Young Mr. Obama (17 page)

Obama's bill, which he sponsored with William Peterson, a suburban Republican, gave a 50-percent tax credit to donations toward developing affordable housing, setting aside $13 million a year from the state's coffers.

Throughout his career in Chicago, Obama took hundreds of thousands of dollars from developers. Some, like Tony Rezko and Allison Davis, were guilty of building low-cost apartments that almost instantly deteriorated into slums: rat haunted, freezing in winter, occupied by squatters and drug dealers.

As an associate at Davis, Miner, Obama had worked with nonprofit groups that helped developers win government grants to build affordable housing. Among them was the Woodlawn Preservative and Investment Co., which was headed by Bishop Arthur Brazier, a Saul Alinsky protégé and influential black pastor who preached on television every Sunday morning. Brazier's group partnered with Rezko in redeveloping slum properties. Rezko was so closely associated with Davis, Miner that Allison Davis eventually left the law firm to go into the real estate business with him. In all, Davis, Miner represented three community groups in partnership with Rezko's company, Rezmar Inc. Through those groups, the firm helped Rezko obtain $43 million in government funds. Obama did only five hours of legal work for Rezko, under the supervision of more experienced attorneys, but he had met the developer even before joining the firm.

During his rise through Illinois politics, it was inevitable that Obama would encounter a suckerfish like Rezko. Illinois has more governments than any other state—over five hundred in Cook County alone—and therefore more opportunities for grafters. Antoin “Tony” Rezko arrived in Chicago from Syria in 1971. He barely spoke English, and he belonged to an ethnic group—Arab Christians—too small to elect even an alderman. There's only one way a guy like that can obtain political power. He has to buy it.

Rezko began his career as a civil engineer but was soon investing in real estate and fast food restaurants. He built houses on the South Side and opened Subway sandwich shops and Papa John's pizzerias. Those deals provided Rezko with 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 fund-raiser for Harold Washington. 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 used his connection with Ali to expand his fast food holdings. After Washington became mayor, Jabir Herbert Muhammad's company, Crucial Concessions, won the contract to sell food and drinks at the Lake Michigan beaches. Rezko took over the company's operations. In 1997, Crucial opened three Panda Express restaurants at O'Hare, under the city's Minority Set-Aside Program. It would be 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, Rezmar purchased thirty properties. The company's work was done on the cheap, but that was at the urging of the city, which figured rehabbers could develop more units if they installed low-grade appliances and cabinetry. When boilers and refrigerators wore out after six or seven years, Rezmar hadn't banked enough money to repair them. Eventually, the city stepped in and forced Rezmar to turn up the heat on six properties, including one that went unheated for five weeks.

Rezko's partner oversaw day-to-day maintenance. Rezko's job was to raise equity and cultivate politicians. He was a master at leveraging political contacts for contracts and grants. Rezko scouted young talent as skillfully as a basketball coach sitting in the stands of a high school field house. 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, the executive 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, who was as blown away as everyone else Obama lunched with in those years.

“He's great,” Rezko raved to the executive. “He's really going places.”

Around the same time he was courting Obama, Rezko was also cultivating an ambitious young state legislator named Rod Blagojevich. Like Obama, Blagojevich was a self-made politician—his immigrant steelworker father raised the family in an apartment. Guys like that were easy targets for Rezko, who could provide the money they hadn't inherited. The day Obama announced his campaign for state senate in 1995, he received $2,000 from two of Rezko's fast-food businesses.

When Davis and Rezko wanted to build a senior apartment house in Obama's senate district, Obama wrote letters to the city and state supporting loans for the project. Both developers would later hold fund-raisers for Obama at their homes.

Rezko built part of his fortune by exploiting the black community Obama served in the state senate. 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, even after he was caught using a black business partner to obtain a minority set-aside for a fast-food franchise at O'Hare Airport, and even after he was under grand jury investigation on charges he had demanded kickbacks from investment firms seeking money from the Illinois Teachers' Retirement System.

During his first year in the U.S. Senate, flush with the book advance for
The Audacity of Hope
, Obama and his wife would decide to trade up from a condo to a bigger, more secure home in Kenwood, a neighborhood of Edwardian piles popular with U of C 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.

At the time, Obama knew that Rezko was under a legal cloud but told the
Tribune
“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.”

Obama believed so strongly in his own integrity that he thought he could associate with a grifter while maintaining his Senator Galahad self-image. “A lot of people ask me, ‘Why would you want to go into a dirty business like politics?' ” he often said in his speeches. So the business will have one less corrupt, cynical politician, was the implication. He was convinced he could work alongside Chicago politicians while not becoming one himself, as long as he maintained a sense of higher purpose. This is a common delusion among officeholders, especially those as idealistic as Obama.

“In the state senate, he had a real sense of personal mission,” said James L. Merriner, author of several books on Illinois politics. “I think he thought he was just above it. He seemed to think he was on a plane above that.”

Tony Rezko taught Obama that you can't go into a dirty business like politics—especially Chicago politics—without losing some of your innocence.

Obama also took contributions from condo developers. Every South Side politician did. If you want to run for office, you need money, and who has more money than a real estate tycoon? Those donations were controversial, too, because Obama's district was being gentrified from two directions. On the northern end, whites who enjoyed downtown living were moving into the South Loop, which had once been a Skid Row district of taverns, men's hotels, and missions. (The South Loop's Second Ward had been represented by a black alderman since Oscar DePriest won there in 1915. Bobby Rush lived in the Second Ward. Before the decade's end, it would elect a white alderman.) On the southern end, middle-class whites and blacks were pushing out of Hyde Park, redeveloping run-down areas around the University of Chicago campus. Despite the urging of preservation groups, Obama did not object to a plan to demolish Geri's Palm Tavern, a historic Forty-seventh Street nightclub, and replace it with an upscale restaurant. Harold Lucas, who ran tours of Bronzeville through his company Black Metropolis Convention and Tourism, tried to get Obama involved in the fight to save Geri's, but “that was too controversial,” he would recall. “He did not step up to that fight.”

Obama didn't want to step on the toes of the local alderman, Dorothy Tillman, who favored the demolition. Tillman, an outspoken politician known for wearing broad-brimmed Sunday-best hats and carrying a gun in her purse, had a strong following among black nationalists.

“There's nothing that jumps out in my mind that he did to risk political capital for my community,” Lucas would say years later. “I don't recall anything he did as state senator that empowered the black community.”

In that respect, he was the completely opposite of Bronzeville's state representative, Lou Jones. Jones was indigenous to the South Side, having begun her political career as president of the resident council in the T. K. Lawless Gardens housing project. As a politician, Jones never forgot where she had come from; Obama never forgot where he was trying to go. Appearing too black might cost him the white votes he needed for statewide office. As Obama's political career advanced, Harold Lucas came to understand the tricky course Obama was following and always supported his campaigns. Obama might not have been the voice of black empowerment, with a raised fist and a copy of
The Wretched of the Earth
on his bookshelf, but he was at least in a position to bring the community's concerns to the white mainstream.

Toni Preckwinkle, who represented a portion of Bronzeville on the city council, also believed that Obama neglected the neighborhood for purposes of political ambition. Every state senator is given a budget for “member initiatives.” It's a goodie fund to spread around the district however he sees fit. In the early 2000s, as Obama was recovering from his loss to Rush and incubating his Senate ambitions, he gave the largest chunk of his member initiative money—$1.1 million—to the Seventeenth Ward, in the southeastern corner of his senate district. The money went mainly for park improvements. Preckwinkle's Fourth Ward got $275,000.

Obviously, every alderman wants more money for her ward, but Preckwinkle was incensed because Obama represented the entire Fourth Ward, while he only represented a small corner of the Seventeenth. She concluded he was trying to score points with Seventeenth Ward alderman Terry Peterson. Like Preckwinkle, Peterson had endorsed Obama in his run for Congress. But Peterson was close to Mayor Daley, whose support could guarantee Obama victory in a Senate primary. (Daley would later appoint Peterson to head the Chicago Housing Authority.) Preckwinkle had backed Obama in his dispute with Alice Palmer
and
his challenge to Rush, and now she was getting leftovers while Obama fattened up a new friend. Using member initiative money to advance his career was evidence of the disloyalty and opportunism that were becoming Obama's modus operandi as he grasped for higher office.

Preckwinkle was particularly frustrated because Obama claimed he didn't have the money to help the city buy and relocate a church that was standing in the way of a proposed pedestrian bridge across Lake Shore Drive.

“We asked him to do things, and it didn't happen, and, subsequently, we discovered that his resources were going other places,” she would later complain. “To people who would be useful to him in the future versus people who had helped him in the past.”

Even though she considered Obama a social-climbing ingrate, Preckwinkle continued to support his campaigns, lending him staff members and putting his name on her ward organization's Election Day palm cards. As an alderman, she had learned to make a distinction between candidates she liked personally and candidates whose politics she liked. A black U.S. senator would be important to her community.

As a committeeman, though, Preckwinkle was in a position to take some revenge. After Obama won the U.S. Senate seat, he would personally ask Preckwinkle to support Will Burns—his former student and legislative staffer—as his successor in Springfield. Preckwinkle would refuse. Instead, she voted to appoint a lawyer named Kwame Raoul. (Burns eventually won a seat in the state house, representing Bronzeville. There, he finally gave Preckwinkle the money to move that church.)

Obama didn't make the daily papers often during his early years in the senate. He wasn't in the leadership, so he was never involved in budget negotiations, which is always the biggest story out of Springfield. If Barack Obama and Emil Jones walked out of a room together, reporters were going to ignore Obama and surround Jones. Occasionally, he was mentioned in a page 5 metro section story about a bill to crack down on payday loan operations. Like any ambitious politician, though, he cultivated the media. There was an affinity between Obama and journalists. He was a published author, so he had a literary sensibility and knew the toil that went into writing. Obama also shared the press corps's political outlook: He was a liberal reformer who believed in open government. His bill to post campaign contributions on the Internet was a boon to investigative journalism in Illinois. Beyond that, he was articulate, quotable, and accessible, willing to leave the senate floor to talk to a newsman waiting by the Rail, the reporters' and lobbyists' nickname for the third-floor rotunda.

Obama took whatever media attention he could get. He was a frequent guest on
Public Affairs
, a one-on-one talk show that aired on public television stations around the state. Al Kindle put him on a public access show in Chicago. In other words, the name “Barack Obama” was unknown to anyone except wonks who read the
Illinois Blue Book
, a legislative directory. Illinois is a state with a vibrant political culture, but that's still a small following.