Culture of Corruption: Obama and His Team of Tax Cheats, Crooks, and Cronies (14 page)

Coincidentally, Chicago-style, Blackwell Sr. is a longtime friend of Barack Obama.

Coincidentally, Chicago-style, Blackwell Sr. and his namesake son had bailed out Barack Obama during hard times after his failed 2000 congressional campaign. At the time, Obama was earning less than $58,000 a year as a state senator. His total income from practicing law that year: zero. In 2001, his fortune took a turn for the better. He drummed up nearly $99,000 in lawyer’s fees—$80,000 of it from the Blackwells. The Blackwell family, owners of the largest minority-owned consultancy in Chicago, had hired Obama to do legal work for the son’s tech business, Electronic Knowledge Interchange (EKI), on an $8,000 per month retainer.
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In 2002, the state senator reported $34,000-plus from legal services and speeches. Of that, $32,000 came from EKI—a relationship that ended when Obama set his sights on the U.S. Senate.

Coincidentally, Chicago-style, Obama had lobbied the Illinois legislature to give another Blackwell-owned business, Killerspin, a tourism promotion grant worth $50,000. The elder Blackwell’s son, Robert Jr., owned the table tennis manufacturer and event producer and worked with longtime Obama aide Dan Shomon. The grant subsidized ping-pong tournaments at the University of Illinois-Chicago. Coincidentally, Chicago-style, Blackwell Jr. was one of Team Obama’s top campaign financiers and a transition team member for former corruptocrat Governor of Illinois Rod Blagojevich.

Hospital officials vigorously denied any favoritism in the hospital contract award. But Blackwell Sr. himself admitted that the circumstances surrounding the work were “really fuzzy.”
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Besides, he explained to the
Washington Post
, Michelle Obama’s “diversity program [was] critical because minorities don’t always enjoy the informal social connections available to others.” Some minorities may not enjoy those informal social connections. But the millionaire Blackwells certainly did.

Health care analyst David Catron points out a major disparity in what Blackwell’s company was paid versus the normal market price for similar services. “It doesn’t help appearances,” Catron noted, “that the going rate for intranet upgrades rarely exceeds 10 percent of what Blackwell Consulting was evidently paid for the project in question.”
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Moreover, Catron observed, the preferential treatment actually put the hospital’s status as a Medicare and Medicaid provider in jeopardy:

Ironically, the Blackwell Consulting deal could have more lasting consequences for the University of Chicago Medical Center than for Michelle or Barack Obama. For a hospital, particularly one with UCMC’s history, the appearance of impropriety associated with such a transaction has far more serious implications than it would for a garden variety corporation. Even if the bidding process broke no state or federal ethics statutes, it could well have violated the “conditions of participation” stipulated by the Centers for Medicare and Medicaid (CMS).

CMS conditions of participation (COP) are standards to which health care providers must adhere in order to receive payment for services rendered to Medicare and Medicaid patients. The most basic COP, for hospitals, is to remain in good standing with the Joint Commission on Accreditation of Healthcare Organizations (JCAHO), which imposes stringent conflict of interest rules requiring a hospital to vet the “relationships” of medical staff, directors, and upper management “to ensure that its mission and responsibility to the clients and community it serves is not harmed by any professional, ownership, contractual or other relationship.”

. . . According to financial reports released pursuant to its bond obligations, audits conducted in 2000 and 2001 found UCMC wanting: “CMS notified the corporation that it is not in compliance with certain of the Medicare Conditions of Participation for Hospitals. . . .”

UCMC still participates in the Medicare and Medicaid programs, which suggests that the hospital eventually cleared up its COP deficiencies. But another unsatisfactory CMS audit could well be disastrous. As the financial reports mentioned above dryly phrase it, “Approximately 28.8% and 24.8% of the gross payment revenues of the corporation were derived from Medicare and Medicaid patients, respectively. As a result, any termination from the Medicare and Medicaid programs would adversely affect the corporation’s financial position.”

Of course, such a termination is not bloody likely with the Obamas running the health care show from the White House now. Pay for play, play for pay: it’s the protection racketeers’ code.

EARMARKS AND EDIFICE COMPLEX

In 2005, Barack Obama nearly tripled the amount of federal earmarks flowing to his wife’s employer to over $310,000. In 2008, United States Senator Barack Obama raised eyebrows even further after disclosing his $1 million request for federal earmark money to help pay for the construction of a new hospital pavilion at his wife’s place of work.
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When asked by the
Chicago Tribune
about the inherent impropriety of his water-carrying for Mrs. Obama’s employer, the Agent of Hope and Change shrugged:

I don’t think that I was obligated to recuse myself from anything related to the university. When it comes to earmarks because of those concerns, it’s probably something that should have been passed on to [Democrat Senator] Dick Durbin, and I think probably something that slipped through the cracks. It did not come through us, through me or Michelle, and Michelle has been very careful about staying separate and apart from any government work. But you could make a good argument that this is something that slipped through our cracks, through our screening system.
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Note the passivity and the pass-the-buck diffidence with which Obama met the question. It “should have been passed on” to someone else. It “slipped” through the cracks. It was the screeners’ fault. But most importantly: “I don’t think that I was obligated to recuse myself.” Spoken like the faux reformer he has always been—and will continue to be during his presidency.

CORPORATE PERKS FOR ME, BUT NOT FOR THEE

Two-faced-ness is a trademark of the Obama power couple. While she profited handsomely from her crony corporate ties, Mrs. Obama earned the adoration of liberal women, the indulgent press, and capitalism-bashers across the country by ostentatiously “abandoning” the corporate life for motherhood, public service, and devotion to her husband’s ambitions. “I wanted to have a career motivated by passion and not just money,” she told the
New York Times
.
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Time
magazine marveled at how “this tough, razor-smart Chicago native had to sacrifice many of her own career ambitions along the way.”
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The
Washington Post
quoted her Best Friend Forever Valerie Jarrett lamenting her protégé’s decision to step down from the University of Chicago Medical Center job in 2007: “It’s a sacrifice for her to give that up.”
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Vanity Fair
reported that Mrs. Obama “sigh[ed] and roll[ed] her eyes” as she recounted making the family decision to enter the presidential race. “Before I signed on, I had to know, in my mind and my heart, how is this going to work for me, and would I be O.K. with that? He wouldn’t have done this if he didn’t feel confident that I felt good about it, because it is a huge sacrifice. The pressure and stress on the family isn’t new. But we entered this thing knowing it was going to be really, really hard.” Once again, power-enabling Jarrett is quoted without a hint of irony, extolling poor Michelle’s hardships: “[S]he was willing to walk away from a huge salary potential and all the trappings of power that go along with it.”
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The Great Goddess of Sacrifice shared her distastes and complaints about her financial and professional plights repeatedly on the campaign trail—moaning about her college debts here, sighing about the constant “struggle” to balance home and work life there. In Zanesville, Ohio, in February 2008, she complained to working women at a child care center about the Ivy League career track. Mrs. Obama made a special effort to bash those who pursue corporate law and hedge-fund management. Bear in mind: the median income for female workers in Zanesville and the surrounding county last year was $20,142, according to professor Ralph Reiland, and nearly a quarter of the city’s population lives below the poverty line. Not exactly an audience at risk of jumping
en masse
into corporate law or hedge fund management. But the tin-eared Mrs. Obama is an incurable kvetch. Moreover, the remarks and visit struck many as opportunistic pretexts for her own therapy and passive-aggressive attack on rival Hillary Clinton (corporate law) and her daughter, Chelsea (hedge fund management employee). Reporter Byron York recounted the grievance-fest:

“The salaries don’t keep up with the cost of paying off the debt, so you’re in your 40s, still paying off your debt at a time when you have to save for your kids,” she says. “Barack and I were in that position,” she continues. “The only reason we’re not in that position is that Barack wrote two best-selling books. . . . It was like Jack and his magic beans. But up until a few years ago, we were struggling to figure out how we would save for our kids.” A former attorney with the white-shoe Chicago firm of Sidley & Austin, Obama explains that she and her husband made the choice to give up lucrative jobs in favor of community service. “We left corporate America, which is a lot of what we’re asking young people to do,” she tells the women. “Don’t go into corporate America. You know, become teachers. Work for the community. Be social workers. Be a nurse. Those are the careers that we need, and we’re encouraging our young people to do that. But if you make that choice, as we did, to move out of the money-making industry into the helping industry, then your salaries respond.”
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“Don’t go into corporate America?” Easy for you to say, sister. Mrs. O. parlayed her brief corporate stint into a cascading series of ever-more lucrative positions and promotions in the “helping industry.” In turn, her hospital gig paid off sweetly thanks to the synergistic relationships she and her husband had with other corporate and political cronies.

While she played the martyr-ific about “leaving” the business world, Mrs. O. was quite happy to serve on a plethora of community and corporate boards that pumped up her income to $500,000 in 2007. Boo-freaking-hoo. Despite her great “sacrifices,” the Obamas were able to afford pricy, five-figure private school tuition for both their daughters, and four-day-a-week personal training sessions for long-suffering mom. Feigning modesty, she downplayed her hefty contribution as bread-winner and filler of the family coffers: “Me? No! Barack had, like, four jobs, always,” she laughs. “No, really. Barack’s a hustler. I shouldn’t say hustler, but he’s a humper in terms of work.”
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The lady doth protest too much.

In June 2005, a few months after her husband was elected to the United States Senate, Mrs. Obama hustled a seat on the corporate Board of Directors of TreeHouse Foods, Inc. The food-processing company is “a leader in supplying high quality products and services to the private label and food service industries” including pickles, non-dairy creamer, and other items. The chairman of the board, Sam K. Reed, was a top executive at Kellogg and Keebler Foods. Other board members had decades of impressive business experience in packaging, food services, financial services, and corporate management. Mrs. Obama had her law degree, “community service,” and her husband’s last name. In fact, she took the position for exactly the opposite reason regular executives get on such boards. Instead of assuming the job to share corporate expertise and experience, she took the seat to acquire what she did not have. Reporting in spring 2007 on her re-election to the board, the UK
Telegraph
said that she took the position “to gain experience in the private sector.”
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The company put her on its audit and nominating and corporate governance committees. For her on-the-job-training and the privilege of putting her name and face on their literature, the company forked over $45,000 in 2005 and $51,200 in 2006—as well as 7,500 TreeHouse stock options worth more than $72,000 for each year.

Must have been “really, really hard” for Mrs. Obama to pocket such easy cash for such little “work” without laughing all the way to the bank.

The corporation-bashing Mrs. Obama would have continued collecting her corporate TreeHouse money for nothing if it hadn’t been for her husband’s pesky pledge to pander to Big Labor and swear off Wal-Mart. The retail giant, you see, happens to be TreeHouse’s biggest customer. And Wal-Mart is to Big Labor as sunshine is to Dracula. In May 2007, Obama told AFL-CIO workers in Trenton, New Jersey, that Wal-Mart was dead to him. “I won’t shop there,” he pledged with an eye toward embarrassing chief rival Hillary Clinton, who had served on Wal-Mart’s board from 1986-1992. The AFL-CIO has waged relentless attacks on Wal-Mart, dubbing it the “Poster Store for Greed.”
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That, by extension, would make Mrs. Obama—all-too-happy recipient of a Wal-Mart dependent compensation package worth more than $100,000 in 2008, according to Securities and Exchange Commission records—a Poster Child for Ancillary Avarice.

Once again, Barack Obama took a diffident, passive view of the glaring conflict of interests his wife’s professional position posed. In November 2006, he told the left-wing “Wake Up
Walmart.com
” organization that there was a “moral responsibility to stand up and fight” the company and to “force them to examine their own corporate values and what their policies and approaches are to their workers and how they are going to be good corporate citizens.”
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But as for walking the walk in their own household, neither of the Obamas felt any real moral responsibility to forego Wal-Mart-tainted cash. “Michelle and I have to live in the world and pay taxes and pay for our kids and save for retirement,” Obama shrugged when questioned by
Crain’s Chicago Business
magazine about his wife’s involvement with TreeHouse while he crusaded for corporate reform .
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