'Unethical?'

Donna White, spokeswoman for HUD: The Chicago Housing Authority competed for [the Hope VI] grant. The housing authority applies for the funding, they select a developer. ... It's common for congressional members to submit letters of support when they know that a housing authority in their jurisdiction is competing for a grant.

We also spoke with William Little, executive vice president of development for CHA, who reiterated that the HUD grant was not awarded to Davis, but to the CHA, and that the grant allowed the CHA to reallocate funds it had already directed to the Stateway project. Davis did not see a profit as a result of the HUD grant, according to Little, nor did the budget for the Stateway project increase. When we asked Little about the charge in the ad that Obama "reward[ed]" Davis with $20 million, he told us:

William Little, CHA: That's totally false. HUD awarded CHA $20 million in a Hope VI grant, which allows CHA to reallocate funds it had previously earmarked for that particular project to other projects. The overall budget for the project did not increase. Allison Davis gets none of it.

A portion of the Stateway development is devoted to market-priced housing, and Davis stood to profit from the sales of those homes. But he did not pocket any of the HUD grant, which went to construction of low-income units.

Tony Rezko (Again)
The ad also claims that Tony Rezko got "fourteen million," because of Obama. But he didn't.

A 2007 report from The Chicago Sun-Times is the source, but the article goes over territory we've addressed before: that Obama wrote letters to state officials supporting a low-income senior housing complex Rezko was trying to have built. Both men say Rezko did not solicit the letters. The Sun-Times quoted Obama spokesman Bill Burton as saying Obama didn't write the letters as a favor but "in the interests of the people in the community who have benefited from the project."

Regardless, the ad is wrong to imply Rezko pocketed millions. The project cost $14 million of taxpayer money. But, as we've reported, Rezko and his partner, who was Allison Davis, received $855,000 in fees. It's not peanuts, but it's not $14 million either.

Kenny Smith's $100,000 Garden
The ad then claims Kenny Smith received $100,000 in taxpayer money as a "reward" from Obama. This claim holds more water than the rest, but it's still a leaky vessel.

The ad cites a New York Post report that details how Obama, then a state senator in the midst of a race for a congressional seat, worked on Smith's behalf in 2000 in an effort to raise $1.1 million in state funding for the "Englewood Botanic Garden Project." Smith, head of the nonprofit Chicago Better Housing Association and a volunteer for Obama's congressional campaign, planned to rehabilitate a plot of land in a Chicago neighborhood. He was awarded a $100,000 state grant to do so, a far cry from the $1.1 million he had hoped to receive. 

But Smith never built the park. And, according to a report from The Chicago Sun-Times, state Attorney General Lisa Madigan, a Democrat who backs Obama, has started to look into whether or not taxpayer money was mishandled. While questions have been raised about how Smith spent the money, according to the Sun-Times, the paper notes that "neither Smith nor his wife are accused of any wrongdoing." The Post report cited by the ad said that "officials in Madigan's office said Obama's actions in giving out the member item aren't under investigation."

Democrats "Promise to Raise Your Taxes"
The ad swings away from the taxpayer hand-outs and claims: "Democrats promise to raise your taxes to reward their friends with wasteful pork." That linkage doesn't sound like a promise any sane politician would make.