, in his slum landlord business in inner city Chicago."
The truth: According to Factcheck.org, "Obama was associated with a law firm that represented the community groups working with Rezko on several deals. There's no evidence that Obama spent much time on them, and he never represented Rezko directly. So it was wrong for Clinton to say he was ‘representing ... Rezko.’ That's untrue."
Myth #2: Obama knew Rezko was a slumlord
Claim: The Chicago Sun-Times reported that in 1997, Rezko’s company failed to turn the heat back on in one of his buildings, while giving $1,000 to Obama’s campaign fund.
The truth: There’s no evidence that Obama knew about problems with Rezko’s buildings. A state senator doesn’t deal with tenant complaints, and the Chicago newspapers never reported on Rezko’s problems as a landlord until after he was indicted. According to the Chicago Tribune, "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." http://www.chicagotribune.com/...
Myth #3: Obama underpaid for his house in a deal with Rezko
Claim: Chicago Tribune columnist John Kass wrote: "Rezko paid more than the asking price for the side lot, and Obama paid less than the asking price for the big house. It’s the Chicago way." Kass claimed that Rezko was "Obama's Real Estate Fairy" and this is "the story of the dream house the Obamas wanted and couldn't quite afford and how the Rezkos helped."
The truth: None of this is true. The seller decided to divide the lot in offering it for sale, not Obama or Rezko. Rezko had paid the list price for his lot, not an excessive amount (as the resale value later proved). The owner reportedly had already been offered $625,000 for the side lot, so Rezko didn’t offer any more money and there was no way Obama could have gotten a special deal this way. The only special arrangement Rezko provided was selling the two lots on the same day, which simplified matters for the seller. Obama paid $1.65 million for a house originally priced at $1.95 million. His was the higher of two bids for the main property. It’s not unusual at all in the Chicago real estate business to see a 15 percent price cut on an expensive house that’s been on the market for four months. Nor is it unusual that a vacant lot next door would sell to a condo developer without such a discount. In the Hyde Park market, there are a lot of upper-middle-class residents making six figures, but not very many millionaires (it’s not Lincoln Park or the Gold Coast). Therefore, a pricey mansion is very difficult to sell, while a $300,000 townhouse is very common.
Myth #4: Rezko’s lot was a front (yard) deal
Claim: One blogger declared it was "a $925,000 favor to a sitting US Senator" because "the Rezko property was never intended to be a separate piece of land."
The truth: It’s insane to think that Obama arranged for Rezko to buy the lot as his front yard, and never intended for anyone to develop it. If Obama had arranged such a deal, it would be crazy for him to spend $104,500 to buy part of the land from Rezko. There is not even the slightest evidence to support this notion.
Myth #5: Obama underpaid (or overpaid) for the slice of Rezko’s lot
Claim: John Kass declared: "Obama’s appraiser told him the fair market value of that slice was $40,500. Since that’s one-sixth of the Rezko side, it means Rezko paid $625,000 for property that was actually worth $243,000. That would make Rezko a complete fool. But he’s no fool." Fox News Channel incorrectly reported that Rezko "sold half that lot to Obama for 1/3 its original value."
The truth: The appraiser was clearly wrong (probably basing the low value on the fact that 1/6th of the lot was too small for any house, which would dramatically reduce its value standing alone). That’s why Obama decided to buy 1/6th of Rezko’s lot for 1/6th of what Rezko paid for it ($104,500). A year after the 10-foot-wide strip of land was sold to Obama, a Rezko business associate bought the rest of the lot for $575,000, resulting in a profit for the Rezkos of $54,000 from the two land sales. This sale proved that Obama paid fair market value for his portion of the land.
Myth #6: Obama hasn’t returned all the money linked to Rezko’s donations
Claim: The Chicago Sun-Times accused Obama of downplaying the $50,000–$60,000 in donations he received from Rezko (Rezko, before his legal troubles started, had cohosted a fundraiser for Obama). The newspaper claimed the actual amount was $168,000.
The truth: The Sun Times came up with that figure by counting every donation to Obama from anyone ever associated with Rezko, even if there was no evidence Rezko prompted the donation. Obama donated additional money to charity, but he’s under no obligation (legal or even moral) to return every dollar ever linked to Rezko. If you play a game of "six degrees of separation" with Rezko, he’s linked to almost every politician in Chicago.
Myth #7: Rezko had a special relationship with Obama
Claim: The Clinton campaign denounces "Sen. Obama's 17-year relationship with the indicted influence peddler."
The truth: Rezko attached himself to lots of politicians. Rezko donated money to every major Democratic politician in Illinois, then helped organize a $3.5 million fundraiser for President George W. Bush in 2003. After giving large campaign donations to Democratic Illinois governor Rod Blagojevich, Rezko arranged to have his buddies appointed by Blagojevich to state boards such as the Teachers’ Retirement System Board and the Illinois Health Facilities Planning Board. With his friend Stuart Levine, Rezko threatened to hold up a $220 million deal to invest teachers’ pension fund money unless $2 million was paid to Levine or $1.5 million was donated to Blagojevich’s campaign. Rezko and Levine also demanded a $1 million cut from a developer to build a hospital. Rezko was indicted for pretending to sell his Papa John’s pizza restaurants while secretly maintaining control of them, and fraudulently using the transaction to get $10 million in loans. It is Blagojevich, not Obama, who did favors for Rezko. Rezko’s eye for scouting political talent was amazing, but he did not capitalize on Obama’s influence. Obama said he had known Rezko for twenty years and "he had never asked me for anything. I’ve never done any favors for him."
Myth #8: Obama did favors for Rezko
Claim: Chicago Sun-Times revealed that in 1998, Obama wrote a letter endorsing a low-income housing development for which Rezko was a codeveloper. As the Sun-Times put it, "NOT A FAVOR? As a state senator, he went to bat for now-indicted developer’s deal." Chicago Tribune columnist John Kass wrote, "No favors? When you transcend politics and walk on water, I guess it all depends on what your definition of favor is."
The truth: The common definition of a favor in this context is a political action done in exchange for donations. Rezko’s lawyer reported that Rezko had not asked Obama to write the letter. Instead, Obama (along with a local state representative and an alderman) endorsed the project because it had widespread community support. It’s difficult to imagine any politician on the south side of Chicago who wouldn’t have a routine letter written to endorse government funding for affordable housing and social services for low-income senior citizens in that area. When it came to political influence, Obama didn’t do any favors for Rezko. The Chicago Tribune reported, "when Rezko pushed for passage in Springfield of a major gambling measure, Obama vocally opposed it."
Myth #9: Obama should have known about Rezko’s sleazy background
Claim: The Chicago Tribune, although endorsing Obama, wrote: "His assertion in network TV interviews last week that nobody had indications Rezko was engaging in wrongdoing strains credulity: Tribune stories linked Rezko to questionable fundraising for Gov. Rod Blagojevich in 2004."
The truth: At the time Obama bought his house, there was no public indication of Rezko’s problems. When Obama bought a small strip of Rezko’s land in 2006, rumors were swirling around Chicago that the federal government was investigating Rezko, but he wasn’t indicted until October 2006. The Tribune stories before 2006 reveal that Rezko was a tightly connected political player, but the evidence of criminal misconduct wasn’t proven.
Myth #10: Obama hasn’t been forthcoming about his mistakes with Rezko
Claim: The Chicago Tribune editorialized, "Obama has been too self-exculpatory."
The truth: Obama has been honest about the mistake he made, and the fact that Rezko was trying to buy future influence with him. Obama declared, "I am the first one to acknowledge that it was a boneheaded move for me to purchase this 10-foot strip from Rezko, given that he was already under a cloud of concern. I will also acknowledge that from his perspective, he no doubt believed that by buying the piece of property next to me that he would, if not be doing me a favor, it would help strengthen our relationship." Obama’s mistake was in allowing the appearance of impropriety. He never actually did anything wrong. And that’s the key issue here.
Despite all of these rumors about Obama and Rezko, none of the evidence indicates any actual wrongdoing. Conservative Republican Tom Bevan called the evidence against Obama "pretty darn weak." Conor Clarke of the New Republic reported that Obama’s real estate deal with Rezko was a "nonscandal." According to Clarke, "journalists have followed the smoke and haven’t found the fire. At that point, accusing someone of something that looks wrong stops making sense."
http://www.dailykos.com/story/2008/1/29/171056/015
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