'The Fix Was In': Obama Donor Gets Sweetheart Real Estate Deal in Chicago

With much-publicized ties between President Barack Obama, the SEIU labor union and the ACORN volunteer organization, it would be a safe assumption that someone with a business relationship with not just one, but both of those groups would have an inside track on doing business with an Obama associate.

But in the world of big money Democratic Chicago politics, there is a difference between white-collar clout and blue-collar clout.

Chicago real estate developer Thomas Bennett thought he had a deal in hand to purchase the old Chicago Housing Authority (CHA) building at 626 West Jackson, just blocks from Union Station. Bennett thought he was paying a fair price for the property as he had a written commitment from two tenants -SEIU and ACORN- to occupy office space in the building.

Bennett-Accepted Letter of Intent re Purchase of 626 West Jackson –

Bennett was dealing with Chicago Housing Authority Chairman Marty Nesbitt on the attempted purchased and put forth an offer of $9 million for the building.

“Occupancy in leasing or their purchasing a few floors that was the model but they were going to occupy,” Bennett said. “When you go in the market with a client, they know what their growth needs would be for a 10-year period. Absent that commitment, I’m not looking at that building. What made this a pragmatic deal was I had commitment from two credible users (SEIU and ACORN). Those don’t come down the road every day. It allowed me to put together a competitive bid. No way was someone going to compete with my bid.”

But Bennett didn’t put forth the winning bid. A company called Sterling Bay properties had the top bid. Actually, top bid is not the proper description. Sterling Bay won with a $7.7 million bid, $1.3 million less than Bennett’s $9 million offer.

“During my dealings, The CHA explained how important a quick, no-due-diligence close was to them,” Bennett said. “Yet they allowed the winning bidder to control the property for 5+ months before closing.”

You go with the highest bid with a party that has a good chance of closing the bid. As a life-long Chicagoan, this was disappointing. After the meeting, I put it in the rearview mirror and tried to move on.”

But later Bennett discovered Nesbitt also had another role: treasurer of the Obama Victory Fund.

Sterling Bay made a substantial campaign contribution ($28,500) to the Obama Victory Fund within months of the deal closing in late December 07. This $28,500 donation was after about $16,000 worth of campaign donations by Sterling Bay principals (Scott Goodman, Andrew Gloor and Craig Golden) to various Obama campaign funds going back to his U.S. Senate bid in 2004.

626 W Jackson – Sterling Bay Contributions – Timeline –

“Nesbit was clearly stonewalling, but he eventually got back to me,” Bennett said. “I wanted to meet days around Labor Day 2009…I couldn’t get on his calendar until after Thanksgiving (2009). I asked him ‘What did the building trade for?’ and he said $7.7 million, $1.3 million less than what we offered in the revised bid. That’s a substantial drop.”

“I went to my final CHA board meeting where Marty Nesbitt called me out in a very disrespectful manner in a room full of taxpayers. He said ‘You’re making a fool of yourself’ and I was amazed at how tolerant people were of this. At CHA they knew what was going on and they didn’t care. The fix was in.”

Bennett went looking for the sale records for the building at the Cook County Recorder of Deeds Office and the City of Chicago Department of Revenue.

“(In August 2009) two bureaucrats in the office told me there was nothing listed about the sale price,” Bennett said. “I wondered why the property was being traded in such a non-transparent event. That’s when I contacted Marty Nesbit to see what was going on. That went nowhere. I have every right to know what it traded for.

He didn’t learn of the sale price until he finally tracked down Nesbitt in early September 2009. While Bennett couldn’t find a sale price immediately after the sale, the information was available when QuincyNews.org met with Bennett on a trip to Chicago a few weeks ago in November 2009.

“I just said thank you,” Bennett said. “(Nesbit) clearly doesn’t appear to be a Tom Bennett fan. Clearly there was steering going on. They were using every trick in the book to slant the process in favor of their desired winning bidder.”

Bennett was willing to move on, but something keeps nagging him about the deal.

“I put in the highest bid…a credible deal…and I lost to a party with a track record of contribution to Obama’s campaign and Nesbitt has a track record of being Obama’s money guy,” Bennett said. “Look at how political fundraising has evolved. This appears to be a very corrupt quid pro quo involving campaign contributions.”

“When the fix is in, the fix is in.”

Phone calls to the Chicago Housing Authority were not returned. A CHA spokesman issued a no comment in a 2007 piece in the Chicago Sun-Times on the matter.