Obama and the Chicago Insider

By David Ignatius
Sunday, April 20, 2008

The trial of Barack Obama's wheeler-dealer friend, Antoin "Tony" Rezko, was back in the news last week because of a disagreement over whether Obama did or didn't attend a party at Rezko's house for an Iraqi-born billionaire named Nadhmi Auchi.

A prosecution witness testified that Obama and his wife were guests at the April 3, 2004, gathering in the Chicago suburb of Wilmette. The Obama campaign responded that neither of the Obamas recalled attending such an event. Auchi similarly has "no recollection of meeting Senator Obama at any party in 2004 or at any other time," according to his lawyer, Alasdair Pepper.

The testimony was a reminder of the vortex of business and politics swirling around Rezko -- and of Obama's curious 17-year friendship with the indicted Chicago businessman. The Clintons rightly have gotten hammered over the years for their friendships with political fixers. And although Obama complained in Wednesday night's debate about "distractions" in the campaign, his long association with Rezko is worth a careful look.

The mystery about the Rezko matter, for me, is why Obama stood by the Syrian-born businessman as his legal troubles mounted. The answer, near as I can tell, is the same one that emerged in the debate over inflammatory statements made by the Rev. Jeremiah Wright, Obama's former pastor. Obama remains doggedly loyal to his friends, especially those who embraced him when he first came to Chicago as a young man struggling to find his place in the world.

Obama met Rezko in the early 1990s as he was finishing up at Harvard Law School. Rezko was well connected in Chicago's African American community, in part because he had worked with Jabir Herbert Muhammad, the son of Nation of Islam founder Elijah Muhammad, when he was managing the career of boxer Muhammad Ali, according to a May 2005 profile in the Chicago Tribune.

Rezko moved into real estate and political fundraising, often a combustible combination in Chicago. Rezko offered Obama a job with his real estate company soon after they met, but Obama declined. When Obama decided to run for the state Senate in 1995, Rezko was his "first substantial contributor," according to the Tribune. That money relationship continued, with Rezko raising as much as $250,000 over the course of Obama's five Illinois races, reported the Chicago Sun-Times.

The friendship may have reflected the fact that both men were outsiders, trying to establish themselves in the rough-and-tumble world of Chicago. Obama told the Sun-Times last month: "My assessment of Tony Rezko was that he was an immigrant who had sort of pulled himself up by his bootstraps. . . . I think he saw me as somebody who had talent, but he was probably also intrigued by my international background."

Part of what Obama says he liked about Rezko was his graciousness: "He never asked me for anything."

The relationship became controversial because of the now-famous home-purchase deal: When Obama and his wife bought a $1.65 million house in Chicago in June 2005, Rezko's wife simultaneously bought the adjoining lot and later sold part of it to the Obamas so that they could have a bigger yard.

Obama conceded in an interview with the Chicago Tribune last month that in the real estate deal, "I made a mistake in not seeing the potential conflicts of interest or appearances of impropriety." He said of Rezko's motivation in the purchase of the adjoining lot, "He perhaps thought that this would strengthen our relationship. He could have even thought he was doing me a favor."

What's troubling about this story is that at the time Obama bought the house in June 2005, allegations had already surfaced about Rezko's alleged influence-peddling. In 2005, a Feb. 13 story in the Chicago Tribune criticized Rezko's receipt of lucrative state contracts to operate restaurants on Illinois toll roads; an April 8 story said he was "under fire from Chicago's city hall" because his restaurant chain had taken two spots at O'Hare International Airport designated for minority firms; and a May 17 article reported that Rezko had been subpoenaed in a corruption probe.

When asked by the Tribune why he didn't break off the relationship, Obama said Rezko "gave me assurances that he was not doing anything wrong" and "my instinct was to believe him." Given the range of information that was available at that time about Rezko's activities, it must be said that Obama was loyal to a fault.

The writer is co-host ofPostGlobal, an online discussion of international issues. His e-mail address isdavidignatius@washpost.com.

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