Obama, Unscrupulous Developers and Campaign Cash

The Boston Globe recently took a look at the sort of public/private partnerships that Sen. Obama forged in an attempt to make public housing in his Chicago district "better."

As a state senator, the presumptive Democratic presidential nominee coauthored an Illinois law creating a new pool of tax credits for developers. As a US senator, he pressed for increased federal subsidies. And as a presidential candidate, he has campaigned on a promise to create an Affordable Housing Trust Fund that could give developers an estimated $500 million a year.

I support the concept, but such public/private arrangements require oversight and, shucks, a little bit of morality on the part of the developers. In this case, both were missing.

But a Globe review found that thousands of apartments across Chicago that had been built with local, state, and federal subsidies - including several hundred in Obama's former district - deteriorated so completely that they were no longer habitable.

Grove Parc and several other prominent failures were developed and managed by Obama's close friends and political supporters. Those people profited from the subsidies even as many of Obama's constituents suffered. Tenants lost their homes; surrounding neighborhoods were blighted.

Close friends and supporters, indeed. They include:

Valerie Jarrett, a senior adviser to Obama's presidential campaign...chief executive of Habitat Co., which managed Grove Parc Plaza from 2001 until this winter and co-managed an even larger subsidized complex in Chicago that was seized by the federal government in 2006, after city inspectors found widespread problems.

Allison Davis, a major fund-raiser for Obama's US Senate campaign and a former lead partner at Obama's former law firm. Davis, a developer, was involved in the creation of Grove Parc and has used government subsidies to rehabilitate more than 1,500 units in Chicago, including a North Side building cited by city inspectors last year after chronic plumbing failures resulted in raw sewage spilling into several apartments.

Antoin "Tony" Rezko, perhaps the most important fund-raiser for Obama's early political campaigns and a friend who helped the Obamas buy a home in 2005. Rezko's company used subsidies to rehabilitate more than 1,000 apartments, mostly in and around Obama's district, then refused to manage the units, leaving the buildings to decay to the point where many no longer were habitable.

Campaign finance records show that six prominent developers - including Jarrett, Davis, and Rezko - collectively contributed more than $175,000 to Obama's campaigns over the last decade and raised hundreds of thousands more from other donors. Rezko alone raised at least $200,000, by Obama's own accounting.

You get the picture. One could say that Obama has at least partially financed his campaign thanks to the money generated by his friends' ability to exploit poor. Of course, Obama denies any knowledge of the widespread problems, including in his own district. As the Globe points out, other politicians did, but even then, they still have Obama's back:

Other local politicians say they knew of the problems.

"I started getting complaints from police officers about particular properties that turned out to be Rezko properties," said Toni Preckwinkle, a Chicago alderman.

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.

But in the early 2000s, she called Rezko to ask for an explanation for the declining conditions. He told her Rezmar was "getting out of the business," she said - walking away from its responsibility for managing the developments.

"I didn't see him nor have anything to do with him after that," she said.

Preckwinkle, who will be an Obama delegate at the Democratic National Convention, said she would not answer any questions about Obama's role in her district, nor his relationship with Rezko.

Preckwinkle isn't alone in the apparent dilemma she faces:

...some people in Chicago's poorest neighborhoods are torn between a natural inclination to support Obama and a concern about his relationships with the developers they hold responsible for Chicago's affordable housing failures. Some housing advocates worry that Obama has not learned from those failures.

"I'm not against Barack Obama," said Willie J.R. Fleming, an organizer with the Coalition to Protect Public Housing and a former public housing resident. "What I am against is some of the people around him."

Jamie Kalven, a longtime Chicago housing activist, put it this way: "I hope there is not much predictive value in his history and in his involvement with that community."