Obama Foundation Leaves Taxpayers Exposed With Empty $470 Million Pledge [WATCH]

The Obama Foundation is facing new criticism over its handling of the Obama Presidential Center in Chicago, after tax filings revealed the organization has deposited just $1 million into a reserve fund that was pledged to reach $470 million.

The fund, meant to protect taxpayers from potential financial fallout if the project falters, has not grown since 2021.

The Obama Presidential Center, located on 19.3 acres of Jackson Park, was secured by the foundation in 2018 under a 99-year deal with the City of Chicago for $10.

The foundation agreed to create an endowment to ensure the public would not be left responsible for costs should the project collapse.

However, critics say the endowment remains virtually empty while construction expenses continue to rise.

Former President Barack Obama and former First Lady Michelle Obama participated in a groundbreaking ceremony in September 2021.

At that time, the foundation had placed just $1 million into the endowment.

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That figure has not changed, even as costs for the center have grown from an initial $330 million estimate to at least $850 million.

Illinois Republican Party Chair Kathy Salvi sharply criticized the project.

“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.

“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.”

JUST IN: Obama’s $850M Presidential Center in Chicago — once promised to revitalize neighborhoods — is now being blasted by residents for gentrification, higher rents, and forcing families out.

What was pitched as “hope & change” is now accused of displacing the very community… pic.twitter.com/up8mCenmtc

— Tony Lane 🇺🇸 (@TonyLaneNV) September 26, 2025

Richard Epstein, a law professor emeritus at the University of Chicago and professor at New York University, has long questioned the foundation’s finances.

He advised Protect Our Parks, a local nonprofit that tried to block the center’s construction through litigation.

Epstein argued that the endowment shortfall confirms his concerns about the deal.

“They put a million dollars into a $400 million endowment, so it’s endowed. That gets you in jail as a securities matter,” Epstein said.

“An endowment means that you have the money in hand… But they have nothing. They just have the same $1 million that they put in in 2021 as far as I can tell. So I regard this as something of a public calamity.”

Epstein noted that without a funded endowment, the foundation will face volatility in raising operating funds.

“Without an endowment, they’ll have to scramble every year to cover $30 million in operating costs,” he said.

“The whole point of an endowment is to avoid that volatility. They just haven’t endowed it. Of that I’m 100% sure.”

Tax records show the Obama Foundation ended 2024 with $116.5 million in cash, nearly $80 million less than the previous year, while owing $234 million in construction costs.

Of that amount, $216 million is tied to firm pledges, while another $201 million depends on conditional pledges that may not be fulfilled.

The foundation has also opened a $250 million revolving credit line, which has not been used but requires significant annual fees.

The foundation has spent roughly $600 million so far on construction, which includes a 225-foot museum tower, digital library, conference space, gymnasium, and NBA regulation basketball court.

It also plans to house the Obama Foundation’s offices on site.

In response to criticism, the foundation said it intends to fund the endowment in the future.

“The Obama Presidential Center is fully funded and it will open in the spring of 2026,” a spokesperson told Fox News Digital, adding that “significant investments in the endowment” will be made in coming years.

CharityWatch, a nonprofit watchdog, noted that the foundation technically complied with its agreement since the deal did not specify an exact dollar amount for the endowment.

However, the group acknowledged the risks of relying on donor pledges and operating without a stable reserve.

Epstein argued that the city of Chicago enabled the foundation by labeling the arrangement a “use agreement” instead of a land lease, which avoided stricter legal scrutiny under the public trust doctrine.

That doctrine bars cities from transferring public land without clear public benefit. Epstein pointed to the 2016 case blocking filmmaker George Lucas’s proposed museum on lakefront land as evidence that the city adapted its terms to sidestep potential legal challenges.

“They’ve gotten a free pass on both the environmental side and the financial side,” Epstein said.

“Unless somebody cracks open the books, nobody really knows if they can actually fund this project. And if they can’t, it’s the public that will be left holding the bag.”

The Obama Foundation maintains that the project will be completed on schedule, but questions remain over the financial guarantees and whether taxpayers may ultimately bear the risk if fundraising goals fall short.