Q&A: The Tony Rezko Case

Who is Tony Rezko? New York Sen. Hillary Clinton called him a "slum landlord." Federal prosecutors call him a corrupt political insider. Illinois Sen. Barack Obama once thought of him as a friend. Now Rezko faces federal corruption charges in Illinois. Here, an overview of the Rezko case.

How did Rezko rise to prominence in Chicago?

For more than two decades, Rezko, 52, has been a real estate developer and fast food entrepreneur in the city. He purchased old factories and parcels in gentrifying neighborhoods and converted them into condominium developments, which earned him millions. He also bought older buildings in poorer neighborhoods, renovated them and rented the apartments to public housing tenants, often in partnership with nonprofit groups. Several of his buildings fell into disrepair, earning Rezko the "slum landlord" title from Clinton. Both of those types of projects require political clout and connections in Chicago.

Rezko also owned a number of Papa John's Pizza franchises and was an investor in the Panda Express chain of fast food Chinese restaurants. He helped both chains land lucrative spots in Illinois Toll Highway rest stops.

What is Rezko's connection to Illinois politicians?

Rezko has been very active in raising money for and contributing to politicians — Republicans and Democrats — at the local, state and federal level. He contributed to President Clinton in the 1990s and served as a co-chair for a multimillion-dollar fundraiser for President George W. Bush in 2003. That most of his activities have been on behalf of Illinois Democrats is probably more a function of political realities than ideology: Democrats hold every statewide office in Illinois and have majorities in both chambers of the state Legislature.

Which politicians have benefited from Rezko's fundraising efforts?

Rezko has contributed to, or raised money for, current Illinois Comptroller Dan Hynes, Illinois Attorney General Lisa Madigan, Illinois Lt. Gov. Pat Quinn and Illinois U.S. Sen. Barack Obama, all Democrats. But his most notable fundraising efforts have been on behalf of Democratic Illinois Gov. Rod Blagojevich, which earned Rezko a spot within Blagojevich's inner circle.

What are the charges against Rezko?

Rezko is accused of using his position on two state boards in an extortion scheme that would enrich him and his co-conspirators, while also adding to Gov. Blagojevich's campaign coffers. He is charged with eight counts, including fraud, attempted extortion, money laundering and aiding bribery.

After he took office in 2003, Blagojevich appointed Rezko to the board that controls the permitting of hospital expansion and construction projects, and to the board that oversees the $30 billion teachers' pension fund. Prosecutors allege that Rezko used his clout to try to collect bogus fees from companies that wanted investments from the pension fund and permits from the hospital board.

One insider who allegedly helped craft the deals, Stuart Levine, has pleaded guilty and will be the government's star witness against Rezko. Blagojevich has not been charged with wrongdoing, but two other members of his inner circle are under indictment. U.S. District Judge Amy J. St. Eve has publicly named the governor as the anonymous "Public Official A" who appears in court papers as a beneficiary of the alleged scheme.

What is the nature of Rezko's relationship to Obama?

Back when Obama was at Harvard Law School, Rezko offered him a job with his development company in Chicago. Obama declined. But the relationship grew while Obama worked as a Chicago community organizer and then for a small Chicago law firm. Obama's firm did legal work for some of Rezko's development companies. Obama himself billed five hours for work on behalf of one of Rezko's nonprofit partners in an inner-city redevelopment project.

When Obama first ran for the Illinois state senate in 1996, Rezko was one of his first campaign contributors. He has remained a significant contributor to and fundraiser for Obama's subsequent campaigns.

What was Obama's land transaction with Rezko?

In 2004, the Obama family wanted to buy a mansion in Chicago's Kenwood neighborhood, on the city's South Side. The asking price was too high, so the owners agreed to split the house and an adjacent lot into two parcels.

The Obamas purchased the house in June 2005; Rezko, through his wife, Rita, purchased the side lot. About a half-year later, Obama purchased a 10-foot-wide strip of that side lot to increase his yard. Obama landscaped the Rezko parcel in exchange for Rezko paying for a security fence around it. At the time, news reports suggested Rezko was already under federal investigation. While there is no indication that there was anything illegal about the yard deal, even Obama now admits the transaction was "boneheaded."

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