Obama's Halo Slips a little more

After an unsuccessful campaign for Congress in 2000, Illinois state Sen. Barack Obama faced serious financial pressure: numerous debts, limited cash and a law practice he had neglected for a year.

Help arrived in early 2001 from a significant new legal client -- a longtime political supporter. Chicago entrepreneur Robert Blackwell Jr. paid Obama an $8,000-a-month retainer to give legal advice to his growing technology firm, Electronic Knowledge Interchange. It allowed Obama to supplement his $58,000 part-time state Senate salary for over a year with regular payments from Blackwell's firm that eventually totaled $112,000.

A few months after receiving his final payment from EKI, Obama sent a request on state Senate letterhead urging Illinois officials to provide a $50,000 tourism promotion grant to another Blackwell company, Killerspin.

Killerspin specializes in table tennis, running tournaments nationwide and selling its own line of equipment and apparel and DVD recordings of the competitions. With support from Obama, other state officials and an Obama aide who went to work part time for Killerspin, the company eventually obtained $320,000 in state grants between 2002 and 2004 to subsidize its tournaments.

Obama's presidential campaign rejects any suggestion that there was a connection between the legal work, the campaign contribution and the help with the grant. "Any implication that Sen. Obama would risk an ethical breach in order to secure a small grant for a pingpong tournament is nuts," said David Axelrod, Obama's chief political advisor.

Business relationships between lawmakers and people with government interests are not illegal or uncommon in Illinois or other states with a part-time Legislature, where lawmakers supplement their state salaries with income from the private sector.

But Obama portrays himself as a lawmaker dedicated to transparency and sensitive to even the appearance of a conflict of interest. Recently, Obama expressed regret over a property deal with Illinois power broker Tony Rezko after Obama was elected to the U.S. Senate in 2004. In an interview this spring with the Chicago Sun-Times, Obama said his regret was not just because the real estate and restaurant entrepreneur was under criminal scrutiny, but because he was "a contributor and someone doing business before the state."