Origins: The above-quoted piece combines a good deal of supposition and some elaborate conspiracy theory to question exactly where Senator Barack Obama obtained the money for his education and the purchase of a house in Chicago in 2005. The answers are fairly straightforward.
As both Barack Obama and his wife, Michelle, have noted many times, they paid for their educations via scholarships and student loans, in the process (like many people) incurring debts which were not fully paid off until many years later. (In the Obamas' case, it was largely the revenue derived from Barack's pair of best-selling books that finally allowed them to retire their student loan debts.)
Likewise, the Obamas' financing of their house in Chicago was no mystery. The couple experienced a significant jump in income from 2000 onwards (largely from royalties on book sales), and they purchased their Chicago home in 2005, a year in which their combined income was $1.6 million:
The Obamas' best financial year came in 2005, when their total combined income was $1.6 million. That included $1.2 million in author fees for Obama's best-selling books. Michelle Obama's salary that year [as vice president for community and external affairs at the University of Chicago Hospitals] was $316,962 plus another $45,000 from TreeHouse Foods [for whom she served a member of the board of directors].
The copies of the Obamas' federal tax returns made available on the Obama campaign web site show that the couple had an adjusted gross income of $1,655,106 in 2005 and $983,826 in 2006.
It is true that Rita Rezko bought an undeveloped lot adjacent to the Obamas' home, and the Rezkos subsequently sold the Obamas a small portion of that lot:
In June 2005, Obama and Rezko purchased adjoining parcels in Kenwood. The state's junior senator paid $1.65 million for a Georgian revival mansion, while Rezko paid $625,000 for the adjacent, undeveloped lot. Both closed on their properties on the same day.
In January [2006], aiming to increase the size of his sideyard, Obama paid Rezko $104,500 for a strip of his land.
When the Chicago Sun-Times questioned Senator Obama about the details of his home purchase, he responded as follows:
Q: How do you explain the fact your family purchased your home the same day as Rita Rezko bought the property adjacent to yours? Was this a coordinated purchase?
A: The sellers required the closing of both properties at the same time. As they were moving out of town, they wished to conclude the sale of both properties simultaneously. The lot was purchased first; with the purchase of the house on the adjacent lot, the closings could proceed and did, on the same day, pursuant to the condition set by the sellers.
Q: Why is it that you were able to buy your parcel for $300,000 less than the asking price, and Rita Rezko paid full price? Who negotiated this end of the deal? Did whoever negotiated it have any contact with Rita and Tony Rezko or their Realtor or lawyer?
A: Our agent negotiated only with the seller's agent. As we understood it, the house had been listed for some time, for months, and our offer was one of two and, as we understood it, it was the best offer. The original listed price was too high for the market at the time, and we understood that the sellers, who were anxious to move, were prepared to sell the house for what they paid for it, which is what they did.
We were not involved in the Rezko negotiation of the price for the adjacent lot. It was our understanding that the owners had received, from another buyer, an offer for $625,000 and that therefore the Rezkos could not have offered or purchased that lot for less.
