BARACK'S FAVORS FOR CORRUPT CRONY

DAVID FREDDOSO

August 21, 2008 --

Barack Obama has admitted it was "boneheaded" to get involved in a land deal with Tony Rezko, his friend and fund-raiser. But the media's focus on that deal has distracted from the bigger question: Why would Obama become involved in any deal with a man like Rezko, who made his living sponging off taxpayers and corrupting public officials? Because, by the time of the deal, the two already had a long relationship of mutual benefit. The deal's details are well-known: On June 15, 2005, Obama bought a gorgeous house in Hyde Park for $1.65 million - $300,000 below the list price. Rezko bought the empty but attractive lot next door from the same seller at the same time; Obama would later buy part of Rezko's lot, overpaying him.

The transaction was shady, but not obviously corrupt. The overall Obama-Rezko relationship looks worse.

After Rezko's 2006 indictment on unrelated federal corruption charges, Obama denied unequivocally that he'd ever helped the man: "I've never done any favors for him."

That's simply false. Rezko was a genius of corporate welfare who enriched himself at taxpayers' expense, both legally and illegally, via his multiple political connections. Yes, he went to others for the illegal deals that landed him in prison. But Rezko depended on Obama when he wanted legal access to the state treasury. The arrangement was a far cry from Obama's image of "change and hope."

It's impossible to know Obama's motives. But several of his official acts benefited Rezko, who in turn raised some $250,000 for Obama's campaigns.

In October 1998, Obama wrote city and state officials, urging them to give Rezko $14 million to build an apartment complex outside of Obama's state Senate district. The Chicago Sun-Times noted last year that Obama's request included $855,000 in "development fees" for Rezko and for another developer, Allison Davis, who happened to be Obama's old law-firm boss. Obama's spokesman said it was just a coincidence that the state senator wrote letters to obtain millions of dollars for his two longtime friends.

In fact, Obama was a dependable ally of subsidized developers in the Legislature, giving Rezko and others broader help as well. In "The Case Against Barack Obama," I identify and parse six housing bills with which Obama was closely involved. A few examples:

* In 2001, Obama cosponsored a bill allowing developers to sell state tax credits to others and pocket half of the proceeds.

* In 2002 and 2004, he was chief cosponsor of a bill to authorize a rent-subsidy fund giving "grants . . . directly to developers" of low-income housing. Seventy percent of the money was earmarked for the Chicago area.

* Obama cosponsored the Illinois Housing Initiative Act of 2003, which required the governor to develop a plan for more low-income housing and "provide[d] for funding for housing construction and rehabilitation and supportive services."

* In 2003, Obama voted for the Affordable Housing Planning and Appeal Act, which required Illinois municipalities to make 10 percent of their housing units "affordable" (by definition, this included subsidized housing). This forced 46 communities just outside of Chicago to create more than 7,000 new "affordable" units - a huge boost in demand for area developers. The bill also provided loopholes for developers to circumvent local ordinances and regulations.

After voting for this measure (it passed narrowly), Obama then cosponsored a new bill that moved up its implementation by more than a year.

These and the other Obama-backed bills helped make millionaires of Rezko and other slum developers at taxpayers' expense. The developers - including his former law boss and an adviser to his current campaign - reciprocated, together giving and raising hundreds of thousands of dollars for Obama's campaigns.

To sum up: Obama got them subsidies to build. He secured them a steady income of government rent subsidies. He arranged special tax credits and abatements for them. He backed measures that increased demand for their services, and helped them legally circumvent local laws.

Perhaps Obama acted with only the poor in mind. Yet some of his developer friends weren't so conscientious - especially Rezko.

Notably, Rezko's company claimed that it lacked the funds to heat one of its 11 buildings in Obama's state Senate district from December 1996 to February 1997. But Rezko still managed to write a $1,000 check to Obama's campaign fund on Jan. 14. That month, his tenants shivered as 19 inches of snow fell on northern Illinois.

With his early and large investments in Obama, Rezko helped the Democratic nominee get to where he is today. Obama, meanwhile, helped Rezko with his legislative work and his letter-writing. Given this close working relationship, the Obama-Rezko land deal is far less surprising.

David Freddoso, a political reporter for National Review, is the author of "The Case Against Barack Obama: The Unlikely Rise and Unexamined Agenda of the Media's Favorite Candidate."