Source: http://www.suntimes.com/news/watchdogs/672314,CST-NWS-watchdog29.article
November 29, 2007
tnovak@suntimes.com
Seven years ago, Sen. Barack Obama was on the board of a Chicago charity when his former boss, Allison S. Davis, came looking for money.
At the time, Davis was a developer represented by the law firm where Obama worked, as well as a small contributor to Obama's political campaign funds. He wanted the charity to help fund his plans to build housing for low-income Chicagoans.
When Allison Davis (right) sought money for a project, his former employee, Sen. Barack Obama, voted to help.
(AP/Sun-Times file)
Rogers Park Montessori School at 1800 Balmoral in Chicago.
(Tom Cruze/Sun-Times)
Obama agreed. He voted with other directors of the Woods Fund of Chicago to invest $1 million with Neighborhood Rejuvenation Partners L.P., a $17 million partnership that Davis still operates.
It's not clear whether Obama told other board members of his ties to Davis, whose family would go on to donate more than $25,000 to Obama's political campaigns, including his bid to be president of the United States.
"Let me get back to you on that," Obama presidential campaign spokesman Bill Burton said when asked about that two weeks ago. He never did.
But Burton defended Obama's voting to invest the charity's money with Davis rather than abstaining to avoid the appearance of a possible conflict of interest.
"It was a worthwhile project," Burton said. "It's not a conflict of interest to do what's right for your community."
The Woods Fund -- whose board is chaired by Laura Washington, an opinion-page columnist for the Chicago Sun-Times -- has no records to show whether the board knew about Obama's ties to Davis, said Woods Fund president Deborah Harrington.
Under its agreement with Davis, Harrington said, the fund cannot disclose how Davis has spent the money.
Davis declined to comment.
City records show Davis used some of the money to build a 72-unit apartment building for senior citizens at 87th and Ashland. The $10 million project -- built with a $5.7 million loan from the city -- netted Davis nearly $700,000 in development fees, city records show. His son Cullen Davis is paid to manage the building, which opened three years ago with a ceremony featuring Mayor Daley.
Davis, who's now business partners with Daley's nephew Robert Vanecko, has known Obama for years. Obama began serving on the Woods Fund board in 1993, the same year he was hired as an associate lawyer with Davis' small Chicago law firm, Davis Miner Barnhill. Obama kept working there until he was elected to the U.S. Senate in 2004.
Davis quit the firm in 1996 to become a developer. But he continued to use his former law firm to represent him.
As a developer, Davis' partners have included Tony Rezko, the now-indicted political fund-raiser who has been among Obama's biggest political supporters.
A few months after Davis left the law firm, Obama won his first political office -- a seat in the Illinois Senate. His campaign contributors included Rezko and Davis.
Two years later, Obama wrote to city and state officials, urging them to give money to New Kenwood LLC, a company that Davis and Rezko formed to build an apartment building for low-income seniors at 48th and Cottage Grove.
Davis and Rezko were building that project in 2000 when Davis approached the Woods Fund, seeking its investment in future projects. Besides Obama, Davis also had ties to another of the not-for-profit organization's seven board members -- Howard Stanback, a former city aviation commissioner who worked for Davis at New Kenwood.
Stanback was the board chairman of the Woods Fund, a $68 million foundation "whose goal is to increase opportunities for less advantaged people and communities" by giving money primarily to not-for-profit groups involved in housing, the arts and other areas, according to its Web site.
While Obama voted to make the $1 million investment with Davis, Stanback abstained, Harrington said.
Stanback and Obama are no longer on the Woods Fund's board. Obama left in 2002. Stanback left last year.
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