Obama's housing policies, part two – Cold constituents

In April, 2007, Tim Novak of the Chicago Sun-Times did an in-depth report regarding the relationship of Barack Obama and Tony Rezko. The article begins with the cold facts:

For more than five weeks during the brutal winter of 1997, tenants shivered without heat in a government-subsidized apartment building on Chicago’s South Side.
It was just four years after the landlords — Antoin “Tony” Rezko and his partner Daniel Mahru — had rehabbed the 31-unit building in Englewood with a loan from Chicago taxpayers.
Rezko and Mahru couldn’t find money to get the heat back on.
But their company, Rezmar Corp., did come up with $1,000 to give to the political campaign fund of Barack Obama, the newly elected state senator whose district included the unheated building.
Obama has been friends with Rezko for 17 years. Rezko has been a political patron to Obama and many others, helping to raise millions of dollars for them through his own contributions and by hosting fund-raisers in his home.

When asked why Obama did nothing, his campaign replied:

“Senator Obama does not remember having conversations with Tony Rezko about properties that he owned” — Obama’s campaign staff on Sunday.

I am not trusting enough to believe this but even if I did believe it, the question remains: why didn’t Obama have a conversation with Rezko? He should have had more than one conversation with him. Obama supporters reading this, please help me understand why this does not give you pause. Obama’s signature issue is housing and public-private partnerships. He wants to continue this course in his administration, giving private developers funding to create public housing. Some of the same people who advised him on housing then are advising him now. If he does for the nation what he did for the South Side of Chicago, we are in for massive spending with little to show for it. Given how poorly it worked in Chicago, why does Obama promote the concept? What am I missing?
I understand Obama had just entered office but one of his primary fundraisers was sued to turn on the heat to people in his senate district and he says he was not aware of the issue. Rezko gave him $1000 when Rezko said he could not pay a heating bill. I bet that sum of money could have triggered the utility to turn the heat back on. If not, then how about giving the money to the residents for blankets? If you were a change agent, it seems you would stage a march or organize tenants for social change. Perhaps you would go the press and shame Rezko and others into giving up the housing game. Instead, Obama used his clout as a state Senator to support additional projects for Rezko.
kids freezing
It is cold in Chicago in January.
The Obama campaign had little to say when queried by the Sun-Times:

For five weeks, the Sun-Times sought to interview Obama about Rezko and the housing deals. His staff wanted written questions. It responded Sunday but left many questions unanswered. Other answers didn’t directly address the question.
Among these: When did Obama learn of Rezmar’s financial problems? “The senator had no special knowledge of any financial problems,” Gibbs wrote.
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.
Did the senator ever discuss Rezmar’s financial problems with anyone at his law firm? “The firm advises us that it [is] unaware of any such conversations,” Gibbs wrote.

What is “special knowledge?” Is it different from ordinary knowledge? Is he saying he knew something but he didn’t know details? What did he know? What complaints did he follow up on? Did they involve Rezko properties? We may never know, because no one in the media is pressing the campaign for the answers.
When a campaign does not answer the questions, you know there is something they do not want reported. Outside of a very few articles, the mainstream media have not pushed the campaign to be specific. Binyamin Appelbaum’s Boston Globe article reported a similar response to his questions.

Obama’s campaign, in a written response to Globe questions, affirmed the candidate’s support of public-private partnerships as an alternative to public housing, saying that Obama has “consistently fought to make livable, affordable housing in mixed-income neighborhoods available to all.”
The campaign did not respond to questions about whether Obama was aware of the problems with buildings in his district during his time as a state senator, nor did it comment on the roles played by people connected to the senator.

In fact, Mr. Rezko was very involved with the Obama state senate campaign as the Sun-Times article makes clear. Is it reasonable to think that Obama did not know his fundraiser was being sued by the City of Chicago because constituents in his district were without heat during sub-zero weather?
Back to the cold building, the Sun-Times reports:

The tenants there had no heat from Dec. 27, 1996, until at least Feb. 3, 1997, when the city of Chicago sued to turn the heat on. The case was settled later that month with a $100 fine.
It was during that time that the area’s new state senator, Barack Obama, got a $1,000 campaign donation from Rezmar. The date: Jan. 14, 1997.

Now what I do not understand is why Barack Obama did not pursue a class-action lawsuit representing his constituents, or at least shame the slumlord into taking care of his obligations. This would be change we could believe in. However, he did nothing at all to influence his fund-raiser to improve conditions for his own constituents.
He didn’t even have a conversation with him.
However, he did have time in 1998 to write a letter of reference for another one of Mr. Rezko’s companies, New Kenwood LLC, after the incident in 1997 where Rezko iced his constituents.
rezko obama
Why would Obama support more money to Rezko after he had failed miserably to protect his constituents? Rezko’s failures were not limited to donating money to a state Senator versus paying the heat bill. The Sun-Times reports the score:

Rezko and Mahru had no construction experience when they created Rezmar in 1989 to rehabilitate apartments for the poor under the Daley administration. Between 1989 and 1998, Rezmar made deals to rehab 30 buildings, a total of 1,025 apartments. The last 15 buildings involved Davis Miner Barnhill & Galland during Obama’s time with the firm.
Rezko and Mahru also managed the buildings, which were supposed to provide homes for poor people for 30 years. Every one of the projects ran into trouble:
• Seventeen buildings — many beset with code violations, including a lack of heat — ended up in foreclosure.
• Six buildings are currently boarded up.
• Hundreds of the apartments are vacant, in need of major repairs.
• Taxpayers have been stuck with millions in unpaid loans.
• At least a dozen times, the city of Chicago sued Rezmar for failure to heat buildings.

These results took place between 1989 and 1998. Obama wrote his letter in support of Rezko (co-owned with Obama’s law firm boss, Allison Davis) in October, 1998. With Rezko’s track record, does it show good judgment to write that letter of support?
He said the letter was not written at the request of Rezko or Davis. Even if you believe that, it side-steps the question: why write it at all?
He should have been exposing the corruption and mismanagement instead of enabling it by recommending more funding. With this record, what inspires Obama’s followers to believe he will bring us positive change?
Several other bloggers have looked into this issue in more depth. Here are some posts that have been helpful.
Doug Ross has more pictures of the apartments.
Obama’s real estate bust
Poor housing conditions have consequences – NoquarterUSA.
A more moderate view which raises unanswered questions – (h/t Legolas)
8 things to know about Obama and Rezko.
Part One: Obama’s housing policies: Is past prologue?
Part Three: Obama’s housing policies: A story about what did not happen
Part Four: Obama’s housing policies: Obama’s housing advisors

19 thoughts on “Obama's housing policies, part two – Cold constituents”

  1. Eddy,
    I have searched and searched for your post to me about the campaign and cannot find it. Just wanted to respond to your comment about how political differences do not have to interfere with friendship – I completely agree. It is all in how we communicate those differences and this is where you have my respect and admiration. Whoever has managed the democratic campaign has done so exemplary and it will probably mean that Barak Obama will be our next president -I am still holding out hope for the “better qualified” team to win though 🙂

  2. Sorry – but even if it is not Obama’s property – there is a lot that goes into the story that others are just reporting what is being reported.
    You’re right I don’t read much of your posts anymore – they are usually more of the same – pick on Obama and his camp.
    Okay – forget that you are working on the negative aspects of someone and their campaign (and not the other guy – this way you can tell me I did not read the article in the entirety.) It must be obvious – I’m tired of the drivel.
    Aren’t you?
    You need not disucss anything with me – I’m simply pointing out that you go on about facts you have little indepth info on.
    LOL – I can see that irritates you when I do it??

  3. Mary – The property was not Obama’s; it was Rezmars. It is hard to discuss this when you do not have the facts.
    I don’t know what to say other than read the articles. I am aware that some, maybe many of those tenants might not have been reliable. I am not saying it was easy, but some are making it work in Chicago. Rezmar was spectacular in the level of dysfunction. If I am Obama, I certainly do not write a letter of support for them to continue mismanagement after 9 years of failure.
    Defend it if you want to but you are ignoring facts that almost no one disputes. Rezko is in jail now because of his deeds. The issue is that Obama did not do anything. He did not even have a conversation with one of his top supporters about these conditions and his track record.

  4. The truth of the matter is that Rezko’s company did a terrible job of building and maintaining the homes. Why is this hard to understand? These public-private partnerships are what Obama wanted then and wants now. Why is that hard to understand? Despite all of his “community organizer” rhetoric, as soon as Obama was in power, none of those communities mattered. Why? Is it hard to understand why someone could possibly be offended by that?
    As for me, I don’t care what this blog is “beginning to sound like”. If you don’t like it, leave. No-one is forcing you to read it. No-one is forcing you to click here.

  5. Warren,
    Also, as a landlord, I am very familiar with how communication breaks down between landlord and tenant. I am not saying that freezing is acceptable or that it did not happen. But ….. there is more information of which we are unaware.
    I had a tenant destroy a washing machine, that finally filled up with water , did not drain and she said she would sue me for mold. I suggested that she take a cup and scoop the water out, that the lease specified that if the washing machine broke it was her repsonsibility.
    We DO NOT KNOW what was in the lease agreement on Obama’s property, how long the heat was off, what reason for it being off was etc… and if he even knew in a timely manner (did the property manager notifiy him in a timely manner??)
    However, you are ready to accuse him for this when you do not know the circumstances. Same ole, same ole – turn your head and pounce on anything negative.
    There’s another story out there about the discount he rec’d on a home loan. I think the average in the US at the time was 5.93 and he rec’d a 5.625. Some are calling that underhanded shady dealings. Well, many of my clients recieve a discount on the interest rate- they pay for it. They do the math and calculate that putting an extra 5k or 10k into the closing fees to buy the rate down is worth the money. Also , the yahoos who are going after him for the loan discount have failed to disclose that the 5.93 average (was it locked on 30, 60, 90 days – or even a shorter lock period – which gives a “discount” to the borrower) How much money did he put down, what’s his credit score, etc… all things that can change the rate for a very low risk borrower. The average citizen has a credit score of about 680, puts 20% down, has a much lower income than Obama, cannot buy down the interest rate, locks on 30 days out or farther (all things which put Obama and the average ‘Joe” in a different risk assesment category) Hence a different interest rate.
    But no – let’s just jump on the issue that people froze and he recieved a discount (of course it looks bad – but what were the circumstances??)
    Finding out the truth means looking closer at the circumstances and not just reporting what is reported. There’s a lot to any situation that is not document or is protected by privacy laws.

  6. Warren,
    You sound like the tired old record that’s been playing. Obama says McCain lies, and McCain says Obama lied and you are playing along. Sorry- but that’s how this blog is beginning to sound. You don’t really believe your own story on this do you???? While I appreciate the research and quest for truth – your quest is one sided.
    No we don’t have to choose between these two. We can stand up and write in our vote.

  7. jayhuck – It bears pointing out that this is a blog, not news reporting. A blogger does not have to be objective. If you want objective news, find a news reporter.
    Although finding one of those these days that is objective will be tough.
    Thank you Warren, for putting this out there. When the “news” media is more interested in vetting Palin as VP and Joe the Plumber as an Average American than they are in a Presidential Candidate, then we know the death of true journalism is here.

  8. Warren –
    We HAVE made a choice – perhaps its just YOU that needs to accept them 😉 You harp on and focus on Obama’s sins, and alleged sins, all the while ignoring McCain’s. You are neither fair nor objective in your reporting. As long as people understand all of this, then I see no harm in what it is you are doing.

  9. Princess
    What??? Unprecedented? You’ve GOT to be kidding? I read three negative Obama articles just today. I’m not sure what “media” you’re talking about – perhaps its that elusive and nebulous Media Elite Gov. Palin keeps harping about. LOL. God bless Tina Fey

  10. Obama’s relationship with Rezko does not put him in a flattering light, but it isn’t really new news:
    Salon mentions some of the things you talk about here…in February.
    CNN transcript mentioning the same…in January
    Huffington Post citing Chicago Sun-Times, again at the first part of the year
    Politifact’s take on the situation, from January
    And here the liberal DailyKos site claims to debunk many of the claims – back in January
    Let’s face it, the media (and the public, and rival campaigns Democratic and Republican) had access to this story, but for whatever reason have decided it just isn’t that important. The aspect that has gotten the most press in the housing deal. Obama’s admitting the housing deal was “boneheaded” and giving away all of Rezko’s contributions to charity seem to have been deemed penance enough. Liberal media charges don’t really stick given that I think everyone can acknowledge that even if there is a “liberal media bias” in the MSM overall, there are plenty of conservative media establishments that could have taken up this story – and they didn’t.

  11. So I guess Clinton’s “SLUMLORD” debate attack was fitting afterall…yet, amazingly, it was CLINTON who was attacked for usage of the word AND the mere suggestion that precious Obama could be even capable of such shady dealings ….
    The ‘protection’ afforded Sen. Obama by the Media is unprecedented … even though everything alleged, gradually is proven true….of course, by that time, people have moved on and the damage has ALREADY been done.
    Like MAC, I’m banking on the voters hesitating b4 pulling that lever for “O”…just like they did when Hillary Clinton was on the ballot…i mean, WHAT A RISK!!!!!!

  12. Mary – The thing about McCain and the internet is wrong, a lie perpetrated by the Obama campaign. Biden denounced the ad saying that. McCain can’t use his arms well and typing at a computer is difficult.
    If you see spin, point it out. I am focusing on Obama because I am a McCain supporter and because there are stories that few others are reporting on that are very important. This story ranks up there.
    I cannot tell you how it impacted me to read that people in Obama’s district were freezing and the man responsible gave the heat money to the senator who represented the people.
    I can’t make it any clearer than that.
    You can lament the choices but we need to make a choice.

  13. It seems to me that this site is spending a lot of time denouncing one individual. Truth be told??? Well, there’s enough on both sides of the election to make anyone look bad, really bad.
    McCain knows nothing of the internet (I’d like to be so well connected), he’s too rich to understand anyone of of us, his comprehension of the financial mess is small (and his contribution larger than anyone is talking about)
    Obama is playing dirty from the get go. His election is bought from top to bottom.
    But what gets me????? This site tells only half the story, focuses on the faults of one instead of all of us, and has pretty much lost it’s ability to see anything clearly. This site has become nothing more than another spin doctor area. Truth telling from one side.
    Niether candidate is worth the postion of president. Someone stand up and say it?

  14. Eddy – I think you are passing a camel and straining at a gnat.
    Rezmar gave the money as the article said.
    Rezko raised lots of money for Obama over the years. I think I saw a figure and will track that down. It is way more than $1000.
    The point is that Obama didn’t reform anything, in fact he continued to support a failed developer after the developer treated his constituents with contempt. In 8 years if you don’t even have a conversation with the perpetrator of those abuses, then you get no respect from me as an agent of change.
    Those are the facts.

  15. A quote from the article about the relationship between Obama and Rezmar:

    But their company, Rezmar Corp., did come up with $1,000 to give to the political campaign fund of Barack Obama, the newly elected state senator whose district included the unheated building.
    Obama has been friends with Rezko for 17 years. Rezko has been a political patron to Obama and many others, helping to raise millions of dollars for them through his own contributions and by hosting fund-raisers in his home.

    I found it most interesting that these two paragraphs were one after the other. In the first, we have the revelation that Rezko donated $1000 while people lived in one of his unheated buildings.
    In the second, we have Rezko ‘helping to raise millions of dollars for them’. The implied meaning of the second paragraph is that Rezko, himself, was majorly responsible for bringing millions to the Obama campaign…’through his own contributions and by hosting fundraisers in his home’. Now, we do have that caveat–over the course of their 17 year relationship. (Translation: Do not try to fact check this; there is enough vagueness in this statement to defy verifying anything.)
    Don’t you find it the least bit puzzling that Rezko has helped raise millions but that he only contributed $1000 in that first paragraph? I’m not exactly sure what the point is but my alarm signals are telling me that the second paragraph is likely way overblown. Either that, or that Rezko is much, much, much, much, much, much better at getting others to contribute than he is himself.
    Further, if you do realize that millions have been contributed to Obama over the year, Rezko’s $1000 wouldn’t raise any flags at all. Those hard-working individuals tracking the donations wouldn’t even think to bring that to Obama’s attention.
    My personal conclusion is that this news source is seriously slanted/biased.
    Personally, I’d like to know if Rezko’s contributions were out of his own pocket or out of the funds of Rezko Corporation. If his contribution was made out of the corporations monies, then a number of your questions stand as valid; if they were made out of his own personal funds, I don’t see your point. $1000 is paltry in the political arena. (It carries approximately the same weight as Joe’s $1800 in back taxes…McCain and Palin still continue to use Joe as their symbol while that unfortunate fact, along with his $40,000 annual income, continues to stare us in the face.)
    it’s politics as usual, both sides trying to make mountains from molehills, telling partial truths and adding an assortment of ‘spin’ messages. My favorite was ‘why didn’t he take that $1000 and at least buy blankets’…We could speculate on that answer all day long but it goes to Rezco not Obama.
    I feel that both candidates are good men. Unlike the last few elections, I won’t slip into depression if the ‘wrong candidate’ wins.
    Re good ol’ Joe being scrutinized more than Obama: Did I miss something? Have they dug beyond his tax records, his income and his political connections? Those questions go directly to the informal debate that made him famous. I must have missed the interviews with his grandmothers (I do believe this is the first campaign where I recall a candidate’s grandmother being interviewed!) And I don’t recall any of the names of the people he has had contact with over the past 30 years or what they were involved in before he was born or while yet a child. Do we know Joe’s church affiliations? Have we analyzed the sermons of his pastors and noted whether he agreed with everything his pastors said?
    Of course, Joe doesn’t deserve those latter questions. But let’s not try to say that Joe has undergone more scrutiny than Barack…it simply isn’t true.
    (LOL. I still want to know if Sarah has received ‘the baptism in the Holy Spirit with the evidence of speaking in tongues’; it’s kind of a hallmark to the Assembly of God tradition. Does she have any of the gifts of the Holy Spirit? If so, has she been ‘tested’ in these gifts?)
    So many unanswered questions, so little time remaining.
    I did appreciate your reply to Lynn-David. I, too, began to wonder if you were going over the edge into compulsivity. I do understand that it is your nature (much like mine) to sink your teeth into something and not let go. I almost can’t wait until the elections are over and we go back to haggling over the imponderables of the ‘gay/ex-gay debate’.

  16. You know, after I read part one of your series about The One’s (Hallowed be His Name) housing policies It struck me that I had read some articles by David Freddoso about what State Senator Obama (Praise be upon Him) had done to His citizens in Illinois- specifically how tax monies and favorable legislation were steered toward favored developers. I knew some articles are at National Review, but I thought I remembered that some had showed up at the New York Post as well. I thought I had saved some onto my computer’s hard drive, but now I cannot find them. click click Hello? Odd how things can just disappear like that. I guess that happens when you read the wrong kind of news sources and listen to the wrong kinds of talk radio shows and watch the wrong kind of television netw

  17. Contrast this to what Gov Palin did in Wasilla when she was mayor. Greta V. interviewed a friend who said her friendship began when she went down to the mayor’s office to thank her for keeping the roads cleared and the power on when the temperature was 40 below. Now that’s taking responsibility and taking care of people.

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