How close were Barack Obama and Tony Rezko?

It was almost inevitable that Obama, as a Chicago politician, would spend a lot of quality time with someone like recently jailed Rezko. But that doesn't excuse bad judgment.

Topics: 2008 Elections, Hillary Rodham Clinton, George W. Bush, Democratic Party, Barack Obama, Chicago, Rod Blagojevich,

How close were Barack Obama and Tony Rezko?

During his rise through Illinois politics, it was inevitable that Barack Obama would encounter a suckerfish like Tony Rezko. Illinois has more governmental bodies than any other state — over 500 in Cook County alone — and therefore, more opportunities for operators.

Usually, their antics fill the front pages of only the Chicago Tribune and the Sun-Times. But thanks to an accusation by Hillary Clinton, who called him a “slum landlord,” Tony Rezko’s alleged crookedness is national news. The Syrian-American businessman is facing federal charges for a scheme to extort money from investment firms seeking business with the state. On Monday, he was arrested at his Mediterranean-style mansion and sent to jail for hiding his assets while out on bond. (Salon attempted to contact Rezko’s lawyer, Joseph J. Duffy, but he is “not accepting press calls,” according to his office.)

Obama’s dealings with his hinky friend have never led him afoul of the law, but they show that, despite his high-minded politics, he was no purer — or no savvier — than Illinois’ biggest hacks in his weakness for a generous contributor. He wouldn’t even say no when Rezko cooked up a deal to help the newly elected senator buy a gracious Georgian-revival home.

Rezko, after all, built part of his fortune by exploiting the black community that Obama had served in the state Senate, and by milking government programs meant to benefit black-owned businesses. But Obama took Rezko’s money even after the businessman was sued by the city of Chicago for failing to heat his low-income apartments, and even after Rezko was caught using a black business partner to obtain a minority set-aside for a fast-food franchise at O’Hare Airport.



Now Rezko is wearing an orange jumpsuit. And Obama may spend the rest of the presidential campaign wearing the jacket for his friendship with the fixer.

Antoin “Tony” Rezko arrived in Chicago from Syria in 1971. He barely spoke English, didn’t have any relatives on the Cook County Democratic Party’s Central Committee, and belonged to an ethnic group — Arab Christians — too small to elect even an alderman. There’s only one way a guy like that can attain political power. He has to buy it.

Rezko began his career as a civil engineer, but he was soon investing in real estate and fast-food restaurants on the side. Many of his business ventures were in downscale black neighborhoods. He built houses on the historically black South Side, and started chains of Subway sandwich shops and Papa John’s pizzerias. Those deals provided him the money to connect with his first powerful patron: Muhammad Ali. In 1983, at the urging of Ali’s business manager, Jabir Herbert Muhammad, Rezko held a fundraiser for mayoral candidate Harold Washington, who would become Chicago’s first black mayor. After that, he was invited to join Ali’s entourage as a business consultant. Rezko put together endorsement deals for the Greatest, and was executive director of the Muhammad Ali Foundation, a group devoted to spreading Islam.

Rezko also used his connections with the Ali camp to expand his fast-food holdings. After Washington was elected mayor, Jabir Herbert Muhammad’s company, Crucial Concessions, won a contract to sell food and drinks at the Lake Michigan beaches. Rezko took over the company’s operations. In 1997, Crucial opened two Panda Express Restaurants at O’Hare, under the city’s minority set-aside program. It was stripped of those franchises in 2005, when investigators determined the company was a front for Rezko.

In 1989, Rezko and a business partner founded Rezmar Inc., a real estate company that aimed to rehabilitate South Side apartment buildings. Partnering with community groups that could help them win government loans, Rezmar purchased 30 properties. At first, Rezmar had a golden reputation. But many of its tenants would have been better off in housing projects. During the winter of 1997, a Rezmar building was without heat for five weeks, until the city took the company to court. It was one of a dozen cases in which the city had to force Rezmar to turn on heat for its tenants. More than half of Rezmar’s buildings went into foreclosure, and several have been boarded up. According to a Chicago Sun-Times investigation, Rezmar properties were “riddled with problems — including squalid living conditions, vacant apartments, lack of heat, squatters and drug dealers.”

Rezmar’s work was done on the cheap, says a former employee who spoke to Salon on the condition of anonymity. But that was at the urging of the city of Chicago, which figured rehabbers could develop more units if they installed low-grade appliances and cabinetry. When boilers and refrigerators started to wear out after six or seven years, Rezmar hadn’t banked enough money to fix them. Rezko’s business partner, Daniel Mahru, oversaw the day-to-day maintenance. Rezko’s job was to raise equity and cultivate politicians. But that doesn’t excuse him from the “slum landlord” tag.

“Somebody pointed out to me that you can’t distinguish between [Mahru and Rezko],” the employee says. “They were both responsible.” (Mahru did not return a call seeking comment. When Salon called his office a second time to ask about Rezko, a secretary said, “I don’t know anything about that,” and hung up.)

One of Rezmar’s partners was the Woodlawn Preservation and Investment Co. (WPIC), founded by Bishop Arthur Brazier, a prominent South Side pastor who later endorsed Obama in his U.S. Senate campaign. WPIC ended its relationship with Rezmar in 2005, says executive director Laura Lane. The National Equity Fund, which syndicates low-income housing tax credits, tipped off the organization about Rezmar’s financial problems. But Lane says Rezmar’s properties “weren’t in such a state of disrepair.” And Brazier disputes the “slum landlord” description.

“When he was with WPIC, the relationship was a good one,” he says now.

However, in 2007 Brazier told the Sun-Times that “WPIC became disenchanted with Rezmar and wanted to get rid of them. They thought the buildings weren’t being kept up properly. There were some financial problems.”

Obama first met Rezko through Rezmar. In 1990, a Rezmar executive read an article about Obama’s election as president of the Harvard Law Review. Intrigued by Obama’s interest in housing issues, and his plans to return to Chicago, he phoned the young law student and struck up a friendship. When the executive learned that Obama was interested in politics, he introduced him to Rezko.

“He’s great,” Rezko told the executive. “He’s really going to go places.”

After law school, Obama went to work for the firm of Davis Miner Barnhill & Galland. During Rezko’s stint in ghetto rehab, Davis Miner represented three community groups in partnership with Rezmar. Through them, the law firm helped Rezko obtain $43 million in government funds.

At last week’s debate in South Carolina, Hillary Clinton stung Obama for “representing your contributor, Rezko, in his slum-landlord business in inner-city Chicago.”

If Clinton was trying to stick Rezko on Obama, that was the wrong line of attack. At Davis Miner, Obama did a total of five hours of legal work for Rezko, under the supervision of more-experienced attorneys. Obama didn’t really become tight with Rezko until he ran for the state Senate, in 1995. Rezko, who can spot a comer, was first in line with a check. The day the campaign started, Obama received $2,000 from two of Rezko’s fast-food businesses. Eight years later, when Obama was campaigning for the U.S. Senate, Rezko hosted a fundraiser at his suburban mansion.

Obama’s state Senate district contained a number of Rezmar properties, but as a legislator, he couldn’t help the company with loans or inspection problems. Still, says Rezko’s ex-employee, Rezko appreciated Obama’s potential. And hobnobbing with politicians was a sign he’d made it in America.

“Occasionally, he would say to me, ‘Can you believe this? You know where I came from,’” says the employee. “He was very humbled by it.”

(Around the same time, Rezko was also funding the career of an ambitious young state legislator named Rod Blagojevich, who had been elected to the General Assembly with the help of his ward-boss father-in-law and was aiming for Congress. Over the years, Rezko would donate $117,652 to Blagojevich’s campaigns. He was a smart investor in political futures: Blagojevich is now governor. Three of Rezko’s associates were appointed to high-ranking positions in Blagojevich’s administration. But Rezko’s connection to the governor is the source of his current legal troubles: Rezko is going to trial on Feb. 25 on charges he demanded kickbacks from investment firms seeking money from the Illinois Teachers’ Retirement Fund. His alleged co-conspirator, who has already pleaded guilty, is Republican fundraiser Stuart Levine. Rezko allegedly used his clout with the Blagojevich administration to help reappoint Levine to the board that controls the fund.)

Rezko was ecumenical in his largesse, doling out hundreds of thousands of dollars in political contributions. He served as an advisor to now-imprisoned Republican Gov. George Ryan, and co-chaired a reelection fundraiser for President George W. Bush. And, of course, he paid to have his photo taken with Bill and Hillary Clinton. (Chicago receiving lines can be so embarrassing: First lady Rosalynn Carter was once photographed with a precinct captain named John Wayne Gacy.)

It’s clear that Rezko was always on the lookout for “a clout,” Chicagoese for a political patron — in Rezko’s case, a patron who could give a Syrian immigrant the same opportunity to work the system as an Irish lawyer who’d gone to Catholic school with the mayor. In Obama’s case, though, Rezko has asked for very little. He’s only received one political favor, and it didn’t benefit him financially: On Rezko’s recommendation, the son of a campaign contributor served an internship in Obama’s Senate office. It could be that Rezko was saving his chits until the senator achieved the one office unattainable to a machine pol.

Obama, on the other hand, seems to have derived some material benefit from his friendship with Rezko. During his first year in the Senate, flush with the book advance for “The Audacity of Hope,” Obama and his wife decided to trade up from a condo to a bigger, more secure home in Kenwood, a South Side neighborhood of turreted, balconied piles popular with University of Chicago econ professors looking to blow their Nobel Prize loot. They found a $1.65 million house with four fireplaces, a wine cellar and a black wrought-iron fence. The doctor who lived there also owned the vacant lot next door and, although the properties were listed separately, wanted to sell both at the same time. Despite their new income, the Obamas could not have afforded both parcels. The Obamas closed on their house in June 2005. On the same day, Rezko’s wife, Rita, purchased the vacant lot for $625,000. They later sold a portion of the lot to the Obamas, for $104,500, so the family could expand its yard. The Rezkos then paid $14,000 to build a fence along the property line.

The sale was brokered by real estate agent Donna Schwan, who’d known Rezko when he lived in the neighborhood. Asked who approached her about the house, Schwan told Salon, “I honestly don’t remember. Tony Rezko lived across the street, so he’d been interested in the lot.”

Last year, Rezko sold the vacant lot to his attorney, Michael Sreenan, who is now peddling it for $950,000. A “Land for Sale” sign rises above the fenced lot, which is hidden by fir trees. Schwan is handling that deal, too. Since Tuesday, when the property was featured in an NBC report, she’s received more than 100 phone calls. Living next door to Obama is a great amenity, she insists. His house is protected by the Secret Service — their SUVs idle in the street and under the basketball hoop in the driveway. “No Stopping/No Standing” signs bar visitors from parking out front, even though there’s a synagogue directly across the street.

“You’d have the most secure house in Chicago,” she says.

After the Chicago Tribune uncovered the land deal, Obama described Rezko as “a supporter of mine since my first race for state Senate” and a friend with whom he occasionally had lunch or dinner. Obama knew that Rezko was under grand jury investigation, but believed that “as long as I operated in an open, up-front fashion, and all the T’s were crossed and I’s were dotted, that it wouldn’t be an issue.”

James L. Merriner, an Illinois political expert who has conducted the only interview with Rezko since his indictment, says Obama has done “nothing illegal. It’s just unsavory.”

Obama knew about Rezko’s legal problems, but Merriner believes he didn’t think they would taint his Senator Galahad image.

“It goes back to when Obama’s in the state Senate,” Merriner says. “He had a real sense of personal mission. I think he thought he was just above it. He seemed to think he was on a plane above that.”

If you’ve been to Chicago, you know it’s a pretty flat place. And if you follow Chicago politics, you know that even the noblest politician can’t remain chaste.

“The national media, they tend to overlook that Obama is a regular Cook County Democrat,” Merriner says. “Maybe he’s a cut above, but he’s still an Illinois politician.”

As long as Rezko was only under investigation, Obama was willing to do business with him. But then Rezko committed the fixer’s biggest sin: He got indicted and got his name in the papers. After that, the friendship cooled. Obama has donated $157,835 in Rezko-linked contributions to charity and has called the real estate deal “boneheaded.” But he still lives in the house. And he still has the power Rezko helped him attain.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 11
  • Close
  • Fullscreen
  • Thumbnails

    Ten spectacular graphic novels from 2014

    Beautiful Darkness by Fabien Vehlmann & Kerascoët
    Kerascoët's lovely, delicate pen-and-watercolor art -- all intricate botanicals, big eyes and flowing hair -- gives this fairy story a deceptively pretty finish. You find out quickly, however, that these are the heartless and heedless fairies of folk legend, not the sentimental sprites beloved by the Victorians and Disney fans. A host of tiny hominid creatures must learn to survive in the forest after fleeing their former home -- a little girl who lies dead in the woods. The main character, Aurora, tries to organize the group into a community, but most of her cohort is too capricious, lazy and selfish to participate for long. There's no real moral to this story, which is refreshing in itself, beyond the perpetual lessons that life is hard and you have to be careful whom you trust. Never has ugly truth been given a prettier face.

    Ten spectacular graphic novels from 2014

    Climate Changed: A Personal Journey Through the Science by Philippe Squarzoni
    Squarzoni is a French cartoonist who makes nonfiction graphic novels about contemporary issues and politics. While finishing up a book about France under Jacques Chirac, he realized that when it came to environmental policy, he didn't know what he was talking about. "Climate Changed" is the result of his efforts to understand what has been happening to the planet, a striking combination of memoir and data that ruminates on a notoriously elusive, difficult and even imponderable subject. Panels of talking heads dispensing information (or Squarzoni discussing the issues with his partner) are juxtaposed with detailed and meticulous yet lyrical scenes from the author's childhood, the countryside where he takes a holiday and a visit to New York. He uses his own unreachable past as a way to grasp the imminent transformation of the Earth. The result is both enlightening and unexpectedly moving.

    Ten spectacular graphic novels from 2014

    Here by Richard McGuire
    A six-page version of this innovative work by a regular contributor to the New Yorker first appeared in RAW magazine 25 years ago. Each two-page spread depicts a single place, sometimes occupied by a corner of a room, over the course of 4 billion years. The oldest image is a blur of pink and purple gases; others depict hazmat-suited explorers from 300 years in the future. Inset images show the changing decor and inhabitants of the house throughout its existence: family photos, quarrels, kids in Halloween costumes, a woman reading a book, a cat walking across the floor. The cumulative effect is serene and ravishing, an intimation of the immensity of time and the wonder embodied in the humblest things.

    Ten spectacular graphic novels from 2014

    Kill My Mother by Jules Feiffer
    The legendary Pulitzer Prize-winning cartoonist delivers his debut graphic novel at 85, a deliriously over-the-top blend of classic movie noir and melodrama that roams from chiaroscuro Bay City to Hollywood to a USO gig in the Pacific theater of World War II. There's a burnt-out drunk of a private eye, but the story is soon commandeered by a multigenerational collection of ferocious women, including a mysterious chanteuse who never speaks, a radio comedy writer who makes a childhood friend the butt of a hit series and a ruthless dame intent on making her whiny coward of a husband into a star. There are disguises, musical numbers and plenty of gunfights, but the drawing is the main attraction. Nobody convey's bodies in motion more thrillingly than Feiffer, whether they're dancing, running or duking it out. The kid has promise.

    Ten spectacular graphic novels from 2014

    The Motherless Oven by Rob Davis
    This is a weird one, but in the nervy surreal way that word-playful novels like "A Clockwork Orange" or "Ulysses" are weird. The main character, a teenage schoolboy named Scarper Lee, lives in a world where it rains knives and people make their own parents, contraptions that can be anything from a tiny figurine stashable in a pocket to biomorphic boiler-like entities that seem to have escaped from Dr. Seuss' nightmares. Their homes are crammed with gadgets they call gods and instead of TV they watch a hulu-hoop-size wheel of repeating images that changes with the day of the week. They also know their own "death day," and Scarper's is coming up fast. Maybe that's why he runs off with the new girl at school, a real troublemaker, and the obscurely dysfunctional Castro, whose mother is a cageful of talking parakeets. A solid towline of teenage angst holds this manically inventive vision together, and proves that some graphic novels can rival the text-only kind at their own game.

    Ten spectacular graphic novels from 2014

    NOBROW 9: It's Oh So Quiet
    For each issue, the anthology magazine put out by this adventurous U.K.-based publisher of independent graphic design, illustration and comics gives 45 artists a four-color palette and a theme. In the ninth issue, the theme is silence, and the results are magnificent and full of surprises. The comics, each told in images only, range from atmospheric to trippy to jokey to melancholy to epic to creepy. But the two-page illustrations are even more powerful, even if it's not always easy to see how they pertain to the overall concept of silence. Well, except perhaps for the fact that so many of them left me utterly dumbstruck with visual delight.

    Ten spectacular graphic novels from 2014

    Over Easy by Mimi Pond
    When Pond was a broke art student in the 1970s, she took a job at a neighborhood breakfast spot in Oakland, a place with good food, splendid coffee and an endlessly entertaining crew of short-order cooks, waitresses, dishwashers and regular customers. This graphic memoir, influenced by the work of Pond's friend, Alison Bechdel, captures the funky ethos of the time, when hippies, punks and disco aficionados mingled in a Bay Area at the height of its eccentricity. The staff of the Imperial Cafe were forever swapping wisecracks and hopping in and out of each other's beds, which makes them more or less like every restaurant team in history. There's an intoxicating esprit de corps to a well-run everyday joint like the Imperial Cafe, and never has the delight in being part of it been more winningly portrayed.

    Ten spectacular graphic novels from 2014

    The Shadow Hero by Gene Luen Yang and Sonny Liew
    You don't have to be a superhero fan to be utterly charmed by Yang and Liew's revival of a little-known character created in the 1940s by the cartoonist Chu Hing. This version of the Green Turtle, however, is rich in characterization, comedy and luscious period detail from the Chinatown of "San Incendio" (a ringer for San Francisco). Hank, son of a mild-mannered grocer, would like to follow in his father's footsteps, but his restless mother (the book's best character and drawn with masterful nuance by Liew) has other ideas after her thrilling encounter with a superhero. Yang's story effortlessly folds pathos into humor without stooping to either slapstick or cheap "darkness." This is that rare tribute that far surpasses the thing it celebrates.

    Ten spectacular graphic novels from 2014

    Shoplifter by Michael Cho
    Corinna Park, former English major, works, unhappily, in a Toronto advertising agency. When the dissatisfaction of the past five years begins to oppress her, she lets off steam by pilfering magazines from a local convenience store. Cho's moody character study is as much about city life as it is about Corinna. He depicts her falling asleep in front of the TV in her condo, brooding on the subway, roaming the crowded streets after a budding romance goes awry. Like a great short story, this is a simple tale of a young woman figuring out how to get her life back, but if feels as if it contains so much of contemporary existence -- its comforts, its loneliness, its self-deceptions -- suspended in wintery amber.

    Ten spectacular graphic novels from 2014

    Through the Woods by Emily Carroll
    This collection of archetypal horror, fairy and ghost stories, all about young girls, comes lushly decked in Carroll's inky black, snowy white and blood-scarlet art. A young bride hears her predecessor's bones singing from under the floorboards, two friends make the mistake of pretending to summon the spirits of the dead, a family of orphaned siblings disappears one by one into the winter nights. Carroll's color-saturated images can be jagged, ornate and gruesome, but she also knows how to chill with absence, shadows and a single staring eye. Literary readers who cherish the work of Kelly Link or the late Angela Carter's collection, "The Bloody Chamber," will adore the violent beauty on these pages.

  • Recent Slide Shows

Comments

0 Comments

Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>