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December 15, 2006
Scandal On The Edge Of Tomorrow

Barack Obama has enjoyed a boomlet in the opening days of the 2008 Presidential campaign, becoming the not-Hillary of the moment. He has positioned himself well for at least a shot at the VP slot on the ticket, and despite his lack of experience and youth (two years in national office and 45 years old) has become a serious contender for the top position. He generates crowds and energy, and the money will not be long in following.

However, he has a potential scandal that has nibbled on the edges of political consciousness for the last few months. John Dickerson in Slate brings it a little closer to the center of debate for the 2008 race, wondering if it will prove damaging enough to Obama's hopes that it stops him:

The Chicago Tribune broke the story back in November. It begins in 2004 with Obama's $1.9 million book advance for The Audacity of Hope. In June 2005, Obama used the money to purchase a $1.65 million Georgian revival home on Chicago's South Side—$300,000 less than the asking price. On the very same day, Rezko, a Democratic Party fund-raiser and developer, bought the adjacent empty lot at the asking price from the same owner (the house and the lot were previously owned by the same person). Rezko, who had raised money for Obama and known him since the senator attended Harvard Law School, did not develop the empty lot. In January 2006, he sold a 1,500-square-foot slice of it to Obama for $104,000, a fair sum in that market.

Here's the question: Did Rezko orchestrate his same-day purchase of the lot at full price so that the seller would give Obama a break on the price of the adjacent house? Was Obama in on the deal? And did Rezko never intend to develop the lot, giving Obama a nice roomy side yard, a favor which he'd call in later?

Since the sale, Rezko's business practices have made headlines in Chicago. Right now he faces a 24-count federal indictment for corruption, specifically in arranging kickbacks for government contracts he helped facilitate. Rezko reportedly has started cooperating with the feds, and Dickerson wonders whether that will include information on Obama's coincidental purchase.

Obama, for his part, has shrewdly skipped the stonewalling for mea culpas. Obama says he learned a lesson, which is to avoid doing business with political supporters, especially in real estate. So far, no one has proven any quid pro quo from Obama to Rezko, and if that doesn't change, then this will most likely get chalked up to a rookie mistake. As Dickerson also points out, Hillary Clinton will not dare to make questionable real estate ventures a campaign issue -- not after Whitewater and the Rose Law Firm records scandals.

The issue for Obama is the vulnerability he has to scandal. His trump card will be his outsider status and his candor. Obama represents the hope of a change from business as usual in Washington, a uniter instead of a divider -- the kind of meme that elected the last two Presidents, of course, and we have seen the resultant increase in partisan rancor over the last 14 years. If Obama's relationship with Rezko gains any traction, it threatens to hurt Obama's greatest strength.

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Posted by Ed Morrissey at December 15, 2006 5:24 AM

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