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Robert Farley
By Robert Farley January 22, 2008

A fragment of truth, distorted

In one of the most heated exchanges of the Democratic debates, Hillary Clinton on Monday night fired off this pointed attack on Barack Obama:

"I was fighting against those (Republican) ideas when you were practicing law and representing your contributor, Rezko, in his slum landlord business in inner city Chicago."

Asked later to respond, Obama said, "Here's what happened: I was an associate at a law firm that represented a church group that had partnered with this individual to do a project and I did about five hours worth of work on this joint project."

The man in question here is Antoin "Tony" Rezko, a Chicago real estate developer and fast food magnate now under federal indictment. He's also a longtime friend of Obama who over the years did a good amount of fundraising for him.

In April 2007, the Chicago Sun-Times reported that Obama did some legal work between 1995 and 1998 on a series of troubled low-income housing deals involving Rezmar Corp., owned by Rezko.

Reporter Tim Novak reported that Obama was an associate attorney with the small Chicago law firm, Davis Miner Barnhill & Galland, that helped Rezmar and not-for-profit community groups secure more than $43-million in government funding to rehab 15 apartment buildings for the poor. Four ended up in foreclosure.

In all, Novak reported, Rezmar rehabbed 30 buildings, a third of which were in the Illinois Senate district Obama represented between 1997 and 2004. Many of the buildings fell into squalid disrepair and financial straits while Obama was state senator, prompting the city to repeatedly sue over problems, including no heat.

Obama's campaign staff told the Sun-Times that Obama worked on some of the deals, but that his Rezmar-related work amounted to just five hours.

"The senator, relatively inexperienced in this kind of work, was assigned to tasks appropriate for a junior lawyer,'' according to an e-mail from Obama spokesman Robert Gibbs. "These tasks would have included reviewing documents, collecting corporate organizational documents, and drafting corporate resolutions.''

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In fact, Gibbs wrote, "Senator Obama does not remember having conversations with Tony (Rezko) about properties that he owned or any specific issues related to those properties.''

Obama told the Sun-Times that he often got complaints as a state senator about housing problems but, "As far as I can tell, we were never contacted by (Rezko) tenants."

It was the latest in a string of embarrassing stories that linked Obama to Rezko, who was indicted in the fall of 2006 on unrelated federal charges that accuse him of fraud, attempted extortion and money laundering. Prosecutors say Rezko's scheme was to get campaign money and payoffs from investment companies seeking to do business with two Illinois state boards. His trial could begin as early as February 2008.

In November 2006, the Chicago Tribune detailed a 2005 real estate deal in which Obama bought a sliver of vacant land adjacent to his home from Rezko's wife. Although he paid fair market price for the land, Obama later called the deal "boneheaded" on his part, as it came at a time when Rezko was widely known to be under federal investigation.

Rezko also has been a longtime, key fundraiser for Obama, dating back to Obama's campaigns to become an Illinois senator. In 2003, Rezko even hosted a cocktail party fundraiser for Obama.

In an effort to create distance, the Obama campaign has pledged that any money from Rezko or donors linked to him will go to charity.

"Mr. Rezko gave me campaign contributions,'' Obama told the Chicago Sun-Times. "While I was a state senator, he had buildings in my district that apparently were not managed properly. I had no knowledge of that at the time.''

Bottom line, Clinton's claim is Barely True. Obama, by his own admission, did some, albeit very little, legal work that helped Rezko's company obtain properties that would later be neglected. But the allegations that Rezko was a slumlord did not arise, at least not publicly, until years after Obama performed that work.

Editor's note: This statement was rated Barely True when it was published. On July 27, 2011, we changed the name for the rating to Mostly False.

Our Sources

Chicago Sun-Times, "Obama and his Rezko ties," by Tim Novak, April 23, 2007

Chicago Tribune, "Old friends, new challenges; Obama, Rezko divided by fence, different fortunes," Nov. 1, 2006

Chicago Sun-Times, "Obama: I didn't know about Rezko problems," by Tim Novak, April 24, 2007

Chicago Sun-Times, "We still live in a slum," by Mark Konkol, June 29, 2007

Chicago Sun-Times, "Broken promises, broken homes," by Tim Novak, April 24, 2007

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A fragment of truth, distorted

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