Obama for America

 

Fact Check on Boston Globe Housing Story

June 27, 2008

RHETORIC: Antoin "Tony" Rezko, perhaps the most important fund-raiser for Obama's early political campaigns...

REALITY: REZKO WAS NOT OBAMA’S MOST IMPORTANT FUNDRAISER

Obama Said Rezko “Wasn’t My Largest Fundraiser But He Was A Significant Fundraiser.” “So fast-forward to the U.S. Senate race. Tony joined my finance committee. He wasn't my largest fund-raiser but he was a significant fundraiser. [Chicago Sun-Times Editorial Board Meeting Transcript, 3/14/08]

RHETORIC: Rezko was “a friend who helped the Obamas buy a home in 2005.”

REALITY: REZKO DID NOT HELP THE OBAMAS PURCHASE THEIR HOME

Politifact Ruled That The Claim That Obama Needed Rezko To Purchase His Home Was “False.” Politifact reported, “The first statement is accurate. It comes from an interview Obama had with the Chicago Tribune, published on Nov. 1, 2006: ‘It was ‘already a stretch’ to buy the house, Obama said, so the vacant lot was not affordable for his family.’ The second quote is based on a Time magazine reporter asking Obama for a March 6, 2008, story: ‘Did you generally or expressively state a need for help in buying both or either of the tracts?’ Obama: ‘No, I didn’t need help.’ This isn’t the ‘gotcha’ it’s made out to be. If Obama had no interest in the vacant lot next to the home (other than the sliver he purchased from Rezko a year later), he would have no reason to tell Rezko he needed help buying it. The answer is not a contradiction of his first statement. We rule this GOP claim False, too.”
[Politifact, 6/19/08]

Zorn: “The Deal Could Have Gone Down Without Rezko” And The Rezkos Did Not Fund The Purchase Of The Obama’s House. Eric Zorn wrote, “The deal could have gone down without Rezko.” “The Obamas did not receive or borrow any money from the Rezkos to buy their house.” [Chicago Tribune, 6/10/08]

The Sellers Did Not Discount The Price Of The House Based On The Lot, Obamas Made Several Offers For The House Including The Highest. Bloomberg reported, “Burton said a campaign adviser discussed the sale with Wondisford by phone and followed up with an e-mail to Wondisford repeating his points. Wondisford responded: ‘I confirm that the three points below are accurate,’ according to the e-mail, provided to Bloomberg News and authenticated through records shown by the adviser. The e-mail says that the sellers ‘did not offer or give the Obamas a ‘discount’ on the house price on the basis of or in relation to the price offered and accepted on the lot.’ It also says that ‘in the course of the negotiation over the sales price,’ Obama and his wife, Michelle, ‘made several offers until the one accepted at $1.65 million, and that this was the best offer you received on the house.’” [Bloomberg, 2/18/08]

RHETORIC: Obama sometimes worked on their cases. In at least one instance, he represented the nonprofit company that owned Grove Parc, Woodlawn Preservation and Investment Corp., when it was sued by the city for failing to adequately heat one of its apartment complexes.

REALITY: BOSTON GLOBE IS THE FOURTH PAPER TO REPORT ON OBAMA SINGLE APPEARANCE IN COURT ON A PROJECT WHERE WORK WAS ONGOING

Zeldin: “No One Who Has Ever Practiced Law…Could Argue, With A Clear Conscience, That These Five Hours On Behalf Of A Church Group…Equated Knowingly Representing A Chicago Slumlord.” Michael Zeldin, a former independent counsel and federal prosecutor wrote “No one who has ever practiced law, let alone Mrs. Clinton, could argue, with a clear conscience, that these five hours on behalf of a church group that partnered with a man who at a later point in time would be alleged to be a scoundrel equated to knowingly representing a Chicago slumlord. Yet she could not resist leveling the accusation.” [Wall Street Journal, 1/31/08]

Chicago Tribune Looked Through 260 Civil And Criminal Cases, And Out Of 260 Cases, Obama Filed One Appearance For Central Woodlawn In February 1994; Building In Question Was A “Former Slum” On Which “Work Was Ongoing.” The Chicago Tribune reported, “At the Tribune's request, Cook County Circuit Court Chief Judge Timothy Evans produced a list of all 260 civil and criminal cases in which the firm filed appearances, and the Tribune separately examined 1990s lawsuits that Rezmar Corp. listed in applications for government grants. The paper also examined files from the Illinois Housing Development Authority and the city housing department, as well as the hundreds of clients Obama listed in the unusually frank ethics disclosure reports he filed as a state senator from December 1995 through April 2004. Those and other records disclosed five instances in which Obama did legal work for ventures that included Rezmar Corp. The case of City of Chicago vs. Central Woodlawn Limited Partnership is one example. In 1992, that community group partnered with Rezmar Corp. to rehab the former slum apartment building at 6107-6115 S. Ellis Ave. As work was ongoing, city officials sued the developers, alleging 16 serious code violations at the property, including a dangerously dilapidated porch. Obama and a co-counsel filed appearances in February 1994, but the court records show they appeared on behalf of Central Woodlawn, Rezko's non-profit partner, not Rezko or his company.” [Chicago Tribune, 1/23/08]

• Obama Filed An Appearance On Behalf Of WPIC In 1994. The Los Angeles Times reported, “In 1994, Obama appeared in Cook County court on behalf of Woodlawn Preservation & Investment Corp., defending it against a suit by the city, which alleged that the company failed to provide heat for low-income tenants on the South Side during the winter.” [Los Angeles Times, 4/6/08]

• Obama Did Not Directly Represent Rezko Or His Firms; Obama Did Represent “On A Very Limited Basis” Ventures In Which Rezko Participated With Others. The Chicago Sun-Times reported, “‘Senator Obama did not directly represent Mr. Rezko or his firms. He did represent on a very limited basis ventures in which Mr. Rezko's entities participated along with others,’ according to the e-mail from Obama's staff.” [Chicago Sun-Times, 4/23/07]

RHETORIC: Obama translated that belief into legislative action as a state senator. In 2001, Obama and a Republican colleague, William Peterson, sponsored a successful bill that increased state subsidies for private developers. The law let developers designated by the state raise up to $26 million a year by selling tax credits to Illinois residents. For each $1 in credits purchased, the buyer was allowed to decrease his taxable income by 50 cents.

REALITY: SB 1135 WAS A BIPARTISAN BILL THAT HOUSING ADVOCATES SUPPORTED

Peterson Said The Bill Was The Culmination Of Bipartisan Work And Work With Housing Advocates. Senator Peterson said, “Senate Bill 1135 amends the Illinois Income Tax Act and the Housing Authorities Act to create credits for donations to certain affordable housing projects. This bill is a culmination of several hearings that were held over the past year, and work with the Chicago Rehab Network, and also a bill that Senator Obama and I sponsored last year, Senate Bill 1676.” [Peterson Floor Statement, 3/29/01, p. 47]

• September 2001: Obama Affordable Housing Bill Receives Praise from YMCA Leader. The Hyde Park Herald reported, “Tax credits are crucial to construction and maintenance of affordable housing, according to Pat Abrams of the Renaissance Collaborative, the company that restored the Wabash YMCA, 3763 S. Wabash Ave. “The only way to do affordable housing these days is through tax credits,” Abrams said, adding that available federal tax credits have remained unchanged in recent years. “Federal tax credits have been frozen for a decade, if not longer,” she said…. Renaissance Collaborative used federal tax credits in its work at the Wabash YMCA, but, according to Abrams, a dearth of funding dragged the project out. “It took us approximately six years to get all the funding that was necessary to redo this building, which is really an incredibly long time when you start to think about what inflation does to prices,” she said.” [Hyde Park Herald, 09/05/2001]

• September 2001: Obama Affordable Housing Bill Receives Praise from Rep. Currie. The Hyde Park Herald reported, “Currie said there is actually a decrease in the commitment of the federal government to affordable housing issues. “The federal government has pulled back on its commitment through Section 8 and certain kinds of other federal programs,” she said.” [Hyde Park Herald, 09/05/2001]

• September 2001: Obama Affordable Housing Bill Has “Broader Implications.” Hyde Park Herald reported, “Funding for affordable housing has broader implications than simply increasing available units, according to Joyce Probst, Policy Director of the Chicago Rehab Network, a citywide affordable housing policy and advocacy group that fought for creation and passage of this legislation. “Once people’s housing costs are affordable, that allows them to make other choices: to invest in education, to have appropriate medical care, to have the nutrition that they need, everything that people need for their lives,” she said. “What we’re seeing instead is that people are paying disproportionate amounts for housing costs, and they’re having to make very hard choices about how much food they have available to their family or how much education they can pursue. Or people are living in substandard units or they’re crowding, they’re doubling up. That is not a good living situation for children or for families,” Probst added. These implications mean the future of the city is linked to the future of affordable housing.” [Hyde Park Herald, 9/5/01]

RHETORIC: Grove Parc Plaza opened there in 1990 as a redevelopment of an older housing complex. The buildings had a new owner and a major renovation funded by the federal government. Even the name Grove Parc Plaza was new.

REALITY: GROVE PARC’S PROBLEMS WERE DECADES OLD, HUD WAS “EAGER TO SELL”

Grove Parc Has Been A Troubled Site Since The 1960s. “Hinsberger argued the development's size has made it unmanageable since it was built in the late 1960s. Grove Parc went through a foreclosure in the late 1970s, facing similarly poor housing conditions, paving the way for Lane's group to step in as an owner.” [Chicago Tribune, 2/25/07]

Grove Parc Had “Sat In HUD’s Inventory For Years” And Was “Eager To Sell.” The Chicago Tribune reported, “In 1988, WPIC acquired Grove Parc Plaza, formerly Woodlawn Gardens, from the Department of Housing and Urban Development. The 504-unit, nine-building complex lines South Cottage Grove Avenue from East 61st to East 63rd Streets. It had sat in HUD's inventory for years. Eager to sell the dilapidated, partially vacant complex, HUD dealt it for $1. WPIC, with the help of a $6 million loan from HUD and $1.6 million of its own funds, by April of 1990 turned the complex into a renovated Section 8 low-income apartment complex with a waiting list of 400 qualified families.” [Chicago Tribune, 4/15/95]

Grove Parc Was Destined To Failure Because The Funding Was Never There. Chicago NPR reported, “But there's widespread agreement that things started going wrong fast. ‘The development was doomed to failure,” said Leon Finney, one of Grove Parc’s architects. “Leon Finney runs The Woodlawn Organization, which co-developed the project. Finney says the development was just never capable of bringing in enough money to pay the bills. The buildings were hard to secure and tenants damaged the property, driving up repair costs. ‘It was an interesting theory, but in practice there was not enough to make it work.’” [Chicago NPR, 8/13/07]

RHETORIC: But Obama has contended that he knew nothing about any problems in Rezmar's buildings.

REALITY: OBAMA SAID THAT HIS OFFICE FOLLOWED UP WITH HOUSING COMPLAINTS AS A MATTER OF ROUTINE

Gibbs: Obama “Did Follow Up On Constituency Complaints About Housing As [A] Matter Of Routine.” The Chicago Sun-Times reported, “Did the senator ever complain to anyone -- government officials, Rezmar or Rezko -- about the conditions of Rezmar's buildings? ‘Senator Obama did follow up on constituency complaints about housing as [a] matter of routine,’ Gibbs wrote.” [Chicago Sun-Times, 4/23/07]

Obama Said That While He And His Aides Did Not Recall Complaints About Rezko Properties, It Was “Possible” That It Could Have Happened. “Obama said in the interview Monday that he was unaware of the scope of properties owned by Rezmar or the problems surrounding them. He said none of the affected residents personally sought his help and that aides at his state Senate district office did not recall any inquiries. Still, he said it was ‘possible’ that during his tenure in the legislature that a constituent may have written or called his office ‘saying, ‘We're in a building, and we're unhappy with the service here.’’” [Chicago Tribune, 4/24/07]

RHETORIC: She had previously received campaign contributions from Rezmar and said she had regarded the company as a model, one of the city's best affordable housing developers.

REALITY: REZKO WAS A LONGTIME FRIEND AND FUNDRAISER FOR PRECKWINKLE

Preckwinkle Had “A Long Friendship With Rezko” And Rezko Served On Preckwinkle’s “Campaign Finance Committee For Years.” The Chicago Sun-Times reported, “Preckwinkle, the South Side alderman, has a long friendship with Rezko. She got more than $30,000 in campaign contributions from Rezko, his family and business associates over the years. And Rezko served on her campaign finance committee for years.” [Chicago Sun-Times, 4/24/07]

RHETORIC: In 1998 the two men created a limited partnership to build an apartment building for seniors on Chicago's South Side. Obama wrote letters on state Senate stationery supporting city and state loans for the project.

REALITY: COTTAGE VIEW TERRACE IS A SUCCESS AND EVERY LOCAL ELECTED OFFICIAL, AS WELL AS THE UNIVERSITY OF CHICAGO AND THE HYDE PARK-KENWOOD COMMUNITY COUNCIL SUPPORTED IT

Alderman Toni Preckwinkle And Representative Lou Jones Wrote Letters Of Support For The Project. Alderman Toni Preckwinkle and Representative Lou Jones wrote letters of support for Cottage View Terrace to IHDA and DOH. [Preckwinkle Letter, 10/27/98; Jones Letter, 10/30/98]

Webber: Cottage View Terrace Would Turn A Vacant Lot “Into A Community Asset.” Henry Webber was the Vice President for Community Affairs at the University of Chicago. Webber wrote, “Your loan proceeds, couple with Trust Fund monies from the Illinois Housing Development Authority, will give the developer an opportunity to turn a vacant lot in West Hyde Park into a community asset. Not only will this project create high-quality housing; it will house a range of social service programs targeted to seniors and create job opportunities for community residents. Cottage View will have a significant impact on West Hyde Park and significantly contribute to the momentum already generated by other positive signs of community revitalization.” [Webber Letter, 10/30/98]

Grossman: Cottage View Terrace “Would Provide An Aesthetic And Commercial Boost To The Community. Robert Grossman served as the Chairman of the Hyde Park-Kenwood Conservation Community Council. Robert Grossman wrote, “The project would provide an aesthetic and commercial boost to the community. It will resolve a nagging problem of uncontrolled parking along the vacant lot and adjoining alley…We look forward to their return to the CCC for further consideration and, based on what we have seen thus far, final approval.” [Grossman Letter, 10/21/98]

5/2006: Cottage View Terrace “Successfully Completed Inspection Without Finds Or Violations Of Regulations.” Rosalyn Banks-Jordan, an Associate Asset Manager for the Illinois Housing Development Authority, wrote in a cover letter to the inspection report, “Please note that this development has successfully completed the inspection without findings or violations of regulations.” [IHDA Letter, 5/15/06]

• 2006: There Were No Tenant Complaints To IHDA About Cottage View Terrace. According to the Loan Rating Form 2006, Cottage View Terrace had No “Tenant Complants Received By IHDA” in the past year. [IHDA Loan Rating Form 2006, 5/1/2006]

• 2006: Cottage View Terrace Received Perfect Scores For “Decent, Safe, Sanitary Housing” And Every Other “Physical” Category. According to the Loan Rating Form 2006, Cottage View Terrace received a perfect score in each of nine categories that described the physical condition of the building, including “Decent, Safe, Sanitary Housing.” [IHDA Loan Rating Form 2006, 5/1/2006]

• 2006: Cottage View Terrace Got “A” Ratings For Management, Physical And Market, High “B” Rating For Financial. According to the audit grades, the overall Management, Physical and Market categories got “A” ratings, including a perfect score for Physical and near perfect for Management. The Financial aspect was .12 off an “A” rating. [IHDA Loan Rating Form 2006, 5/1/2006]

RHETORIC: In 2000 Davis asked the nonprofit Woods Fund of Chicago for a $1 million investment in a new development partnership, Neighborhood Rejuvenation Partners. Obama, a member of the board, voted in favor, helping Davis secure the investment.

REALITY: GLOBE IS THE SECOND PAPER TO OMIT THE FACT THAT A MEMBER OF THE WOODS FUND BOARD WORKED FOR NEIGHBORHOOD REJUVENATION PARTNERS; MAJOR INVESTORS INCLUDING THE UNIVERSITY OF CHICAGO AND LASALLE BANK ALSO SUPPORTED NEIGHBORHOOD REJUVENATION PARTNERS

Sun-Times Omitted Stanback’s Direct Connection To Neighborhood Rejuvenation Partners. Media Matters reported, “Despite noting that Stanback ‘worked for Davis,’ Novak omitted Stanback's direct link to Neighborhood Rejuvenation Partners. The December 27, 2000, The December 27, 2000, agreement of limited partnership (p.4) through which Neighborhood Rejuvenation Partners was formed lists both Stanback and Davis as ‘principals.’ Subsequent Woods Fund documents -- such as its 2002 annual report and 2003 annual report -- listed Stanback as a member of the board of directors, and stated that ‘[o]ne of the Fund's Directors was an employee of the general partner of Neighborhood Rejuvenation Partners, L.P.’ and left that position in 2003. According to the limited partnership agreement, the general partner of Neighborhood Rejuvenation Partners is Davis Associates Managers LLC.” [MediaMatters, 11/29/07]

Neighborhood Rejuvenation Partners Was An Affordable Housing Fund Sustained By Major Donations. The Chicago Tribune reported that Neighborhood Rejuvenation Partners “ is an affordable housing fund supported by $17 million in donations from institutions such as the University of Chicago and LaSalle Bank. It was started and is managed by the Davis Group, a Chicago-based developer headed by Allison Davis.” [Chicago Tribune, 2/16/03]

• NRP Has Invested More Than $640 Million Since 2001. “Chicago-based Neighborhood Rejuvenation Partners (NRP) is a real estate development capital pool established by The Davis Group, with investors representing some of the city’s largest education, corporate and financial institutions and foundations. Since its inception in 2001, NRP has become one of the city’s best-funded developers, investing more than $640 million to strengthen communities and create premier urban properties of exceptional quality and value.” [Press Release, Undated]

Woods Fund Made A Capital Commitment Of One Million Dollars In December 2000. Under the heading “Investment in Neighborhood Rejuvenation Partners, LP,” the Woods Fund of Chicago reported, “In December 2000, a capital commitment was made to Neighborhood Rejuvenation Partners, LP in the amount of $1,000,000. No capital has been contributed to date.” [Form 990, Filed 8/19/01]

• The Woods Fund Contributed The Minimum Amount For A Limited Partner. Under Section 3.03 Capital Commitments, “Each Limited Partner which is accepted by the General Partner shall make a Capital Commitment of no less than $1,000,000; provided, however, that the General Partner may, in its sole discretion, permit smaller Capital Commitments.” [Agreement of Limited Partnership, 12/27/00]

RHETORIC: In the midst of the uproar, a small group of Lawndale residents gathered to rally against the Democratic candidate for the US Senate, Barack Obama. Obama's Republican opponent, Alan Keyes, trailed badly in the polls and was not seen as a serious challenger. But the organizers had a simple message: Cecil Butler had donated $3,000 to Obama's campaign. Habitat had close ties to Obama. And Obama had remained silent about Lawndale's plight.

REALITY: KEYES TRIED TO BUS SUPPORTERS TO LAWNDALE GARDENS TO PROTEST BUT ENDED UP AT A POLICE STATION

Keyes Was Invited To Lawndale By “Ex-Cons Who Are Fed Up With The Democratic Party” But The Rally Did Not Occur At Lawndale Gardens Because Keyes “Found Himself On The Wrong Side Of The Law.” But last Friday afternoon a crowd milled around the mother-and-child statue at the corner of Kedzie and Douglas, waving Keyes placards and getting ready to board a charter bus with the candidate's name on the side. The bus was scheduled to take them to Lawndale Manor, the crumbling low-income housing project overseen by Cecil Butler, a contributor to Obama's campaign. It never got that far. It ended up instead at the 11th District police station, where the Republican candidate found himself on the wrong side of the law. Keyes was invited to Lawndale by members of V.O.T.E. 4 Hip Holitics, an inner-city political action group founded by ex-cons who are fed up with the Democratic Party. [Chicago Reader, 10/29/04]

Keyes Held His Rally In Front Of The 11th District Police Station. “As Hunter spoke, there was a sudden commotion. Everyone rushed toward the corner of Roosevelt and Homan. The flatbed truck had been pulled over by the police, and Carter was being handcuffed…Reverend Hunter grabbed a megaphone and announced a change in the itinerary. ‘We need to descend on the police station and tell them they can't take our citizens off the streets,’ he said. ‘This is not Russia. Why do we live like this when so many of America's dollars have come to this community? This stuff has to end, and it can end with your vote.’ Hunter led the flock, including the candidate, back onto the bus. Ten minutes later everyone was in the lobby of the 11th District police station at Kedzie and Harrison, demanding Carter's release. On the other side of the desk, the police looked bemused and bewildered. Hunter spoke quietly with the shift commander, while Keyes stood beside his press secretary, Connie Hair, who was taping the confrontation with a video camera.” [Chicago Reader, 10/29/04]