An Obama Patron and Friend Until an Indictment

An Obama Patron and Friend Until an Indictment By CHRISTOPHER DREW and MIKE McINTIRE CHICAGO — Antoin Rezko, an entrepreneur of considerable charm who found riches in fast food and real estate, is known around Chicago as a collector of politicians. Back in the 1990s, Mr. Rezko’s office was adorned with framed photos of candidates he viewed as up-and-comers. Among them was Barack Obama, a state legislator whose first campaign donations included $2,000 from Mr. Rezko’s companies. As Mr. Obama built a career that carried him to the Senate in 2004, Mr. Rezko was there with him, holding fund-raisers and rallying support. Now, as Mr. Obama runs for president, the once-beneficial relationship with his old friend and patron has become problematic. Last fall, Mr. Rezko was indicted on federal charges of business fraud and influence peddling involving the administration of Gov. Rod R. Blagojevich of Illinois, whose picture was also on Mr. Rezko’s wall. Since then, Mr. Obama, a Democrat, has had to answer questions about a land deal with Mr. Rezko’s wife, Rita, and about other ties to him. Since early June, Mr. Obama has given to charity more than $21,000 in donations that his Senate campaign had received from Rezko associates now linked to the federal inquiries. He gave away $11,500 from Mr. Rezko himself last fall. Mr. Obama says he never did any favors for Mr. Rezko, who raised about $150,000 for his campaigns over the years and was once one of the most powerful men in Illinois. There is no sign that Mr. Obama, who declined to be interviewed for this article, did anything improper. Mr. Obama has portrayed Mr. Rezko as a one-time fund-raiser whom he had occasionally seen socially. But interviews with more than a dozen political and business associates suggest that the two men were closer than the senator has indicated. Mr. Obama turned to Mr. Rezko for help at several important junctures. Records show that when Mr. Obama needed cash in the waning days of his losing 2000 Congressional campaign, Mr. Rezko rounded up thousands of dollars from business contacts. In 2003, Mr. Rezko helped Mr. Obama expand his fund-raising for the Senate primary by being host of a dinner at his Mediterranean-style home for 150 people, including some whose names have since come up in the influence scandal. And when Mr. Obama and his wife, Michelle, bought a house in 2005, Mr. Rezko stepped in again. Even though his finances were deteriorating, Mr. Rezko arranged for his wife to buy an adjacent lot, and she later sold the Obamas a 10-foot-wide strip of land that expanded their yard. The land sale occurred after it had been reported that Mr. Rezko was under federal investigation. That awkward fact prompted Mr. Obama, who has cast himself as largely free from the normal influences of politics, to express regret over what he called his own bad judgment. “Senator Obama is a very intelligent man, and everyone by then was very familiar with who Tony Rezko was,” said Cindi Canary, executive director of the Illinois Campaign for Political Reform, a nonpartisan research group. “So it was a little stunning that so late in the game Senator Obama would still have such close involvement with Rezko.” While it is not clear what Mr. Rezko got from the relationship, he liked to display his alliances with politicians, including Mr. Obama. In one instance, when he was running for the Senate, Mr. Obama stopped by to shake hands while Mr. Rezko, an immigrant from Syria, was entertaining Middle Eastern bankers considering an investment in one of his projects. [Years earlier, as a state legislator, Mr. Obama wrote letters to city and state officials supporting efforts by Mr. Rezko and a partner to build apartments for the elderly with $14 million in government money, The Chicago Sun-Times reported in its June 13 editions. The developers received $855,000 in fees.] Mr. Obama’s spokesman, Bill Burton, said the senator was one of several politicians who intervened because the project was important to local residents. Mr. Burton also said in a statement that the senator “has held himself to a high standard and has had a career in public service fighting for the toughest possible ethical rules.” “This is not a record changed by anything that has happened to Tony Rezko,” Mr. Burton said. Mr. Rezko, 51, declined to comment. He has pleaded not guilty to the federal charges. People who know Mr. Rezko describe him as warm and personable. “I am sure that Obama saw in Tony the same thing that many of us saw — someone who was willing to help if asked, and for little in return,” said Michael Rumman, a former top Illinois official and Rezko business partner. Mr. Rezko, whose politics were more practical than partisan, raised hundreds of thousands of dollars for Democrats, in particular Mr. Blagojevich, who gave Mr. Rezko’s associates state jobs and contracts. He also raised money for Republicans, including President Bush. Mr. Rezko sometimes got involved in the private lives of the officials he backed. Governor Blagojevich’s wife, Patti, did real estate work for him, and Mr. Rezko sold a town house to Representative Luis V. Gutierrez, a Chicago Democrat. Mr. Rezko got his start in business and politics after graduating from college in Chicago in the late 1970s, when he met a son of the late Nation of Islam leader, Elijah Muhammad. Through this contact, he joined Muhammad Ali’s entourage and won county food concessions. By the 1990s, Mr. Rezko was developing low-income housing. One of his partners spotted a news item about Mr. Obama’s being the first black president of the Harvard Law Review and offered him a job. Mr. Obama decided to join a law firm, where he later spent several hours on work involving Mr. Rezko’s housing developments. Mr. Rezko also owned dozens of pizza and Chinese food franchises, as well as commercial real estate projects. And after he raised $500,000 for Mr. Blagojevich’s election in 2002, Mr. Rezko became the man to see for state appointments. When Mr. Obama first fielded questions about Mr. Rezko last fall, he said they had had lunch once or twice a year and had socialized with their wives “two to four times.” In addition to enlisting his huge circle of donors, Mr. Rezko and Mr. Obama talked frequently about campaign developments during the Senate race, Mr. Rezko’s associates said. Many of the donors also contributed to Mr. Blagojevich, and several have been linked to the federal charges against Mr. Rezko. One indictment accuses him of seeking payoffs from companies doing business with state boards, another with fraud in his business dealings. Mr. Obama recently said he would give away three donations totaling $21,500 from Mr. Rezko’s fund-raising dinner. The senator has said that he was giving away the donations to “make sure there were no questions” about the matter. Several other Rezko associates who contributed to the Senate campaign were appointed to the state boards that Mr. Rezko is accused of influencing. Mr. Obama has not returned those donations; Mr. Burton, his spokesman, said the senator had nothing to do with the appointments. Mr. Burton also said that Mr. Obama had not known of any questions about Mr. Rezko and his associates at the time he took their donations. While Mr. Obama was running for the Senate, Mr. Rezko was also raising money for a huge development in the South Loop of Chicago, often playing host to dinners in a private room at the Four Seasons Hotel here. Former Rezko associates said that Governor Blagojevich attended one of the dinners, and that at Mr. Rezko’s request, Mr. Obama dropped in at one for Middle Eastern bankers in early 2004, just as he was starting to pull ahead in the Senate primary. The visits, Mr. Rezko’s partners said, helped impress foreign guests. “I remember that he had been on the campaign trail, and he was completely wiped out and exhausted,” said Anthony Licata, a lawyer who represented Mr. Rezko on real estate deals. “My recollection is that he drank ice tea, and he talked about how he was really making progress, and we were all excited to see him.” Mr. Burton said it was not unusual for Mr. Obama to be “shaking hands late in the Senate primary season.” “If someone recalls meeting him during this period,” he said, “Senator Obama has no reason to doubt it.” By 2004, Mr. Rezko’s pizza restaurants were in trouble, and creditors were suing him. Yet after the Obamas bid $1.65 million for their house in January 2005, Mr. Rezko got involved. Mr. Obama has said that he mentioned the deal to Mr. Rezko. People familiar with the transaction said that the sellers did not want to close until that June 15, and that the sale would go through only if someone bought the adjacent lot from them on the same date. Rita Rezko paid $625,000 to outbid others for the lot and later sold the Obamas one-sixth of that land, for $104,500. After The Chicago Tribune reported the transactions last November, Mr. Obama said he had acted ethically, though it had been a mistake to let Mr. Rezko do anything that could be seen as a favor. The disclosure came four days before Michelle Obama was to appear as a special guest at a charity fashion show organized by Mrs. Rezko. Mrs. Obama attended, though others there said it seemed a bit awkward.