Barack Obama:
A Radical Leftist’s Journey from Community Organizing to Politics
Summary
: The remarkable ascent of Demo-cratic presidential candidate Barack Obamabegins with his career as a “communityorganizer” for far-left causes in Chicago,an experience that served as a launching pad for his political career. Along with way,Obama acquired some unsavory friendsincluding sleazy political fundraiser Tony Rezko and unrepentant Pentagon bomber William Ayers. Obama promises to carry hisactivist spirit into national politics, but doeshe also carry the smell of Chicago politicsinto the national arena?
CONTENTS
June 2008
Barack Obama
Page 1
Philanthropy Notes
Page 12
“What Obama is proposing goes far beyondthe boundaries of traditional communityservice volunteers. Obama wants to bringthe spirit and tactics of community organiz-ing into the political system, and there is noroad map out there for how to do it.” —JohnK. Wilson,
Barack Obama, The ImprobableQuest
(2008)
T
he Chicago winter of 1996-1997 wasa bad one, especially for residents of the Englewood apartment building at7000-10 South Sangamon. The 31-unit build-ing had been rehabilitated with a $653,500loan from the city of Chicago’s low-incomehousing fund, another $654,000 in bank
fi
-nancing, and $1.9 million in tax credits. Thegeneral partner on the project was RezmarCorporation, run by Antoin (“Tony”) Rezkoand Daniel Mahru. But the tenants shiveredfor over
fi
ve weeks without heat becauseRezko and Mahru claimed they
lacked thecash to turn the heat back on again.Rezko was a successful real estate in-vestor who owned fast-food restaurants inChicago’s inner-city neighborhoods. But hebranched out into politics in the early 1980swhen he met Jabir Herbert Muhammad,the former manager of retired heavyweightchampion Muhammad Ali and son of Na-tion of Islam founder Elijah Muhammad.Jabir Muhammad asked Rezko to donate tomayoral candidate Harold Washington, anAfrican-American challenging Chicago’swhite establishment. After Washington waselected mayor, Rezko, an Arab Christian whoemigrated from Syria to Chicago in 1971, be-came increasingly involved in causes linkinghis business interests to the political clout of Chicago’s black community. For several yearshe was even chairman of the Muhammad AliFoundation, an Islamic charity founded in1975 that in 1985 changed its name fromthe Elijah Muhammad Foundation whenthe champ lent it his name. Rezko was alsothe actual owner of fast-food franchises thatJabir Mohammed told city of
fi
cials were his.
By Elias Crim and Matthew Vadum
When you’re running for president, it’s hard to outrun your past. Shown in old mug-shots, unrepentant terrorist William Ayers (above center), and his wife, BernadineDohrn (right), helped launch Barack Obama’s political career by holding a 1995 fund-raiser in their Hyde Park home. The event came years after the couple detonatedbombs in the Pentagon, the U.S. Capitol, and New York City police headquarters.
’,’o
2June 2008
Foundation
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Editor:
Matthew Vadum
Publisher:
Terrence Scanlon
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According to the Chicago Tribune (March16, 2005), in the late 1990s Jabir Moham-med was the front man who allowed Rezkoto secure city contracts using Chicago’sminority set-aside program.Harold Washington died in 1987 and in1989, the year Richard M. Daley was electedto the
fi
rst of six (so far) terms as mayor of Chicago, Rezko and Mahru formed RezmarCorp., promising to build more low-incomehousing in Chicago. Rezmar became theDaley administration’s
favored low-incomehousing developer. Rezko’s timing was good:During these years many neighborhoods onthe South Side were undergoing gentri
fi
ca-tion, and the prospect of rising real estatevalues attracted a
fl
ock of developers withwallets open to make whatever campaigncontributions might be necessary in orderto get business done.The South Sangamon building was one of 30 low-income projects—containing a totalof 1,025 apartments—that Rezko took onbetween 1989 and 1998. In all, Rezmar Corp.collected more than $100 million by arrang-ing “public-private partnerships” with thecity, the state and federal governments, andin bank loans to rehab South Side buildingsintended as low-income housing. NeitherRezko nor his partner had any constructionexperience when they created Rezmar, butthey became experts at working Chicago’spolitical system to acquire taxpayer subsidiesfor their redevelopment schemes.Rezko and Mahru also managed thebuildings. Not surprisingly, every one of theprojects ran into
fi
nancial dif
fi
culties withinsix years, according to a Chicago Sun-Timesinvestigation, and more than half went intoforeclosure. Chicago sued Rezmar on at leasta dozen occasions. “Their buildings werefalling apart,” a former city of
fi
cial told theSun-Times. “They just didn’t pay attentionto the condition of these buildings.”To arrange project
fi
nancing Rezko fre-quently relied on a small Chicago law
fi
rm,Davis Miner Branhill & Galland, whose toppartner, Allison S. Davis, was a Rezko associ-ate and Daley administration insider.Davis’s name recently surfaced inRezko’s trial for money-laundering, fraud,bribery, and extortion. Witnesses say he wasthe go-between in one of the alleged crimes:an attempted pay-to-play shakedown of Chicago businessman Tom Rosenberg whose
fi
rm managed $1 billion for the Illinois Teach-ers Retirement Association, a $40 billionpension fund. In early 2004 Davis allegedlyapproached Rezko about how to secure anadditional $220 million pension allocationfor Rosenberg’s asset management
fi
rm andwas told that Rosenberg needed to
pay Rezko
a $2 million kick-back or raise $1.5 millionfor the re-election campaign of Illinois Gov-ernor Rod Blagojevich, a Democrat. At presstime, the trial, which ended on May 5, hadgone to the jury for deliberation. Rezko didnot testify and made no defense, his lawyersarguing that the prosecution failed to meetits burden of proof.
Ensnared in Chicago Politics
The sleazy tale of Tony Rezko —corruptbusinessman and political fundraiser— ishardly unique in Chicago. What makes thestory noteworthy is that it touches Demo-cratic presidential candidate Barack Obamawho has promised to move America awayfrom politics as usual. Obama now admitsthat becoming involved with Rezko whenhe purchased a new home in January 2005following his election to the U.S. Senate theprevious November was a “bone-headedmistake.” The terms of that involvementhave received widespread publicity: Senator-elect Obama and Rezko toured the propertytogether when it was already known thatRezko was under criminal investigation.Obama and his wife Michelle subsequentlypaid the seller $1.65 million for their newhome, $300,000 below the asking price. Onthe same day Mrs. Rita Rezko paid the sameseller the asking price of $625,000 for the
Barack Obama endorsed Chicago Mayor Richard M. Daley (right) for a sixth term inJanuary 2007. Daley later returned the favor, endorsing Obama for president.
3June 2008
Foundation
Watch
adjoining 9,000-square-foot lot. In January2006, Mrs. Rezko sold a 10 foot-by-150 footstrip of the lot to the Obamas for $104,500,and in December she sold the remainder of the property to her husband’s lawyer for$575,000.Obama’s previous connections withRezko have received less attention, but theywill invite further scrutiny during the elec-tion season and as Rezko’s legal troublesplay out. During that badwinter 11 years ago whenRezmar couldn’t affordto turn on its tenants’heat, Obama was a third-year associate at AllisonDavis’s law
fi
rm, whichrepresented Rezmar. Astandard Rezmar prac-tice was to team up withnonpro
fi
t groups that wereclients of the Davis
fi
rmto secure government andprivate funding for low-income housing projects.The groups included theChicago Urban League,the Woodlawn Preserva-tion and Investment Corp.(WPIC), and the Fund forCommunity Redevelop-ment and Revitalization.According to the
fi
rmand the Obama campaign,Obama had little associa-tion with Rezmar, gener-ating only
fi
ve billablehours of work related toRezko’s business. (The Sun-Times says none of the billingrecords have been supplied to the media.)However, Obama’s acquaintance withRezko goes back even further. He has said thatin the early 1990s, while he was a top studentat Harvard Law School, Rezko offered him a job—that he did not accept. He admits thatthe two men stayed in touch following hiswork for Davis, that the Obamas and Rezkoshave had dinners together, and that Rezkohosted a big 2003 fundraiser at his home whenObama ran for the Democratic nomination forthe U.S. Senate seat of retiring RepublicanSenator Peter Fitzgerald. According to theSun-Times (June 18, 2007), Rezko and hisassociates have donated at least $168,000 toObama’s campaigns, three times more thanwhat Obama has acknowledged.Sun-Times research also found that 11Rezko buildings were located in Obama’sdistrict during the years when he was an Il-linois state senator (1997-2004). Would theresidents of these apartment buildings havevoted to elect the idealistic young Obama tothe state senate had they known of his tiesto their negligent landlord?As a young activist in the mid-1980s,Obama worked with community and churchgroups to clean up public housing on Chi-cago’s South Side. Protests and demonstra-tions could accomplish only so much, so heswitched careers from community organizingto elective politics. Obama explained hisvision of the agitator-politician to a reporterthis way:“What if a politician were to seehis job as that of an organizer, aspart teacher and part advocate, onewho does not sell voters short butwho educates them about the realchoices before them? As an electedpublic of
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cial, for instance, I couldbring church and community lead-ers together easier than I could as acommunity organizer or lawyer…We must form grass-roots structuresthat would hold me and other electedof
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cials more accountable for theiractions.”Those words mustring hollow to theRezko tenants.Obama’s staff sayshe was unaware of Rezmar Corp.’s fail-ings, which they saywould more appro-priately be handledby a local alderman.The irony here is thatObama understoodthat grassroots or-ganizers could notsucceed unless theyhad political alliesin power. And it’sapparently why hesought the fund-raising help of aman identi
fi
ed as a“slumlord” by hisrival for the Demo-cratic presidentialnomination, SenatorHillary Clinton.The South Sanga-mon building finallyhad its heat turned onin February 1997 after the city of Chicagosued, eventually collecting a $100
fi
ne fromRezmar
.
At about the same time—January14, 1997, according to public records—statesenator-elect Obama received a $1,000 cam-paign donation from Rezmar.
Community Organizing: From Saul Alin-sky to Martin Luther King
Between his graduation from ColumbiaUniversity in 1983 and his admission toHarvard Law School in 1988, Obama movedto Chicago where he became a communityorganizer. He returned to Chicago with hislaw degree in 1991 and resumed advocacy
Real estate developer Tony Rezko and Obama embrace in this undatedphotograph.
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