The Wall Street Journal does a nice job outlining the Obama-Ayers connection here.

In early 1995, Mr. Obama was appointed the first chairman of the [Chicago Annenberg Challenge] board, which handled fiscal matters. Mr. Ayers co-chaired the foundation’s other key body, the “Collaborative,” which shaped education policy.

…CAC translated Mr. Ayers’s radicalism into practice. Instead of funding schools directly, it required schools to affiliate with “external partners,” which actually got the money. Proposals from groups focused on math/science achievement were turned down. Instead CAC disbursed money through various far-left community organizers, such as the Association of Community Organizations for Reform Now (or Acorn).