Obama's Problematic Friends

By His Friends Ye Shall Know Him
The trial of Tony Rezko spells trouble for Barack

STEPHEN SPRUIELL

Chicago
Barack Obama has two categories of problematic friends. On one hand, there are the radicals ?- such people as his pastor, Jeremiah Wright, and his friend Bill Ayers, a former leader in the homegrown '60s terror group the Weather Underground. On the other hand, there are the players ?- such Illinois political operators as indicted fundraiser and businessman Antoin "Tony" Rezko, a man who raised hundreds of thousands of dollars for Obama's campaigns and helped him buy a $1.65 million house here.

The radicals have received more coverage in the national media so far, simply because the public nature of what they do makes them easier to cover. All a broadcast network needs to do is play clips from Wright's "God damn America" sermon, bring on a couple of political analysts to talk about it, and voilà: insta-story. For newspapers, it's as simple as reprinting excerpts from Ayers's memoir, in which he wrote, "Everything was absolutely ideal on the day I bombed the Pentagon."

But Rezko's corruption trial, which has been unfolding in a federal courtroom here over the past several weeks, has the potential to change the balance. For one thing, the trial has already yielded new information on the corrupt activities of several other Illinois players to whom Obama has ties, including his former boss, Allison Davis. For another, Rezko stands a good chance of being convicted when the jury decides this case, which should happen sometime this summer. If he is, it will create a new opening for Obama's opponents and a new opportunity for the press to probe his relationships within the bipartisan political machine that Illinoisans refer to simply as "The Combine."

Rezko's trial has lifted the veil on Illinois's infernally corrupt political establishment, and a government witness named Stuart Levine has taken on the role of a meth-snorting, double-dealing Virgil, guiding the public through it. Levine, a drug addict and crooked GOP operative, is testifying for the government in order to avoid spending the rest of his life in prison. Over the course of seven days of direct examination by the prosecution, he described a statewide network of fraud, extortion, and bribery that included key figures in the administration of Illinois governor Rod Blagojevich, a Democrat.

One of those figures was Tony Rezko, a top fundraiser for and adviser to Blagojevich. Most of the public first heard of Rezko when Hillary Clinton mentioned him during a Democratic debate sponsored by CNN back in January. After Obama criticized Clinton for her ties to Wal-Mart, Clinton shot back with, "I was fighting against [conservative] ideas when you were practicing law and representing your contributor, Rezko, in his slum-landlord business in inner-city Chicago."

Obama responded that, as a young associate at the law firm of Davis Miner Barnhill & Galland, he had done about five hours of work on a real-estate deal involving a "church group" and "this individual" (meaning Rezko), implying that he barely knew the man. In fact, Rezko was one of Obama's first political contacts in Chicago, and the two men had a close relationship until it became clear in early 2006 that Rezko would be indicted on corruption charges.

In 1990, when Obama was making headlines at Harvard for becoming the first black president of the law review, Rezko offered him a job at Rezmar, his burgeoning low-income-housing firm. Obama declined the offer and took a job at Davis Miner instead. In 1995, Obama spent 32 hours, not five, working on a deal that enabled a non-profit run by his boss, Allison Davis, to join with Rezmar in acquiring an old nursing home and converting it into subsidized housing for poor people, according to the Chicago Sun-Times. That property ?- like many others Rezmar obtained using city, state, and federal loans ?- ended up in foreclosure at the taxpayers' expense.

In 1995, Obama also launched his first bid for the Illinois state senate, and Rezko was among his first contributors. Approximately $10,000 to $15,000 of the $100,000 that Obama hauled in during that campaign came from Rezko, according to an estimate Obama provided to the Chicago Tribune. Rezko continued to raise money for Obama during his subsequent state-senate races, his unsuccessful run for Congress in 2000, and his successful U.S. Senate run in 2004 ?- about $250,000 in all.

Finally, when the Obamas were looking for a new house in the summer of 2005, Rezko helped them buy their dream home by purchasing an adjoining lot they could not afford, then selling them a strip of the land on which they wanted to build a fence. The real-estate deal attracted scrutiny after Rezko's indictment, and Obama has called it a "bone-headed move." But he told the Tribune that he did not see anything wrong with the deal at the time, because "I've known him for a long time. I assumed I would have seen a pattern [of corrupt behavior] over the past 15 years." Never mind that, by the summer of 2005, the Chicago papers had run over 100 stories about the clouds gathering over Rezko's head.

A month into the Rezko trial, it's just as hard to believe that Obama didn't see Rezko's pattern of corrupt behavior as it was to believe that he sat in Jeremiah Wright's pews for over 20 years and didn't see him damning America. In both cases, the more likely alternative is that he looked the other way. Rezko's whole business was the buying and selling of influence: It's how he became one of Chicago's biggest recipients of government loans to build low-income housing despite having no experience in real estate, and it's how ?- prosecutors allege ?- he built a corrupt network of political operatives to enrich himself and buy more influence.

Stuart Levine was one of these lower-level operatives. At Rezko's trial, he testified that he and Rezko conspired to use Levine's position on two state boards to benefit themselves and buy influence with Governor Blagojevich. In one such instance, Levine told the jury, he directed the Illinois Teachers Retirement System, of which he was a trustee, to invest $50 million with a firm called Glencoe Capital. In exchange, Levine arranged for himself and Rezko to split a fraudulent $500,000 "finder's fee." Rezko allegedly told Levine to route his half to an associate named Joseph Aramanda.

According to the indictment against Rezko, Aramanda "used the money . . . in substantial part for the benefit of Rezko." To that end, the indictment alleges, Aramanda received half of the money in March 2004 and wrote a $10,000 check to Barack Obama's Senate campaign that same month.

Of course, Obama has donated any and all Rezko-related contributions, including those he received from Aramanda, to charity, and he says neither he nor anyone on his campaign had any reason to suspect that Aramanda had obtained the money by fraudulent means.

Levine also offered testimony, backed up by wiretap evidence, which put Obama's former law-firm boss, Allison Davis, in the middle of an attempted quid pro quo. Davis's friend Thomas Rosenberg, a financier and the producer of the film Million Dollar Baby, was in line for a $220 million allocation from the Teachers Retirement System, but Levine was holding it up so that he and Rezko could attempt to extort money from Rosenberg.

Davis allegedly approached Rezko on Rosenberg's behalf and asked if a campaign contribution to Blagojevich would speed things along. Rezko told Davis to "call Stuart Levine." Rezko and Levine planned to give Rosenberg a choice: either pay a $2 million "finder's fee" or raise $1.5 million for Blagojevich.

When Rosenberg realized he was the target of such a massive shakedown, he was furious. In a recorded phone call that prosecutors played for the jury, one of Levine's co-schemers quoted Rosenberg's reaction: "?'If [Tony Rezko and Blagojevich fundraiser Chris Kelly are] going to do this to me and think they're going to blackmail me, I'm going to take them down.'"

Rosenberg's threat convinced the alleged conspirators to back off, and ?- in the biggest bombshell to emerge during the trial so far ?- Levine testified that Rezko told him that Blagojevich had been informed of the situation and had agreed with Rezko's proposed course of action: to back off from the extortion plot but also to deny Rosenberg any more state contracts. Levine is not the most credible witness, but prosecutors played numerous recorded phone calls in which he discussed these schemes with co-conspirators in situations where it would have made little sense for him to lie.

If the allegations about Blagojevich are true, then such nakedly corrupt behavior at such a high level is bound to attract greater scrutiny from the national media on the problem of corruption in Illinois. Three out of the last seven elected Illinois governors have gone to jail for corruption, and based on evidence presented at the Rezko trial, Blagojevich could well become the fourth.

For Obama, this scrutiny would present a problem, not because he was involved in the serious wrongdoing for which Rezko is on trial, but because the evidence presented at his trial has made clear that Rezko's method of operating should have raised red flags for anyone doing business with him. Yet Obama did not distance himself from Rezko until the latter's indictment made him politically radioactive. We saw him do the same thing when the media discovered Jeremiah Wright's sermons. Obama wants us to believe he didn't really know his friends at all.

National Review