June 05, 2008, 0:00 a.m.
Rezko: Guilty
For an untouchable change agent, Obama certainly has a lot of questionable associates.
By Stephen Spruiell
Talk about bad timing. Barack Obama’s friend and fundraiser Antoin “Tony” Rezko was found guilty today of mail fraud, wire fraud, soliciting bribes, and money laundering in connection to a federal investigation into political corruption in the state of Illinois. Rezko now faces sentencing on 16 of 24 counts, some of which carry punishments of up to 20 years in prison.
The verdict comes as Obama is securing the Democratic nomination and trying to put behind him yet another controversy involving Trinity United Church of Christ. It should be stated at the outset that Obama was not involved in any of the illegal acts a Chicago jury has found Rezko guilty of committing. But Obama
is guilty of maintaining a close relationship with Rezko long after it had become clear that Rezko’s primary business was buying and selling political influence for personal gain.
The following fact pattern was out in the open long before Obama severed his ties to Rezko (sometime in late 2006): In 1983, Rezko started raising a lot of money for Chicago politicians. In 1989, he and his partner Daniel Mahru started vacuuming up deals with the city to develop low-income housing, despite having virtually zero experience in the field. They proceeded to obtain over $100 million in city, state, and federal grants and bank loans to develop 30 run-down properties into affordable-housing projects, earning $6.9 million for themselves. By 2007, the city had sued them numerous times for failing to heat these properties; over half of the properties had fallen into foreclosure, and six of them were boarded up.
Obama helped put one of these deals together during his time as a junior associate at Davis Miner Barnhill & Galland. Other lawyers at Davis Miner helped Rezko acquire half of the properties that fell into disrepair. And many of these properties were located in the district Obama represented as an Illinois state senator. Nonetheless, Obama told the Chicago Sun-Times that he was unaware of Rezko’s growing reputation as a slumlord until he read Sun-Times reporter Tim Novak’s two-part series on the subject. So we are to believe (yet again) that Obama was the last person to know what one of his longtime friends was up to.
Now that may well be true — but still, it indicates that Obama is the kind of Democrat who cares a great deal about securing the funding for liberal programs like subsidized housing, but very little about what happens to the money after that. In Rezko’s case, it appears to have been doled out based on which developer had the right political connections, not which one could actually do the job.
Even if Obama can claim plausible deniability about the deteriorating shape of Rezko’s slums, he faces a more difficult challenge in explaining why he entered into a real-estate deal with Rezko after the Chicago papers had run over 100 stories about the clouds gathering over Rezko’s head. When the Obamas were looking for a new house in the summer of 2005, Rezko helped them buy their dream home by purchasing an adjoining lot they could not afford, then selling them a strip of the land on which they wanted to build a fence.
Obama
admitted to the Sun-Times that when he bought the strip of land, he knew Rezko “was going to have some significant legal problems,” and characterized his decision to buy the property anyway as a “boneheaded move.” Obama said he proceeded with the transaction because Rezko had always acted “in an above-board manner with me and I considered him a friend.”
Obama may have thought all of his interactions with Rezko were above-board, but they weren’t. One of the counts against Rezko detailed how he funneled the proceeds of an illegal kickback scheme into Obama’s 2004 Senate campaign. Rezko’s co-conspirator, a former trustee of the Illinois Teachers Retirement System (TRS) named Stuart Levine, told the jury that he directed the TRS to invest $50 million with a firm called Glencoe Capital. In exchange, Levine arranged for himself and Rezko to be paid a fraudulent $500,000 “finder’s fee.” Levine routed Rezko’s half to an associate named Joseph Aramanda in March of 2004. That month, Aramanda wrote a $10,000 check to Barack Obama’s campaign.
Of course, Obama may well not have known the details of such a shadowy transaction, and his campaign has donated that $10,000 — and all other Rezko-related money — to charity.
But what became clear over the course of the Rezko trial is that this kind of scheme exemplified Rezko’s way of doing business. It’s hard to believe that Obama could be so clueless about Rezko’s character, just as it’s hard to believe that Obama sat in Jeremiah Wright’s pews for 20 years and had no idea that the man was a radical black nationalist.
The question now is whether Rezko will try to cut a deal with the government to reduce his sentence by cooperating with prosecutors in further investigations that stem from this trial. Many in Chicago speculate that Illinois Democratic governor Rod Blagojevich could be the next target. During Rezko’s trial, several witnesses
testified that Blagojevich was aware of schemes to shake down donors who stood to gain lucrative state contracts.
In the only
interview he has granted since his 2006 indictment, Rezko was asked by
Chicago magazine if he would consider testifying against others to save his own skin. “Hell no,” he told the magazine. “Tell them I’ll see them in court on February 25th.” Now that his trial is over, and he’s looking at a long prison term, it will be interesting to see whether Rezko came through the ordeal with his defiance intact.
— Stephen Spruiell is an NRO
staff reporter.
Wednesday, June 4th, 2008
Analysis: McCain, Obama polar opposites
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