Undue Diligence Toward Obama

Wednesday, January 23, 2008

The two candidates sparred repeatedly Monday night in the Democrats' most vigorous presidential debate of the season, with Hillary Clinton questioning Barack Obama about his ties to a real estate developer and his comments about Ronald Reagan, among other exchanges. The Fact Checker weighs in:

Clinton was on the Wal-Mart board of directors from 1986 to 1992, while her husband was governor of Arkansas and she was a member of the Rose Law Firm in Little Rock. She has subsequently distanced herself from the Arkansas-based company and has criticized its labor practices. She returned a $5,000 campaign donation from Wal-Mart in 2005.

During the same period, Obama worked as a community organizer in Chicago, attended Harvard Law School and then moved back to Chicago. In 1993, he became an associate lawyer with a small Chicago firm, Davis, Miner, Barnhill and Galland. It was during this time that he first became involved with a real estate developer named Antoin "Tony" Rezko, who was subsequently indicted on charges of fraud, extortion and money laundering and will go on trial on Feb. 25.

According to the Chicago Sun-Times, Obama received $168,000 in campaign contributions from Rezko and his associates after 1995. Obama has denied doing any legal work directly for Rezko or his companies. During Monday night's debate, he said that he had done "about five hours' worth of work" on a joint real estate development project involving Rezko and a Chicago church group.

William Miceli, Obama's supervisor at the law firm, said the firm represented the Woodlawn Preservation and Investment Corp., a nonprofit group that redeveloped a run-down property on Chicago's South Side with Rezko. He called Clinton's assertion that Obama represented Rezko in a slum landlord business "categorically untrue."

"He was a very junior lawyer at the time, who was given responsibility for basic due diligence, document review," said Miceli, adding that Obama did what he was told by the firm. According to Miceli, that was the only time Obama worked on a Rezko-related project while at the law firm.

The story of Obama's relations with Rezko remains murky. Obama has been embarrassed by revelations that he bought a house alongside a lot purchased by Rezko, paying $300,000 less than the asking price. But investigations by Chicago newspapers have not produced evidence that he represented Rezko in a slum landlord business. What has been demonstrated so far is that he did some due diligence legal work for a joint venture between Rezko and a Chicago nonprofit.

Two Pinocchios for Clinton.

ONE PINOCCHIO: Some shading of the facts. TWO PINOCCHIOS: Significant omissions or exaggerations. THREE PINOCCHIOS: Significant factual errors. FOUR PINOCCHIOS: Real whoppers. THE GEPPETTO CHECK MARK: Statements and claims contain the truth, the whole truth and nothing but the truth.

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