As a state senator from the South Side, Barack Obama once arranged for a $200,000 state grant to jump-start an urban venture capital fund for a non-profit group run by Rev. Jesse Jackson.
The grant was the very sort of faith-based initiative now at the center of an uncomfortable rift between Jackson and Obama, the presumptive Democratic presidential nominee. The money was spent, but the promised investment pool for job-poor neighborhoods never materialized, an example of the mixed record for Obama and other officials in getting results from such programs.
Obama’s embrace of this approach, championed by President George W. Bush, led Jackson to lash out earlier this week at his fellow Chicago Democrat. The salty rebuke was captured on videotape and aired on the Fox News Channel, and Jackson quickly apologized.
The flap erupted amid Obama’s attempts to broaden his appeal by reaching out to evangelicals and moderate voters, a development that has disturbed some liberals like Jackson who fear the faith-based emphasis is an excuse for curtailing government social service obligations.
While proclaiming support for Obama, the veteran civil rights leader has at times been openly critical. Jackson has chafed at Obama’s lectures about responsibility to black fathers and condemned the nation’s only black U.S. senator for “acting like he’s white” by not taking a more active role in the controversy over the prosecutions of six black teenagers in Louisiana.
The Obama campaign defended his plan to support faith-based institutions. The plan “recognizes that the federal government does not always have the best solutions to local issues,” said Ben LaBolt, an Obama campaign spokesman. LaBolt said the proposal includes strong accountability safeguards to ensure effectiveness and protect against waste.
The faith-based issue is both complex and sensitive in the African-American community, where there is a long tradition of church-centered activism. Black church groups often benefit from government grants, but at times they have been loosely monitored and used to curry political favor.
For decades, Chicago politicians have made courting black ministers an art form. Assistance has ranged from selling vacant lots to churches for $1 to providing them public grants for an array of programs such as job training or teen tutoring.
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Grants doled out
As a state lawmaker, Obama, too, sought to tap that approach. His stint in the legislature coincided with a time when lawmakers set aside a pool of $1.5 billion for themselves to shower on pet projects.
Obama’s share came to $6million, and much of that went to parks, schools and libraries. But he also directed hundreds of thousands of dollars in taxpayer-funded grants to religiously affiliated organizations.
One $75,000 grant arranged by Obama went to an initiative to wire churches and community groups for Internet access. It was run by a former Obama political opponent later tied by the Illinois attorney general’s office to an unrelated charity kickback scheme.
And another $225,000 in Obama-linked grants went to a church group affiliated with Obama’s friend Rev. Michael Pfleger. The money paid for improvements at a community center used for youth programs and a job training and placement center. Pfleger is the controversial Roman Catholic priest whose derisive remarks from the pulpit about Sen. Hillary Clinton caused a stir near the end of the Democratic primary campaign.
In an interview last year, Obama told the Tribune that he lacked the resources as a state lawmaker to vet the merit of grant requests and that almost every non-profit group that asked him for state money got it. “It was a pretty wide-open process,” Obama said.
LaBolt said Obama’s South Side constituents benefited from the “vast majority” of grants he secured in the state Senate. Even so, LaBolt said Obama understood that the Illinois process lacked accountability and was happy when it was finally ended by Gov. Rod Blagojevich.
Money for consultants
Jackson’s Citizenship Education Fund spent much of its state grant on consultants, including a firm tied to former national Democratic Party chief David Wilhelm, but never launched its investment vehicle aimed at stimulating job growth in poor neighborhoods.
Jackson did not respond to requests for comment.
The grant proposal from CEF, an offshoot of Jackson’s Rainbow/PUSH Coalition, had said the “centerpiece” of its work would be creation of a venture fund for private equity investment on the South Side and in adjacent south suburbs.
Obama arranged the grant to CEF before revelations in 2001 that Jackson had fathered a child out of wedlock with its onetime executive director. There is no connection between the Illinois grant and a sizable payment that the non-profit made to Jackson’s former mistress upon her departure.
Nevertheless, state records show that Illinois officials had trouble getting CEF to thoroughly account for its spending and warned the group in a 2004 letter that it could be barred from future state grants if it wasn’t more forthcoming. There is no indication in state records that the group complied with the demand, yet it has continued to receive state funds for unrelated projects.
Charity questioned
Obama was involved with another faith-based charity called Charisma that in 1998 nearly lost a $40,000 state grant sponsored by another South Side lawmaker because it failed to file required legal documents with the state.
Charisma, formed in 1995 with a goal of promoting youth programs, was run by a board that included Rev. Leon Finney Jr. and other South Side ministers as well as Vince Lane, the onetime Chicago Housing Authority chief later sent to prison in an unrelated loan fraud scheme. Obama was the group’s original registered agent, typically a lawyer hired by corporations to act as a doorkeeper for legal papers.
The grant, for a summer youth academy, was stalled, and Charisma was involuntarily dissolved by state officials until the tardy legal paperwork was filed.
Obama’s association with Charisma ended in 1999, but controversy over the group continued. State officials had to prod the charity to detail how the $40,000 grant was spent, and the required report was condensed to three lines and filed two years past the due date.
In 2004, the Illinois attorney general’s office canceled the charity’s registration because it failed to file required expense and income reports with the state. Even so, state records show Charisma has received at least $819,000 in state money after it lost its charity status.
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