[Vision2020] The Chicago Boys

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The Chicago Boys

For the past seven years, U.S. Attorney Patrick Fitzgerald has time
and again put the Chicago machine through the prosecutorial cleaners.
Come next week, a product of the Windy City's political culture may be
on his way to the White House. Now would be a good time to know if a
President Obama would keep the pressure on his friends back home.

One of the first Obama political boosters, Tony Rezko, is at the
center of the state's highest profile corruption case. Recall that in
June the Chicago real-estate developer and Democratic fundraiser was
convicted on 16 counts of influence peddling. His sentencing was
delayed this month to let Mr. Rezko "engage in discussions" with
prosecutors. In other words, Mr. Fitzgerald wants him to spill the
beans on Illinois corruption, possibly up to Governor Rod Blagojevich,
perhaps in return for a shorter prison term. (Mr. Rezko still faces
trial in Chicago in a $10 million business fraud case, as well in
Nevada over unpaid casino-gambling debts.)

The Blagojevich administration has been under investigation for years.
Mr. Rezko, who raised money for the Governor, solicited $7 million in
kickbacks from private firms in exchange for steering state contracts
their way. Prosecutors are now interested in toll highway vendor
contracts granted by the administration with Mr. Rezko's involvement.
They also are looking into who paid for the renovations of the
Blagojevich home in Chicago; Mr. Rezko's defunct construction company
was the contractor on the project. Meantime, the Governor's approval
ratings have sunk to 13%, and Democrats in the state House may move to
impeach him.

Mr. Obama has a Rezko image problem himself. The Democratic candidate
met the Syrian-born businessman in his final year at Harvard Law
School, and they stayed on friendly terms in the next two decades.
When Mr. Obama started his run for the state Senate in 1995, Mr. Rezko
gave him $2,000 on the first day of the campaign. The Illinois Senator
says his political career didn't start in Bill Ayers's living room,
but the Rezko wallet certainly launched him on his way. Over the next
decade, Mr. Rezko raised as much as $250,000 for him and served on the
Obama Senate campaign finance committee in 2004.

A year after his election, Mr. Obama bought his home in Chicago's
Kenwood neighborhood with Mr. Rezko's help. At the time, he was the
subject of a (then rumored) federal investigation. The men together
looked at a house listed at $1.95 million. The seller insisted an
adjoining lot must be sold simultaneously, though it was bound by a
restrictive covenant that severely limited what the purchaser could do
with the lot.

Nevertheless, on the same day that the Obamas offered $1.65 million —
the highest bid on the property — Mr. Rezko's wife put in for the lot
at the listed price of $625,000. (Mrs. Rezko earned $37,000 a year at
the time and had assets of $35,000.) In 2006, Mrs. Rezko sold a 10
foot wide strip of her property to Mr. Obama for $112,000 to expand
his garden. He paid nearly double the assessed value, but the sale
made the Rezko lot less attractive to develop.

As Mr. Obama considered a Presidential run, he gave $159,000 in past
donations traceable to Mr. Rezko to charity, and he called the house
purchase "boneheaded" and "a mistake in not seeing the potential
conflicts of interest or appearances of impropriety." Speaking of Mr.
Rezko earlier this year to the Chicago Tribune, Mr. Obama said, "He
hadn't asked me for favors." Mr. Rezko hasn't yet told his side of the
story. Following his conviction this summer, Mr. Obama said, "This
isn't the Tony Rezko I knew." The Senator said the same about the Rev.
Jeremiah Wright, after his longtime pastor's "God Damn America"
YouTube turn this spring.

Mr. Obama was never the formal target of a government investigation or
Senate ethics probe, or charged with any wrongdoing. "I think that I
have done a good job in rising politically in this environment,
without being entangled in some of the traditional problems of Chicago
politics," he told the Tribune.

Chicago is a small political town, and other politicians, including
the Daley family and prominent city Republicans, are linked to Mr.
Rezko and feel the heat from Mr. Fitzgerald. Before the Rezko case,
the prosecutor won a racketeering conviction against former GOP
Governor George Ryan. He has indicted a number of aides to Chicago
Mayor Richard Daley for corruption in hiring practices at City Hall.

Along with John McCain, Mr. Obama explicitly pledged he wouldn't
dismiss Mr. Fitzgerald. But does that mean the prosecutor won't be
"promoted" out of Chicago? And while we're at it, will Mr. Obama rule
out a pardon for Tony Rezko? Clarifying both points could keep the
wheels of justice turning against corruption.

There's a different question for American voters. Mr. Obama pledges to
clean up our nation's politics and outpolls John McCain on honesty and
ethics. Yet in Chicago, he moved with the Tony Rezkos and endorsed
pols like Mayor Daley and Cook County Board President Todd Stroger.
Can a politician so steeped in his hometown's ways really be an agent
of change in Washington?
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