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Friday, December 15, 2006
 
Barackgate?

Here's an interesting little story about Barack Obama and a skeleton in his closet.

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?


The obvious thing to do here is look at that parcel of land and figure out whether the price Rezko paid is justified by comparable properties in the neighborhood. How does it compare on a per-square foot basis to what Obama paid for the small piece? That 1,500 SF parcel was almost $70 per square foot, which is an extraordinarily high amount for residential dirt; that would work out to about $3 million per acre.

More from the Marathon Man.
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