Duff Indictments a Story You Can Sink Teeth Into

When the friends of the mayor of Chicago--friends from a family with connections to the Chicago Outfit--are about to be indicted by a federal grand jury in a $100 million affirmative-action contract fraud scheme, word gets around fast.

So last week, word about the Duffs fanned out from City Hall. But there were a couple hours to kill before U.S. Atty. Patrick Fitzgerald's Thursday news conference about the Duff financial empire. It was time for lunch; I was hungry and wanted to think this through. There was only one place to go. "You've just got to go to Gene's," said a friend and colleague. She meant my favorite steakhouse, and the Duffs' favorite steakhouse, Gene & Georgetti's.

Gene's is a hangout where information is traded, among politicians, insiders, reporters, wise-guys, salesmen, consultants, from the buttoned down to the gold chains crowd. And what makes it work is that they serve the Best Steak in the City, period. The service is impeccable without being showy and the drinks are honest. Gene's is a part of the old Chicago, the city as it was before so much of the downtown was turned into a theme park.

It's also the place where the Duffs came up to me about a year ago, their tough, hard eyes smiling. They asked me why they don't ever see my children playing in the front yard of my home in the suburbs. They asked it twice. But the columns didn't stop and neither did the news stories by the investigative reporters, or Tribune editorials about the mayor's friends. And here's why: This is not about getting personal with the mayor or the Duffs. Though the mayor has been a frequent target in my column, what drives the criticism is the obscene amounts of taxpayer dollars that go to his pals. In deal after deal after deal, the attitude is that his guys can take what they want and the people in the neighborhoods better shut up about it, while higher taxes put more and more pressure on families to pay for the deals.

It's not personal, it's business, and it's your money.

Mayor Richard Daley is an able politician and has done some good things, including taking personal responsibility for trying to improve the public schools. But he must also take personal responsibility for his friends who get rich on government contracts he controls, paid for by our tax dollars.

The Duff stories broke in 1999, when Tribune investigative reporters Ray Gibson, Andrew Martin and Laurie Cohen wrote about the Duffs' City Hall deals and their connections to Daley and the Outfit. You can find the archive of the stories available on the Tribune's Web site.

Much of what was alleged in the indictments was laid out in those stories: that the Duffs, who are white, ran phony front companies that got $100 million in city contracts that should have gone to firms owned by women or minorities.

Daley knew the Duffs were not minorities, even when he was a crime-fighting Cook County state's attorney. A Duff sits across from you, gives you campaign cash, pours a drink, it's reasonable to assume that even the mayor could tell whether the person was white or not.

Think back to how the media treated the late Mayor Harold Washington, when Washington's buddies were involved in contract scandals. Back then, even minor stories about corruption got sustained media attention, particularly from TV and radio, even if the dollar amounts were only chump change. Washington faced constant media pressure on corruption issues. TV crawled all over him for years.

"If I was white, you wouldn't be doing this to me," Washington said once, in a private moment, as he filched a smoke from me and we stood in a parking lot after a campaign stop. We argued about it, and I told him that since we were off the record, he didn't have to play the race card. "You don't know anything, do you?" he said. He was right. I was a kid, then. I didn't know. But when the Duff stories first broke, involving a white mayor and white guys getting rich, the Chicago media scrutiny wasn't as intense. TV news didn't hound Daley the way it hounded Washington. The mayor must appreciate the kindness.

I'm sure he also appreciates the new federal prosecutor, Patrick Fitzgerald. The feds have already outflanked former Govenor George Ryan's Republicans. Ryan himself is a target. And now the feds are moving toward Daley's Democratic City Hall.

The Daley-Duff relationship is not just a Tribune story anymore. A group of citizens--sworn as federal grand jurors--looked at the evidence. They didn't find a flaw in the system, as the city claims. They found a crime.

A couple friends and I talked of this at Gene's, about the change in things, about the importance of an independent federal prosecutor, about how the bipartisan political clique that runs this state tried to stop Fitzgerald's appointment in hopes of installing one of their own.

Just then, the cell phones began chirping and word of the Duff indictments began to spread through the bar.

We had our steaks medium rare. And they were tasty.

Thanks to John Kass

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Daley anti-crime message doesn't apply to Duffs

A few hours after his good pals, the Duffs, were indicted by a federal grand jury for defrauding city taxpayers out of more than $100 million--Mayor Richard Daley made like a comedian. He asked Chicago to stand with him to fight crime. Then he said the Duffs were hard-working guys. Excuse me for not laughing, but a joke that involved a $100 million contract--even as your property taxes skyrocket--isn't all that funny, is it?

Daley was on the Northwest Side, asking Latinos, African-Americans and others to bravely face down street thugs. All that was missing was a caped-crusader costume or a tiny and sarcastic court jester at his side. When the mayor talked about criminals, he wasn't talking about the Duff clan. They're pink and suburban and close to him, part of his clique, and some Duffs are friends of Chicago Outfit bosses.

"That's why you're here holding your child on your shoulders!" Daley shouted to the crowd Thursday night, which was ready to commence with an anti-crime march. "We're here to protect all the children! That's why [criminals] are enemies!"

It was an amazing display. At least it proves what he thinks of taxpayers. They're the suckers who get squeezed to fill the public troughs from which his friends eat.

Daley wouldn't hang out with drug dealers, obviously. But he'd show up at the Duff Christmas parties at the Como Inn, legendary affairs, glad-handing and back-slapping, letting political Chicago know the Duffs were his guys.

The parties were Daley declarations, that the Duffs were Daley's, so watch it. And everybody who's anybody got the message. But out in the neighborhood Thursday, he wasn't referring to the alleged Duff criminal masterminds. Instead, he was referring to neighborhood lowlifes, guys who take your money with a gun, not a deal.

What was also amazing was that the crowd at the anti-crime rally was largely minority.

Only a few hours before, the Duffs were indicted for ripping off minorities and women, by running phony minority businesses that got $100 million in city contracts, though the Duff men are not blacks or Latinos or women.

They're pinkish tough guys, with Daley clout, from a family that brags about ties to the Outfit bosses, including the late Anthony Accardo, and the imprisoned (but still vigorous behind bars) Rocco Infelice.

"I know a lot of people," Daley told reporters. "And they have to be on their merits. And that's what it is."

He was asked: Is it disconcerting to you that your friends and political supporters were indicted? "It happens, unfortunately, it does," he said.

The mayor did brag, though, once the Duff scandal became public--he forgot to mention that Tribune investigative reporters and editors made it public--that his administration denied minority contract certification to 880 companies.

A Tribune reporter asked: How many of those denied were political contributors?

"Geez, I don't know."

How many were your friends?

"Gee, I don't know. I don't really know. Doesn't matter if they're friends or not."

Geez.

Daley made news, although some might miss it, by admitting Thursday that he knows the Duffs. When the Tribune first broke the Duff investigation in 1999, he didn't know them. "Oh, I know them. Sure," he said Thursday. "You know that. They're hard-working people. This is an unfortunate incident."

What about their ties to organized crime? "Geez. I don't know about that," said the crime-fighting mayor of Chicago.

Earlier, City Corporation Counsel Mara Georges said she was not surprised by the indictments, which is natural, since there were federal subpoenas issued first. And she had trouble explaining why the Daley administration couldn't find the fraud--she actually defended Daley's "investigation" of the Duffs--which found that, geez, pink guys got minority contracts.

"We took aggressive and affirmative action against them," said Georges, perhaps unaware of the pun.

She also explained why her investigation of the Duffs didn't find any fraud. "We do not have subpoena powers," she said.

Geez, Mara.

Tribune investigative reporters Andrew Martin, Laurie Cohen and Ray Gibson don't have subpoena powers. The editors don't have subpoena powers. But they figured out that the Duffs aren't minorities.

Now, finally, a federal grand jury has figured it out. And it only cost you $100 million to make Daley's friends happy.

That's funny. Like a clown.

Thanks to John Kass

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Chicago Outfit Bosses Dive for Cover as Enforcer Nick Calabrese Talks

Editor's note: John Kass broke the story of the federal investigation dubbed "Operation Family Secrets" in February 2003.

Until recently, the bosses of the Chicago Outfit felt relatively safe, with their connections in politics and local law enforcement. But now, they're on the verge of FBI-inspired paranoia.

They're not concerned where fellow mob boss Joey "The Clown" Lombardo is hiding these days. There's a good reason for The Clown to keep a low profile: Formerly imprisoned mob loan shark and enforcer Nick Calabrese is talking to the FBI, sources said.

Investigators are being given a road map through crime and time, including unsolved Outfit murders going back over decades.

FBI agents have spread out across the country armed with search warrants to collect DNA evidence, hair cuttings and oral swabs, from dozens of Outfit bigwigs. Sources familiar with the investigation said search warrants for the mob DNA have been sealed.

This must aggravate some folks, including imprisoned Chicago street boss Jimmy Marcello, convicted of bookmaking and loan sharking. Marcello hopes to be released from a 12-year federal prison term in a few months.

Marcello, Calabrese and Calabrese's brother, Frank Calabrese Sr, a convicted loan shark, spent years together inside. When old friends talk in prison, they reminisce about dis and dat and dat other ting, don't they?

The U.S. Bureau of Prisons said Thursday that Nick Calabrese's federal prison records had disappeared. My highly educated guess is that he is now in the witness protection program.

"No comment," said the U.S. attorney's office. "No comment," said the Chicago FBI.

Some of the victims of unsolved Outfit hits being discussed with FBI agents might be familiar to you.

They include Anthony Spilotro and Michael Spilotro, the vicious gangster brothers beaten to death and dumped in an Indiana cornfield in 1986. If you saw the movie "Casino," you know how it happened. Joe Pesci, one of my favorite actors, played Tony. And if you're a faithful reader of this column, you know why the Spilotros were available to be murdered. A few weeks earlier, they beat a federal criminal case against them in Las Vegas.

The key federal witness against them had his testimony undercut by a then-heroic former Chicago police chief of detectives, William Hanhardt.

Hanhardt's surprise testimony as a top cop and defense witness undercut the credibility of hit man-turned-government informant Frank Cullotta. (Frankie got a bit part in "Casino," too, as a hit man).

During the Spilotro trial, Hanhardt was a hero cop, with friends in the newspapers and in Hollywood, where he was glorified in the TV show "Crime Story."

Now, though, Hanhardt is serving a long federal prison term for running an Outfit-sponsored jewelry theft ring. Still, Hollywood may make a movie about him. But nobody made a movie about hit man John Fecaratta. He was killed outside Brown's bingo parlor on Belmont Avenue three months to the day after the Spilotros' bodies were found. The Spilotros weren't supposed to be found. Federal investigators figured Fecoratta was punished for botching the planting of the Spilotros.

Outfit enforcer Billy Dauber and his wife, Charlotte, left a Will County courtroom in 1980. They were hacked to pieces by shotgun blasts during a high-speed chase along a lonely country road.

Daniel Siefert was murdered in front of his family at his plastics manufacturing plant in 1974. Siefert was a key government witness in a federal case against Lombardo, in connection with a scheme that bilked the Teamsters Union pension fund out of millions of dollars.

Siefert was with his wife and 4-year-old son when the Outfit came for him. He ran a short distance after the first shot, but it knocked him down. A gunman walked up to the fallen Siefert, pressed a shotgun against his head, pulled the trigger.

Lombardo and six others were acquitted two months after Siefert's murder.

Nick Calabrese is not as flashy and as loud as his brother, Frank. Nick is quiet. He was to be released this year. Then a strange thing happened. His prison records disappeared. They don't exist, according to the U.S. Bureau of Prisons.

Carla Wilson, a bureau spokeswoman, was helpful Thursday in finding Frank Calabrese, and prison records on his sons, Frank Jr. and Kurt. But no Uncle Nick.

"If he were in the witness protection program, then we would not be able to access that information," she said. Then she said she had to check something and later had a different story about Uncle Nick's vanished records.

"I really can't speculate about that," she said. "All I can tell you is that I don't have any public information on him."

That's OK. We'll wait.

Thanks to John Kass

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Is Al Capone's Pizzeria Haunted?

74 years ago last Friday, the infamous St. Valentine's Day massacre occurred on the north side, cementing Al Capone's legacy as a ruthless mob figure. Of course it is well-documented that Capone and his gang spent a lot of time in Willow Springs. One of those places, we learned, is now a pizzeria. By the way, before you ask, this is not another Al Capone's vault story. But it is, perhaps, another slice of mob life.

At Cavallone's West Pizzeria the bar is always packed, the pizza is piping hot. But the cold reality, according to Cavallone's owner, Rob Degen, is that this is an infamous mob hang out dating back to the 1920's. "I wonder how many times Capone hid in here," Degen asks?

That's right Al Capone. Degen claims that this is where Al's gang spent at least some of its time. Al's picture is on the wall next to the entertainers of the day. He's seen in one picture with his lawyer.

Back in the 20's Cavallone's was called Old Henry's. It was part speakeasy, part brothel part murder and gambling. For author and tour guide Richard Crowe it's always been alluring. "Well you know you always hear stories about tunnels but when you can actually find them and see where the tunnels lead through the walls and they're caved in that's more than legend, there's actually something to that," Crowe said.

Ah yes, the tunnels. There are three in Cavallone's basement. They're boarded up now but when the ground freezes to six feet, rob believes it will be safe to explore them. "So what they would do is put ice picks in the holes and open up the wood," Degen said.

One apparently was a hiding place, another used to funnel booze to a nearby ballroom, and the third? Legend has it that one of the tunnels led to a mausoleum at a cemetery several hundred yards away. The name white was apparently one of Al Capone's pseudonyms and because the mausoleum is actually empty, it was welded shut back in the mid 1930's. "Whenever they were raided if they couldn't get to the secret room, they would run out there through the woods."

The secret room, is just behind the tunnel, you have actually walk through another door, and crouch down to get there. According to Degen, it was used to hide patrons during raids and more. "The room was mainly used to hide money, guns, and bodies if they didn't have time to dispose of them in the woods."

The Secret room is where Degen says he found a decorative, elaborate gaming table. "Take the top off, and then you take the second layer off, and then you open up the table, this is all made of nickel, we have all of the original chess pieces."

Then there are the stories of love and murder. Like the jealous boyfriend of a prostitute named Christina. "The boyfriend found out that she was having an affair with the bartender so he went downstairs and killed the bartender, then came upstairs and strangled Christina in this room."

To this day, Degen says Christina and the bartender haunt Cavallone's along with other restless souls. Which brings us back to Richard Crowe, who is also a ghost hunter. "Under test conditions we've been able to capture things that we can't readily explain," Crowe said. Like several orbs, unexplained energy sources, from a tape Crowe provided to ABC7 News. Though on the night ABC7 cameras were at Cavallone's there was no such luck. "When we have a big crowd we usually won't pick something up," Crowe said.

Even though Crowe's team of ghost hunters shot video of areas they scanned with high tech equipment, looking for otherworldly electromagnetic fields. They got just a scant reading near that gaming table. "We were getting a 3.0, but now we're getting zeroes, its like they showed up. yeah they come and they go."

This pizzeria and potential mob relic provides Degen and his wife Susette a unique vocation, though she refuses to spend the night with their 2 year old daughter in the living quarters upstairs. "Not a day goes by when I flip a switch on and think I'm either going to see something or when I flip it off something's going to grab me or something," Susette Degen said.

For those who take the tour it's an unforgettable slice of Americana. As for Rob Degen its about fun...and whatever he might find once his digs through those tunnels. "What could be in there, what could be on the other side? They never did find Al Capone's money," Degen said with a laugh.

Friday for Valentine's Day, Degen had a group of fifty in for pizza, a tour, and some ghost hunting. But he also sponsors events like séances where psychics try to summon the spirits that allegedly haunt his pizzeria.

Thanks to Rob Johnson

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Did Feds Kill Off the Mob?

A mere decade ago, the Chicago Outfit's political wing still had an address: Room 2306 of the Bismarck Hotel, at Randolph and LaSalle, the 1st Ward offices of Committeeman John D'Arco Sr. and Ald. Fred Roti, a made member of the mob. Downstairs at Counsellors Row Restaurant, D'Arco and Roti held court with mob-friendly aldermen, judges and state legislators like John D'Arco Jr. The feds installed a hidden camera at Counsellors Row and wired lawyer Bob Cooley (When Corruption Was King: How I Helped the Mob Rule Chicago, Then Brought the Outfit Down). They caught D'Arco and Roti discussing mob business such as rigging elections, bribing judges to fix cases and greasing zoning and license deals.

"Yes sir," the judges and aldermen--some still in office--told ward Secretary Pat Marcy, and rushed off to get him a liquor license or whatever he asked for.

Roti and D'Arco Sr. went to jail and have since died. Counsellors Row was torn down and the old 1st Ward mapped out of existence. Even the Bismarck has a new name: Hotel Allegro. At the same time, the feds took over some of the most mobbed-up unions to try to clean them.

So did the feds kill the mob? Are local pols right to call mob influence in Chicago "ancient history?" Have the mobsters gone straight and quit trying to cultivate friends in government? Mob-watchers and cops say, "No."

The mob has always wanted friendly judges on the bench for help on cases and cops on the force to keep some crimes unsolved. Controlling unions provides jobs for flunkies and money for pols. Friendships with legislators prevent bills cracking down on video poker, which some say nets $100 million a year for the mob.

Most of all, the mob wants friends in government for jobs and contracts. The mob doesn't offer health insurance--mob lackeys need day jobs for that. "It used to be you'd give him $200 a week to get the [illegal betting] books--now you get him a city job," a city worker said at a Northwest Side coffee shop as he looked around cautiously and sipped coffee on his 11 a.m. break. "There's a lot of power with jobs," said Terrance Norton, the Better Government Association executive director.

A slew of convictions this year shows the downsized mob has just diversified and moved west. And the video poker games stay in the bars.

Stone Park Mayor Robert Natale went to prison this year for taking mob bribes to allow illegal video poker gambling at mob-linked bars.

Cicero Town President Betty Loren-Maltese, widow of convicted mobster Frank Maltese, will be sentenced next month for an insurance scam that skimmed $4 million from employee policies. The firm behind the scam gave $21,000 to Gov. Ryan, state Rep. Angelo "Skip" Saviano (R-Elmwood Park) and others.

Union boss John Serpico--appointed and reappointed by Gov. Jim Thompson and Gov. Jim Edgar to head the state port authority even though Serpico testified in 1985 he regularly met with mob boss Joe Ferriola--was sentenced this year on a loan scheme. Serpico showered union money on pols.

Still, elected officials whose campaigns benefit most from the generosity of businesses the state Gaming Board or the Chicago Crime Commission call mob-tied say the mob is dead: "I don't think there's a mob around anyway to run anything," said state Rep. Ralph Capparelli (D-Chicago). "They're still talking about 1924 and 1930. I think you use the word 'mob' because some guy has an Italian name." Saviano and state Sen. James DeLeo (D-Chicago) have made similar statements.

If a mob-linked legitimate business does good work and offers the low bid, why shouldn't it get the contract, one west suburban mayor asked.

With no official address or go-to guy in local government, it's hard to know the mob's legislative agenda. Mob-watchers say a new casino in Rosemont, or better yet, downtown Chicago, tops the list, along with more video poker.

The state Gaming Board refused to allow a casino in Rosemont, finding mob-linked firms already working on the site. Former Crime Commission chief investigator Wayne Johnson blasted twice-indicted, never-convicted Rosemont Mayor Don Stephens for ties to men the commission says are associated with organized crime, such as Sam Giancana and Bill Daddano.

Stephens sued Johnson for libel but admitted the ties to Giancana and Daddano in court filings. Stephens' suit silenced Johnson, the most vocal mob-watcher in town. Johnson left the commission and has been advised by attorneys not to discuss Stephens' alleged mob ties.

Mayor Daley has not cut all ties to the mob-linked Duff family, which donated $8,875 to his campaigns and reaped $100 million in local government contracts. Patriarch John F. Duff Jr. was a character witness for mob boss Tony Accardo. "I just know them. That's all," Daley said. "I'm not personal friends with them. I know them. So what?" A federal grand jury subpoenaed records of Duff contracts with local governments.

Daley's main ally in pushing a downtown casino in the early '90s was Ed Hanley, who had to give up control of the Hotel and Restaurant Workers union amid a federal probe of mob ties.

William Hanhardt was convicted this year of running a jewelry theft ring that stole more than $5 million while Hanhardt climbed the ranks of the Chicago Police Department to deputy superintendent. Cooley warned officials more than a decade ago that Hanhardt was the mob's main plant on the force, getting mob lackeys hired and promoted.

Police Supt. Matt Rodriguez quit five years ago after admitting a close friendship with a mob-linked felon questioned in an oil executive's murder.

Chicago police have watched as powerful ward committeemen still in office today huddled with mob higher-ups such as Vincent "Jimmy" Cozzo.

"What does the mob want from government? No. 1, money, and No. 2, power," Cooley said. "Nobody could ever get a city job or a promotion without the approval of the 1st Ward. They had all the jobs in McCormick Place, all the city jobs, police, sheriff's, state's attorney."

Mobbed-up unions provide an entree for mob types to get jobs in departments like Transportation and Streets and Sanitation that hire union members. A raid at Streets and Sanitation found 37 employees AWOL, including Chucky Miller, who was robbing a Wisconsin jewelry store of $250,000 on city time.

Transportation Department 'worker' James Vondruska, whom the commission calls a mob associate, pleaded guilty this year to playing the horses on city time. WBBM-TV reporter Pam Zekman taped him and other mob-linked workers playing hooky.

Mob-watchers say the mob wants to unionize workers at any new casino that opens in Rosemont or Chicago to work their way into the operation there. "John Serpico was out there with John Matassa 'cause they were going to unionize all the workers at the casino," one mob-watcher said.

The feds have taken over one union after another, from the Teamsters to the Laborers and Hotel and Restaurant Workers' locals, to try to purge them. Serpico was kicked out of the Laborers Union, then committed his loan fraud at Central States.

"The attraction of a union to a mob organization is the union's pension fund investments and medical plans, which are supposed to go to benefit union rank and file, most of whom could never enter the same restaurants ... as Hanley and his syndicate friends," said Combined Counties Police Association President John Flood. "And the main attraction of a union like that controlled by Hanley to the politicians also is the ability to dish out cash contributions."

Thanks to ABDON M. PALLASCH

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