Thursday, November 16, 2006

Obama under the microscope: An article from the Chcago Sun-Times

The Obama Chronicles: Waukegan interview transcript. On Rezko, mistakes and being held to a high standard.

After a month long blitz--selling his new book, stumping for Democrats, testing the water for a 2008 presidential run, Sen. Barack Obama on Monday traveled to Waukegan, Ill. to stump for a House candidate. He found himself answering questions about a real estate deal he made with a local shady developer named Tony Rezko. Rezko was recently indicted on corruption charges.

Obama, on the road to the White House, will have to run in the primary of public perception, just like his rivals and the Rezko episode is at the least a learning experience for him.

Obama, in a session with local reporters said "I'm human like everybody else and I'm going to make mistakes."

excerpts from the Waukegan question and answer session. ....

What in the world were you doing in a real estate deal with Tony Rezko?

Look, I bought a house. He bought a piece of property next to the house, and that transaction was entirely separate. But what is true is I purchased a 10-foot strip alongside that property from him, and although I paid more than the appraised value of the house, I think it's fair to say that, given some of the issues that were going on with him, it certainly raised the kinds of appearances that I should have been mindful of.

Why'd you do it then?

For the last 10 years, I think people who have worked with me know that I try to maintain the highest standards in how I deal in my personal and public lives. I don't accept lunches with lobbyists. If I play golf with somebody I reimburse them. In this situation, my focus was more on making sure I was paying a fair market price and not thinking through sort of how it potentially would appear. As I said in the newspaper it was a mistake. Not one of my smarter moves.

Did you recruit Tony becuase you needed him. . . . It sounded like you were only going to get (your house) if you had somebody buying the other lot?

No, no, no. I didn't recruit Tony. What happened was I saw this house. . . . We went through our real estate broker. And We put in a bid on the house the way any other purchaser would. The adjoining lot., there was already a bid on that lot. The sellers were the ones who had separated them, and Mr. Rezko became interested in that other lot, and he bid for that lot separately and negotiated with the seller separately.

Did you pay $300,000 less because of connections or clout, or anything Rezko did?

No. Nothing at all related to the purchase of my house involved Rezko. . . . The adjoining lot had already gotten an offer for the list price, which was 600-something-thousand. So the seller already had that in hand. The problem was they needed to sell the house. They were moving, and, so, this was to some degree a fire sale situation for them. They had gotten a new job. They were moving to Maryland. And so they needed to sell the house. That's the reason, as is true in any real estate market, if somebody needs to sell then you've got a little more leverage over them.

So there was no involvement with Rezko in the purchase of the house. . . .

Q: How did it happen that Tony just so bought the lot next to your home?

What happened was . . . Rezko's been a longtime developer in Kenwood. He's got property all across the Kenwood area. When the house came on the market, I asked a number of people about the house because I've never bought a house. I'd owned a condo. And I called a number of friends -- four or five friends -- who either had homes in Kenwood or were familiar with development in Kenwood. Rezko was one of those people. It turned out that the person who had renovated the house which I was interested in purchasing had worked with Rezko in the past, so that was the connection. He [Rezko] ended up looking at the property and became interested in it. But as I said it was negotiated entirely separately. It wasn't something that we were coordinating in any sort of fashion.

The reason we ended up having the same closing date -- that was actually a requirement of the sellers' because the seller was trying to . . . they had conditioned the sale of one lot on the sale of the house.

What do you say to people that your judgment is faulty?

I'm human like everybody else and I'm going to make mistakes. One of the things that I've prided myself on is when I make a mistake, I own up to it. . . . Although I made a mistake in terms of not being attentive to appearances, in terms of the actual transactions themselves, there was no quid pro quo, there was no clout involved. . . . The problem here was you had somebody who was doing state business, who had been a contributor of mine. While I paid more than the appraised value, it's understandable people . . .

Did you know he was under investigation at that point?

Obviously, things had surfaced. But this is somebody I had known for quite some time. He had never asked me for anything. I'd never done anything for him. We had never discussed government issues. But, look, I think it's fair to hold me to a higher standard. And I understand, at this point, I have been in the public eye quite a bit. I'm somebody who's taken the lead both in Springfield and at the federal level on ethics issues, and I think it's entirely appropriate for folks to expect more. . . .

Was the person you were bidding against for your property the same person Rezko was bidding against?

No. No.

How do you know that?

Well, I don't know it for certain, but I don't think so because my broker did not indicate they were the same party.

So there's no way -- either directly or indirectly -- that you knew how much money Tony was offering for his property?

I had no idea whatsoever.

Did you coordinate your bids?


Why did Tony end up paying full price if it were such a fire sale?

There were two separate lots. [On the first lot], there was already a bid for the full price. They already had a bid on the table for that full price.

What have you learned from this?

One of the things that I've always prided on myself is the fact that I have never had any questions about my integrity and how I conduct myself in public office. . . . This is the first time this has happened, and I don't like the feeling. It's frustrating to me, and I'm kicking myself about it. But, as I said, look, I'm going to make some mistakes every once in a while. These aren't mistakes that involve the public trust. They aren't mistakes that involved my responsibilities in terms of representing my constituents. But, one of the things you purchase when you enter into public life is there are going to be a different set of standards, and I'm going to make sure from this point on I don't even come close to the line.

Will this come back to haunt you?

I'm in politics, so anytime you make an error that's something that somebody will be sure to remind you of in the future. And I don't think that's illegitimate. You have to be held accountable for what you do. . . . What I assume is in any election, people look at you in the whole. . . . Here's one time where it appears that he didn't pay enough attention to what the situation was, but hopefully people will judge me on my entire record. And I'm very confident that when they do that, they'll end up feeling I'm somebody they can trust.

Will your groundsman keep cutting the lawn?

. . . . We don't know exactly who is making decisions on behalf of the various properties that are involved. We've talked to the property manager that we have been communicating with, and we just want to make sure of is everything is as separate as possible.

So you're not going to mow his lawn anymore?

No. Here's the problem: the lawn is right next to our house, so I want to make sure somebody mows it. Originally, their intention, as I understand it, was to develop townhomes. They've got to get some sort of curb cut. . . . Right now, they don't have an entry. . . . I could seal off the fence and have people climb over with the lawnmower, but that's probably not . . .

Are you running for president?

After Tuesday, I will have the opportunity to sit down and think about how I can be most useful. That's a conversation that I, first and foremost, have to have with my family, with my pastor. It's also something that I need to have conversations with key people in Illinois because, after all, I'm an Illinois senator, and I think it's very important for me to make determinations in terms of whatever plans I have doing right by the constituents who put me in office.

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