Chicago taxpayers could be on the hook for hundreds of millions of dollars for the costly Obama Presidential Center after new tax filings show the Obama Foundation has only deposited $1 million into its promised $470 million reserve fund.
That’s the conclusion of an in-depth report by Fox News as it looked at what it described as a “sweetheart deal” to create the reserve fund “to spare taxpayers should the project ever go belly up.”
The center will serve as Obama’s presidential library.
According to the report:
Under its agreement with the city, the [Obama] foundation was required to create the fund, known as an endowment, to take control of a sprawling 19.3-acre section of Jackson Park — often described as Chicago’s Central Park equivalent — where the complex is now slowly rising.
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But when former President Barack Obama and former First Lady Michelle Obama turned the sod at the site in September 2021, just $1 million — or 0.21% of the pledged funds — had been deposited into the endowment, and that figure has remained unchanged ever since.
An endowment is typically a large sum of of money meant to earn enough interest each year to cover operating costs without touching the principle in order to avoid needing funding from other sources.
Also according to Fox News’s report, the “use agreement” hands over “exclusive control” of the land to the Obama Foundation “for nearly a century in exchange for $10.”
As Breitbart News has reported, construction on the Obamas’ presidential library has been painfully slow, with the project’s cost rising from an original estimate of $330 million to at least $850 million.
The poor funding of the promised endowment has fueled fears the Obama Presidential Center could leave taxpayers holding the proverbial bag if finances spiral into the red, Fox reported.
Concern has been generated by the Obama Foundation’s latest tax return, “which shows its finances under strain with revenue swinging wildly year to year, fundraising shortfalls and unfulfilled donor pledges,” according to Fox.
Illinois GOP Chair Kathy Salvi hammered the project as an “abomination” while blasting Democrats for potentially exposing taxpayers with the deal.
“It should come as no surprise that the Obama Center is potentially leaving Illinois taxpayers high and dry — it’s an Illinois Democrat tradition,” Salvi told Fox News Digital in a statement. “Democrats in this state, when not going to prison for corruption, treat taxpayers like a personal piggy bank giving sweetheart deals to their political benefactors.”
Richard Epstein, a University of Chicago law professor emeritus and a New York University law professor, advised the local nonprofit Protect Our Parks with former legal challenges to the Obama Center’s construction.
He said that “the city never should have signed over the large section” of the park.
“They put a million dollars into a $400 million endowment, so it’s endowed. That gets you in jail as a securities matter,” Epstein told Fox Digital. “An endowment means that you have the money in hand. But they have nothing. … So, I regard this as something of a public calamity.”
“Without an endowment, they’ll have to scramble every year to cover $30 million in operating costs,” Epstein further explained. “The whole point of an endowment is to avoid that volatility.”
The Obama Foundation told Fox Digital that it will be making “significant investments in the endowment in the coming years,” claiming that raising money for the center has been one of its priorities.
“The Obama Presidential Center is fully funded, and it will open in the spring of 2026,” a spokesperson for the foundation said.
Contributor Lowell Cauffiel is the author of the New York Times best seller House of Secrets and nine other crime novels and nonfiction titles. See lowellcauffiel.com for more.
