Obama sought HUD grant for donor’s project

EXCLUSIVE:

Sen. Barack Obama, who vows to change Washington by trimming wasteful spending and disclosing special-interest requests, wrote the Bush administration last year to seek a multimillion-dollar federal grant for a Chicago housing project that is behind schedule and whose development team includes a longtime political supporter.

Mr. Obama’s letter, however, was never disclosed publicly. In fact, the letter was ghostwritten for him by a consultant for the Chicago Housing Authority, which wanted the money - a practice ethics watchdogs have frequently criticized.

The housing project through July had completed fewer than one-sixth of the 439 public housing units it had planned, court records show.

The Bush administration obliged Mr. Obama’s request, awarding a $20 million competitive grant last month from the Department of Housing and Urban Development (HUD). It called the project a “shining example” of urban revitalization. The Washington Times learned of the letter from Republican operatives.

As Mr. Obama campaigns for president as an agent of change who promises to clean up Washington’s money game, his role in the Stateway project raises questions about the appearance of a conflict of interest and whether he has been participating in the very system he criticizes, watchdogs say.

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“It’s not just Senator Obama; it’s endemic to Capitol Hill. It’s a broad issue, where lawmakers are just simply rubber-stamping something through,” said Steve Ellis, vice president of the nonpartisan Taxpayers for Common Sense, referring to the practice of consultants writing funding requests for lawmakers.

“It’s sort of like of your standard earmark practice in a lot of ways, where lobbyists end up writing the request letters,” he said. “It’s a problem especially if neither the staff nor the lawmaker knows what’s going into the request.”

Mr. Obama’s aides say he knew the project was worthwhile because it is helping make safe and affordable housing available to hundreds of people displaced by the demolition of public housing complexes.

But complicating the picture, one of developers for the Stateway Project is a firm headed by Allison S. Davis, one of Mr. Obama’s early mentors and a longtime political supporter. A founding partner at the firm where Mr. Obama practiced law, Mr. Davis and his family have given the senator from Illinois tens of thousands of dollars in political contributions over the years.

Aides to Mr. Obama said he did not know of Mr. Davis’ involvement in the Stateway project when he sent the letter. They noted that none of the HUD money will flow to Mr. Davis or his business. They also said other lawmakers - including fellow Illinois Democrats Sen. Richard J. Durbin and Chicago Mayor Richard M. Daley - sent similar letters to HUD.

“John McCain, Barack Obama and other members of the U.S. Senate have routinely written to executive agencies in support of federal grant requests for programs critical to their constituents. Making safe and affordable housing available to those displaced by the demolition of public housing certainly meets that threshold,” said Obama spokesman Ben LaBolt.

None of the elected officials drafted the letters of support. Rather, the letters were written by an Atlanta-based housing consultant working for Chicago’s housing authority.

Though Mr. Obama’s office said he didn’t know of Mr. Davis’ role, ethics watchdogs said he left himself open to creating the appearance of a conflict of interest, a situation senators are encouraged to avoid in their code of ethics.

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