Hillary Clinton's campaign unleashed what may be its toughest attack yet on Barack Obama, ripping into her Democratic rival for trying to distance himself from an indicted Chicago real estate agent by claiming "nobody had an inkling" he was suspected of illegal activities.
The real estate agent, Antoin "Tony" Rezko, is under federal indictment for fraud and extortion. Rezko has long been a contributor to Obama's political campaigns and as recently as June 2005 Obama and Rezko did a real estate deal together.
The Rezko connection has dogged Obama as the increasingly bitter Democratic fight for the presidential nomination moves into the crucial state of South Carolina this week.
Sen. Obama, D-Ill, went on "Good Morning America" this morning and tried to minimize his relationship with Rezko.
"The facts are this: This is somebody who was active in politics in Illinois, who I knew. Nobody had any indications that he was engaging in wrongdoing," Obama told Diane Sawyer on "Good Morning America."
"We have returned any money that we know was associated to Mr. Rezko, and that is something that, if there's additional information that we don't know about, we'd be happy to return the money," he said.
The Clinton campaign quickly pounced. Calling Rezko Obama's "political patron," campaign spokesman Phil Singer issued a release stating, "Sen. Obama has repeatedly tried to minimize the closeness of their relationship. This morning was no different."
Singer said Obama "misrepresented basic facts" and zeroed in on Obama's claim that "nobody had an inkling" that Rezko was under investigation for fraud and for extorting kickbacks from companies doing business with the Illinois Teachers Retirement System Board and the Illinois Health Facilities Planning Board.
The Clinton camp cited four stories in newspapers from Obama's hometown of Chicago between July 2004 and September 2005 detailing the federal investigation into Rezko's alleged activities.
The Clinton camp also cited statements from two Chicago-area civic watchdog groups this week, the Illinois Campaign for Political Reform and the Better Government Association of Chicago, who claimed Rezko's legal troubles were well-known in Chicago political circles.
"Sen. Obama's assertion is contradicted by press reports, federal indictments and independent groups," Singer said.
Obama also spoke on "GMA" about the controversial real estate deal he did with Rezko. For more on the controversial real estate deal click here.
"In terms of appearances, and I've already said this, I should not have entered agreement with him," Obama told Sawyer. He pointed out that "everybody who has investigated knows that I haven't gotten in anything that was related to the problems that he's having with the law."
Today's Clinton broadside was the latest effort to tarnish Obama, who is leading in the South Carolina polls, and keep him on the defensive in the run-up to Saturday's vote.
During a Democratic debate earlier this week, Hillary Clinton lashed Obama for doing legal work for Rezko, whom she derided as a slumlord.
And both Hillary and former President Bill Clinton have accused Obama of praising Ronald Reagan as a better president than Bill Clinton, and of inconsistency in his opposition to the Iraq War.
During his "GMA" appearance, Obama tried to turn the spotlight on the bare knuckle tactics of the Clinton campaign.
"I haven't been looking for a fight. We have run a consistently positive campaign. The only thing that I want to make sure to do during this debate was to correct some of … distortions of my record that have been sprouting up during the course of this campaign," Obama said.
"Ultimately, what the American people are looking for is somebody that's going to be straight with them about how we solve the economic crisis we're facing and how we solve long-term problems to make sure our next generation is going to be able to live out the American dream," Obama said.
Referring to the Clinton attacks, he said, "My hope and suspicion is that going forward, they will be a little more cautious in terms of how they present what's going on."