Insiders' housing projects targeted
Subpoenas probe deals by Obama ex-boss and Daley pal Davis, plus Rezko, Cellini
A federal grand jury has subpoenaed records on dozens of low-income housing projects built over the last 30 years by indicted businessman William F. Cellini, convicted political fund-raiser Tony Rezko and City Hall insider Allison S. Davis.
The mountain of documents the grand jury wants from the Illinois Housing Development Authority includes two projects in which President Obama has acknowledged playing a minor role. Both of those projects involved Rezko, a former fund-raiser for Obama. One of them included Davis, who was once Obama's boss at a small law firm.
(Keith Hale/Sun-Times file)
* Nicholas Hurtgen, a former investment banker awaiting trial on corruption charges.
* Brian Hynes, a lobbyist who once represented the state agency.
* Chris Kelly, a close friend and adviser of former Gov. Rod Blagojevich.
* Mark Kirincich, president of Commonwealth Realty Advisors, a company started by William Cellini.
* Robert Kjellander, a lobbyist, Republican Party heavyweight and close Cellini pal.
* Milan Petrovic, a lobbyist and Blagojevich buddy.
* Paul Rosenfeld, an IHDA lobbyist and Blagojevich insider.
* Marvin Traylor, a lobbyist and Cellini associate.
* John Wyma, a lobbyist and longtime Blagojevich associate.
* Kelly King Dibble, former IHDA executive director and relative of President Obama's adviser Valerie Jarrett.
* Darren Collier, an ex-IHDA staffer.
* Michael Todd, an ex-IHDA staffer.
The grand jury is the same panel that's investigating alleged corruption under former Gov. Rod Blagojevich.
It issued the subpoena Sept. 29, 2008, newly released records show.
Four months later, IHDA officials are still gathering the documents, memos, e-mails and other records involving "more than dozens" of low-income housing projects funded by the state agency, said IHDA attorney Mary Kenney. "It's a very large production," said Kenney.
Cellini -- a powerful Republican Party figure ever since he served as transportation secretary under then-Gov. Richard Ogilvie in the late 1960s -- has been getting deals at IHDA since 1976, when James R. Thompson was elected governor.
Cellini's companies have gotten more than $90 million in loans from IHDA, the Chicago Sun-Times has reported. New Frontier -- one of his companies -- has built or managed thousands of apartments paid for by the state agency. Among them: Lake Shore Plaza, 445 E. Ohio, which is the only Cellini project specifically mentioned in the subpoena.
Cellini, 73, of Springfield, is awaiting trial on federal charges that he tried to extort Hollywood movie producer Tom Rosenberg to make campaign contributions to Blagojevich in exchange for state pension business. According to Rosenberg's testimony at Rezko's trial last year, the scheme was hatched in a meeting of Cellini, Rezko, Davis and Blagojevich's close friend Chris Kelly.
Attorneys for Cellini, Rezko and Davis didn't return calls seeking comment.
Rezko was convicted of wide-ranging corruption involving state government deals and has been cooperating with federal investigators.
Rezko, 53, got his first deal from IHDA after he helped Jim Edgar's successful campaign for governor in 1991. Rezko got the funding after hiring Cellini's partner, Robert Kjellander, to lobby the state.
In all, Rezko got more than a dozen deals from IHDA, often with the help of Davis' law firm, Davis Miner Barnhill, a small firm that specialized in helping developers get government funding for low-income housing.
Obama was a lawyer with the Davis firm. The president has said he did six hours of legal work in 1995 on one of the deals now under scrutiny by the grand jury, helping Rezko and his business partners -- Bishop Arthur Brazier and the Rev. Leon Finney -- turn an abandoned nursing home in Hyde Park into low-income apartments.
Six years later, Rezko's company stopped paying the mortgage. IHDA foreclosed on the property in 2001, as Rezko's low-income housing empire began to collapse, falling into physical and financial ruin.
Davis has long been one of Mayor Daley's top allies in the African-American community. Davis left the law firm in 1996 to become a developer, getting IHDA funding for four projects.
Among those was a senior citizen building he and Rezko built at 4801 S. Cottage Grove, just outside the Illinois Senate district Obama then represented. Though the project was outside his district, Obama wrote letters in 1998 to IHDA and city officials, urging them to give Davis and Rezko government funding for the project. Obama has said he didn't remember writing the letters, which he has called "form letters'' sent out by a staff member.
Five years ago, when former Rezko employee Kelly King Dibble ran IHDA under Blagojevich, the agency agreed to give Davis as much as $11 million to build Cleveland Tower, a high-rise for low-income seniors. Davis has yet to begin construction on the project at West Chicago Avenue and Cleveland, for which IHDA has given him a two-year extension.
Cleveland Tower is the only Davis project named in the federal subpoena. It's being developed by Neighborhood Rejuvenation Partners, a company that listed the mayor's nephew Robert Vanecko among its principals in documents it filed seeking government funding, the Sun-Times has reported. The mayor's office and a Vanecko spokesman have said that Vanecko merely did consulting work for the company.
Davis, 69, and Vanecko, 43, are partners in a start-up real investment company, DV Urban Realty Partners. Five city pension funds have invested $63 million with the Davis and Vanecko company.