Obama and the Big Scam

The way the deals were structured was an invitation to corruption. Like strip mining and walking away. Rezko and his partner stripped away their profits up front and off the top in all these so-called affordable housing deals, then abandoned the properties and tenants, leaving taxpayers on the hook. Sun Times:

If one of these low-income housing deals failed, lenders and investors would lose money -- but not Rezmar or its owners.

Rezko and Mahru weren't responsible for any government or bank loans. And they would never have to repay the $50 million in federal tax credits they got to rehab the buildings.

But they were guaranteed to make money. Rezmar put just $100 into each project and got a 1 percent stake as the general partner in charge of everything. Rezmar got to hire the architect and contractor, as well as the company that would manage the buildings, screen tenants and make repairs. The management company Rezmar hired? Chicago Property Management, also owned by Rezko and Mahru.

Rezmar made its money on upfront development fees. And Rezmar got paid first -- $6.9 million in all from its deals.

The development fees ultimately came from taxpayers.

For years, city and state officials maintained the polite fiction that these deals were working, while raking in Rezko's campaign contributions for themselves. Along with Governor Blagojevich, Mayor Daley, and former Cook County Board President John Stroger, (oh, and let's not forget Lisa, now Illinois' top law enforcement official, and her dad), Barack Obama was one of the most prominent beneficiaries, and tapped Rezko to head his Senate election effort. As so many Democrats do after mucking it all up---remember how moveon.org got its start--- these con men moved on to greener pastures:

As Rezko and Mahru left many black neighborhoods with deteriorating apartment buildings, they moved on to something new -- building upscale condos and townhomes in booming Chicago neighborhoods, including the South Loop.

Mahru blamed Rezmar's problems on their low-income tenants -- tenants he and Rezko were responsible for screening.

"We lost huge amounts of money operating those buildings," Mahru said. "There's no money in affordable housing. The tenants don't pay their rent. You can't evict them. And when you finally evict them, they owe more than a year's rent, and the apartment is a mess. There's no money to clean it up or fix it up. That happened over and over again.''

Ah yes, porking out at the government trough leaving things worse than they started and wasting millions of taxpayer dollars that could have been spent more wisely. And they are poised to push this stuff in the suburbs.

So next time you hear from Illinois' Dem leaders and some of those profitable non-profits (Note: Robin Coffey of Harris Bank, Rezko's lender, is on the Executive Committee of the BPI Board. Obviously Harris didn't do so hot.) and their politically savvy advocates in local and state government--- State Sen. Jeff Schoenberg, State Rep. Julie Hamos, (Hamos also a big beneficiary of campaign cash from those connected to these "non-profits"), Rezko's protege and former head of IHDA Kelly King Dibble--- remember this BIG SCAM.

PS: And remember the holier-than-thou-he-who-wants-to-be-leader-of-the-free-world Barack Obama's response to this story:

U.S. Sen. Barack Obama said Monday he accepted campaign contributions from Antoin "Tony'' Rezko without knowing that Rezko was a slumlord with problem buildings in the state Senate district Obama represented at the time.

"Should I have known these buildings were in a state of disrepair? My answer would be that it wasn't brought to my attention,'' Obama, who's seeking the Democratic presidential nomination, said at a South Side campaign stop.

Call him Lame-O Obama.

Previous post: Obama for Sale

UPDATE: Related Sun Times editorial on the dubious merits of TIFS.