Obama's Friends?

Rezko sells lot next to Obama


By David Jackson and Ray Gibson
Tribune staff reporters

February 24, 2007

A land sale recorded this month ended the neighborly relationship between U.S. Sen. Barack Obama and indicted political insider Antoin "Tony" Rezko, Obama's friend and former fundraiser.

On Dec. 28, 2006, land records show, Rezko's wife, Rita, sold the garden lot she owned next to Obama's home, transferring it to a company that plans to develop housing there. That sale deed became public this month when it was registered with the Cook County recorder of deeds.

On Friday, a spokesman for the Democratic senator and presidential candidate issued a written statement saying Obama hadn't communicated with Rezko about the deal: "The senator knows only that development is planned, but not any of the details. Sen. Obama was informed by his counsel of the plan for development."

Rezko's wife and Obama bought the adjoining South Side lots in 2005 and then engaged in a series of personal financial transactions to re-divide and improve their parcels. After their dealings were disclosed by the Tribune, Obama said he was "bone-headed" to enter the financial arrangements because Rezko was reported to be under grand jury investigation during that period.

In October, Rezko was indicted in a state government kickback scandal and in an alleged business fraud. He has pleaded not guilty to both indictments.

As he campaigns for president, Obama has distanced himself from his longtime friend.

Rezko's wife appears to have netted roughly $54,500 from her dealings with the parcel, but that figure does not include expenses and property taxes. She bought the parcel for $625,000 in June 2005, the same day Obama bought his home for $1.65 million. Both lots had been part of the same estate, but the owner listed them for sale separately.

In January 2006, Rita Rezko transferred a 1,500-square-foot strip of her land to Obama for $104,500. Her recent sale of the rest was for $575,000.

The vacant lot once owned by Rita Rezko will be developed by a company owned by former Rezko business attorney Michael J. Sreenan. Rezko has no involvement with the new development, Sreenan said. "He's not a silent partner or anything like that," Sreenan said.

He said he has hired an architect and is discussing plans with the alderman and the city Landmarks Commission.

When they owned the adjoining properties, Obama paid his landscaper to mow Rezko's lawn. Obama hired an attorney and architect to design a wrought iron fence on their property line and secure city permits, but Rezko agreed to pay the $14,000 cost of building that fence.

Since Rezko was indicted, six creditors have sued him, including one this month that contends he owes $12.2 million in a real estate deal.

Chicago Tribune