Obama's Ex-Boss and Rezko Pal Pushes Questionable Pension Deal

The Chicago Sun-Times reports:

In July 2004, state pension board member Allison S. Davis voted to turn over as much as $100 million in state workers' retirement cash to an investment management firm.

Months after it won the lucrative deal at Davis' urging, that investment firm hired Davis.


RREEF America REIT II Inc. agreed to pay the Chicago developer $30,000 a year to take a part-time post on its board of directors, even as Davis continued to serve on the Illinois State Board of Investment.

There were questions about the legality of the dual roles. According to Illinois law, "No member of the board shall have any interest in any brokerage fee, commission or other profit or gain arising out of any investment made by the board."

But the state board got a legal opinion that Davis could hold both posts as long as he didn't vote on any future state deals for RREEF, a real estate investment trust.

It's an unusual situation. Davis -- who was appointed to the state pension board by Gov. Blagojevich at the behest of since-convicted gubernatorial adviser Tony Rezko -- is the only member of the state's two main pension boards to also serve as a paid board member of a firm that handles state employees' retirement money.

"It's extremely uncommon to have a [pension] board member serve on the board of a portfolio adviser," says Edward Siedle, a former U.S. Securities and Exchange Commission lawyer. "It raises a lot of serious conflict-of-interest questions."

The Obama-Davis-Rezko-Blagojevich-Daley network at work.For more on Allison Davis and Barack Obama.