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Tony Rezko and Barack Obama

This background article is part of a series on the Obama home at 5046 S. Greenwood establishing that three individuals other than Obama are listed in public records as owners and taxpayers on the property. The account of Obama’s purchase of the home and property at 5046 S. Greenwood Ave. is drawn from Jerome R. Corsi’s book “The Obama Nation: Leftist Politics and the Cult of Personality.”.

In the 2008 presidential campaign, now-convicted felon Tony Rezko’s role in helping Barack and Michelle Obama purchase their dream home at 5046 S. Greenwood Ave. in Chicago’s Hyde Park area created a scandal that threatened to derail Obama’s presidential hopes.

As the elements of the scandal emerged, Obama went into overdrive, holding extensive interview meetings with the staffs of Chicago’s two major newspapers, with his supporters rebutting and attacking critics and justifying Obama’s decisions.

The deal

Here are the key points in how Obama wanted to represent the home purchase once the criticism began:

  • When a prestige house across the street from Tony Rezko’s came on the market at 5046 S. Greenwood, Rezko must have thought it was just perfect for Barack and Michelle Obama and their two daughters. Rezko found the house for Obama. Salon.com reported that Donna Schwan of MetroPro Realty, the real estate agent who listed the property, recalled that the deal started when Rezko expressed interest in the listing, according to the Chicago Tribune.

  • The house was evidently perfect, a 96-year-old, multi-story, 6,400-square-foot, brick Georgian Revival home with four fireplaces, six bedrooms, six bathrooms, glass-door bookcases fashioned from Honduran mahogany, and a wine cellar large enough to store 1,000 bottles, the Tribune reported. The house was situated on a large double corner lot, with the vacant lot adjoining the home at the street corner. With a foot-tall concrete barrier and a wrought iron fence surrounding the property, there was no access to the vacant lot, except through Obama’s driveway.

    The neighborhood was in Kenwood, a South Side oasis of pricey homes attractive to the University of Chicago professors who liked to live close to work. The property would be a nice step-up for the Obama family seeking to move from the small Hyde Park condo the couple bought in 1993 for $277,500, where they lived in the eight years Obama was state senator, to a prestige home suitable for the family of a U.S. senator, the Boston Globe reported.

    The problem was that the doctor and his wife who owned the property, Fredrick E. Wondisford and Sally R. Radovick, wanted to sell the vacant lot and the house at the same time, even though the two properties were separately listed. Also, while the sellers wanted to find a buyer as quickly as possible, they did not want to close the deal until June 2005.

  • The list price just for the home was $1.95 million, outside the reach of the Obama family, even with Obama’s re-issued 1995 autobiography, “Dreams from My Father,” hitting bestseller lists, his U.S. Senate salary of $157,082, and Michelle’s 2005 income of $317,000 at the University of Chicago Hospitals, Lynn Sweet of the Chicago Sun-Times reported.
  • Rezko came up with a solution. His wife Rita bought the vacant lot at the full asking price, permitting Obama and Michelle to negotiate buying the house for $1.65 million, a discount of $300,000 from the asking price.
  • Rita Rezko closed on the vacant lot the same day the Obamas closed on the house, paying $625,000 for the vacant lot.

“Both actions would be clear violations of Senate ethics rules baring the granting or asking of favors,” wrote John Fund in the Wall Street Journal.

The Boston Globe reported Obama asked Rezko’s advice in negotiating the deal – after all, Rezko was supposedly experienced with real estate, having negotiated so many low-income housing deals in Chicago – and Obama toured the house with Rezko before making an offer.

The Boston Globe also reported real estate agent Schwan’s recollection that the Obamas may not have made the highest bid, but the willingness of the Obamas and Rita Rezko to close in June was decisive.

This detail shows the importance of Rezko to the ability of the Obamas to buy their dream house. Had Rita Rezko not been willing to buy the vacant lot in June, “the deal was off.”

Obamas buy slice of vacant lot

After the Obamas moved in, the senator and his wife decided they wanted to buy a slice of the vacant lot.

The Boston Globe reported an independent appraisal of the entire vacant lot parcel was worth about $500,000, about $125,000 less than Rita had paid for it. The Obamas wanted to buy one-sixth of the vacant lot, to create a yard next to the house.

The appraisal said the strip Obama wanted to buy was worth only $40,500, because it was not suitable for building. Still, in January 2006, the Obamas paid Rita Rezko $104,500 for the one-sixth strip, a proportionate share of what Rita had paid for the entire vacant lot. Rita built a fence to separate out the rest of the vacant lot, and the deal was closed.

Obama hired an attorney and architect to design a wrought iron fence on the new property line, including the one-sixth of the vacant lot bought from Rita. Rezko agreed to pay the $14,000 cost of building the fence, and Obama agreed to pay his landscaper to mow Rita’s vacant lot for her, according to the Chicago Tribune.

Enter Michael J. Sreenan

Then, when Tony Rezko was indicted, Rita Rezko sold the vacant lot, evidently needing the funds.

The Chicago Tribune reported land records in the Cook County Recorder of Deeds database showed Rita sold the “garden lot” on Dec. 28, 2006, to a company owned by former Rezko business attorney Michael J. Sreenan that planned to develop housing on the lot.

Rita sold the remaining five-sixths of the vacant lot for $575,000, netting an estimated $54,500 from the sale. A spokesman for Obama said the senator was aware development was planned on the lot but denied he knew any of the details.

Following the sale of the lot, the blog Rezko Watch reported that following Obama’s marathon sessions with the Chicago Sun-Times and Tribune on March 14, 2008, Obama released a new list of Rezko-related campaign contributors whose money had been released to charity.

On the list was a $2,000 donation Michael Sreenan made to Obama on June 30, 2003.

Then Politico.com reported Sreenan made five other contributions totaling $3,500 to Obama on the same days other Rezko associates and employees contributed often matching sums.

Sreenan’s first contribution on record was a $1,000 check reported on the same March 2000 day that five other Rezko employees contributed a like sum. Evidently, Obama donated all these Rezko contributions to charity.

Then, in an article entitled “Obama is one lucky fellow,” Rezko Watch reported the Obamas had little to fear that Sreenan would actually construct any condos on the lot Sreenan bought from Rita Rezko.

According to Rezko Watch, Alderman Toni Preckwinkle has rejected plans from a prospective buyer who wanted to build a single-family home on the lot adjoining the Obama home, as well as a developer’s plans to put condos up there.

Preckwinkle declared that any home built on that land would have to be compatible with the neighborhood’s mansions.

Preckwinkle, Rezko Watch noted, is not only the Democratic Committeeman of the 4th Ward, but she is a known Obama supporter. The Chicago Sun-Times has reported Rezko was conveniently the long-time head of Preckwinkle’s campaign-finance committee. Six of Rezko’s problem housing projects are in Preckwinkle’s 4th Ward.

A ‘bonehead’ deal

After a year of taking heat in the local Chicago media over the Rezko scandal, Obama finally decided to face the music, coming into the offices of the Chicago Sun-Times on March 14, 2008, and the offices of the Chicago Tribune the same day, to give a lengthy opening statement and answer questions from the newspapers’ editorial staff and investigative reporters.

The Sun-Times bluntly asked Obama, “Why didn’t alarm bells go off when you agreed to buy a 10-foot-wide strip of property to buffer your home at the same time reports were coming out that [Rezko] was being investigated for alleged illegal influence-peddling?”

Obama answered, “Probably because I had known him for a long time, and he had acted in an above-board manner with me, and I considered him a friend. In retrospect it should have, so this was a mistake on my part.”

The newspaper pressed, reminding Obama that he had spoken a lot about judgment in his presidential campaign, asking if the decision to purchase the 10-foot-wide strip from Rezko was a judgment issue.

Obama repeated that the decision was a mistake, adding for emphasis, “I said it was a bonehead move. I think it is further evidence I am not perfect.” The comment “bonehead move” stuck and was repeated widely in the media after the interview.

In his prepared statement, Obama told the Sun-Times that Michelle fell in love with the house. The next day, in his prepared statement to the Tribune, Obama explained, “Michelle calls me and says, “I’m in, I love this house, but it’s more than we were talking about paying for, but I really think it’s a great house, you should go take a look at it.”

When the Tribune grilled Obama about whether he and Rezko had coordinated their bids so Obama could afford to buy the home at a discounted price, Obama admitted he and Rezko had toured the home together before making offers.

Obama denies wrongdoing

Obama told the Tribune he had a written statement from the sellers, saying “at no time did they ever consider the lot in relation to the price of the house, that they did not offer a discount on the house, that there was no contingency with respect to our house purchase relative to the lot.”

The transcript of the question-and-answer session clearly shows the Tribune staff had a hard time believing Obama. Yet, Obama persisted, denying he coordinated the purchase with Rezko.

Obama insisted he believed Rezko bought the vacant lot because Rezko thought it was a good business decision to develop it.

Obama could offer no explanation of why Rita Rezko bought the vacant lot, instead of her husband, and he complained that the sellers were private people who objected to reporters intruding into their lives with hostile questions.

The Tribune asked directly, “The issue of judgment is one of the keystones of your campaign right now. How should Americans look at this series of events that you’ve just laid out?”

Obama answered, “I think that the way they should view it is that I made a mistake in not seeing the potential conflicts of interest or appearances of impropriety.”

Still, he insisted, “They should see somebody who was not engaged in any wrongdoing, who did not in any way betray the public trust, who has maintained consistently high ethical standards and who they can trust.”

In his account of the interview, Tribune reporter David Jackson noted that the question-and-answer session was the first time Obama disclosed he and Rezko had toured the Kenwood home together.

“In his first accounts of the purchase, Obama did not divulge that tour,” Jackson wrote. “He said Friday that he simply didn’t feel the information was salient and insisted the tour didn’t mean he and Rezko coordinated their purchases.”

“Obama: I trusted Rezko,” was the way Jackson’s story was titled.

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