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Ticket Special Report: Obama and Rezko, the early years

The trial of Antoin “Tony” Rezko, one-time patron to Sen. Barack Obama and Illinois Gov. Rod Blagojevich, has turned lurid.

Under cross-examination by Rezko attorney Joseph Duffy, star prosecution witness Stuart Levine, a Chicago-area lawyer, is admitting to conspiracy, extortion, bribery, fraud and other bad acts while he “served” at the Illinois public school teachers pension fund board.

At Duffy's urging, Levine is detailing 30 years of drug Syrian-born Tony Rezko big-time Illinois political fundraiser and one-time confidante of both Senator Barack Obama and Gov Rod Blagojevich is now on federal trial in Chicago where the inner workings of Chicago's political system are unfoldingusage including sordid day-long binges with other men at a Chicago inn called the Purple Hotel. Rezko's attorney Duffy is wondering whether all that cocaine, crystal meth and other drug use has perhaps fogged Levine's memory.

That aside, much of the trial's focus is on money -- much of it given in the form of campaign money in the careers of Obama and Blagojevich.

It’s an unfolding, seemingly local political story that’s fascinating in its revealing details about the subterranean world of business, financial and family connections in Illinois and Chicago politics that helped take a virtually unknown black Chicago attorney, nurtured him politically and financially and turned him into....

...the polished candidate who today thrills crowds of thousands across the country with his eloquence.

Obama currently leads in delegates for the Democratic nomination for president.

This tale is long by Ticket standards. We'll do this rarely. But for those interested in delving into details it provides important background about the early political connections of a little-known newcomer to the national political scene.

This story concerns two men, neither of whom face any legal charges today. They are two of Illinois’ top Democratic politicians -- Gov. Blagojevich, who's been mentioned often in court, and Sen. Obama, who's received only passing mentions. They're entwined in the Rezko saga, particularly through the bounteous campaign money he raised for them both.

Get used to that name. Rezko's currently in a long-running Chicago trial on federal extortion and bribery charges. Few campaign donors were more responsible than Rezko for the rise of Blagojevich (Blah-goy-ah-vitch) and Obama. Both politicians came to rely on him for political and personal advice -- and lots of campaign money.

Illinois Democrat Governor Rod Blagojevich like Illinois Senator and Democratic presidential candidate Barack Obama a one-time confidante of Tony Rezko, now on trial in Chicago federal court

Their intimate relationship is coming into focus through Rezko, a Syrian-born businessman who made his money in real estate and restaurant franchises and now sits daily in the federal courtroom of U.S. District Judge Amy St. Eve. The trial's daily events are covered in this Tribune Rezko court blog.

So far, Blagojevich, reelected in 2006, is more deeply enmeshed in the scandal than Obama, who's not been implicated in any wrongdoing.

But all three operated in the murky world of Illinois Democratic politics, where money, family relationships and long business associations provide the invisible glue of the local political world.

Witnesses in Rezko’s trial have testified that Rezko recommended friends and associates for government jobs and posts on Illinois state boards when Blagojevich took office in 2003, and some of those friends were generous donors to Blagojevich.

An early trial exhibit from prosecutors was a spreadsheet. Prepared by an FBI agent , the spreadsheet identifies Rezko-related donors who supplied $1.43 million between 2001 and 2004 to Blagojevich, who was first elected governor in 2002.

Using Federal Election Commission and Illinois state records, The Times' Dan Morain compared donors on the FBI spreadsheet to Obama’s contributors. Guess what.

Sen. Obama received $222,000 during the same 2001-2004 period from Rezko-related Blagojevich donors.

And Obama received at least another $32,000 from them for this presidential run -- although Rezko, indicted in 2006, has not been involved in Obama’s current campaign.

Those Obama-Blagojevich donors include Rezko himself, along with his family members, employees and associates of his various business enterprises. There’s also the head of a major Chicago investment firm that received Illinois public teachers' pension money to invest.

Jay Stewart, of the nonprofit government watchdog Better Government Assn. in Chicago, called the overlapping list of donors a “who’s who of the inner circle” of Democratic politics in the Land of Lincoln.

“Did they come from the same general political environment?” Stewart said of Blagojevich and Obama. “Yes. They’re Chicago pols. They both knew Tony Rezko. Tony Rezko raised money.”

In his presidential race, Obama increasingly has relied on small donations delivered via the Internet from more than a million individuals. But when he started in Illinois politics, Stewart noted, “if you wanted money, you needed to ask the big boys.”

Rezko was a big boy. He was, for instance, a link between Obama and Santa Monica developer Jay Wilton of Wilton Partners. On July 16, 2003, Wilton gave $5,000 to Obama’s first U.S. Senate run. A few days later, Wilton gave $50,000 to Blagojevich, Illinois state records show.
Unlike the federal system, Illinois state campaign finance law permits donors to give as much as they want to state candidates. So, in Illinois they do.

In early 2004, WiltIllinois senator and Democratic Party presidential candidate Barack Obama a one-time friend and confidante of Tony Rezko now on trial in Chicago federal courton and Rezko spent $78,000 on a Los Angeles-area fundraising tour for Blagojevich, Illinois campaign records show. Three Southern California companies donated a combined $150,000 to the Illinois governor during the trip.

Shortly before the initial $50,000 donation, Blagojevich announced that Wilton would begin work on an $83 million state contract to refurbish rest stops on Illinois tollways, called “oases.”

Some of the restaurant concessions granted the right to operate at those rest stops “trace back” to Blagojevich’s patrons including Rezko, the Chicago Tribune disclosed in 2005. Wilton, who did not return repeated calls, is not implicated in the Rezko case.

Another overlapping donor is John Rogers, head of Ariel Capital, a major Chicago-based investment firm. Rogers gave $12,500 to Blagojevich in 2004, the FBI spreadsheet shows. Rogers has also given Obama $25,000, state and FEC records reveal.

Aides to Obama and Rogers said the pair has a friendship that is separate from Rezko. Ariel vice president Matt Yale said Rogers’ inclusion on the FBI spreadsheet was a surprise, adding, “To the best of our knowledge, we have not made any contributions to Governor Blagojevich or any political candidate on behalf of Tony Rezko.” Ariel is not implicated in the criminal case.

As an Illinois state senator, Obama appeared before Illinois pension funds in 2000 and 2001 to urge that they provide more business to black-owned investment houses including, as it happens, Ariel.

Describing his efforts to the Urban League last year, Obama said African-American-owned firms were not getting any business from state pensions. Obama singled out Rogers’ Ariel Capital, calling it a well-respected investment house, but one that received no business.

“We didn't have to implement a formal program,” Obama told the Urban League, taking no credit. “I simply said, ‘Listen to what these folks have to say,’ and in about six months they got about a half billion dollars worth of business simply on their own excellence.”

In 2002, the year after Obama made the pitch, the Illinois Teacher Retirement System reported an 18% increase in assets managed by minority-owned firms. Ariel’s share grew to $442 million by 2005.

In 2006, after the federal investigation became public, the teacher pension board severed its relationship with Ariel, concluding that Ariel’s investment returns were insufficient.

As he was for Blagojevich in his initial run for governor in 2002, Rezko in 2003 and 2004 was part of Obama’s finance committee, responsible for raising campaign money.

Obama started out as a long shot. The main candidate was Blair Hull, a wealthy businessman who was financing his own campaign. But less than three weeks before the primary, a court unsealed multimillionaire Hull's divorce file, which alleged spousal abuse. The divorce case so damaged Hull that he finished third in the race. The four-year anniversary of that primary passed on Palm Sunday.

The eventual winner of that primary: Barack Obama.

-- Andrew Malcolm

                Photo Credits: AP/Nam Y. Huh, Democratic Governors Assn.

Comments () | Archives (20)

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Andrew Malcolm is at it again. One half-expects to hear the foreboding "Law and Order" theme song accompany his insinuations that border on yellow journalism. There is no story here -- just an attempt to implicate. So some friends of some crooks in Chicago gave $32K to Obama's presidential campaign. Woo hoo. Given that Obama has raised over $200 million, mostly, from small donors, I'm sure friends of friends will wield ENORMOUS influence. Sleep in the Lincoln Bedroom? Get pardoned like Marc Rich? Very doubtful. But thanks for the juicy -- if blatantly biased and patently doubtful -- gossip, Mr. Malcolm.

this TOP OF THE TICKET Special Report on Obama & Rezko & illinois gov blagojevich is a topnotch reportage. it's an expose, in a great way, on obama's hidden character.

how in Christ's name was obama able to stand--for quite a time--a drug addict like rezko, and an opportunist of a poltician like blagojevich without batting an eyelash, or, worse, without experiencing any qualm of conscience?

the answer is very obvious: obama is a "user" himself who, in his machiavellian politics, will take in anybody, just anybody, who can help him (obama) advance his political career, and push his selfish agenda.

if obama "operated" this way in the "murky world of illinois politics," as your writer put it, then what could you expect of him to be, what do you think he's doing now in his bid to win the democratic presidential nomination?

what's clear by now is that obama has pulled everybody's legs so successfully that no one, not even the reputedly "perceptive" PRESS, has noticed it. it's pretty obvious he's been deadpanning his posture as a self-proclaimed "agent of change."

given this damning expose by the LOS ANGELES TIMES TOP OF THE TICKET Section, IT BEHOOVES OBAMA TO RESIGN, IN A JIFFY, HIS SENATE POST & QUIT THE DEMOCRATIC PRESIDENTIAL NOMINATING CONTEST NOW--IF ONLY FOR DELICADEZA (but really for more serious reasons). in like manner, it is incumbent upon blagojevich to resign as illinois gov.

the great american people deserve no less, even as they should demand of obama--who touts himself as a presidential candidate of impeccable character--the strictest code of conduct as a politician.

obama has been throughly vetted--and has been found wanting. it's time for him (obama) to cut, and cut cleanly NOW!

I am not surprised to read this. Have you guys read Obama's laundry list of lies? Check it out here:

God bless America.

Barack Hussein Obama is a deeply corrupted Chicago politician.

This is a most revealing account of the Democrats ways
and modus operandi . Fraude is right up there at the top,
followed closely by extorsion and blackmail with little
beeing mentioned here about drugs and prostitution..but
stay tuned.Links to lacqueys of Saddam Hussein are part
of this picture and may go a long way in explaining Barak's
otherwise unexplained opposition to regime change in Irak.
A major career ajustment is in the cards for the peddler of
false hope .

Too many coincidences between Obama, Blagojevich and Rezko not to point to something that goes deeper than what we already know (the money and the real estate deal).

Whose to say that Rezko and Blagojevich didn't have something to do with leaking Hull's divorce papers.

The more I hear about Obami, the less I trust him.

This is a problem with the media not fully vetting Obama. Consequently the Democratic Party is in this awkward position that may end up nominating a candidate with shady dealings and relationships.

"So far, Blagojevich, reelected in 2006, is more deeply enmeshed in the scandal than Obama, who's not been implicated in any wrongdoing."

Did anyone read that line? I stopped reading the article after he basically admitted it was pointless.

OK, and I'm sure Hillary has received a bunch of money from Wall Street titans who fleeced middle class America for decades... of course financial "risk taking" isn't a crime, though, even when you screw over millions.

I'm from Illinois and a blogger. For the record, Blair Hull's divorce records had his wife comment that he had kicked her with his foot one night while they were in bed while fighting and he shoved her out of bed with his hands. Far cry from what anyone would consider spousal abuse.

Come on L.A. Times. Why is your so-called “special report” about Obama’s obviously intimate, long-term financial/political connection with Tony Rezko buried in the blog? Rezko, now under federal indictment for fraud and extortion, is the same Tony Rezko who, just two short years ago, helped Obama purchase a million-plus-dollar home and lot adjacent to his in one of Chicago’s most affluent neighborhoods. If this type of story involved any of the other candidates in this race, you'd splash it in headlines all over the front page and posit it in the most accusatory, sinister terms known to journalism, certainly not in the weak, wrist-slapping verbiage of this lame excuse for investigative reporting. Why not call Obama what he is -- a "mob puppet"? The only remaining question seems to be, which mob? Instead, you call this story, euphemistically, a "fascinating tale" of "financial and family connections in Illinois and Chicago politics that helped take a virtually unknown black Chicago attorney, nurtured him politically and financially and turned him into [a] polished candidate." That kind of tale usually is called a lot more than “fascinating,” for instance, INCRIMINATING. Lots of other words also spring to mind, like "mob-controlled” and “influence peddling." Obama, whom you report just happens to have the same Rezko-connected donor list as Illinois Gov. Blagojevich, also should be under the same intense federal scrutiny it appears Blagojevich is or soon will be. For, in his short time as an Illinois state senator, it appears likely that Obama did the same sorts of things that Rezko’s friend Mr. Levine has admitted doing while a member of the Illinois public school teachers' pension board, e.g., engaging in “conspiracy, extortion, bribery, fraud and other bad acts.” Or, would the Times or Obama really expect people to believe that all the then-unknown Obama really had to do was simply “ask” the state pension board to “listen” in order for the board to miraculously, suddenly cut loose with a half BILLION dollars in business to one of those donor firms, a firm just coincidentally run by a guy who donated many thousands to Obama’s campaign? Maybe a lot of the turncoat Dems who’ve recently come out backing Obama aren’t, as it first seemed, jumping on the 'Obamamania' bandwagon lamely trying to avoid looking un-hip. Now it appears maybe they’re trying to avoid having the same or worse tactics (digging up and exaggerating some dirty little marital secret) used against them that the Rezko machine used against Blair Hull to get Obama elected in the first place. The first wake-up call for Obama’s pied-piper-mesmerized, media-indoctrinated, guilt-ridden, ill-informed supporters should’ve been the revelation of his 20-year relationship with Rev. Jeremiah Wright’s hate-filled, racist, anti-Semitic, homophobic, anti-American views. Obama's slimy, cozy, 17-year connection with the Syrian-born Rezko and friends should be the second. Heed it.

So, what exactly are you accusing Obama of with this column? I must have missed it. Being associated with Tony Rezko doesn't look good. We knew that already. I guess I thought with the title there would be something illegal or improper that Obama had done, besides the sleazy house deal he did with Rezko's help. Compared to many politicians, including both of the others still running for President, this isn't too impressive.

It is blantanly obvious that LA TIMES has something against Barack...They had three juicy pieces of information to write a story or post an editorial on Hillary; finally releasing tax returns on a Friday after 4pm, and using the slogan talk is cheap while her husband made 51 million giving so called speeches..., her lead campaign manager is making side deals with Colombians who are totally against what she is supposedly fighting for, and she got caught lying AGAIN about a woman being turned away at a hospital. Do you think the LA TIMES could atleast write something on one of these issues?? Yet you guys ran that REV WRIGHT story for three weeks after it happened. Even on Martin Luther King anniversary, LA TIMES found a way to attach it to REV WRIGHT.

I'm an independent, I could sway either way...but I don't like people making me like Hillary. I think it's unfair the way this newspaper has attacked Barack. And because of this, Mc Cain will win again....But maybe that's the LA TIME'S plan....cause it sure is Hillary's.

LA TIMES, do you think we haven't notice that you list the campaign as Clinton, Obama everytime. In a city like Los Angeles, you know the importance of top billing. We can see the game you guys are playing and who this newspaper supports. Until Clinton catches Obama in Popular votes and Delegates, she should not get top billing...Even with your help she's still losing.

Terry Boyer is at it again. Terry Boyer is a DISEASE.

To : Steeve Harris
I would rather pull my intestines out with a fork than read
nother pack of lies from you. You are just another
ignoramus sucking up to that crummy bowler and hate
speech addict. Pardon me while I fart in disgust.

Yeah Bushy, some of us do like to read dirt on all the candidates, not just one. It's called being open minded and well informed. We don't like one source making our minds up for us. I know it's hard when you don't dress yourself.

04.07.08 @ 1:18pm your comment is spot on. As a native Chicagoian, registered as an Independant, I know all too well about the "pay-to-play" fleecing of the Illinois electorate that both sides of the political asile have been a party to.

We went from a colossally corrupt republican administration in the ex-gov., future ex-con George Ryan right in to meet the new corrupt boss, same as the old corrupt boss with the election of Rod Blago-vitch who was fast-tracked in to the govenorship by the Daley Crime Family and Blago's Father-in-law. Once elected Blago has pissed off everybody and is probably going to find himself in jail like Ryan.

There is only one political party in Illinois and they're called Republicrats. Politicians who in the vernacular of the Texan Kinky Friedman are politicians in the sense of being "poly" meaning more then one and "ticks" meaning blood suckers.

There motto is we're the "green" party and by "green" they wouldn't be talking about Birkenstock wearing, tree-hugging, carbon, credit traders.

Anybody that doesn't see that Obama is a fraud and up to his neck in this square-dance is a "schnook".

The LAT proves itself out as a shill for Obama for not putting this article above the fold of pg. 1

I'm sick of the same 'ole same 'ole. I'm tired of Clintion's and I'm tired of Bushes. I wish there were better choices rather then the lesser of evils but that's the way it often is so I'm likely going to vote for the guy who spent several years getting the snot kicked out of him in a Vietnam prision.

At least it appears he hasn't been stuffing his pockets and he loves his country and isn't afraid to say what he stands for.

After him, we'll have the rest of our elections to vote for these glib, silver-tounge, user crooks because that's all that will likely be runnning for public office.

I hope I'm wrong.


Tony Rezko offered Obama a job at Rezmar that Obama turned down, but he did take a job at a law firm whos' biggest and best client was Tony Rezko of Rezmar. Obama and Tony Rezko have been close friends for over 17 years. Another partner of Rezkos is Dan Frawley of Companion Security who went to seek help from Obama for a $50 million dollar contract with the Iraq government, Frawley met with Seamus Ahern 'Obama's right hand man" for over 6 months. Obama said he didn't know Frawley and Rezko were partners. Obama isn't for the war in Iraq, but I don't think he's against profiting from it.


Thank you for this article. I, too wish it was on the front page but then I wish the MSM would stop fawning over Obama long enough to cover what appears to be a racist, hate filled campaign orchestrated by some very wealthy people.

My question has always been why has a 2 year Senator received more than 200 Million to run for the Presidency? Who is pulling Obama's strings?


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About the Columnist
A veteran foreign and national correspondent, Andrew Malcolm has served on the L.A. Times Editorial Board and was a Pulitzer finalist in 2004. He is the author of 10 nonfiction books and father of four. Read more.
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