Clinton-Obama
Animosity Overshadows Campaign

Barack Obama sought to distance himself Wednesday from a contributor who faces fraud and extortion charges, links his rival Hillary Rodham Clinton has seized upon in their increasingly nasty race for the Democratic presidential nomination.

Clinton raised Obama's relationship with Antoin ''Tony'' Rezko during an acrimonious Democratic debate Monday night, as the escalating invective between the two front-runners threatens to overshadow their efforts to cast themselves as the candidates best suited to fix a faltering U.S. economy.

Republican candidates seized on America's financial worries to tout their own economic credentials as a wide-open presidential nomination contest moves forward.

Both the Democratic front-runners have criticized President George W. Bush's proposed economic stimulus plan while offering their own alternatives. But the escalating animosity between them has focused attention on personality, not policy.

Obama said Wednesday he had no indication of any problems when he accepted thousands of dollars in campaign contributions from Rezko.

''My relationship is, he was somebody who I knew and had been a supporter for many years, he was somebody who had supported a wide range of candidates all throughout Illinois,'' Obama said in an interview with CBS television's Early Show. ''Nobody had an inkling that he was involved in any problems. When those problems were discovered, we returned money from him that had been contributed.''

Rezko faces a February 25 trial on charges of fraud, attempted extortion, and money laundering for allegedly plotting to get campaign money and payoffs from firms seeking to do business before two state boards.

Obama's name has not come up in connection with any of the corruption charges swirling around Rezko. The Democratic candidate has given to charity about $37,000 in contributions to his Senate campaign and political action committee that were linked to Rezko.

During the weekend, Obama gave to charity more than $40,000 in past political contributions linked to Rezko. None of the money was for his current presidential bid.

Meanwhile, Clinton won an endorsement Wednesday from Pennsylvania governor Ed Rendell, a key nod in a delegate-rich state.

The Clinton vs. Obama feud in a historic race pitting a black man against a woman for the party's presidential nomination comes as the Democrats next turn to Saturday's primary in South Carolina -- a state where unemployment recently spiked at 6.6%.

The battle there is particularly important for Obama, the surprise winner in the leadoff Iowa caucuses, as about half the Democratic electorate is black.

Former North Carolina senator John Edwards, who acknowledged that he got his ''butt kicked'' last week in Nevada, has staked his fading hopes on South Carolina, the state where he was born and whose primary he won in 2004. He won the endorsement of one of the state's largest unions, the Communications Workers of America, as he gave details of an economic plan his campaign said would offer the state's struggling economy $1.5 billion in relief.

On the Republican side, Sen. John McCain of Arizona stalked rival Rudy Giuliani on his home turf in New York, a state once seen as an easy win for the former New York City mayor who has campaigned heavily on his leadership during and after the terror attacks of September 11, 2001.

But recent polls now show McCain even with or leading Giuliani in New York, with its rich prize of 101 convention delegates up for grabs in the February 5 round of primaries across 22 states that will go a long way toward settling the battle for the party's nomination.

McCain called for calm in response to the recession fears: ''Financial events raise the urgency of cutting taxes and pro-growth policies in the United States .... but with the right leadership and pro-growth policies the economy can weather this upheaval.''

The former Vietnam prisoner of war was endorsed Wednesday by retired Army general H. Norman Schwarzkopf.

''Sen. John McCain has served our country with honor in war and in peace,'' Schwarzkopf, who commanded U.S. forces in the 1991 Persian Gulf war, said in a statement released by the campaign. ''He has demonstrated the type of courageous leadership our country sorely needs at this time.''

The Republican field narrowed Tuesday as ex-TV star and former Tennessee senator Fred Thompson quit after a series of poor finishes in early voting states, capped by South Carolina's party primary last Saturday, when he finished third in a state that he said he needed to win.

Even with Thompson's exit, the Republican race remains fragmented, as three candidates -- McCain, Mitt Romney, and Mike Huckabee -- have split the spoils in contests that netted three different winners in six states.

Millionaire businessman Mitt Romney continued his campaign in Florida, arguing that his business experience makes him the only candidate who can turn around the U.S. economy. The former Massachusetts governor unveiled a new backdrop reading ''Economic Turnaround'' a few hours after the Federal Reserve, the U.S. central bank, cut interest rates by 0.75% and the stock market opened sharply lower on recession fears.

Clinton, in a news conference in Washington, urged President Bush to extend a proposed economic stimulus program estimated at $140 billion to $150 billion to include millions of lower-income families who do not earn enough to pay federal income taxes.

Bush and the Republicans have insisted that the plan include tax rebates only for taxpayers and business tax cuts.

Obama on Tuesday also proposed tax rebates for all working families, even non-income tax payers, and to all pensioners receiving Social Security checks. (AP)