Board Games For Slumlords
By Evelyn Pringle
Barack Obama has a long history of working with Chicago Mayor Richard Daley and governors of Illinois, including the current Governor Rod Blagojevich, in doling government funding for housing development in Chicago. His history is hardly a model of success, except for the hundred of millions in profits made by the chosen few slumlords.
Less than a year ago, in the April 26, 2007 Chicago Sun-Times, Fran Spielman reported that Chicago aldermen were accusing the Daley administration “of being asleep at the switch while low-income housing projects developed by the now-indicted Tony Rezko collapsed into disrepair.”
“The spigot of loans, grants and tax credits should have been cut off when the first of 30 taxpayer-supported Rezko buildings in Chicago fell into disrepair, the aldermen said,” according to the report.
Instead, Spielman said, a “Sun-Times investigation showed that the city, state and federal governments kept the gravy train rolling — to the tune of $100 million between 1989 and 1998.”
The lending continued, the Times noted, even as the city repeatedly sued Rezko’s development company, Rezmar, “for such basics as no heat.”
“They were going after people for being slum landlords in one department and loaning them money in another,” said Alderman Freddrenna Lyle.
Obama now wants to bring this dog and pony show to Washington. I can see it now. His former boss, Allison Davis, at the Davis, Miner & Barnhill law firm, that served as a hub for Rezko’s thriving slumlord business for a decade before Davis quit and became partners with Rezko, will be appointed to head the Department of Housing and Urban Development.
Davis and his partners, which include his sons Jared and Cullen, have received more than $100 million in taxpayer subsidies to build and rehab apartments and homes over the past 10 years and have made at least $4 million in development fees, according to the Times.
“Davis has gotten deal after deal from the mayor, helping to make Davis one of the city’s top developers,” Tim Novak noted in the November 7, 2007 Sun-Times.
There’s already a plan in place to guarantee that the Chicago model of “community development” is carried out in the White House. In his Plan to Fight Poverty in America, Obama says, “we should create an Affordable Housing Trust Fund to develop affordable housing in mixed-income neighborhoods.”
The Plan will create a “White House Office of Urban Policy” to develop a strategy for metropolitan America, and Obama will appoint a Director of Urban Policy who will report directly to him, as president, to “coordinate all federal urban programs,” the Plan states.
Mayor Daley will probably be hired for this gig. The Plan explains that Obama will task his new Director “to work across federal agencies and with community and business leaders to identify and address the unique economic development barriers of every major metropolitan area in the country.”
While climbing the political ladder, Obama held himself out to be a champion of rights for minority-owned businesses. According to an article on Black Enterprize.com, “it is Obama’s strong record when it comes to supporting minority-owned businesses that has black business leaders working overtime to send the 42-year-old congressman to Washington.”
However, an example of the Chicago version of a minority-owned business is DV Urban Realty Partners, where Allison Davis, who is an African-American millionaire many times over, owns 51%, and Robert Vanecko, Mayor Daley’s nephew, owns 49%.
On July 18, 2007, Obama discussed his plan to deal with urban poverty in a speech at the Town Hall Education Arts and Recreation Center in Washington and started out by tugging the heart strings by invoking the name of Bobby Kennedy and stated:
“It’s been four decades since Bobby Kennedy crouched in a shack along the Mississippi Delta and looked into the wide, listless eyes of a hungry child. Again and again he tried to talk to this child, but each time his efforts were met with only a blank stare of desperation.
“And when Kennedy turned to the reporters traveling with him, with tears in his eyes he asked a single question about poverty in America: ‘How can a country like this allow it?’”
“Forty years later,” Obama said, “we’re still asking that question.”
First of all, “Barack Obama, you are no Robert Kennedy,” and we’re still asking the question because the careers of politicians like Obama are funded by a political mafia which has turned helping the poor into a cottage industry.
During his speech, Obama himself spelled out why low-income housing developers get away with funneling tax dollars through poor people in cities like Chicago without drawing any scrutiny, when he stated:
“These Americans cannot hire lobbyists to roam the halls of Congress on their behalf, and they cannot write thousand-dollar campaign checks to make their voices heard. They suffer most from a politics that has been tipped in favor of those with the most money, and influence, and power.”
In Obama’s case, a whole gang of slumlords in Illinois made their “voices heard” by writing campaign checks to fund his rise to fame. But as long as the focus of the slumlord allegations remains solely on a crook named Rezko, the other members of the gang will not get the credit they deserve.
One fact is beyond dispute. Without the fundraising of his political Godfather, Rezko, Obama’s rise to power would not have occurred. However, Rezko was not the pied piper of Hamlin who led Illinois politicians astray. It’s the other way around. Without the cooperation of the corrupt government officials, Rezko would not have been able to fund their political campaigns.
In Illinois, favored politicians are joined at the hip when it comes to fundraising. For instance, from 1999 through 2006, an analysis by the Chicago Tribune shows Obama took in more than $1.5 million from some 700 people who also contributed to Mayor Daley during his political career.
A cursory review of Illinois campaign records shows Allison Davis and his family members giving close to $16,000 to Obama’s presidential campaign. The Sun-Times reports that Davis has donated more than $400,000 to dozens of political campaigns, and the top beneficiaries include Mayor Daley, Blagojevich and Obama.
The truth about all the scams run by the political mafia operating in Illinois is only coming out now because of Rezko’s corruption trial, and if the Democrats want to lose any chance of winning the White House, all they have to do is nominate Obama.
This case is only the first of what could be many to go to trial. Other criminal charges are pending against several people listed in the indictment, and civil lawsuits have been filed against many of the same people and are awaiting the outcome of the criminal cases.
If Obama had an ounce of respect for Democratic voters, he’d drop out of the race before the details of the corruption in Illinois spread to the rest of the country. If the leaders of the Democratic party had a lick of sense, they would inform Obama right now that under no circumstances will his name be on the ballot come fall.
Political junkies know the details of all the sordid scandals swirling around Obama in Chicago, but the average American voter does not have a clue.
The prosecution team is led by the US Attorney for Northern Illinois, Patrick Fitzgerald, of Scooter Libby fame; the same guy who put the last Illinois Governor behind bars and convicted a host of government officials from the Daley administrations who were involved in what prosecutors called “pervasive fraud” to rig city hiring for 12 years with persons who got out the vote for Mayor Daley, and the candidates he endorsed, as well as numerous crooks rounded up during the scandal involving Daley’s Hired Truck program.
The list of names in the indictment includes about eight persons referred to as “Co-Schemers,” and reads like a “who’s who list” of major campaign donors to Obama, Blagojevich, Daley and other powerful Illinois politicians.
Blagojevich is referred to as “Public Official A,” Obama is referred to as a “political candidate,” and there is a list of “Individuals” from “Individual A” all the way up to “Individual HH.”
By now, everybody following the case knows the names of the “Co-Schemers” and “Individuals”, and the Republicans can use the court filings as a roadmap for their plan of attack on Obama. In fact, they are probably editing their talking points for cable news shows as we speak. They no doubt already have video clips in the can of every failed low-income housing project in Chicago connected to Obama to splash across the airwaves the minute he is nominated.
In addition, the Chicago Tribune has two ace reporters, Bob Secter and Jeff Coen, stationed at the courthouse, who provide a daily blog called “Gavel-to-Gavel” on the Tribune website which gives a blow-by-blow account of the live testimony in the trial every few hours.
The names of corrupt politicians and power brokers from both the Democratic and Republican parties are being dropped before the jury like flies. Many of the witnesses, including the main co-defendant, Chicago businessman Stuart Levine, have already pleaded guilty and are testifying under grants of immunity in hope of getting a lighter sentence, which means they have everything to gain by testifying about the other crooks.
Although the Tribune’s Gavel-to-Gavel coverage is just as good as having a front-row seat in the courtroom, the Obama camp apparently feels the need to monitor the trial first-hand. On March 14, 2008, during an interview with the Sun-Times, a reporter said to Obama: “You have somebody in the courtroom to monitor the trial, right?”
“We may,” he replied, “I think that may be true.”
The case involves the corruption of two state regulatory boards. The investigation, dubbed “Operation Board Games,” by the Feds, began in December 2003, based on information supplied by an informant. Its now obvious that Rezko was aware of the investigation as early as 2004, because during a January 16, 2007, court hearing his attorney, Joe Duffy, told US District Judge Amy St Eve that he was hired in 2004.
“And my guess is you hired Mr. Duffy to deal with the Feds?” the judge said to Rezko, and Rezko replied, “Yes, your Honor.”
The first board controls the Teachers Pension System, which administers pensions and benefits for all Illinois teachers except for those in Chicago, and the Health Facilities Planning Board, which approves all proposals for construction projects that involve medical facilities in Illinois.
The Teacher’s Pension fund has over $30 billion in assets. Investment firms that want to do business with the fund submit proposals, and the board votes on whether to approve the proposal. Some members of the board are elected by teachers in the state, others are appointed by the governor and others serve by virtue of their state office such as the school superintendent.
On Blagojevich took office, the Schemers were able to stack the TRS board with members who would vote whichever way they were told. Once they accomplished that feat, they demanded kickbacks from investment firms in exchange for the approval of their proposals.
Rezko’s partner in the Rezmar development company, Daniel Mahru, is referred to as “Individual Z” in the indictment, and according to court filings, Rezko told Mahru that “$500 million” of TRS money was earmarked for their company. Mahru is reportedly cooperating with federal investigators.
In addition to lining their own pockets, the money gained through the scheme was funneled to the campaigns of Blagojevich and Obama. Prosecutors have identified two $10,000 payments that were made to Obama’s US Senate campaign through straw donors Joseph Aramanda and Elie Maloof, which originated from a kickback paid by investment firm, Glencoe Capital, to secure approval for a $50 million deal.
Aramanda and Maloof also each gave Obama $1,000 for his failed run for Congress in 2000. Once Obama became a US Senator, Aramanda’s son was granted a coveted intern position in Obama’s Senate office in Washington during the summer of 2005, based on a request which the Obama’s camp has admitted came from Rezko.
Levine was appointed to the TRS Board in 2000, by Republican Governor George Ryan and was reappointed in 2003 by Blagojevich. As part of the team led by Levine to rig the votes, Blagojevich appointed, attorney Anthony Abboud, to serve. He is “Individual Q” in the indictment. He has been donating money to Obama’s political career since March 2000, with a total of more than $2,800.
Blagojevich also appointed, attorney Jack Carriglio, or “Individual R.” On June 30, 2003, Carriglio donated $1,000 for Obama’s US Senate campaign.
The TRS story has the makings of a great Hollywood movie with subplots upon subplots. Allison Davis, or “Individual BB,” was a friend of Hollywood producer Tom Rosenberg, who produced the movie, The Human Stain, with Anthony Hopkins and Davis in a small part. He also produced the Oscar winning, Million Dollar Baby.
Rosenberg, or “Individual J,” is a central figure in the case. His investment firm, Capri Capital Advisers, a real estate manager, had done about a billion dollars of business with the TRS in the past and wanted to do more. In 2004, the Schemers tried to coerce a bribe from Rosenberg, or in the alternative a $1.5 million contribution for Blagojevich, in exchange for approval of a $220 million deal.
According to the indictment, Davis admitted to Rosenberg that Rezko, and Blagojevich’s top fund raiser, Christopher Kelly, or Co-Schemer B, had asked Davis who could raise funds for Blagojevich from the state pension system and he volunteered Rosenberg’s name.
During his testimony on April 1, 2008, Levine explained that he was already mad at Rosenberg because he expected $500,000 for help he gave Rosenberg in getting the TRS board to approve a $100 million deal in 2001, but he never came through with the money.
The only benefit Levine received from the deal was that Rosenberg said Levine no longer had to pay him $50,000 a year for lobbying efforts, according to the monitoring by Gavel-to-Gavel.
However, all hell broke lose when Rosenberg refused pay the $1.5 million. During the trial, prosecutors played tapes of phone calls in which comical conversations were discussed between the bipartisan group of Co-Schemers and Individuals, as they were trying to figure out how to deal with Rosenberg and his threats.
The jury heard conversations between Republican power broker, William Cellini, or Co-Schemer A, and Levine, in which they said Rosenberg was threatening to “stand at State and Madison,” and make public the attempt to extort money for Blagojevich’s campaign and that he would “take them all down,” and even threatened to go to the Feds.
Rosenberg said he considered Rezko and Christopher Kelly the two most
likely members of Blagojevich’s inner circle to end up in prison
someday, according to Gavel-to-Gavel. Kelly has been charged in a
separate case with hiding $1.3 million from the IRS and using money
from his business to pay gambling debts with Chicago bookies and Las
Levine testified that Rezko wanted things to settle down and quoted Rezko saying, “Mr. Rosenberg was a dangerous individual, and nobody wanted to be put in a dangerous situation.”
Levine said Rezko told him that TRS should grant Capri the $220 million. “But, in fact, that should be the last business that Mr. Rosenberg does with the State of Illinois,” Levine recalled Rezko telling him, according to Gavel-to-Gavel. Levine testified that Rezko said Blagojevich had been briefed on the plan and agreed with it.
During his testimony, Levine also told the jury that Rezko had plans for Blagojevich to run for President. “He said that he had raised a great deal of money for Gov. Blagojevich and that he had great hopes and expectations that Gov. Blagojevich would run for president,” Levine told the jury.
“And although he knew it was a long shot, he was working toward that end,” Levine said.
He also told the jury about an October 29, 2003, trip in a plane he chartered to carry Blagojevich and others to fundraisers in New York, during which Levine thanked Blagojevich for reappointing him to the Planning board and said the governor told him, “Never discuss any state board with me, discuss them with either Tony Rezko or Chris Kelly.”
The TRS part of the story has many subplots. For instance, in 2005, the Feds issued a subpoena to the TRS for records pertaining to a $150 million deal approved for the Carlyle Group, in which Robert Kjellander, or Individual K, described in the August 11, 2005 Sun-Times as the “national Republican Party treasurer,” and “a Springfield lobbyist with close ties to the White House,” was to be paid a $4.5 million fee.
The most famous investor in the Carlyle Group is the family of Osama bin Laden, and its most famous advisor is the first President George Bush. On October 26, 2001, the New York Times reported that the “Saudi family of Osama bin Laden is severing its financial ties with the Carlyle Group, a private investment firm known for its connections to influential Washington political figures.”
“It came largely as a result of public controversy about the family’s stake in a Carlyle fund that invests in buyouts of military and aerospace companies,” a Carlyle executive told the Times.
After the September 11 attacks, the Times noted, “the investment was criticized amid speculation that the family might profit from increased military spending from America’s war on terrorism.”
Kjellander reportedly headed Bush’s reelection campaign in three states and in December 2003, he was able to obtain an invitation from the Bush administration for Levine, Rezko, and Cellini, along with their wives, to attend a Christmas Party at the White House.
Apparently Kjellander is still in good graces with the Republicans because he is “helping plan this September’s Republican National Convention in Minneapolis,” according to John Kass in the March 7, 2008 Chicago Tribune.
The subpoena issued to the TRS in 2005, also included a request for records involving a $10 million investment approved for Hopewell Ventures in 2003, whose principals included David Wilhelm, a former chairman of the Democratic National Committee, who is now a super delegate who openly supports Obama. Wilhelm was a main player in getting members approved to serve on the Health Facilities Planning Board.
The Board is made up of nine members and approval of a project requires a majority of five votes. At the center of this scheme was a proposal by Mercy Health System to gain approval to build a new hospital in Crystal Lake. On April 21, 2004, the board voted to approve the project, even though state analysts said the hospital was not needed.
Levine was also appointed to the Planning Board by a Republican Governor. However, he established himself as a bipartisan crook early in the trial. On March 10, 2008, he told the jury that even before he got involved with the Blagojevich administration, he used to funnel campaign contributions to Democratic candidates through straw donors at the request of former Chicago Alderman Edward Vrdolyak, who has also been indicted on federal fraud and bribery charges in a related case.
Levine’s term on the Board was set to expire in 2004, but the Schemers made sure he remained on the panel. On March 10, 2008, Rezko’s lawyer questioned Susan Lichtenstein, former general counsel to Blagojevich, about a series of email exchanges she had related to the appointments of members to the Board in 2003.
One of the emails was between Lichtenstein and the office of Wilhelm, who ran Blagojevich’s 2002 campaign, which suggested several appointees, including Levine.
“With the e-mails,” Gavel-to-Gavel reports, “Rezko’s lawyers appear to be pushing the point that Rezko wasn’t alone in backing Levine and that Levine’s appointment had a broad array of support.”
While all this was going on, as a state senator, Obama was the chairman of the Senate Committee on Health and Human Services. As such, his name also appeared in the email exchanges as a member of a team working on legislation to keep the board from expiring under a sunset provision of Illinois law.
The email exchanges said, Wilhelm had “worked closely” over six months with state legislators to extend the life of the board and listed Democrat and Republican leaders in the Illinois Senate and House, including Obama.
The exchange with the names of four candidates for the board stated that “our attached recommendations reflect that involvement” with the political leaders.
In the end, the changes made by the lawmakers in 2003 dropped the number of members on the Board from 15 to 9, making it much easier to stack the panel, and by the summer of 2003, the Schemers controlled a 5-bloc vote.
At the time, Thomas Beck was the chairman of panel, and Levine was the vice-chairman. Beck testified, under a grant of immunity, and told the jury that he took a $1,000 donation for Blagojevich when he met with Rezko to seek reappointment.
The persons chosen to guarantee the votes were 3 doctors: Imad Almanaseer, Michel Malek and Fortunee Massuda.
Massuda, or “Individual Y,” gave Obama $2,000 on January 26, 2004. Malek is “Individual FF,” and he donated $10,000 to Obama’s US Senate campaign on June 30, 2003, and another $500 in September 2003.
Almanaseer, or “Individual EE,” contributed $1,000 to Obama on March 12, 2004, and ponied up another $2,000 on May 24, 2004.
This part of the scheme also opens up several subplots. The person responsible for working out the details for the kickback on the Mercy proposal was Jacob Kiferbaum. Kiferbaum was the builder hired by Mercy to construct the new hospital. Levine told the jury about a long history of taking bribes from Kiferbaum, who would then pad his bills to hide the payments. He said the money would be passed through middlemen, such as John Glennon, a prominent Republican insider, who had served on a pension board with Levine.
The new hospital was never built after details about the crimes became known. Kiferbaum has pleaded guilty in the case and is cooperating with the Feds.
When referring to the fact that Obama’s name shows up in the email exchanges as reviewing the recommendations to appoint Levine and the others to the Planning Board, the media is always careful to mention that Obama is not accused of anything.
However, on March 14, 2008, during an interview with the Tribune, Obama was finally asked directly: “Did you have discussions with him [Rezko] about either recommendations that you sought for people or recommendations that he was making?”
“I did not have any formal discussions with Tony,” Obama said, “beyond one individual, and that was Dr. Eric Whitaker, who ultimately became the head of the Illinois Department of Public Health and who had been a longtime friend of mine, who I had known since he was getting his master’s at Harvard and I was at the law school there.”
“He had expressed an interest in that post,” Obama informed the Tribune.
“I think he had applied separately,” Obama said, “but I don’t recall whether I called Tony or he called me.”
“And I simply said, ‘I think this guy is outstanding and is certainly somebody who is worthy of an interview,’” he added.
“And was it your understanding that Tony was going to effectuate that?” the Tribune asked.
“No,” Obama said. “What I knew was, and I don’t think this has been disputed, that he was one of a number of people within the Blagojevich circle who were, you know, helping to screen or interview potential candidates for administration posts.”
The job Obama recommended for his friend paid about $150,000 a year. However, Eric Whitaker is now an executive vice-president of the University of Chicago Medical Center, according to the March 9, 2008, Sun-Times. That would be the same employer that pays Michelle Obama a salary of close to $350,000 as a vice president.
But Obama’s using the lure of the pension funds to raise campaign money goes way back. In 1999, he “was instrumental in the formation of a coalition of black investment firm owners and legislators in Illinois to create an initiative that would award black-owned firms with the management of some of the state’s retirement funds,” according to a 2004 article on Black Enterprise.com.
“He’s out there fighting for us,” said John Rogers, chairman and CEO of Chicago-based Ariel Capital Management in the article. Rogers donated $9,000 to Obama’s US Senate campaign.
“He was a catalyst to pull [everyone] together to create the initiative to have these organizations let minority firms do business with state funds,” said Lee Holland, managing partner and Chief Investment Officer of Holland Capital. Lee Holland, his wife and two of his partners donated $35,000 to Obama’s US Senate campaign. In the October 1, 2007, New York Times, Christopher Drew and Raymond Hernandez reported that:
“Members of the group, the Alliance of Business Leaders and Entrepreneurs, say Mr. Obama checked into their problems and helped start a drive that enabled minority investment executives to win millions of dollars in business from the state’s giant pension funds.”
However, the Times pointed out that Obama’s political career had benefited many times over from his ties to the group. “Several of the businessmen or their wives would help clear the debts from his Congressional race,” the Times wrote, “and six of the group’s members are now among the top fund-raisers for his presidential campaign, according to campaign finance records.”
All totaled, the Times said, employees at more than 30 companies listed on the group’s website and their relatives donated more than $300,000 to help Obama win his US Senate seat in 2004 and “set fund-raising records early in the 2008 presidential race.”
In fact, when Illinois State Senator Emil Jones, Jr became the State Senate president in 2003, he assigned Obama to a committee looking into the pension questions “to help raise his political profile,” according to the Times.
During this period, the Times says, campaign finance records show executives from Ariel Capital, Loop Capital, Holland Capital and Capri Capital, “sharply increased their donations” to Obama’s State Senate campaign fund.
“And once he began his campaign for the United States Senate,” the Times wrote, “they quickly became a fund-raising core that has carried over into the presidential race.”
Obama quit the State Senate committee in late 2003 as his race for the US Senate heated up, “and just as the panel began a series of hearings that produced the most substantial changes,” the Times reports.
The changes generated millions dollars in fees for some of the firms. For instance, Loop saw its fees from one pension fund rise to $2.4 million in 2006, from $5,700 in 2001, and Holland and Ariel both got several hundred million from the pension funds to invest.
John Rogers and two other people at Ariel each bundled at least $50,000 in donations for Obama’s presidential campaign, according to the Times.
An October 3, 2005 article in the Sun-Times, by Chris Fusco and Dave McKinney, reported that Ariel and its top executives also contributed $117,500 to Blagojevich’s campaign.
Although the current criminal case focuses on two boards, the testimony of Jill Hayden, the former head of Blagojevich’s Office of Boards and Commissions, established that the same process was used to fill some 1,500 positions, on 300 boards and commissions, that control a wide variety of regulatory decisions, which would include other pension funds.
Blagojevich appointed Davis to serve on a separate pension board, the Illinois State Board of Investment, which oversees funds for state employees, judges and legislators, and “also has been under federal investigation,” according to the November 7, 2007 Sun-Times.
In the September 23, 2007 Sun-Times, in reference to the “minority owned” DV Urban, of Davis and Robert Vanecko, Tim Novak reported that a “nephew of Mayor Daley stands to make millions of dollars from city-connected pension funds” in “winning business from pension funds for city workers, cops, teachers and CTA employees”.
All total, the pension funds gave DV Urban $68 million. The first investor was the Chicago Teachers Pension Fund, but according to Novak’s report, the board members did not learn that DV Urban was owned by the Mayor’s nephew until 6 months after they voted to approve the investment.
As of September 23, 2007, Davis and Vanecko had received $1 million in management fees and they are “guaranteed at least $3 million in management fees and could make as much as $8.4 million before the pension deal ends on Dec. 31, 2014,” Novak reports.
In addition, Davis and Vanecko will share in any profits from the real estate deals and can earn a 3% fee on the property they develop.
Obama says he met Rezko, when he got a call right out of the blue from David Brint, after he was elected president of the Harvard Law Review, wanting to know if he would be interested in being a developer for Rezko’s real estate company, Rezmar.
Because they read that he was interested in community development work, Obama says, Rezko and his two partners, Mahru and Brint, met with him to discuss the job. “I said no, but I remained friendly with all three of them,” Obama said in the Chicago Tribune on November 1, 2006.
“All three of them remained great contributors of mine,” he added.
And so they did. According to the latest tally given during interviews with the Tribune and Sun-Times on March 14, 2008, the amount attributed to Rezko went from a claim of $50,000 or $60,000 a year ago, to Rezko raising roughly $250,000. In fact, Obama told the Tribune that Rezko “might have raised $50,000 to $75,000? for one campaign alone in his failed run for Congress in 2000.
The Rezmar connection is a gift that keeps on giving. In February 2007, David Brint gave Obama $4,600, and his wife, Elizabeth gave contributed $2,300. Brint also hosted a fundraiser for Obama in June 2007. Elizabeth donated a couple thousand in 2002 and $2,000 more in 2003 as well.
On March 17, 2000, Mahru gave Obama $1,000, listing himself as president of Rezmar. On March 4, 2004, he donated a whopping $5,000. Mahru also tossed $1,000 to Mayor Daley in 2001 and gave him another $1,500 in 2003.
But then Rezko and Mahru had plenty of money to throw around. By 1998, Rezko had a reported net worth of $34 million and Mahru was worth $14.6 million, according to the “Rezmar who’s who list,” published in the April 24, 2007 Sun-Times.
After turning down the surprise job offer from Rezko, Obama expects voters to believe that he just happened to get hired at the small 12-attorney Davis law firm, which just happened to represent Rezmar in development deals. And then a couple years later, Rezko’s companies just happened to appear on the very first contributions made to the “Friends of Obama” committee to launch his political career as a state senator.
On March 14, when asked by the Sun-Times whether the subject of politics was mentioned at his first meeting with Rezko, Obama stated: “Quite frankly, I don’t recall. I think it was talking about the possibility of me working for him.”
About the same time that Rezko began funding Obama’s campaign for the Illinois senate, Rezmar began developing low-income apartments with three non-profit groups, which were also represented by the Davis law firm, including the Chicago Urban League, the Woodlawn Preservation and Investment Corp, and the Fund for Community Redevelopment and Revitalization.
Bishop Arthur Brazier, described as “a powerful ally of the mayor” by the Sun-Times, founded the Woodlawn Preservation Corp and the Fund for Community Redevelopment.
Davis was the treasurer for Woodlawn when the group went into business with Rezmar and he also served on the board that ran the Fund for Community Redevelopment.
By the time Rezmar started working with the non-profits, two of its earlier projects were having major problems, including a building where the tenants were without heat for five weeks between December 1996 and February 1997. The city had to sue to get the heat turned back on and in fact Chicago sued Rezmar for failing to heat buildings at least a dozen times, according to the Sun-Times.
Obama got a $1,000 campaign donation from Rezmar on January 14, 1997, while those tenets were without heat, Novak reports. Records show that Obama also received a $1,000 contribution from Resko Concessions, a day earlier on January 13, 1997.
Rezmar rehabbed 15 buildings between 1995 and 1998 in partnership with the nonprofits. Each project involved public and private financing including loans from the city or state, federal low-income-housing tax credits and bank loans. The way it was set up, Rezko and Mahru always came out ahead because Rezmar was paid part of the development fees when a deal closed and the remainder when tenants moved in.
The projects were supposed to provide housing for low-income tenents for at least 25 years. “But the first deal Rezmar struck with the Woodlawn Preservation and Investment Corp. collapsed in just six and a half years, when the state sued for foreclosure,” according to a report by Novak in the April 23, 2007 Sun-Times.
Of the buildings managed by Rezko and Mahru, 17 ended up in foreclosure, six buildings are currently boarded up, hundreds of the apartments are vacant and in need of major repairs, and taxpayers are left stuck with millions in unpaid loans, Novak reports.
An “Operation Board Games” investigation should be conducted on the slumlord business in Illinois over the past 15 years. The Chicago Sun-Times reporters, and especially Tim Novak, have already done an excellent job in connecting all the dots.
Daley became Mayor in 1989 and Rezmar got its first city loan of $629,000 the same year, even though Rezko and Mahru had no construction experience. Rezmar stopped making the $2,982 payments three years later and missed 16 payments before the city changed the terms so that Rezmar would only have to pay $465 a month, according to the Sun-Times report by Novak.
Over the years Davis has been appointed to serve on the Illinois Capital Development Board, which oversees state construction projects, and the Chicago Public Building Commission. Daily appointed Davis to the Chicago Plan Commission in 1991, where he stayed until January 2006.
The Plan Commission must approve, disapprove or defer any proposal by a public body or agency “to acquire, dispose, or change any real property within the territorial limits of the city” on the basis of whether or not the referral complies with the city’s long range planning goals and objectives, according to its web site.
After Rezko got Davis appointed to the pension fund Board, Davis helped Rezmar in two major developments as a member of the Plan Commission, even though the two men were business partners. The first vote involved a housing development along the Chicago River at Irving Park Road and was cast a month after Davis won a seat on the Board.
The second was cast a year later in March 2004, for the approval of Rezmar’s proposal for the 62 acre South Loop project. This deal collapsed shortly before Rezko was indicted in October 2006, according to Novak.
Daley made Thomas McNulty, the attorney who acquired the buildings for Rezmar, president of the Chicago Low-Income Housing Trust Fund, a charity run by the city that doles out tax dollars to landlords to subsidize rent payments for the poor. Rezmar received more than $2.7 million from this charity fund, according to the “Rezmar who’s-who list” in the April 24, 2007 Sun-Times.
Mahru was appointed to the Illinois Affordable Housing Advisory Commission in 1993, which helps decide which projects get state funds, by Governor Jim Edgar.
Obama began serving on the board of Woods Fund, a Chicago charity foundation, in 1993, the same year he was hired by Davis’ law firm. In 2000, Davis went to the foundation to help fund his plans to build low income housing. Obama voted to invest $1 million with Neighborhood Rejuvenation Partners, a $17 million partnership that Davis still operates, according to a report by Novak in the November 29, 2007 Sun-Times.
Davis used some of the money to build a 72-unit apartment building for senior citizens, a $10 million project built with a $5.7 million city loan, which earned Davis nearly $700,000 in development fees, Novak says city records show.
Davis’ son Cullen is paid to manage the building, which opened three years ago with a ceremony featuring Mayor Daley.
Kelly King Dibble was the vice president for business development at Rezmar and she became the executive director of the Illinois Housing Development Authority once Blagojevich became Governor. She is now an attorney with, The Northern Trust Company, the same company that financed Obama’s mansion.
Velma Butler, an investor in Rezko’s 62 acre Loop project, also serves on the Illinois Housing Authority. She donated $1,000 to Obama’s US Senate campaign in 2003.
On October 1, 2006, Daley appointed Martin Nesbitt chairperson of the Chicago Housing Authority. The CHA was created for “the purposes of engaging in the development, acquisition, leasing, operation, and administration of a Low Rent Housing Program and other federally assisted programs,” according to the agency’s 2005 annual financial report.
Nesbitt succeeded Sharon Gist Gilliam, according to the CHA web site. Gilliam is a former board member of Rezmar. She told the Sun-Times that she was only on the Rezmar board until 1991. However, the Times found her still listed as a board member in a 1994 biography on the company’s web site.
Daley had appointed Nesbitt commissioner of the Housing Authority on July 9, 2003, and he served as vice chairperson of the Board since January 17, 2006.
Nezbitt is also vice president of the Pritzker Realty Group, where he procures new real estate investment opportunities, retail investments and developments for the Pritzker Group, according to the CHA web site. A quick trip to the Huffington Post site showed tens of thousands of dollars donated to Obama from people with the last name Pritzker in the Chicago area but many people are listed as homemaker or not employed or information requested, so its impossible to sort them out.
Nesbitt is treasurer for Obama’s presidential campaign according to the Center for Public Integrity. Over his political career, Nesbitt has contributed more than $10,000 to Obama’s campaigns.
Michelle Obama was hired as an assistant in Daley’s office by Valerie Jarrett, Daley’s deputy chief of staff in 1991. When Daley appointed Jarrett chairman of the Office of Planning and Development, Michelle became her assistant..
Jarrett is now CEO of the real estate development and management firm, called Habitat, which manages the housing program for the Chicago Housing Authority.
The Commission on Chicago landmarks “is responsible for recommending to the City Council that individual buildings, sites, objects, or entire districts be designated as Chicago Landmarks, thereby providing legal protection,” according to the government web site.
Daley appointed Michelle to serve on the Chicago Landmark Commission. The current chairman of the Commission is Daley’s former chief of staff, David Mosena. Mosena was a member of Obama’s US Senate Finance Committee in 2004, with other members that included Valerie Jarrett, Tony Rezko, Rita Rezko, and Allison Davis. The committee raised more than $14 million, according to Federal Election Commission records, cited by Novak in the Sun-Times on April 23, 2007. Jarrett serves as an advisor to Obama’s presidential campaign.
The Illinois Finance Authority was established by Blagojevich in 2004. Its “role is to support the Governor of Illinois’ economic development agenda,” and “IFA approves about $3 billion in project financing each year,” according to the its site.
Rezko business associate, Ali Ata, was appointed to head the Finance Authority. He is now under indictment in a separate criminal case in which Rezko is also charged. On June 30, 2003, Ata contributed $5,000 to Obama’s US senate campaign.
On June 13, 2007, the Sun-Times reported that as a state senator, “Obama wrote letters to city and state officials supporting his political patron Tony Rezko’s successful bid to get more than $14 million from taxpayers to build apartments for senior citizens.”
“I am writing in support of the New Kenwood LLC’s proposal to build a ninety-seven unit apartment building at 48th and Cottage Grove for senior citizens,” Obama wrote in October 28, 1998 letters to both city and state housing officials. “This project will provide much needed housing for Fourth Ward citizens.”
New Kenwood was set up as another “minority owned” company, where Davis owned 51% and Rezko 49%.
In the Times, Novak reported that the deal included $855,000 in development fees for Rezko and Davis, while Obama was still working at the Davis law firm, for a bid on a project that was “four blocks outside Obama’s state Senate district.”
Although the law firm represented several companies owned by Davis and Rezko when Obama wrote the letters, the firm did not represent New Kenwood in the deal. According to the Sun-Times, Davis and Rezko instead hired a firm owned by Mayor Daley’s brother Michael, “to help them get $3.1 million from bonds issued by the city of Chicago.”
“In addition to the development fees, a separate Davis-owned company stood to make another $900,000 through federal tax credits,” Novak reported in the June 13, 2007 Sun-Times.
The development opened in 2002 and was supposed to be managed by William Moorehead & Associates. William Moorehead was also a client of the Davis law firm and a business partner of Davis. In April 2007, Moorehead told the Times that his company was dropped from the deal before the apartments opened. The apartments are now managed by a company owned by Davis’ son, Cullen Davis, according to Novak.
In the Times article, Novak also noted that Moorehead received a 4-year prison sentence “for stealing more than $1 million from … public housing projects he managed for the Chicago Housing Authority and the U.S. Housing and Urban Development Department, as well as from two developments he co-owned with Davis.”
In a 2006, Moorehead pleaded guilty to fraud and other crimes and admitted stealing more than $600,000 from the Island Terrace and other federally subsidized projects.
During the period when Moorehead was stealing money, the Times reports, he lent Davis $100,000. Davis sent Moorehead a letter on June 15, 2000, and said the sale and refinancing of one of their housing projects had been delayed and wrote: “I need to borrow $100,000 from the Island Terrace resources.”
As part of a plea deal, Moorehead is cooperating in an ongoing federal investigation.
David Brint now owns Brinshore Development. He told the Times that he quit Rezmar four years after the company got its first deal with city because Mahru did not find money for building repairs. Brint and his partners have taken over four failed Rezmar buildings — “in one case paying the city $1 million to settle a $4 million loan made to Rezmar,” according to the Times.
Gary Poter owned the construction company that rehabbed all of Rezmar’s buildings. He was stabbed to death in May 2006, supposedly by a disgruntled employee, according to the Times “Rezmar who’s who” list. Back on March 3, 2004, Poter donated $2,000 to Obama’s US senate campaign and on July 19, 2004, he gave Obama another $1,000.
Its more than obvious that the political mafia of Illinois now has plans to install the new, “White House Office of Urban Policy,” as a means of getting richer by funneling tax dollars through poor people and retirees on a national level via Obama.
The leaders of Democratic party need to tell him that he will not be the nominee and to drop out of the race. If they do not, the Republicans have enough truthful information lined up to drive Obama out before election day.
A month ago, a friend of mine who knew I did not think Obama was qualified to be president, asked me what I would do if he was nominated. I replied that I would vote for him of course, what a dumb question. No more. After a month of research, I could no more support Barack Obama as the leader of this country than I could support another war profiteering Republican.
If he becomes the nominee, all the Democrats in America will be viewed by the rest of the world as either utterly stupid, or totally corrupt. Therefore, for the first time in my life, I have made a conscious decision to take a stand and not vote in a presidential election if the choice is Obama.
Pringle is an investigative journalist focused on exposing
corruption in government and corporate America. She can be reached