The Chicago Syndicate: Harold Washington
Showing posts with label Harold Washington. Show all posts
Showing posts with label Harold Washington. Show all posts

Thursday, January 03, 2019

Chicago Alderman Ed Burke Charged with Extortion by Federal Prosecutors #Corruption

Federal prosecutors on Thursday filed a corruption case against Edward M. Burke, who has been Chicago’s most powerful alderman for decades, just weeks after FBI agents dramatically raided his offices at City Hall and on the city’s Southwest Side.

As the longtime chairman of the Council’s Finance Committee, Burke built far greater clout than any alderman and a long list of private law clients who do business with City Hall. But his historic tenure now comes to the same place where so many of his colleagues have found themselves: in Chicago’s federal courthouse, with authorities alleging he abused his power to enrich himself. And like so many other aldermen with far less clout, Burke apparently got caught on a wiretap saying something he would not dare utter in public.

Burke’s spokesman did not return calls seeking comment. Nor did Anton Valukas and Charles Sklarsky, the two prominent defense lawyers who have represented Burke since the initial federal raids at his offices on Nov. 29.

On that day, the windows of Burke’s offices were covered in brown butcher paper as investigators spent hours executing search warrants. And the feds raided the Finance Committee offices, on the third floor of City Hall, again on Dec. 13, indicating the urgency of the probe.

The criminal case hits as Burke is seeking to extend his record tenure in the City Council, running for another term in the February election in the 14th Ward, which he has represented for half a century.

The investigation of Burke began at the office of City’s Hall independent inspector general, Joe Ferguson. Burke and many other aldermen long had resisted allowing the I.G. to have oversight of the Council, but Ferguson finally won authority to investigate aldermen in 2016.

Burke, 75, has been an alderman since 1969, when he succeeded his father in the council during the tenure of Mayor Richard J. Daley.

In his time as alderman, Burke has watched as more than 30 fellow aldermen who served alongside him were convicted of corruption. And the charges against Burke come as yet another alderman, Willie Cochran (20th Ward), continues to fight a two-year-old federal corruption case. But Burke is clearly the most powerful alderman the feds have targeted since Thomas Keane -- another Finance Committee chairman -- was convicted in 1974.

With his finely tailored pinstripe suits and emerald-green ties, Burke long has been the personification of the South Side Irish Democratic Machine that ruled City Hall for generations.

While he presided over the Finance Committee, Burke frequently had to recuse himself from voting on hundreds of pieces of legislation that benefited the dozens of corporate clients of his law firm.

An investigation published last month by WBEZ and the Better Government Association found that Burke recused himself from voting on City Council measures 464 times in the last eight years. That’s four times as many “abstentions” for Burke as for the the rest of the aldermen combined. But even in some cases where Burke did not vote, WBEZ and the BGA found that the veteran alderman had exercised his clout to make sure his clients got what they wanted from City Hall.

At times, Burke has guided legislation through the council process, writing letters to city bureaucrats or even chairing meetings on the ordinances and motioning for his colleagues to vote them through -- only to recuse himself at the last moment due to his conflicts of interest.

In the case of a multi-billion-dollar bond deal at O’Hare Airport a year ago, no less than three banks that are Burke clients stand to benefit from the transaction.

The Burke firm’s work focused mostly on winning property tax appeals for its clients from Cook County authorities who determine the valuations of downtown high rises and other real estate.

His most prominent client in recent years was Trump Tower Chicago, for which Burke reportedly won millions of dollars in tax breaks. Earlier this year, Burke stopped representing the building amid criticism for doing the bidding of President Trump who is deeply unpopular in Chicago, especially among Latinos who are often the target of his anti-immigrant rhetoric.

With election challenges looming for the first time in many years, Burke even began criticizing Trump recently.

While his private law practice made his very wealthy, Burke is probably best known for his role in the turbulent “Council Wars” period in the 1980s, when he and fellow South Side Ald. Ed Vrdolyak spread-headed the mostly white block of aldermen that frequently thwarted Chicago’s first black mayor, Harold Washington. Due to his notoriety from that era, Chicago politicos have long believed that Burke could never get elected mayor. But Burke has enjoyed his greatest power since then as a loyal and crucial Council ally of the last two mayors, Rahm Emanuel and Richard M. Daley.

When both Emanuel and Daley took office, they had been at odds with Burke. Still, both mayors decided to make deals with Burke, rather than confront him.

Under Emanuel, Burke has maintained his chairmanship of the Council’s most powerful committee and continues to enjoy the most visible and expensive perk of his clout: a police bodyguard detail that costs taxpayers hundreds of thousands of dollars a year.

In return, Emanuel appears to have gotten Burke’s loyalty. The alderman voted with Emanuel’s agenda on 100 percent of divided roll-call votes at the Council, according to a recent study by political scientists at the University of Illinois-Chicago.

Burke had endorsed Gery Chico, his former aide and ex-president of Chicago’s school board, to succeed the retiring Emanuel in the upcoming Feb. 26 election.

The alderman himself faces four challengers. All of them are Latinos, reflecting the changing demographics of the Southwest Side’s working-class neighborhoods.

On Wednesday, Democratic U.S. Rep. Jesus “Chuy” Garcia threw his backing to 28-year-old Burke challenger Tanya Patino, deriding the incumbent as “a walking conflict of interest for decades.”

As Mexican immigrants and their families have become the largest ethnic group in his ward, Burke has sought to adjust for the changing times, recruiting Latino precinct captains for his powerful ward organization and even speaking a bit of heavily accented Spanish. Talking to one constituent recently, he joked in Spanish that his command of the language was not that bad for “an older gentleman.”

Yet, the alderman’s once-absolute power had weakened in recent years. In the March primary election, his brother, Dan Burke, lost his seat in the Illinois House to a young Hispanic challenger.

Burke owns a fortress-like, three-story home that looms over his constituents’ bungalows and ranches in the Gage Park neighborhood, next to the elevated tracks of the CTA’s Orange Line. The home is surrounded by wrought-iron fencing.

His influence was so great that city crews strayed far from their normal routes during blizzards to plow the side street in front of the Burke home, even before more heavily trafficked roads got cleared. And Burke’s clout extended far beyond the Southwest Side.

Burke also long has enjoyed the central role in the Democratic Party’s process for placing judges on the Cook County bench. And his wife, Anne Burke, has a spot on the Illinois Supreme Court.

He has more than $12 million in campaign accounts that he controls. That’s a sum that far exceeds the political cash of all of his 49 Council colleagues combined.

In the weeks since the initial FBI raids at Burke’s offices, it was unclear what exactly the feds suspected.

Burke said he did not know what the agents were investigating. But he said he would cooperate fully and was confident that the probe would end as so many other investigations he has faced – with no charges against him.

Thanks to Dan Mihalopoulis.

Wednesday, November 16, 2016

Ed Vrdolyak indicted for 2nd Time in Last Decade

Former Chicago Ald. Edward Vrdolyak earned the nickname "Fast Eddie" for his bare-knuckled ability to work the angles. But for the second time in the past decade, Vrdolyak has been indicted on charges of using his influence to shoehorn his way into a big-money deal and turn a handsome profit for himself and his connected friends in spite of doing little or no work.

In charges made public Tuesday, federal prosecutors alleged Vrdolyak muscled in on one of the biggest bonanzas of them all — the record $9.2 billion settlement with the tobacco companies from the late 1990s.

Prosecutors charged that Vrdolyak worked out a secret deal with other attorneys to collect as much as $65 million even though he'd done no work on the tobacco case. The indictment did not make clear just how much the former alderman actually pocketed. The case was unsealed last week without fanfare by low-key U.S. Attorney Zachary Fardon's office. His spokesman, Joseph Fitzpatrick, declined comment Tuesday.

Vrdolyak, who turns 79 next month, could face up to five years in prison if convicted of both counts of impeding the IRS and income tax evasion. His lawyer, Michael Monico, said he was dismayed by the government's decision to charge Vrdolyak. He said the former longtime alderman will plead not guilty to the two-count indictment Tuesday in federal court.

Vrdolyak was added to an indictment against attorney Daniel Soso, a former Chicago police officer who once ran for alderman with Vrdolyak's backing. Soso was originally indicted alone in May 2015 on charges of failing to pay about $780,000 in taxes related to the settlement money.

Despite Vrdolyak's reputation for skirting criminal probes, the case marks the second time in less than a decade that the onetime political powerhouse faced criminal charges. In 2010, Vrdolyak was sentenced to 10 months in prison for his role in a $1.5 million real estate kickback scheme that had links to the federal probe that felled then-Gov. Rod Blagojevich.

Like many Chicago politicians, Vrdolyak got his start by working precincts at election time and within a few years he had grown a formidable ward organization. In 1970, he survived scandal when his brother, Peter, was indicted on charges of gambling and using prostitutes as door prizes during Vrdolyak ward events, according to Tribune stories from the time. Peter Vrdolyak was convicted; his brother was not charged.

First elected alderman of the Far Southeast Side's 10th Ward in 1971, Vrdolyak, the son of Croatian-born tavern keepers, quickly earned a reputation as a consummate Chicago politician, brash at times but with a keen sense of how to do business the old-fashioned way. A Tribune editorial from his freshman term called Vrdolyak an "influence-peddler and backroom wheeler and dealer almost without peer in a city noted for them."

In an interview that year, Vrdolyak said he lived by the axiom that "if you're good to people, they reciprocate."

"They send business your way, so you get jobs for people," he said. "That's the way it's done. Me — it's the only place these people can go. I'm the committeeman, alderman, father confessor, cop, lawyer, employment agency. Me. I'm the man."

In the 1980s, Vrdolyak became Cook County Democratic chairman, led the "Vrdolyak 29" block of white aldermen who frustrated Mayor Harold Washington and twice ran unsuccessfully for mayor. After Washington's death, Vrdolyak ran as a Republican for mayor but made his worst showing ever — and the bitterness of that race still showed years later as Mayor Richard M. Daley tightened his grip on City Hall.

"You've got to understand something about the Irish, the Daley Irish," he told the Tribune in 1996. "It's the Irish first, and everybody else is a Polack."

Through the years, Vrdolyak has had to defend himself against allegations he was cozy with the Chicago mob. In 1983, Vrdolyak wrote a letter to the Tribune detailing his close relationship with Joe Salas, a reputed hit man who was convicted in the 1979 abduction and murder of a Florida agriculture inspector. Vrdolyak, who had sponsored Salas for a city job, wrote that he'd been friends with Salas' family for years and "attempted to counsel (them) against any anti-social behavior."

Later, after his power at City Hall waned, Vrdolyak found political refuge in the alleged mob stronghold of Cicero, where he was paid millions of dollars in taxpayer-funded fees under then-town President Betty Loren-Maltese, who was later convicted of corruption.

The indictment made public Tuesday alleges Vrdolyak was in the middle of a scheme that stemmed from a series of lawsuits brought by some 46 states seeking to recover Medicaid funds the state had spent treating smoking-related diseases from tobacco giants such as Phillip Morris. The tobacco companies eventually negotiated a series of settlements totaling $206 billion.

The $9.2 billion settlement in Illinois' suit sparked controversy after it was revealed that then-Attorney General Jim Ryan had negotiated a contingency arrangement promising 10 percent of the payout to four law firms that handled the litigation. That figure was dramatically reduced after years of court arbitration, but in the end, Ryan agreed to pay a total of $188.5 million to several law firms.

One of those firms was the Seattle-based Hagens Berman, which was headed by attorney Steve Berman. According to the indictment, Berman entered into a secret agreement in 1996 to pay Vrdolyak and Soso fees from the settlement and hide the payments from the attorney general and tobacco companies. Under the final deal struck in 1999, Vrdolyak expected to receive about $65 million from Berman. The firm has denied any attempt to conceal payments.

In 2005, while investigating Soso for failure to pay income taxes, the Internal Revenue Service learned that he had been receiving large payments from Vrdolyak and failed to report the income, the charges alleged. The IRS then served Vrdolyak with a levy notice requiring him to pay the IRS instead of Soso because of all the back taxes owed.

That November, Vrdolyak sent a fax to an IRS investigator claiming that he was no longer paying Soso and therefore he owed them no money. The fax stated that if there were any payments made in the future he "intended to honor the 2005 levy served on him" and remit the funds to the IRS, according to the charges. But according to the indictment, money again began changing hands two years later, with Soso hiding funds paid to him by Berman and Vrdolyak in accounts used by his relatives and girlfriend.

In 2011, Vrdolyak sent payments totaling $170,000 to Soso, including checks that a Vrdolyak relative wrote, the indictment alleged.

The indictment comes five years after Vrdolyak was released from prison on his 2007 case. He pleaded guilty to fraud for his role in a kickback scheme in which a Gold Coast real estate deal was rigged so he could secretly split a $1.5 million finder's fee with corrupt insider Stuart Levine, a close friend who later secretly wore a wire on Vrdolyak.

In 2009, U.S. District Judge Milton Shadur spurned prosecution calls for prison and sentenced Vrdolyak to probation for a fraud conviction, but prosecutors appealed.

The 7th Circuit U.S. Court of Appeals later ordered that a different judge resentence Vrdolyak, calling Shadur's punishment a "slap on the wrist" that ignored Vrdolyak's status as one of Chicago's most influential insiders. The appeals court also held that Shadur gave too much weight to dozens of letters — including one from then-Bears linebacker Brian Urlacher — attesting to his acts of generosity.

In October 2010, U.S. District Judge Matthew Kennelly sentenced Vrdolyak to 10 months in prison as well as five months in a work-release center and an additional five months in home confinement.

Reported by Jason Meisner and Jeff Coen.

Sunday, September 28, 2003

Duff Indictments a Story You Can Sink Teeth Into

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thanks to John Kass

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