The Chicago Syndicate: Don Stephens
Showing posts with label Don Stephens. Show all posts
Showing posts with label Don Stephens. Show all posts

Friday, January 09, 2015

Joseph Caffarello Dies from Shot by Off-duty Police Officer

A clouted Rosemont man who came to local attention when he was photographed sleeping on the job as a tollway supervisor was shot and killed Wednesday in a domestic incident, officials said.

Joseph Caffarello, 31, was shot at noon on Scott Street just south of Granville Avenue, authorities said — the second homicide in less than a week in the normally quiet northwest suburb of just 4,000 residents, the Sun-Times is reporting.

An off-duty Rosemont police officer allegedly shot and killed Caffarello, so Rosemont turned the investigation over to the Illinois State Police, according to a news release from Rosemont police. The police officer, who has been on the job for four years, has been put on leave pending the outcome of the investigation.

State police spokeswoman Monique Bond confirmed ISP was investigating but declined to provide details. Rosemont village spokesman Gary Mack said the shooting was a “domestic incident” that occurred in the street.

Caffarello was two years ago photographed on the front page of the Chicago Sun-Times, sleeping on the job while he worked as an Illinois Tollway garage supervisor.

He'd twice previously been fired, only to win his job back, before underlings in 2013 finally secured his dismissal by photographing him asleep in his office. And he wasn't shy about bragging that he had clout that protected him, authorities said at the time. He was also accused of intimidating tollway employees and threatening to bring down the tollway's inspector general.

Caffarello “did threaten to get anyone who was opposing him, including me,” Tollway Inspector General James Wagner said in 2013. “There were reports from the employees that he referred to his clout being able to take care of him.”

Caffarello's attorney disputed the allegations, but Cafarello did have ties to people with mob or political connections, public records show.

Though Caffarello wasn't accused himself of being in the Mob, he once wrote that his uncle — the late mob street tax collector Anthony “Jeep” Daddino — had been like a father to him. Daddino has been described by the Chicago Crime Commission as an Outfit member who was friends with the first mayor of Rosemont, Donald Stephens, and was a village employee. Daddino also worked for the late, feared mob killer Frank “The German” Schweihs, court records show.

When Stephens died in 2007, Daddino was at the funeral and told the Sun-Times he “lost a very good friend.”

The following year, after Daddino died from cancer, Caffarello asked the tollway for bereavement leave — something normally reserved for the deaths of immediate relatives. “I consider my uncle immediate family due to the fact that he raised me from a baby,” Caffarello wrote in a letter to tollway officials. “I do not have a relationship with my father, and my uncle was the closes [sic] thing to a father.”

When he wasn't working at the tollway, Caffarello found work at D & P Construction, which has been tied to the family of reputed Chicago Outfit boss John DiFronzo.

Caffarello also was married to the daughter of the clerk of the village of Rosemont. In 2013, Caffarello became a father.

He said he was “screwed” by the tollway after he was fired the third time. Beyond that, he didn't want to discuss his dismissal with the Sun-Times in 2013, telling a reporter he was about to enjoy a dinner of orecchiette with sausage and broccoli rabe cooked by his mom, whom he described as “the best.”

Relatives could not be reached Wednesday.

Mack could not provide further details of the shooting.

Cafarello's murder is the second this year in the Northwest suburb, which until Friday had not seen a murder in more than a decade.

On Friday, a 14-year-old Des Plaines student was killed in what police said was a gang-related murder.

Mack said the cases are not related.

Thanks to Fox Chicago.

Sunday, December 07, 2008

Rosemont Mayor to Return Campaign Contribution from Alleged Mob-Linked Company

The mayor of Rosemont, whose suburb is among three finalists vying to land a casino, is returning a campaign contribution from an alleged mob-linked company after an inquiry by the Chicago Sun-Times and the Better Government Association.

The company, D&P Construction, gave $400 in November 2007 to the Regular Republican Voters League of Leyden Township, which is headed by Rosemont Mayor Bradley Stephens. In 2001, the Illinois Gaming Board said the company was tied to "individuals who have been identified as known members of organized crime."

Stephens said the Leyden Republican group's treasurer mistakenly deposited D&P's check, which was among hundreds of checks to come in after a fundraiser. "She was almost in tears when I questioned her, 'How did this get through the cracks?' " Stephens said.

The contribution - along with others examined as part of a Sun-Times/BGA analysis - is prompting new questions about an old subject - whether Rosemont is a suitable home for the state's last-available casino license.

In 2004, Illinois Attorney General Lisa Madigan documented ties between Bradley Stephens' father, then-Rosemont Mayor Donald Stephens, and persons connected to reputed mobsters.

D&P's owner, Josephine DiFronzo, did not respond to requests for comment. The company was a focus of a gaming board disciplinary case that stopped Emerald Casino from building a floating gambling barge in Rosemont in 2001. The board eventually revoked Emerald's gaming license, setting the stage for it to be re-bid this year.

Last week, the Chicago Crime Commission encouraged the state board to remove Rosemont from the casino race. "In our view, the inability of the Illinois Gaming Board to address the concerns about alleged mob ties is enough to disqualify their application," said J.R. Davis, the commission's president.

The gaming board's five members plan to award the license to one of three bidders by year's end. Trilliant Gaming, which wants to build in Rosemont, is widely seen as the leading contender. Its $435 million bid is more than double what others are offering to put the casino in Waukegan or Des Plaines.

Jim Wagner, formerly a top FBI mob investigator and gaming board investigations chief, said the $400 from D&P to the Stephens-run political group raises new concerns about Rosemont. "D&P is, to me, a company that has been so often in the news that there should be every attempt to disassociate themselves from that company," said Wagner, who recently stepped down as head of the Chicago Crime Commission. "The problems that are in Rosemont should be enough to disqualify putting the casino in that environment."

Stephens, who became mayor after his father's death last year, said any mob taint to his community is a thing of the past. And he scoffed at the idea he'd risk a lucrative casino project for a $400 political contribution.

He also said he has adopted his father's policy of rejecting campaign contributions from anyone whose integrity has been questioned by the gaming board.

"To keep throwing this stuff up is ridiculous," Stephens said.

The Sun-Times and the BGA examined campaign contributions from people and companies involved in the state board's disciplinary complaint against Emerald. In that March 2001 document, the gaming board said: "The owner of D&P, Josephine DiFronzo, is married to Peter DiFronzo and is the sister-in-law of John DiFronzo, individuals who have been identified as known members of organized crime. Emerald's failure to exercise appropriate supervision resulted in work being performed at the site by D&P."

D&P also had done waste-hauling work in Rosemont, but Donald Stephens severed ties with the company after the gaming board's case was made public. The late mayor also donated to charity thousands of dollars in campaign cash he'd received from the company.

Besides its 2007 contribution to to the Regular Republican Voters League of Leyden Township, D&P gave $1,350 to the Rosemont Voters League on Jan. 17, 2000 and another $1,150 on Jan. 19, 2001.

The Voters League has supported the campaigns of several Rosemont village trustees, including Bradley Stephens before he became mayor, park district commissioners and school board members. Rosemont officials said they believe the organization gave the D&P contributions to charity but don't have records to show that.

D&P's contribution troubles Jay Stewart, the BGA's executive director. "Maybe Mayor Stephens' pledge to not take money from D&P is as sincere as the day is long," Stewart said. "But if this got through the cracks, what else might?"

Thanks to Chris Fusco

Friday, October 12, 2007

Otta Da Joint

Nick Boscarino -- an alleged mob associate and former business partner of Rosemont's late Mayor Donald Stephens -- got out of federal prison Friday. Boscarino, 55, did most of the three-year sentence he got for stealing $288,670 in insurance premiums paid by Rosemont in the 1990s. He split it with Ralph Aulenta, an insurance broker who got out of prison last year. Boscarino and Stephens once co-owned a forklift company. A trust fund in the name of Boscarino's wife, Shari, had a $1.5 million stake in the failed Rosemont casino. Illinois casino regulators once asked Boscarino if he ran his wife's trust fund; Boscarino refused to answer. Those authorities thought Boscarino was "at the very least a close associate'' of mobsters.

Thanks to Tim Novak

Thursday, April 26, 2007

Mob Enforcer Attends Stephens Funeral

Friends of ours: Sam "Momo" Giancana, Anthony "Jeeps" Daddino
Friends of mine: Don Stephens

The one and only mayor of suburban Rosemont, Don Stephens, was laid to rest Monday. The funeral attracted some of the state's top political figures. In this Intelligence Report: one mourner linked to the Chicago mob and the late mayor's fight to shed an unsavory image.

Since the day 45 years ago that Don Stephens did some business with Chicago's supreme outfit boss, Sam "Momo" Giancana, Stephens had been dogged by scurrilous suggestions that he was mobbed up.

To his death, Stephens denied connections to organized crime. But he never wavered in his personal commitment to one organized crime figure, a former outfit enforcer who Monday paid his respects to the friend who cut him a break.

As the flag-covered coffin of Rosemont's mayor was walked to a waiting hearse Monday, there in the crowd of onlookers was Anthony Daddino, a.k.a. "Jeeps." He was the only outfit-connected face recognized by mob-watchers.

In 1990, Daddino was sentenced to federal prison for collecting a mob street tax from porn shop operators on Chicago's North Side. At the time, Rosemont Mayor Don Stephens wrote to the judge asking for leniency for the outfit enforcer. "My connection with him -- I went to Leyden High School with him," said Stephens.

In Mayor Stephens' last interview the I-Team did with him in December, he remembered helping Daddino, despite knowing that people would be suspicious. When Daddino got out of prison, Mayor Stephens knew he would need a job. "I said, 'OK, I'll give you a job,' " Stephens told the I-Team. " 'A very low-level job,' where he inspected for building violations."

Monday at Stephens' funeral, Daddino remembered him. "That's what good friends do," Daddino said.

Despite decades of being dogged by innuendo, Stephens was never charged with any mob crimes, and in the early 1980s he was acquitted in the fraud and bribery cases that federal prosecutors did bring against him.

Governor Blagojevich Monday was joined by former Illinois governors Jim Edgar, Jim Thompson, Mayor Daley and House Speaker Mike Madigan. Absent was state attorney general Lisa Madigan who killed a casino license for Rosemont citing mob connections.

Thanks to Chuck Goudie

Thursday, April 19, 2007

Donald Stephens Dies

Friends of mine: Donald Stephens

Donald Stephens, who saw this Chicago suburb develop into a commercial haven during his half-century as its only mayor, has died, a city spokesman said. He was 79.

Rosemont Mayor Donald Stephens has died.Stephens had stomach cancer and died at his home on Wednesday, spokesman Gary Mack said.

The Rosemont mayor was the longest-serving incumbent mayor in U.S. history, according to the Chicago Sun-Times.

During his 51-year tenure, Stephens focused on large-scale projects — an entertainment center, a theater and a convention center that bears his name. His final years in office were colored by a casino bid that collapsed amid allegations of mob ties.

Stephens won his latest four-year term in 2005. It was not clear how his successor would be chosen, Mack said. Stephens' son Bradley, a village trustee, had served as mayor pro tem when his father was unable to attend city meetings, Mack said.

The tiny suburb near O'Hare International Airport had only 85 residents when Stephens was first elected mayor in 1956, the same year Rosemont was incorporated. Today, with about 4,200 people, its annual economic impact is estimated at $248 million.

"He took Rosemont from a tiny mud swamp to an incredible mecca of tourism in the hospitality industry," Mack said.

An effort to attract the Emerald Casino, consuming many years and millions of dollars, ended in December 2005 when the Illinois Gaming Board voted unanimously to revoke the casino's gambling license. The board said top company officials lied to regulators and took investments from people allegedly tied to organized crime.

In a summer 2005 hearing on the proposed casino's license, an FBI agent testified that Stephens had met with organized crime figures about mob control of construction and operations contracts at the planned gambling hall. Stephens repeatedly denied allegations about any mob connections.

Stephens was born in Chicago on March 13, 1928. Along with Bradley, he is survived by his wife, Katherine; a daughter, Gail; and two other sons, Donald and Mark.

Thanks to Fox News

Tuesday, November 29, 2005

New head of the Chicago Crime Commission

The ABC7 I-team has learned Illinois is losing its top gambling investigator, who is now taking over as head of the Chicago Crime Commission.

The I-team has learned that veteran mobfighter Jim Wagner accepted the job as president of the Chicago Crime Commission, a position that has been vacant for the past six months. Wagner is a career lawman but will soon leave the government job he has held for five years...that of chief investigator for the Illinois Gaming Board...a post that has put him right in the middle of the Rosemont casino controversy.

As the village of Rosemont saw dollar signs in landing a gambling casino...gaming board chief investigator Jim Wagner saw signs of trouble...alleged mob links to Rosemont mayor Don Stephens, the Emerald Casino and some of it's shareholders. "As you all know the Outfit makes its money on gambling; they always go were the cash is. So we have to remain diligent," said Jim Wagner on April 28, 2005.

Wagner will be remaining diligent against the outfit from a new vantage point: here at the Chicago crime commission where he takes over as president the middle of next month. He is expected to rejuvenate the crime commission's roots...that were planted in 1919: the same year that Al Capone moved to Chicago.

It was no coincidence that the nation's first citizen anti-crime organization grew during the heyday of the Chicago mob. Jim Wagner could be considered a modern day Elliott Ness the G-man who brought down Capone.

As a career special agent with the FBI here in Chicago, Wagner toiled for years on outfit cases, eventually becoming supervisor of the organized crime squad. Wagner had trained many of the federal agents whose investigation recently resulted in the indictment of top hoodlum Jimmy "the man" Marcello and more than a dozen other Chicago mob figures in connection with 18 unsolved gangland murders.

Mr. Wagner will replace Thomas Kirkpatrick as head of the crime commission. Kirkpatrick resigned last summer but his departure wasn't made known until the i-team revealed it ten days ago. "I'd say he did a pretty good job. It was time we branched out into different areas," said Douglas Kramer, Crime Commission Board Chairman in November 15, 2005 I-Team Interview.

One key area will have to be fundraising, attracting financial support from local businesses with programs such as the safe neighborhoods project that featured the late Johnny Cochran in TV ads. "If you're a felon caught with a gun...not even I can get you off, " Cochran says in the ad.

If Wagner can help cure the crime commission's dire financial ailment, his first major duty will be to hire a chief investigator. That person would undoubtedly share Wagner's educated belief that the mob in Chicago is far from dead as some so-called experts suggest.

The crime commission had hoped to keep Wagner's hiring under wraps until the organization's annual luncheon on December 14th, but last week Wagner informed his own staff at the gaming board.

Thanks to Chuck Goudie.

Thursday, November 17, 2005

Illinois Gaming Board and Emerald Casino

Friends of Ours: Sam Giancana, James Marcello, John DiFronzo
Friends of Mine: Donald Stephens, Vito Salamone, Joseph Salamone, Nick Boscarino, Peter DiFronzo, Michael Marcello

Recommendations to the Illinois Gaming Board
In the Matter of Emerald Casino, Revocation of License Proceeding
Abner J. Mikva
Administrative Law Judge.

This matter officially commenced on March 6, 2001 when the Illinois Gaming Board (IGB, the Board) formally revoked the license of Emerald Casino, Inc. (Emerald) pursuant to Section 5(c) of the Illinois Riverboat Gambling Act (The Act) and Subpart K of the Rules of the IGB (Rules). Emerald duly answered (Answer) the complaint for disciplinary action (complaint) and an Administrative Law Judge (ALJ) was appointed to hear the matters in dispute concerning the revocation.

Protracted hearings were held by Herbert Holzman, ALJ, until August 4, 2004 when he recused himself from further proceedings o the matter. On April 14, 2005 the undersigned was appointed as successor ALJ and continued the hearings until their conclusion. A short procedural history of Emerald and its Owner's license follows.

On July 9, 1992, Emerald, then known as H.P. Enterprises, was issued a three - year Owner's License by the IGB for a riverboat gaming operation in East Dubuque, Illinois. Subsequent renewals of that license were granted in July, 1995 and July, 1996.

On December 1, 1994, the Board issued a disciplinary complaint against Emerald for its failure to obtain prior Board approval to change its equity and debt capitalization and for failure to notify the Board of its source of funds. Emerald had entered into various loan agreements in July, 1994 that were not timely disclosed to or approved by the Board. Emerald was fined $30,000.00.

In June, 1997 IGB denied Emerald's renewal application for its failure to submit a responsive renewal application, significant compliance shortcomings and failure to adhere to the overall requirements of the Act. Emerald stopped gaming operations in July, 1997. Emerald requested an administrative hearing regarding the denial of its renewal application and in 1999, at the conclusion of hearings, the ALJ concurred with the Board and recommended that the Board take final action to deny the renewal of Emerald's license.

However, before the Board acted on the ALJ's recommendations, the Illinois General Assembly amended the Act by adding a provision that "A licensee that was not conducting Riverboat Gambling on January 1, 1998 may apply to the Board for renewal and approval of relocation to a new home dock location ... and the Board shall grant the application and approval upon receipt by the licensee of approval from the new municipality or county as the case may be in which the licensee wishes to relocate...". This provision, Section 11.2 of the Act, became effective June 25, 1999.

Emerald accordingly applied for renewal of its license and for relocation for its operations to Rosemont Illinois. IGB undertook an investigation of Emerald and its key persons and proposed stockholders. The Board denied the renewal of Emerald's license on January 30, 2001. Emerald took an appeal from IGB's denial of the license and the case was heard both by the Appellate Court of Illinois and the Supreme Court of Illinois. Both these courts agreed with Emerald's contention that "shall" is mandatory in Section 11.2 of the Act and that the Board had no discretion in terms of the renewal of the license. However, both courts specifically upheld IGB's authority and discretion in all other respects under the Act and specifically told IGB that it could pursue the revocation hearings, which had previously been instituted. (Philip N. Crusius v. The Illinois Gaming Board, et al., Case No. 98351 September 22, 2005) IGB accordingly modified its directive to the undersigned to pursue only the revocation proceeding and to discontinue any reference to the denial of the renewal which had been previously been heard as part of the same proceeding. The findings of fact and conclusions of the law, which follow, pertain, therefore, to the revocation.

Two lengthy and complete staff reports were prepared pertaining to the Board's revocation action. Both of those reports are included in the record and made available to Emerald as part of this proceeding. There were 59 hearing days in this matter. The record consists of 6498 pages. The Board offered 440 exhibits and Emerald offered 112 exhibits, all of which are made a part of this record. All subpoenas requested by Emerald were carried out except that I rejected efforts to call Chairman Jaffe as a witness in this proceeding, since he is one of the ultimate adjudicators. (R. 5223) The Inspector General also resisted a subpoena as to one of its investigations of a board employee. Emerald conducted interrogation as to that investigation through another witness. And in both instances Emerald made offers of proof which are part of the record. The Board made an offer of proof in lieu of cross-examining one of Emerald's witnesses. I did not deem any of the allegations in any of the offers of proof to be pertinent to the outcome of this proceeding.

I recommend to the IGB that it confirm its order of revocation against Emerald and that order be made final pursuant to the Act. My Findings of Fact and Conclusions of Law are as follows:

FINDINGS OF FACT

1. EMERALD AND ITS PRINCIPALS DISSEMBLED ABOUT ITS PLANS TO MOVE THE LICENSE LOCATION TO ROSEMONT, ILLINOIS.

Emerald's gambling operations at East Dubuque, Illinois had been financially unsuccessful for some time. At least since 1995 Emerald had been making efforts to move those operations either by obtaining permission from IGB or by lobbying to get legislation passed, which would allow such relocation. IGB did not have the legal authority to authorize such relocation.

(R. 2846)

In November, 1997 an entity known as Lake County Riverboat LP entered into negotiations with Emerald to create a joint venture for gaming operations in Lake County, Illinois. (R. 1880) On or about November 6, 1997, the parties entered into a non-disclosure agreement. (R. 1887) On November 12, 1997, the parties entered into a joint venture agreement. Neither of the agreements were ever disclosed to the IGB and were not discovered by the IGB until subsequent litigation between Emerald and the Davis Companies. (R. 473-75, 485-88, 2963) These negotiations were largely conducted by Joe McQuaid and Kevin Flynn on behalf of Emerald. Their roles in this matter will be further discussed below.

In 1997, Kevin Flynn and Victor Cassini, on behalf of Emerald met with Rosemont Mayor Donald Stephens at the mayor's office (R. 393, R. 5301-5304). At that meeting, Flynn and Stephens discussed the possibility of relocating the Emerald Casino operation to the Village of Rosemont, according to Stephens in his sworn statement and in his testimony in this hearing. (R. 395-96) Kevin Flynn acknowledged that he met with Mayor Stephens, but testified that they only talked about the Flynn's Blue Chip operation in Indiana. Kevin Flynn's testimony in this aspect was not credible. (R. 2431-32)

In October, 1998 Kevin Flynn and David Filkin, then Vice President and General Counsel of Duchossois Industries, met with other representatives of Duchossois to discuss legislative efforts which would allow the relocation of the Emerald Casino. (R. 1783) Kevin Flynn commented that the Village of Rosemont was "a no brainer" as far as relocation. (R. 1785-86) At or about that same time the Davis Companies of California were also interested in owning or investing in a casino in Illinois, particularly in Rosemont. Michael Colleran was a Vice President of the Davis Companies. (R. 1789) In December, 1998, Kevin Flynn agreed to sell an ownership interest in the Emerald operation to the Davis Companies and to the Duchossois group. The Davis Companies would purchase 37.5 percent of the Emerald operation, while the Duchossois group would purchase 20 percent of the Emerald operation. The parties agreed to cooperate to pass legislation that would allow the casino to relocate. (R. 1806-07) This was all set forth in the First Amended Complaint in the Davis litigation. In addition to the three way split between the Flynns, the Davis Companies, and the Duchossois group , a 5 percent ownership interest in the casino was reserved for "local investors". (R. 1806-07) In Mayor Stephens sworn statement to IGB of September 2000, Mayor Stephens testified that as to the 5 percent designated for local investors, "that was for me". (Stephens sworn statement at 69-70) At or about that same time, Filkin telephoned Kevin Flynn and Kevin Flynn confirmed to Filkin the terms of the agreement. (R. 1809-10) The IGB was not notified of any of these agreements at any time until the Davis Companies tried to enforce the agreements through litigation. (R. 1844-45)

Throughout 1998 and 1999, the Duchossois group and the Davis group were actively involved in and supported the legislative initiative to authorize Emerald's relocation. (R. 1815-16) The Village of Rosemont and Mayor Stephens also participated in the lobbying efforts in 1998-99 to pass the legislation allowing relocation of Emerald's license. (R. 5352) In his sworn statement Mayor Stephens stated "you get a bill down there and I can probably kill it with people that I know in the forty-five years I have been around. I can convince enough people to squash your bill unless it is something the public really wants." (Stephens sworn statement at 47).

Emerald repeatedly told IGB that it never considered Rosemont as its prospective site until after Section 11.2 of the Act was passed by the General Assembly. As late as the filing of its Verified Answer in this proceeding, paragraph 15, it maintained that position. Everybody else seemed to know differently. The legislative history of the debate during which Section 11.2 of the Gaming Act was approved, was replete with references to Rosemont as the designated city for the relocation.

Representative Hoeft said "We're [taking the riverboat] and putting it in Rosemont and anyone here that tells me that we're not doing that, pardon the pun folks, but you want to make a bet, because that is where this boat is going." (Transcript from May 21, 1999, Illinois House of Representatives debate on SB 1017, at 102). Senator Shaw said: "and most of us do not come from such rich districts as up in Rosemont and up in Arlington ...I do not have anything against Rosemont... [Now] the argument is going to be, but do I know it is going to Rosemont. Let me tell you this; Those of us who are elected to this Body we did not come out of the dust closet to get here: we understand this process." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 117)

Senator Welsh stated, "the question that we have to ask is why it is going where it is going. Is that really economic development or are we just cutting a deal that started out being dock site gambling for ---- to keep a few boats going... [W]e've come to some kind of - secret agreement that it is going to Rosemont. And to get it there, another person, who wanted it up in Arlington Heights, agreed to give up his contention that he deserved it in exchange for a piece of the pie... what we have here is akin to a run-away train." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 123)

It was not until July, 1999, that Emerald's attorney advised IGB that it intended to move its operation to Rosemont. (R. 182, 183)

In October, 1999, the parties who had cooperated to see that the legislation allowing the new location had passed were still cooperating with each other and with Mayor Stephens. A fundraiser for the Donald E. Stephens Committeeman Fund produced the following contributions:

a. American Trade Show Services Inc. -donated $25,000 to the Fund. Nick Boscarino- husband of a new Emerald investor, Sherri Boscarino, is a principal of that company. The Boscarino interests, persons who were called to testify in these hearings, asserted their Fifth Amendment rights and refused to answer any questions. The Individuals contributed $21,000 to the Fund.

b.
D & P Construction, which ended up a contractor for Emerald,
contributed $5,000 to the Fund.
c.
The Davis interests contributed $20,000 to the Fund.
d.
The Duchossois interests contributed $21,000 to the Fund.
e.
The Flynn interests contributed $25,000 to the Fund.

Loans to by Parkway Bank to the Fund were extensive. Apparently there was one gift of over $208,000 (R. 6095) As will be detailed below, principals of Parkway were included as secret investors in Emerald. These included its president, Rocco Suspenzi. Mr. Suspenzi as well as Jeffrey Suspenzi were subpoenaed to testify in this proceeding, but exercised their Fifth Amendment rights.

The refusal of Mr. Rocco Suspenzi and Mr. Jeffrey Suspenzi to testify at these board proceedings, notwithstanding their secret investment in Emerald, and notwithstanding their closeness to Mayor Stephens and his activities, entitled IGB to draw inferences from these political loans and contributions, notwithstanding the "legality" and "timing" of such loans and contributions.

Counsel for Emerald insisted that all of these contributions were legal and indeed they are. Illinois has no limit on contributions nor does it prohibit contributions from investors or would-be investors in the gaming industry. However, IGB was entitled to infer from contributions and their timing and the lobbying efforts acknowledged by the parties involved that there was indeed an agreement in 1998-99 to get such legislation passed through the General Assembly, to relocate the Emerald gaming operations to Rosemont, and to divide the pie in some kind of secret arrangement.

2. THE RENEWAL APPLICATION FILED BY EMERALD ON SEPTEMBER 28, 1999 WAS NEITHER ACCURATE NOR COMPLETE.

Joe McQuaid testified that as the responsible official of Emerald, he completed and filed the Renewal Application. He testified that he reviewed the instructions for the application carefully. (R. 3176-77) As would be detailed, Mr. McQuaid had extensive experience as the Chief Enforcement Officer and Interim Administrator of IGB for many years immediately prior to being employed by Emerald. Indeed he was the official of IGB who signed the first disciplinary action against Emerald in 1994, which resulted in the $30,000 fine against Emerald.

Notwithstanding Mr. McQuaid's experience and his testimony that he had reviewed the instructions, the application stated that none of the shareholders were public officials or relatives of public officials. A list of stockholders submitted to IGB included a relative of State Representative Ralph Caparelli, one of the prime movers of the relocation amendment to the Act, as well as two other public officials. McQuaid never asked any of the persons involved whether or not they were public officials and testified that he thought that it was not important to ask such questions because none of the stock purchased and transferred to these public officials had ever been approved by the IGB. Therefore, even though the proceeds of such sales and others were used by Emerald, McQuaid's position was that it was of no consequence who the stockholders were until the IGB finally approved the transfer. Neither McQuaid nor anyone else at Emerald had ever examined the Personal Disclosure Forms (PDF) which were submitted to the Board directly.

The application also requested that Emerald submit "all agreements, arrangements, and commitments related to proposed gaming facility and related projects". Emerald submitted five agreements, none of which were pertinent to this inquiry and stated it had not executed any other agreements. In fact, Emerald had executed a letter of intent with the Village of Rosemont; Emerald made no reference to any of the arrangements that it had made with the Davis interests (which were about to lead into a law suit filed by Davis).

The application specifically asked whether the licensee or any of its affiliates had been a party to any legal action, including pending or threatened litigation. Emerald did not include any information about the threatened litigation by the Davis companies, even though the Davis companies had already planned a complaint and notified Emerald of that fact.

One of the questions asked whether any current or proposed shareholders had been arrested, charged, indicted, convicted etc. of any felony or misdemeanor. Emerald answered by saying it relied on the PDF's that were submitted directly to the Board. Emerald thus sought to absolve itself of any responsibility for the identity of the stockholders other than perfunctory interviews by Mr. McQuaid. As will be detailed below, several proposed stockholders were covered by that question, but not disclosed to IGB.

In July and August 1999 Rosemont and Emerald entered into several letter agreements relating to the development of the proposed casino on the Rosemont property. (R. 3229) These letter agreements were not disclosed to IGB until sometime in 2000. IGB became aware of these letter agreements with Rosemont in September, 2000, pursuant to a letter received from the attorney for Rosemont. Emerald did not disclose these agreements with IGB until December, 2000. (R. 3220)

3. EMERALD FAILED TO NOTIFY IGB OF ITS CONSTRUCION ACTIVITES OR ITS LEASE AND DEVELOPMENT AGREEMENT WITH ROSEMONT IN A TIMELY FASHION.

It would appear that after Emerald and its principals were successful in obtaining the amendment to the Act from the legislature pertaining to relocation, it decided that the rules and procedures of IGB need not be given too much concern. On July 21, 1999, Rosemont and Emerald had entered into a Letter of Intent regarding the construction of a casino at the site agreed upon between them. The Letter of Intent was "intended to memoralize key items that had been agreed to which are to be incorporated into a lease and development agreement". (R 1235-36) This Letter of Intent was extended and augmented by various letter agreements signed in August 1999 and December 1, 1999. Emerald did not include the Letter of Intent or any of the documents previously signed with Rosemont in its September 24, 1999 application. Indeed none of those agreements were sent to IGB by Emerald until December, 2000 more than one year after commencing construction and after IGB had obtained these letters from the Village of Rosemont in September, 2000. (R. 1235-36)

On February 10, 2000 Emerald submitted a fully executed copy of the Lease and Development agreement between Emerald and Rosemont. That Agreement contained many of the identical terms originally memoralized in the July 21 Letter of Intent. This February submission to IGB was long after Emerald had commenced construction at the site, and Rosemont had commenced construction of a parking garage. Indeed, on or about February 29, 2000 Emerald informed IGB that it had ceased all construction activities at the site as of that date.

The Lease and Development Agreement contained many provisions violative of IGB's rules and procedures. That Agreement allowed the Village of Rosemont to waive the requirement that Emerald obtain necessary regulatory approval from IGB prior to commencing construction of the casino. That Agreement committed Emerald to fund the construction of the parking garage addition even though Emerald did not have sufficient financing dedicated to do so. That Agreement failed to provide Emerald the ability to exercise appropriate control or supervision over the management of the contractor or sub-contractors for the casino and parking garage construction project. At the hearings, Emerald took the position that submission of construction contracts or review of construction contractors was not necessary because IGB would always have an opportunity to reject anything that had been built in the final instance before the "casino" became a "casino". Such a position is contrary to the statute.

At least one of the subcontractors doing work on the casino construction project was a company known as D & P Construction. The FBI in its memorandum of April 16, 2003 identified D & P Construction as controlled by Peter and John DiFronzo. The Memorandum stated that D & P obtained contracts through illegal payoffs or intimidation (IGB Exhibit 397). During the hearings, none of the witnesses, either for Emerald or for any other party would admit that they hired D & P Construction.

4. KEVIN FLYNN, AS A MAJOR STOCKHOLDER AND PROPOSED CHIEF EXECUTIVE OFFICER OF EMERALD, CONSISTENTLY DISSEMBLED TO IGB AS TO HIS ACTIVITES ON BEHALF OF EMERALD.

Kevin Flynn identified himself as a stockholder of Emerald in December, 1996. However Kevin Flynn, both in sworn statements and letters to the IGB, insisted that he did not become involved in the activities or management of Emerald until June of 1999 when he was appointed to the new post of Chief Executive Officer of Emerald.

As far back as November, 1997 Kevin Flynn had negotiated on behalf of Emerald with the Lake County Riverboat L.P. to discuss a joint venture for a riverboat in Lake County Illinois. Kevin Flynn acted as the primary spokesman for Emerald in those negotiations. (R. 1890-91, R. 1900-01) In November, 1997 Emerald and Lake County Riverboat entered into a nondisclosure agreement and a joint venture agreement to pursue a Lake County operation. (R. 1887) These agreements and Kevin Flynn's role in negotiating these agreements were not disclosed to IGB. IGB only become aware of the circumstances through a review of material produced in the Davis litigation at a much later time. (R. 473-75, R. 485-88)

In 1997, Kevin Flynn met with Mayor Stephens at the Mayor's office. They discussed the possibility of moving the Emerald Casino operation to Rosemont. (Stephens' sworn statement at 12; R. 5301-04) Kevin Flynn insisted that Rosemont "was not anything considered as far as I know until the legislation passed" in 1999. (R. 2439) Kevin Flynn lied about his 1997 meeting with Mayor Stephens and the possibility of moving to Rosemont.

In October, 1998, Kevin Flynn met with representatives of Duchossois Industries including David Filkin, Vice President and General Counsel for Duchossois. Kevin Flynn stated at that meeting that Rosemont was a "no brainer" as to relocation. (R. 1785-86) While Kevin Flynn testified that he was just there listening, that he "had no role" as to Emerald. (R 70) Filkin and others testified that Kevin Flynn was the primary spokesman for Emerald. (R 1785-86) In the Fall of 1998 Kevin Flynn told Filkin that any negotiations or deal among Emerald, Davis, and the Duchossois group, need be kept secret. (R. 1802-03) Kevin Flynn had meetings with representatives of the Davis Companies around the same time.

(R. 1793-98) At a meeting on December 1, 1998, Kevin Flynn agreed or reached an understanding to sell an ownership interest in the Emerald operations to the Davis Companies and to the Duchossois group. (R. 246364, R. 1799-1801) (R. 1806-07) In addition to agreeing about the division between the three groups at the meeting, a 5 percent interest was reserved for "local" investors. (R. 1806-07) Mayor Stephens in his sworn statement to IGB testified that the 5 percent designated for local investors, "that was for me." (Stephens sworn statement 69-70)

After talking to the parties representing Davis, Filkin called Kevin Flynn and Kevin Flynn confirmed that the terms of the agreement that had been outlined to Filkin were correct. (R. 1809-10)

In 1998 and 1999 the Duchossois group and the Davis Companies were actively involved in lobbying the legislature to allow Emerald to relocate. (R. 1815-16)

After the legislation was passed which allowed the relocation, Filkin learned that Emerald might not abide by the agreement that had been reached in December 1998. (R. 1814-15) McQuaid advised Filkin in the summer of 1999 that the Duchossios group would be able to invest in Emerald but that the Davis Companies may be cut out of the deal. (R. 181617)

On September 20, 1999, Emerald organized a meeting with the Duchossios group. At the meeting Kevin Flynn told the Duchossios group that they would not be given the opportunity to invest in Emerald regardless of the prior agreement or understanding. Kevin Flynn stated that, "things change." (R. 1817) (R. 2495)

Notwithstanding all these negotiations and agreements, Kevin Flynn repeatedly denied that he had made any kind of deal with the Davis Companies or the Duchossios group. (R. 423-24; Kevin Flynn sworn statement 107-08) Indeed, in all his presentations to IGB and in subsequent litigation with the Davis Companies, Kevin Flynn insisted that he had nothing to do with running Emerald until June, 1999.

Kevin Flynn attended four of the five Emerald Board of directors meetings held between April, 1997 and April, 1999. Kevin Flynn insisted that the only reason he was at the Emerald meetings was because they coincided with the dates of the Blue Chip Casino Board meetings. Kevin Flynn testified that at some Emerald meetings he would get up and leave and sometimes he would stay. Donald Flynn gave similar testimony about Kevin Flynn's attendance at board meetings. Donald Flynn, father of Kevin and principal stockholder of Emerald, was not in town often and apparently relied heavily on his son to represent his interest. In fact, only one of the five Emerald Board of Directors meetings coincided with a Blue Chip Casino Board of Directors meetings. (R. 499-501; R. 2451)

In sum, the record is replete with clear and convincing evidence that Kevin Flynn dissembled to IGB about his activities on and in behalf of Emerald prior to June of 1999. Whether his reasons for such dissembling was to establish deniability of responsibility for agreements reached with such groups as the Davis Companies and the Duchossios group or negotiations with other dissenting stockholders or to deny how long Emerald was involved in its desire to relocate to Rosemont, he did not tell the truth to IGB.

Between April 1996 and 1999 Kevin Flynn was the CEO of Blue Chip Casino, a gambling boat operating in Michigan City, Indiana. In 1999, Blue Chip was sold to Boyd Gambling. (R. 5704-05) On June 27, 1999 as part of the sale of Blue Chip to Boyd, Kevin Flynn created a company known as Field Street. That company entered into a consulting and lobbying agreement with Boyd. Under this agreement, known as the Field Street Agreement, Kevin Flynn agreed to lobby to prevent tribal gambling from entering into southwest Michigan; such gambling would compete with Blue Chip in Michigan City. The agreement was also to cover activities in Indiana and Illinois. (R. 5726-27) Under the agreement Kevin Flynn was to be paid $500,000 a year plus expenses. If Kevin Flynn was successful in keeping tribal gaming out of southwest Michigan for five years, he would be paid five million dollars as a bonus. One of the activities that Kevin Flynn agreed to pursue was to facilitate the funding of money from Boyd to grass roots anti-gambling interests that were opposed to gambling and the expansion of gambling in Michigan. (IGB Exhibit 306, page 129, R. 572627)

Neither Kevin Flynn nor Boyd disclosed the existence of the Field Street Agreement either to Indiana or Illinois authorities. The Indiana authorities determined that it was Boyd's responsibility to disclose the agreement and for such non-disclosure the Indiana Gaming Board fined Boyd the equivalent of one million dollars. IGB first learned of the Field Street Agreement in late 1999 on receipt of a telephone call from the Indiana Gaming Commission. (Supplemental staff report at 63) Kevin Flynn did not disclose the existence of the Field Street Agreement until June 29, 2000. (IGB Exhibit 210) Whether such an agreement would or would not be against public policy under Illinois precedents, such a contract could affect the gaming industry and the reputation of persons in the gaming industry in Illinois.

5. EMERALD FAILED IN ITS OBLIGATION TO PREVENT INELIGIBLE INTERESTS FROM INVESTING IN ITS CASINO. AS A RESULT, NUMBEROUS INELIGIBLE INTERESTS WERE SOLD STOCK IN THE CASINO AND THE PROCEEDS OF SUCH SALES WERE USED TO FINANCE CONSTRUCTION OF THE NEW CASINO FACILITY AT ROSEMONT.

Throughout these proceedings Emerald insisted that it was IGB's obligation to investigate the eligibility and background of investors in the casino, since no stock purchase was complete until IGB approved it. It claimed its only responsibility was a very perfunctory review of the eligibility of the proposed stockholders; it caused such stockholders to fill out a Personal Disclosure Form 1 (PDF) and submit it directly to IGB. Emerald insisted that it could not look at the PDF's, since they were confidential. As a result, at least three of the individuals to whom stock was sold were ineligible because of their status as public officials or relatives of public officials. (R. 233) This has been covered above.

In addition to persons ineligible to be stockholders as a result of the public official disqualification, several persons and interests who had some association with organized crime were allowed to purchase stock in Emerald. In a complicated transaction involving a trust instrument with his daughter and a loan from Parkway Bank in the amount of $1,500,000, Nick Boscarino was allowed to acquire an interest in Emerald. Boscarino did business with the Village of Rosemont and was a partner in a company with Mayor Stephens' son, Mark Stephens. The company cleans office buildings including the Rosemont Exposition Center. Mayor Stephens acknowledged that he had been close to Nick Boscarino until Boscarino was indicted and convicted for defrauding the Village of Rosemont. (R. 5330-32)

Boscarino, his mother Ida L. Hansen, and his wife were all subpoenaed to testify in this proceeding; all of them took the Fifth Amendment and refused to answer questions regarding the transactions or anything else about their background.

Vito Salamone was identified by the FBI as being close with members and associates of organized crime. (R. 1353) The stock certificate issued by Emerald was originally in the name of Vito Salamone but was changed to Joseph Salamone, his brother. Whatever the effect of this crude change of ownership, there was in fact a secret memorandum of agreement, not provided to the Gaming Board, which showed that both brothers, as well as officers of the Parkway Bank and Trust Company, were sharing in the ownership interest purchased in the name of Joseph Salamone. Rocco Suspenzi was the chairman of Parkway Bank and Trust, and he as well as the Salamone brothers and Jeffrey Suspenzi were all subpoenaed to testify in this proceeding. All of them refused to testify, claiming their Fifth Amendment rights when asked questions about the secret agreement or any other questions pertaining to Emerald. Parkway Bank served as Mayor Stephens' bank in many other transactions.

Agent John Mallul (Mallul) testified as a special agent employed by the Federal Bureau of Investigations since 1986. In 1988, Mallul was assigned to an organized crime squad and has been assigned to that position since that time. For the last two years Mallul has been a supervisory special agent within the organized crime division of the FBI. (R. 2178) Mallul testified as to various terms used to describe organized crime in Chicago. (R 2182-85) Mallul directed the preparation of five letterhead memorandums, which were introduced into evidence. (R. 2186-94) These memoranda, from confidential sources, provided information regarding Nick Boscarino and the Salamone brothers and their relationships to organized crime. They also described activities of Peter DiFronzo and Joseph DiFronzo and D & P Construction Company, one of the contractors performing work at the Rosemont casino site. (IGB Exhibit 251, 252, 397, 396) Agent Mallul testified that he was satisfied as to the veracity and credibility of the source information which was used in these memoranda. (R. 2199-2200) Agent Mallul's testimony was credible and the FBI had determined to its satisfaction that the sources of the material contained in the memoranda were credible. IGB was entitled to use this information to make decisions concerning Emerald's conduct and its relocation move to Rosemont. This is particularly true since most of the individuals identified in the FBI memoranda that were involved in stock ownership in Emerald or construction activities in Rosemont refused to testify in these proceedings.

Mayor Stephens, who was identified in several of the FBI memoranda, vigorously denied any associations with organized crime. He stated that he severed his personal relationship with Mr. Boscarino after Boscarino was indicted. He acknowledged knowing Mr. DiFronzo (Sworn statement at 99-100) and others identified by Mallul. Mayor Stephens acknowledged that he at one time purchased a hotel from Sam Giancana who was then the head of the Chicago Outfit. (R. 5368-71) Mayor Stephens acknowledged that he had brushes with law enforcement early in his career.

(R. 5337) However, he vigorously denied that he was present at a meeting where organized crime figures planned their involvement in the Rosemont Casino. He also denied that he had anything to do with selecting shareholders in Emerald or contractors that Emerald hired for the construction. He did not make any effort to explain his earlier statement to IGB that under the arrangement that Emerald made prior to the amendment allowing the relocation to Rosemont, 5 percent of the stock was set aside for him. (Stephens statement at 69-70).

It is not necessary to resolve the conflicts between Mayor Stephens' testimony and the information provided by the FBI. It is not even necessary to resolve the conflict between Mayor Stephens testimony as to the selection of shareholders at the hearing as compared to his earlier sworn statement. There was sufficient credible evidence about Emerald's stock transactions, about its construction activities and about its lack of candor in its statements and submissions to IGB to warrant the revocation action taken by IGB.

Similarly it is not necessary to rely on the tape of a conversation between James and Michael Marcello, which has been recorded by the FBI pursuant to court authorization. (R. 5921-24) James Marcello is a member of organized crime and was in prison at the time the tape was made. Michael Marcello was visiting his brother and the tape of the conversation was made at that time. An approximate two and one half minutes portion of recorded tape was presented at the hearing and agent Mallul stated that no other portion of the conversation pertained to Mayor Stephens or the casino in Rosemont. (R 5932) The tape and the accompying testimony of agent Mallul were not useful in resolving any of the controversies involved in this proceeding. The tape itself had very poor fidelity and the brothers were speaking in some kind of cryptic code. Agent Mallul had to testify as to the words and as to the true meaning. Even if he were confident as to both fidelity and his interpretation of code words and phrases, there is no way that anybody could verify the facts related in the conversation. The brothers may have been puffing their own exploits and influence to each other, or they may have been deliberately trying to confuse law enforcement or anybody else that might be overhearing their conversation. In any event, notwithstanding the admissibility and relevance of agent Mallul's testimony concerning this conversation, I give it no weight in my findings of fact.

6. THERE WAS NO EVIDENCE OF BIAS ON THE PART OF THE STAFF OR OF THE MEMBERS OF IGB IN THIS REVOCATION PROCEEDING.

Throughout the proceedings, attorneys for Emerald insisted that staff and members of IGB were biased against Emerald. These bias challenges raised questions about everyone from former Governor James Edgar to Chairman Aaron Jaffe to the staff of the U.S. Attorney's office, to the various ALJ's that were involved in this proceeding and to numerous members of the IGB staff. No evidence was presented to back up the charges. Emerald presented some evidence concerning a "voodoo doll" which was given to a departing employee on the day of her departure from IGB. She allegedly stuck a pin into it and stated that the pin was for Joe McQuaid. (R. 4481-82) There was never any connecting evidence to show that if this incident took place, it was anything more than jest or an expression of irritation against Mr. McQuaid who had previously been the employee's supervisor. There was nothing to indicate that this employee did anything, said anything, or wrote anything which affected the decision to revoke Emerald's license because of any bias.

It is always unfortunate when lawyers decide to challenge the tribunal or the process rather than present their case. In this instance, Mr. Ficaro, then attorney for Emerald, delivered his opening statement in this proceeding by turning his back to the presiding officer, ALJ Holzman, and announcing to the assemblage of reporters and others who were present in the room "I would like to welcome everybody to Kangaroo Court. This proceeding is a sham." At the same time, various computers were displayed to the audience showing kangaroos jumping on the screen.

Four separate motions to disqualify previous ALJ Holzman were made; he granted the fourth one. I denied three separate motions to disqualify me; two were taken to the Gaming Board for review. Motions were made to disqualify Chairman Jaffe, and add him as a witness. The motions were all denied. On two occasions I had to remonstrate with Mr. Clifford to behave in a professional manner. (R 4919-20, 5084-85)

CONCLUSIONS OF LAW

1. When gambling was first authorized in Illinois in 1990, the Legislature

declared, that gambling would only be good for Illinois

"if public confidence and trust in the credibility and integrity of the gambling operations and the regulatory process is maintained. Therefore, regulatory provisions of this Act are designed to strictly regulate the facilities, persons, associations and practices related to gambling operations pursuant to the police powers of the State, including comprehensive law enforcement supervision." (230 ILCS 10, Riverboat Gambling Act)

2. IGB rules adopted pursuant to the Act provide that licensees shall be subject to revocation of their licenses

"for any act or failure to act...that is injurious to the public health, safety, morals, good order and general welfare of the people of the State of Illinois or that will discredit or tend to discredit the Illinois Gaming industry of the State of Illinois. (IGB Rules 3000.110(a))

As examples of such acts which can lead to revocation, the rule provides

in subsection 5:

"associating with, either socially or in business affairs, or employing persons of notorious or unsavory reputation or who have extensive police records, or who have failed to cooperate with any officially constituted investigatory or administrative body and would adversely affect public confidence and trust in Gaming."

Section 3000.140(a) of such Rules states that "Board licensees and applicants for licenses issued by the Board shall have a continuing duty to disclose promptly any material changes in information provided to the Board." Section (b) of that same rule requires licensees to disclose agreements, whether oral or written relating to "construction contracts", "agreements with or involving Key Persons", "agreements to sell… or otherwise transfer or share", "agreements in lieu thereof, relating to ownership interest or interest in an owner's license."

Subsection (c) of the same rule specifically provides that the failure to meet the requirements of subsection (a) or (b) may result in discipline "up to and including revocation of a license."

Emerald insist that revocation of its license was too harsh a remedy even some or all of the alleged conduct occurred. It suggests that transgressions of other riverboat gambling licensees were disciplined by settlement short of revocation of their licenses. Indeed, the instant matter was tentatively settled at one point and the hearing process was held in recess; however Emerald violated the terms of the tentative settlement, and the hearings were resumed. In any event the Board has discretion to judge the seriousness of the transgressions and the fitness of the penalty that should be applied. The fact that no license had been revoked before would not cause the revocation authority of the Board to lapse.

The record discloses that numerous lawsuits were filed in both federal and state court seeking to halt or terminate these proceedings and to challenge the Board's authority to act. As previously indicated, both the Appellate Court of Illinois and the Supreme Court of Illinois specifically found that IGB had continued authority to engage in these disciplinary proceedings for revocation notwithstanding the action of the legislature in making the renewal process for Emerald a mandatory matter. Most recently, Judge Thomas P. Quinn of the Circuit Court of Cook County and Judge Matthew T. Kennelly of the United States District Court for the Northern District of Illinois specifically refused to halt these proceedings or to intervene. (Emerald Casino, Inc. v. Aaron Jaffe, et al Case No. 05 C 4077, October 12, 2005)

3. Section 3000.1140(a) of the Rules states "the licensee bears the burden of

rebutting the charges contained in the complaint by clear and convincing

evidence." Section 3000.1145(a) states that

"the hearing need not be conducted according to technical rules of evidence. Any relevant evidence may be admitted and shall be sufficient in itself to support a finding if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in a civil action."

Hearsay evidence, which might normally be inadmissible in a civil action, thus was allowed to be admitted into evidence. Specifically, the FBI reports and the testimony accompanying such reports by agent Mallul were admitted under the evidence rules adopted by IGB. The reports which were identified as reliable by agent Mallul and which were made in the course of law enforcement procedures of the FBI, were admitted and given appropriate weight. The tape conversation between the Marcello brothers, while admitted, was not given weight because of the circumstances described above.

4. Case law of this state and of other states where gambling is allowed, is replete with statements of reviewing courts that the regulatory authorities of gambling have wide discretion in exercising their judgement on matters relating to licensure and revocation thereof. See Archview - Casino Cruises Inc. v. the Illinois Gambing Board 263 ILA 3rd 375 (1994); Balmoral Racing Club v. Illinois Racing Board 240 ILA 3rd 112 (1991); Oklahoma Park Inc. v. Oklahoma Horseracing Commission 716 P2d 666 (1986); Circuit Court of Virginia v. City of Richmond and Harold R. Wall, 1982 WL215-291 (VA Circuit Court, (1982)).

Section 3000.1105 of IGB Rules provides that "All Board licensees have a continuing duty to maintain suitability for licensure. A Board license does not create a property right, but is a revocable privilege granted by the State contingent upon
continuing suitability for licensure." This provision has been in the Rules since 1993 and makes clear IGB’s authority to revoke a license if it finds that the licensee is not suitable to maintain its license.

At least since 1997, when Emerald first lost its license, it and its principals have played fast and loose with the law and with the rules and regulations of IGB. Its modus operandi seemed to be "Catch me if you can", rather than abide by the legal and ethical standards that the law imposes on those privileged to get a gambling license.

Kevin Flynn flat - out lied and others dissembled as to when Emerald first attempted to move its gambling operations to Rosemont. Instead of advising IGB of its plan to sell interests in it s operations to others, Emerald claimed that "Letters of Intent" do not count as anything and that Kevin Flynn did not have "authority" to make such deals. When Emerald was confronted with undeniable facts that persons ineligible by law to be stockholders because they were public officials or related to public officials, Emerald said it was IGB's responsibility to determine such facts. When Emerald was confronted with evidence that persons associated with organized crime had obtained interests in Emerald's operation, Emerald's defense was that it was IGB's responsibility to determine such facts and that such stock transactions were not binding. When asked about making Joe McQuaid its principal enforcement officer even before he had gone off the State Police payroll for his terminal leave, (R. 2607) Emerald insisted that it was not against the law at that time. When Emerald was asked about the propriety of the Field Street Contract and why it was not reported to either the Indiana or the Illinois authorities, Emerald insisted that it was somebody else's responsibility, not Kevin Flynn's.

Any one of these defaults probably would have been sufficient to justify IGB's action in revoking Emerald's license. The sum of the parts far exceeded the making of a prima facie case against Emerald's suitability. The rebuttals by Emerald were wholly insufficient. The operation of gaming by Emerald in Rosemont would greatly undermine "public trust and confidence in that credibility and integrity of the gambling operations and of regulatory process" in Illinois.

I recommend that IGB make permanent its order of revocation and that any efforts by Emerald to engage in gambling in Illinois at any location be denied.

Dated : November 15, 2005

Abner J. Mikva
Administrative Law Judge

Thanks goes out to Jim McGough, Director of the Laborers for Justice, for bringing this to my attention. You can find a lot more additional information at IPSN .

Sunday, October 16, 2005

Rosemont Mayor again denies Mob ties

Friends of mine: Donald Stephens

Rosemont Mayor Donald Stephens, who for years wanted a casino in his town, said Wednesday he now hates the idea but is stuck because he poured $50 million in village funds into the project. During a sometimes combative interview with the Tribune editorial board, Stephens portrayed himself as caught in the middle of a legal and political tug-of-war over the plans to build a casino in the northwest suburb. He also railed against accusations by state and federal authorities--highlighted in regulatory hearings--that he and the village have links to organized crime.
Donald Stephens
"I wish I never heard of this damn casino. As a matter of fact, I don't think much of casinos anyway. They're just boxes with slot machines in them," said Stephens, who in 1999 played a critical role in persuading state lawmakers to clear the way for a Rosemont casino. "Rosemont does not need a casino. That I can tell you. Rosemont can live without a casino."

Stephens blasted comments made last year by Illinois Atty. Gen. Lisa Madigan, who said he has ties to organized crime. He acknowledged that in the days after Madigan made the public comments he complained to Madigan's father, Illinois House Speaker Michael Madigan, a Chicago Democrat. "I said, `What's wrong with your daughter? I mean she knows that I'm not associated with [the mob].' He said, `Don, I can't do anything with her,'" Stephens said. "I told him, `Michael, if I'm an associate of crime syndicate hoodlums, so are you because you associate with me.' And he says, `You know what? You're right.' He's been a guest in my home."

A spokesman for Michael Madigan declined to comment Wednesday. (Michael Madigan, a Notre Dame graduate, just held his annual fundraiser at the Sabre Room which is always well attended by many of my former neighbors.)

Lisa Madigan's spokeswoman, Melissa Merz, said the attorney general was unaware of the conversation between the mayor and her father. She said the attorney general "doesn't clear her statements with anyone," including her father.

Stephens' comments come just weeks before former federal appellate judge Abner Mikva is expected to decide whether to revoke the state riverboat license for the Emerald Casino, once proposed for Rosemont, amid allegations that Emerald officials lied to state regulators and some casino investors had ties to the mob.

During the administrative hearing before Mikva, attorneys for the Illinois Gaming Board presented evidence they said raised questions about Stephens and organized crime. The head of the FBI's organized crime division in Chicago testified that a federal informant told them Stephens met with five high-ranking organized crime figures to discuss what control the mob would have over contracts at the casino.

Stephens has vehemently denied the allegations and reiterated those denials Wednesday. "If I've done something, pillory me for it. But don't just say it's `alleged that' or whatever," he said. "The biggest problem that I've got is the allegations, and that's what they are, and the innuendoes and the accusations of mob influence, mob involvement in Rosemont, when there's no truth to it at all."

Should Mikva recommend revoking the license--and the Gaming Board accept that recommendation--Emerald would lose the only asset that it can sell. Emerald would be able to appeal the decision in court.

When asked if he would oppose those efforts, Stephens said he had little choice in the matter. He said the village paid nearly $50 million to build a parking garage for the Emerald Casino and until Emerald pays that money back he must support a casino project for the suburb. "I'd love to get rid of this thing. Can I? No. What can I do ... I've got $50 million of the people of Rosemont's money involved here," he said.

Stephens said he made a mistake by not requiring safeguards in Rosemont's deal with Emerald that would have protected the village's investment.

Gaming Board officials have maintained that Rosemont built the parking deck at its own financial risk because it was done before the board voted on the Emerald project. The board eventually rejected the Emerald plan in 2001, triggering the case now before Mikva.

Emerald was eventually forced into bankruptcy court, where plans were made last year to sell the license to Isle of Capri Casinos, which also planned to build in Rosemont. But the attorney general opposed the sale, partly because of concerns about mob ties.

Stephens said he didn't ask Speaker Madigan to have the attorney general back off. He was simply inquiring why she was making her allegations. "Frankly, I was astounded. I mean this man's a friend of mine. I know his daughter. Wouldn't you say, What's going on?" he said.

Stephens has become increasingly frustrated by the casino saga. And while he long pushed governors and lawmakers to let him have a casino in Rosemont, he said has grown to dislike modern casinos for their strong reliance on computerized video poker or slot machines.

His opinion has changed, in part, because of a newfound friendship with the state's biggest opponent of gambling, Tom Grey, executive director of the National Coalition Against Gambling Expansion.

"You know what these things are? They're vacuum cleaners ... you take the vacuum cleaner and stick the business end in my pocket, you put the switch on and when there's nothing left to suck out of my pocket you turn the switch off," Stephens said. "The house can't lose. That's a casino? No."

Thursday, September 29, 2005

Evidence In Mob Murders Surfaces In Casino Battle

The first piece of evidence in the Operation Family Secrets mob murder case surfaced Tuesday during a battle over a casino license. As CBS 2's John Drummond reports, a top FBI agent believes the undercover videotape shows a link between the mob and Rosemont Mayor Don Stephens.

James Marcello is identified by the FBI as the boss of the Chicago mob. In March 2004, the FBI videotaped a conversation between Marcello and his brother, Michael, at the federal prison at Milan, Michigan.

Stephens, the long-time mayor of Rosemont, had lobbied hard for the Emerald Casino Inc., to be granted a license to operate in Rosemont. But the Illinois Gaming Board rejected the Emerald bid, citing alleged mob ties. At a special hearing Tuesday on the Emerald license, the gaming board watched an undercover videotape from the Operation Family Secrets investigation. On the tape, the Marcello brothers discussed whether the mob would have a piece of any casino in Rosemont.

The two men did not use proper names when discussing the matter. The FBI said "he" referred to Stephens.

James Marcello: “Are we gonna be in there at all?”

Michael Marcello: “I don’t ... MGM or one of them companies will wind up with it. I mean he ain't going to get it like he wanted it before but...”

James Marcello: “They'll pay him so much a month and that'll be it.”

James Marcello: “You gotta say it. This guy really knew what he was doing, Mickey. They could say what they want about him.”


Attorney Robert Cliffford, who represents Emerald Casino, was skeptical of the meaning of the tape. “When I first saw this my reaction was you have a couple of sideways talking about stuff they don't know an awful lot about,” Clifford said. But top FBI organized crime agent John Mallul said that Stephens had a special interest in Emerald getting a license since he could exercise some control over it.

A spokesman for the Rosemont mayor ripped the FBI tape, calling it "meaningless." He said it proves nothing and suggests the gaming board has a "vendetta against Mayor Stephens."

As far as the videotape itself, this is the first time we've seen some of the mountain of evidence expected to be used against James Marcello and other alleged mobsters in the Family Secrets case. The video portion clearly showed the Marcello brothers having a chat in a day room at the Michigan prison. But the audio was difficult to make out. We had to read from a transcript provided by an FBI agent.

Thanks to Bulldog John Drummond

Wednesday, September 21, 2005

FBI Says Mob Eyed Rosemont Casino

Friends of ours: James Marcello, Michael Marcello, Tony Spilotro, Michael Spilotro
Friends of mine: Don Stephens

The reputed head of the Chicago mob and his half-brother were caught more than two years ago on FBI surveillance videotape discussing organized crime's efforts to infiltrate a casino in Rosemont, the head of the FBI's organized crime unit in Chicago testified Tuesday.

A portion of the grainy and muffled videotape, recorded surreptitiously in the visiting room of the federal prison in Michigan where James Marcello was incarcerated at the time, was played openly for the first time. It was part of the Illinois Gaming Board's ongoing public hearing aimed at stripping the Emerald Casino once planned for Rosemont of its riverboat gambling license. But attorneys for Emerald attempted to cast serious doubt about the relevance of the tape and whether FBI Special Agent John Mallul's opinion of what Marcello, the reputed boss of the Chicago mob, and his half-brother Michael were discussing in the coded conversation was accurate.

Emerald attorney Robert Clifford also pointed out that the portion of the tape played was only a two-and-a-half minute piece of a five-hour conversation and that the testimony was part of the gaming board's effort to yank Emerald's license by sullying Rosemont's reputation. "Is this fair to produce this?" Clifford said. "I don't think so."

According to Mallul's testimony about the discussion, James Marcello asked Michael Marcello what influence and control organized crime would have in a Rosemont casino. They also discussed what role longtime Rosemont Mayor Donald Stephens would have in the casino deal.

"Are we gonna be in there at all?" James asks on the tape as he sits next to his half-brother in the crowded visiting room.

"I don't ... MGM or one of them companies will wind up with it," Michael responds. "I mean he ain't gonna get it like he wanted it before."

Mallul testified that the "he" Michael Marcello referred to was Stephens. In July Mallul testified that an informant had placed Stephens in a suburban restaurant meeting with several high-ranking members of organized crime to discuss what control the mob would have over contracts at the casino.

"It's my opinion based on this conversation, Donald Stephens had a special interest in having Emerald itself be a casino in Rosemont," Mallul testified.

When asked to describe "special," Mallul said he thought the mayor had an "extraordinary interest" in Emerald being selected as the casino in Rosemont as opposed to another casino firm, in part to have more control over the casino.

Rosemont attorney Robert Stephenson questioned Mallul's opinions about what the vague conversation between the brothers was actually about. "The guy is either a liar or incompetent," Stephenson said. "In either case, he should be immediately fired by the FBI."

In April federal prosecutors charged the Marcello brothers, along with more than a dozen other alleged members of organized crime, with an array of crimes. James Marcello is charged with the murders of Anthony and Michael Spilotro in 1986, and Michael is facing charges that include conducting an illegal gambling business.

The March 24, 2003, conversation between the two brothers also included a new allegation that former Chicago alderman and Cicero village attorney Edward Vrdolyak played a role in getting former Chicago Crime Commission investigator Wayne Johnson to settle a defamation lawsuit Stephens had filed. The two brothers implied that because of the settlement, Rosemont was allowed to continue to seek a casino.

The suit stemmed from comments Johnson made in 2001 about a "troubling ... litany of associations" between Stephens and six people the commission considered to have criminal or mob ties. The month after Johnson accepted the job of Cicero police chief in 2003, Johnson and Stephens privately settled the suit when Johnson said in a letter that he had "no personal knowledge about Mayor Donald E. Stephens' business dealings."

"The V guy put his arm around him," Michael Marcello said, referring to Vrdolyak, according to Mallul. "Put 'em over there in that town [Cicero]. He backed off the other guy [Stephens] out there."

Johnson and Vrdolyak both flatly denied the assertion, saying they never met each other until after Johnson became police chief, a job he left this year. "Ed Vrdolyak had nothing to do with that letter," Johnson said.

"It's absolute folly to say that anything like that ever went down," Vrdolyak said. "LSD must be coming back. It's nuts."

The testimony came on the second-to-last-day of testimony in the hearings. The administrative law judge overseeing the case, former federal judge Abner Mikva, is expected to rule no sooner than next month.

Thanks to John Chase and Brett McNeil

Friday, September 16, 2005

Mayor Donald E. Stephens: I didn't meet with mob

Excerpted from articles by Carol Marin and Shamus Toomey of the Sun Times and by Matt O'Connor and John Chase of the Tribune.

Rosemont Mayor Donald E. Stephens adamantly denied under oath Thursday that he met with the mob in 1999 to talk about a casino for his town. And, in an ironic twist, a reputed mob boss on the lam is backing him up.

Joey "The Clown" Lombardo fired off a letter to his lawyer last month denying an FBI informant's claim that Lombardo and reputed mobsters John "No Nose" DiFronzo, his brother Peter, Joe "the Builder" Andriacchi, Rudy Fratto and other alleged hoodlums met with Stephens at Armand's, an Elmwood Park restaurant, according to Rick Halprin, Lombardo's lawyer.

"Let me inform you that it is positively a lie," the hand-printed letter, which included misspellings, read. "I have never, never, ever sat down with Mayor Stephens and the rest of the names in the article. I will take truth serum or lie detector test if the agent and there reliable witness will take one. It has to be done by a private co., not the FBI."

Lombardo, 76, has been missing since a major federal indictment linking the mob to 18 unsolved murders came down in April. Shortly after the indictment, a letter from Lombardo arrived by mail at Halprin's Chicago office. That letter, postmarked in Chicago and directed at U.S. District Court Judge James B. Zagel, proclaimed his innocence and asked for a separate trial from the others indicted. However, FBI spokesman Ross Rice said agents don't necessarily think Lombardo is hiding out in the Chicago area.

The FBI launched international manhunts for Lombardo and co-defendant Frank "the German" Schweihs and are offering rewards of up to $20,000 apiece for their arrests. Lombardo, 76, who had lived on Chicago's Near West Side for more than half a century, and Schweihs, 75, who last lived near Ft. Lauderdale, face up to life in prison if convicted.

The latest letter was dated Aug. 24 and postmarked Aug. 25 in Chicago. The letter was on three-ring notebook paper and was accompanied by two Chicago Sun-Times articles, including a July 19 clipping about Lombardo's alleged meeting with Stephens, Halprin said. "I doubt that he has a home subscription," Halprin said of Lombardo. "I have no idea where Mr. Lombardo is," Halprin said. "I'm saying the same thing I've said over and over again: It's my obligation to tell Joey, I can only tell him he should surrender himself and prepare for trial."

'Ridiculous nonsense'

FBI agent John Mallul had testified on July 18 that an informant told him of the Armand's meeting. Mallul's testimony came during a state Gaming Board hearing to revoke the license of Emerald Casino, which has been trying to open a casino in Rosemont but has been bogged down by mob allegations.

Lombardo says he also sent a separate letter to Rosemont's village attorney denying the Armand's meeting. "And also if I met with these people on that date, May 29th, 1999 I would have been in violation of my parole and probation," the letter to Halprin read.

Rosemont attorney Bob Stephenson confirmed he recently received two letters, purportedly from Lombardo. One appeared to mirror the Halprin letter, the other was a brief note in which Lombardo told Stephenson he remembered him from an old Teamsters trial, Stephenson said. The letters were signed "Joseph Lombardo I'm an innocent man," wording similar to the letter sent in the spring. The Rosemont letters were turned over to the feds, Stephenson said.

Word of the latest round of Lombardo correspondence came as Stephens testified before retired Judge Abner Mikva, who will rule whether Emerald should lose its gaming license. Stephens testified he was "absolutely not" at the Armand's meeting -- and said he had never even been to the restaurant.

Outside of the hearing, Stephens, 77, called the Armand's allegation "such ridiculous nonsense."

'I hate my son-in-law'

"The FBI agent said there was some informant. Well, at the very least, the informant's a liar," Stephens said. "As a matter of fact, I also understand that my [ex-]son-in-law was at this meeting. I've got news for you, I hate my son-in-law. I've never gone around the block with him in my car. Never."

Friday, May 06, 2005

Casino hearing expected to call reputed mobster

Reputed Chicago Outfit boss John "No Nose" DiFronzo and his brother, Peter DiFronzo, will be among those called to testify at a state hearing on whether to revoke the state gambling license once destined for Rosemont, Illinois Gaming Board sources said Thursday.

Robert CooleyWhen Corruption Was King: How I Helped the Mob Rule Chicago, Then Brought the Outfit Down--the corrupt lawyer turned government informant who testified in mob cases involving the nexus between the Outfit and politicians--is also expected to be called as a witness. Cooley is the author of the book "When Corruption Was King: How I Helped the Mob Rule Chicago, Then Brought the Outfit Down."

The new head of the Gaming Board said he's looking forward to the hearing but isn't talking about who will testify. "I'd rather not comment on that, because I think it's up to the lawyers to conduct the case as they see it," Chairman Aaron Jaffe told me in a telephone interview. "But I will promise you this. It will be very interesting."

What he didn't say is important here. He didn't say they weren't going to subpoena the tough guys. He didn't say that the DiFronzos and others would not be called. He could have. But he didn't.

Gov. Rod "The Unreformer" Blagojevich appointed Jaffe with the understanding that the Gaming Board was to become independent again. That's nice, since Blagojevich tried to gut the board by denying it a full set of independent investigators.

Jaffe said that to make the board truly independent, though, the governor and the legislature must allow gambling officials to hire more investigators to be led by chief investigator Jim Wagner, the retired chief of the FBI's Organized Crime task force in Chicago. Wagner helped train several current FBI agents who brought the Operation Family Secrets case, with 18 previously unsolved mob murders, to indictment last week.

The Rosemont casino license has been a political Gordian knot. Republican powerhouses have pushed it as a favor to Rosemont Mayor Donald Stephens and his ally, the indicted former Gov. George "Safe Roads" Ryan.

Last year, past board chairman Elzie Higginbottom, a longtime ally of Chicago Mayor Richard Daley, led a controversial pro-Rosemont ruling. He and other board members dismissed the concerns of Gaming Board staff that Rosemont was mobbed up and approved a plan to steer a license to a new casino in Stephens' town.

One of those pro-Rosemont board members appointed by Blagojevich was Bill Fanning. After the Rosemont vote, Fanning privately told his colleagues he had neglected to inform them that he had once been related by a past marriage to reputed Outfit boss Joe "The Builder" Andriacchi. Then Fanning resigned. There was little official comment about the development. Fanning did tell colleagues, though, that he had rarely spoken to Andriacchi and hadn't seen him in years.

What surprised me was that Blagojevich hadn't asked Fanning--before appointing him--whether he knew any tough guys. But now Blagojevich says independent is a good thing. Good luck, Mr. Jaffe.

Rosemont was once the headquarters of Outfit boss Sam "Momo" Giancana. According to Illinois Atty. Gen. Lisa Madigan and other law enforcement authorities, Rosemont has been mobbed up.

Mayor Stephens, who will also be called to testify, vigorously disputes this characterization and has released the findings of an investigation he commissioned that said he's never been "connected to or associated with" the Chicago Outfit.

So I mentioned to Jaffe that he might consider calling another witness--Antoinette Giancana, daughter of the murdered Sam Giancana.

Several years ago, as Stephens was railing that his was not an Outfit town, I had breakfast with the gracious Antoinette and she remembered the days when Stephens eagerly hung out with her father at the Thunderbolt motel in the 1960s. Stephens disputes this. Obviously, a hearing would be quite interesting. "We were very friendly and casual and we all had a good time at the pool," she said. "My father's friends were there too. They had their board meetings in the banquet room. And Don was at the motel too, of course."

I asked her if it was true that the daughters of Outfit bosses teased the young and anxious Stephens by ordering him to fetch them towels at poolside. Did you ever say: Hey Don, get me a towel!? "Wait a minute!" Antoinette Giancana said. "I'd never shout, `Don, go get me a towel!' That would be rude. I was ladylike. You would say, `Don? Would you please get me a towel?'"

Recently, Jaffe appointed the distinguished jurist and former congressman Abner Mikva to preside over the hearing on the Rosemont license revocation. Jaffe said he expects Mikva to set a date for the hearing sometime next week. And Mikva has said he doesn't expect the hearing to drag on forever.

With all that's going on--Operation Family Secrets, City Hall corruption cases and Unreformer Blagojevich's problems--it'd be nice to spend time near a pool. Don, would you please bring me a towel?

Thanks to John Kass

Monday, December 23, 2002

Did feds kill off the mob?

Friends of ours: Fred Roti, Frank Maltese, Joe Ferriola, Sam Giancana, Bill Daddano, Tony Accardo, Vincent "Jimmy" Cozzo
Friends of mine: John D'Arco Sr., Pat Marcy, Betty Loren-Maltese, Robert Natale, John Serpico, Don Stephens, John Duff, Ed Hanley, William Hanhardt, James Vondruska, Bob Cooley

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. 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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