2 ex-federal prosecutors OK’d former city comptroller indicted last week

BY FRAN SPIELMAN City Hall Reporter

August 19, 2013 7:46PM

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Updated: September 21, 2013 6:17AM

Two former federal prosecutors questioned Amer Ahmad — and interviewed others in Ohio — about investments there that culminated last week in Ahmad’s indictment in an alleged kickback scheme and determined there was no reason to block Ahmad’s appointment as Chicago city comptroller.

Vincent J. Connelly said he and Zaldwaynaka “Z” Scott, Illinois’ former executive inspector general, conducted the March 2011 review as attorneys working pro bono for Mayor-elect Rahm Emanuel’s transition team.

At the time, Ahmad was Ohio’s deputy treasurer and his boss was embroiled in a bitter re-election campaign.

“There were allegations from the competing candidate in an attack ad suggesting that the treasurer was close to this fellow [Mohammed Noure] Alo and the treasurer attending the same mosque. The ad got national attention for being anti-Muslim and race-baiting,” Connelly recalled Monday.

“That was the big thing we drilled down about,” he said. “We touched base with some people familiar with the situation in Ohio. We were reliant on Amer in large measure to point out what happened and how it happened, but we didn’t just take him at his word.”

After questioning Ahmad and doing their own digging, Connelly and Scott concluded that there was no reason for Emanuel to steer clear of Ahmad.

They turned out to be dead wrong.

Three weeks after resigning as Chicago’s city comptroller, Ahmad was indicted in Ohio last week for allegedly participating in a $500,000 kickback and money-laundering scheme involving Ohio investment business. Allegedly joining Ahmad in the scheme were a high school classmate, a Chicago business partner and Alo, an Ahmad friend who was the subject of the Ohio attack ad.

Still, Connelly said he did all he could to spare Emanuel the potential for embarrassment.

“If people want to deliberately hide information that’s not readily available to people who don’t have subpoena power, it’s unfortunate. But it doesn’t embarrass me,” Connelly said.

“Was I comfortable we vetted this guy and gave him every opportunity to let us know if there was anything awkward, embarrassing or worse that needed to be brought to our attention? For sure. Could we have gone further? Of course. But he hid it from us,” Connelly said.

He scoffed at the notion that, as former White House chief of staff, Emanuel could have picked up the phone and called his contacts in the U.S. Justice Department to find out for himself whether Ahmad was under investigation.

“There’s no possibility that Rahm or anybody else could do that. There’s no upside for somebody in the Justice Department to do Rahm Emanuel a favor by providing insider information about a federal investigation. You keep that investigation quiet and confidential until it’s time to go public,” Connelly said.

Also on Monday, police and fire union leaders demanded that their underfunded pension funds conduct their own investigation — free from the “long arm of Rahm Emanuel” — to determine whether Ahmad engineered kickback schemes in Chicago similar to those he’s accused of arranging in Ohio.

“It’s Rahm’s guy who got us into this mess and we need someone independent of Rahm to make sure there’s no kickback scheme in Chicago. It’s a $3.2 billion fund that’s our retirees bread and butter and we’ve got to protect it,” said Fraternal Order of Police President Mike Shields. “If you find a gun on a person, they tell you at the police academy to, ‘Go find a second gun.’ Amer Ahmad has been indicted for a kickback scheme in Ohio. Let’s make sure there’s nothing similar going on in Chicago.”

Last week, Emanuel asked Corporation Counsel Stephen Patton and Inspector General Joe Ferguson to join forces in investigating Ahmad’s two-year tenure in Chicago.

The pairing is ironic, considering that Ferguson is on his way out and the IG and Patton were adversaries in a marathon court battle that tied Ferguson’s hands and insulated Emanuel and his top aides from investigation.

Sarah Hamilton, Emanuel’s communications director, said Patton reached out to Ferguson on Friday and the two men “determined that conducting a joint review using outside resources was the best way to move forward.”

At the mayor’s behest, Patton also reached out to the four city-employee pension funds, adding, “We will have a comprehensive and coordinated review.”

Independent Ald. Bob Fioretti (2nd) and Scott Waguespack (32nd) demanded Monday that Patton “stand down” in favor of Ferguson.

“To bring the mayor’s attorney on — the person who fought him all the way to the Illinois Supreme Court — is foolish and a way to reroute the investigation,” Fioretti said. “We know that Joe Ferguson is independent. Why do we need somebody looking over his shoulder and saying, ‘You can look at this. You can’t look at that.’ They already did that on a small contract. Why do it on something this big and this important? Patton should step to the sidelines, give Ferguson unfettered discretion and allow him to go down any road.”

In a text message to the Sun-Times, Waguespack said, “The IG should have complete independence to run an audit of the mayor’s ex-comptroller. If anyone is at the table with the IG, it should be the U.S. attorney working with him on the audit — not the corporation counsel.”

The indictment alleges that Ahmad used his authority in the Ohio treasurer’s office to direct state business to Ohio securities broker Douglas Hampton in return for payments from Hampton. Hampton was a high school classmate-turned-investment adviser of Ahmad.

Ahmad and his Chicago business partner Joseph Chiavaroli allegedly concealed those payments from Hampton by passing them through the accounts of a landscaping business in which Ahmad and Chiavaroli held ownership interests.

Hampton also allegedly funneled in excess of $123,000 to Alo, an attorney and lobbyist who is Ahmad’s close friend and business associate.

As a result of the scheme, Hampton allegedly received about $3.2 million in commissions for 360 trades on behalf of the Ohio Treasurer’s office.

Both Hampton and Chiavaroli appear to have turned against Ahmad — by signing plea agreements that require them to cooperate with the federal probe of Ahmad’s alleged scam in return for lighter sentences.

Email: fspielman@suntimes.com

Twitter: @fspielman

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