Obama on Rezko deal: It was a mistake, Chicago SunTimes, November 5, 2006, BY DAVE MCKINNEY AND CHRIS FUSCO, Obama regrets Rezko lot purchase
“Why did Mutual Bank fire whistleblower Kenneth J Connor after he
challenged the appraisal on the land purchased by Rita Rezko, just
prior to the land sale to Obama?”…Citizen Wells
“Where did Rita Rezko get the money to buy the lot she sold to Barack and Michelle Obama?”…Citizen Wells
The following article was presented by the Chicago SunTimes on November 5, 2006. It has been quoted numerous times since then. The article disappeared from the internet quite some time ago due to what appears to be the standard policy of the SunTimes to not retain articles for any length of time. I cannot guarantee that this is the entire original article.
From the Chicago SunTimes November 5, 2006.
“Obama on Rezko deal: It was a mistake
November 5, 2006
BY DAVE MCKINNEY AND CHRIS FUSCO Staff Reporters Contributing: Mark Brown
U.S. Sen. Barack Obama expressed regret late Friday for his 2005 land
purchase from now-indicted political fundraiser Antoin “Tony” Rezko in
a deal that enlarged the senator’s yard.
“I consider this a mistake on my part and I regret it,” Obama told the
Chicago Sun-Times in an exclusive and revealing question-and-answer
exchange about the transaction.
In June 2005, Obama and Rezko purchased adjoining parcels in Kenwood.
The state’s junior senator paid $1.65 million for a Georgian revival
mansion, while Rezko paid $625,000 for the adjacent, undeveloped lot.
Both closed on their properties on the same day.
Sen. Barack Obama says he regrets purchasing land from politcal
fundraiser Antoin Rezko.
Last January, aiming to increase the size of his sideyard, Obama paid
Rezko $104,500 for a strip of his land.
The transaction occurred at a time when it was widely known Tony Rezko
was under investigation by U.S. Attorney Patrick Fitzgerald and as
other Illinois politicians befriended by Rezko distanced themselves
In the Sun-Times interview, Obama acknowledged approaching Rezko about
the two properties being up for sale and that Rezko developed an
immediate interest. Obama did not explain why he reached out to Rezko
given the developer’s growing problems.
Last month, Rezko was indicted for his role in an alleged pay-to-play
scheme designed to fatten Gov. Blagojevich’s political fund. Rezko
also was accused of bilking a creditor.
“With respect to the purchase of my home, I am confident that
everything was handled ethically and above board. But I regret that
while I tried to pay close attention to the specific requirements of
ethical conduct, I misgauged the appearance presented by my purchase
of the additional land from Mr. Rezko,” Obama said.
“It was simply not good enough that I paid above the appraised value
for the strip of land that he sold me. It was a mistake to have been
engaged with him at all in this or any other personal business dealing
that would allow him, or anyone else, to believe that he had done me a
favor,” the senator said.
The land deal came up in a court hearing Friday that delved into
Rezko’s finances. Obama said he has not been approached by federal
prosecutors about the transaction nor has plans to go to them about
Obama and Rezko have been friends since 1990, and Obama said the
Wilmette businessman raised as much as $60,000 for him during his
political career. After Rezko’s indictment, Obama donated $11,500 to
charity–a total that represents what Rezko contributed to the
senator’s federal campaign fund.
After the controversy surfaced on Wednesday, the Sun-Times presented
Obama’s office with a lengthy set of questions about the land deal,
Obama’s relationship with Rezko and the story’s impact on a potential
2008 bid for the White House.
Here are his responses:
Q: Senator, when did you first meet Tony Rezko? How did you become
friends? How often would you meet with him, and when did you last
speak with him?
A: I had attracted some media attention when I was elected the first
black President of the Harvard Law Review. And while I was in law
school, David Brint, who was a development partner with Tony Rezko
contacted me and asked whether I would be interested in being a
developer. Ultimately, after discussions in which I met Mr. Rezko, I
I have probably had lunch with Rezko once or twice a year and our
spouses may have gotten together on two to four occasions in the time
that I have known him. I last spoke with Tony Rezko more than six
Q:. Have you or your wife participated in any other transactions of
any kind with Rezko or companies he owns? Have you or your wife ever
done any legal work ever for Rezko or his companies?
Q: Has Rezko ever given you or your family members gifts of any kind
and, if so, what were they?
Q: The seller of your house appears to be a doctor at the University
of Chicago . Do you or your wife know him? If so, did either of you
ever talk to him about subdividing the property? If you ever did
discuss the property with him, when were those conversations?
A: We did not know him personally, though my wife worked in the same
University hospital. The property was subdivided and two lots were
separately listed when we first learned of it. We did not discuss the
property with the owners; the sale was negotiated for us by our agent.
Q: Did you approach Rezko or his wife about the property, or did they
A: To the best of my recollection, I told him about the property, and
he developed an interest, knowing both the location and, as I recall,
the developer who had previously purchased it.
Q: Who was your Realtor? Did this Realtor also represent Rita Rezko?
A: Miriam Zeltzerman, who had also represented me in the purchase of
my prior property, a condominium, in Hyde Park. She did not represent
Q: How do you explain the fact your family purchased your home the
same day as Rita Rezko bought the property adjacent to yours? Was this
a coordinated purchase?
A: The sellers required the closing of both properties at the same
time. As they were moving out of town, they wished to conclude the
sale of both properties simultaneously. The lot was purchased first;
with the purchase of the house on the adjacent lot, the closings could
proceed and did, on the same day, pursuant to the condition set by the
Q: Why is it that you were able to buy your parcel for $300,000 less
than the asking price, and Rita Rezko paid full price? Who negotiated
this end of the deal? Did whoever negotiated it have any contact with
Rita and Tony Rezko or their Realtor or lawyer?
A: Our agent negotiated only with the seller’s agent. As we understood
it, the house had been listed for some time, for months, and our offer
was one of two and, as we understood it, it was the best offer. The
original listed price was too high for the market at the time, and we
understood that the sellers, who were anxious to move, were prepared
to sell the house for what they paid for it, which is what they did.
We were not involved in the Rezko negotiation of the price for the
adjacent lot. It was our understanding that the owners had received,
from another buyer, an offer for $625,000 and that therefore the
Rezkos could not have offered or purchased that lot for less.
Q: Why did you put the property in a trust?
A: I was advised that a trust holding would afford me some privacy,
which was important to me as I would be commuting from Washington to
Chicago and my family would spend some part of most weeks without me.
Q: A Nov. 21, 1999, Chicago Tribune story indicates the house you
bought “sits on a quarter-acre lot and will share a driveway and
entrance gate with a home next door that has not yet been built.” Is
this shared driveway still in the mix? Will this require further
negotiations with the Rezkos?
A: The driveway is not shared with the adjacent owner. But the
resident in the carriage house in the back does have an easement over
Q: Does it display a lack of judgment on your part to be engaging in
real estate deals with Tony Rezko at a point his connections to state
government had been reported to be under federal investigation?
A: I’ve always held myself to the highest ethical standards. During
the ten years I have been in public office, I believe I have met those
standards and I know that is what people expect of me. I have also
understood the importance of appearances.
With respect to the purchase of my home, I am confident that
everything was handled ethically and above board.
But I regret that while I tried to pay close attention to the specific
requirements of ethical conduct, I misgauged the appearance presented
by my purchase of the additional land from Mr. Rezko. It was simply
not good enough that I paid above the appraised value for the strip of
land that he sold me. It was a mistake to have been engaged with him
at all in this or any other personal business dealing that would allow
him, or anyone else, to believe that he had done me a favor. For that
reason, I consider this a mistake on my part and I regret it.
Throughout my life, I have put faith in confronting experiences
honestly and learning from them. And that is what I will do with this
experience as well.
Q: Why did you not publicly disclose the transaction after Rezko got indicted?
A: At the time, it didn’t strike me as relevant. I did however donate
campaign contributions from Rezko to charity.
Q: Have you been interviewed by federal investigators about this
transaction or about your relationship with Rezko? If not, do you
intend to approach them?
A: I have not been interviewed by federal investigators. I have no
reason to approach them.
Q: Did Rezko or his companies ever solicit your support on any matter
involving state or federal government? Did Al Johnson, who was trying
to get a casino license along with Tony Rezko, or Rezko himself ever
discuss casino matters with you?
A: No, I have never been asked to do anything to advance his business
interests. In 1999, when I was a State Senator, I opposed legislation
to bring a casino to Rosemont and allow casino gambling at docked
riverboats which news reports said Al Johnson and Tony Rezko were
interested in being part of. I never discussed a casino license with
either of them. I was a vocal opponent of the legislation.
Q: Has this disclosure about your relationship with Rezko changed your
thoughts about a White House run?
A: No. As I have said, how I can best serve is something I will think
about after the 2006 election next Tuesday.
Q: Did Rezko ever discuss with you his dealings with Stuart Levine,
Christopher Kelly or William Cellini or the role he was playing in
shaping Gov. Blagojevich’s administration?
Q: Are the Obamas the only beneficiaries of the land trust?
Q: Are you aware of any efforts by previous owners to develop what is
now the Rezko lot, possibly as townhomes?
A: I was not aware of any prior effort by the seller to develop the
property, but always understood the other lot was to be developed upon
Q: Did Rezko have an appraisal performed for the 10-foot strip?
A: I had an appraisal conducted by Howard B. Richter & Associates on
November 21, 2005.
Q: Was there a negotiation? Did he have an asking price, or did he
just say, whatever you think is fair?
A: I proposed to pay on the basis of proportionality. Since the strip
composed one-sixth of the entire lot, I would pay one-sixth of the
purchase price of the lot. I offered this to Mr. Rezko and he accepted
Q: How many fundraisers has Mr. Rezko hosted for you? Were these all
in his home? How much would you estimate he has raised for your
A: He hosted one event at his home in 2003 for my U.S. Senate
campaign. He participated as a member of a host committee for several
other events. My best estimate was that he raised somewhere between
$50,000 and $60,000.”