The Obama You Don't Know | The Washington Examiner

Chapter III

Chapter III: The 1997 speech that launched Obama

September 19, 2012 | 12:00 am

Photo - Like so many in the liberal powerbase that served as a springboard for Obama, Marilyn Katz’s activist roots stretch back to her days as a Students for a Democratic Society operative. Today, Katz is an influential political operative in Chicago who has visited the White House 26 times since 2009.
Like so many in the liberal powerbase that served as a springboard for Obama, Marilyn Katz’s activist roots stretch back to her days as a Students for a Democratic Society operative. Today, Katz is an influential political operative in Chicago who has visited the White House 26 times since 2009.

Few doubt that Barack Obama's stirring oration before the 2004 Democratic National Convention vaulted him into the national limelight.

But another, less-heralded Obama address -- delivered on Valentine's Day 1997 at First Chicago Bank -- was equally essential to his later successes. Without it, it is doubtful that he would have ever been in position to assume so prominent a role in 2004.

Obama was a newly elected Illinois state senator in 1997 when he addressed an audience that included many of Chicago's most powerful political insiders and activists, nonprofit executives, business movers and shakers, and philanthropic funders.

The occasion was a meeting of the Futures Committee, an elite Chicago civic leadership group created by the Local Initiatives Support Corp., or LISC, a liberal, nonprofit, low-income-housing activist group.

No authenticated text of Obama's speech -- which was billed beforehand by LISC in a promotional flier obtained by The Washington Examiner as "a local perspective on effective communities" -- is now known to exist.

But people interviewed by the Examiner who heard him speak say Obama laid out a powerful vision for a political strategy that ultimately reshaped housing activism on the Left, first in Chicago and then nationwide, even as it paved the way for an accommodation between the corrupt political machine of Mayor Richard M. Daley and its long-standing nemesis, the city's coalition of white liberal reformers and black community organizers.

Obama described a practical strategy for building on the federal Low Income Housing Tax Credit, or LIHTC, contained in the 1986 Tax Reform Act, plus federal, state and local funds and programs, to create new public-private development partnerships.

The LIHTC encouraged the partnerships needed to unite government officials and progressive nonprofit activists behind the cause of building thousands of new affordable-housing units, first on Chicago's poor South Side and then, as the movement spread, to similar neighborhoods across the nation.

Obama spoke at a time of great ferment on the Left in which federal housing policies became a central focus for political activism.

He was drawing from the same well that had produced the Community Reinvestment Act, relaxed federal standards for mortgage qualifications, and creative financial packaging of subprime loans, but doing so in a manner uniquely matched to conditions on the political ground of Chicago.

Public-private partnerships for affordable-housing projects were not a new idea to some of Obama's listeners, since philanthropic groups like the Ford Foundation and the MacArthur Foundation had been promoting the concept for several years.

Not coincidentally, it was a MacArthur vice president, Rebecca Riley, who arranged for Obama to speak at the Valentine's Day gathering.

Obama's innovation was to expand the concept beyond simply building affordable apartments and high-rises. It encompassed a cradle-to-grave vision of providing for the material needs of the low-income families residing in the new housing, including their schools, child care, job training, medical coverage, clothing and food.

In turn, the residents would campaign and vote for the officials advocating the partnerships, adding significantly to their political power.

Left unstated was the underlying reality that politically connected developers who built the housing would profit handsomely and could be expected to gratefully give millions of dollars in campaign contributions to politicians like Obama who made it all possible.

Chicago thus became the proving ground for Obama's vision, which, according to LISC spokesman Joel Bookman, "really changed the direction of community development in Chicago and ultimately nationally."

It was an irresistible combination of money, politics and idealism that also offered endless opportunities for greed and tragic abuse of the poor.

That made it an ideal tool for uniting the Daley machine with the reform coalition that had elected Harold Washington as the city's first African-American mayor in 1983. (Richard M. Daley, who reinvigorated the machine and became mayor in 1989, was the son of the machine's founder, Richard J. Daley, who died in 1976.)

The key to Obama's vision in Chicago, according to Marilyn Katz, was the city's most famous radical: "Remember, this is the community of Saul Alinsky. And most of the first housing groups were the Alinsky groups who were still banging at the door."

Katz, an influential Chicago public relations executive and longtime Obama friend and political operative, has visited the White House more than two dozen times since 2009.

Like so many in the liberal power base that served as a springboard for Obama, Katz had activist roots stretching back to her days as a Students for a Democratic Society operative in Chicago.

A Futures Committee handout for the Valentine's Day meeting titled, "Barack Obama's principles of community development," said the proposed program had "to organize around production, not just consumption."

Such words were a clarion call to activists raised on a thousand variations of the Marxist labor theory of value and capitalist alienation.

"He really questioned the kind of surrogate capitalist strategy that most of the nonprofit community-based organizations had been pursuing," Katz told the Examiner.

"And he suggested that a real estate strategy for redevelopment of communities was not enough and that you had to really go into the quality-of-life issues, education, wealth building, amenities that were the hallmarks of any community needs," she said.

Obama's vision "changed the direction and the nature of the 123 groups that were working in the various communities in the city. It was a very influential speech," she said.

The LISC vision speech was a critical turning point for Obama because his position with the Chicago law firm of Davis, Miner, Barnhill & Galland put him at ground zero with what Katz called "the tangential and interlocking circles between the Left-liberal political community, the urban redevelopment community, the legal community and politicos" who controlled Chicago, then and to this day.

It was from that point that Obama cultivated the personal, professional and political relationships that would serve him well all the way to the White House.

Next: Chapter IV: For the slumlord's defense, Barack Obama, Esq.

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