November 20, 2014
Mayor Rahm Emanuel on Tuesday rejected suggestions that he should have known about the alleged Ohio kickback scheme that culminated in the indictment of his former City Comptroller Amer Ahmad.
Emanuel promised an exhaustive investigation — with the city’s corporation counsel and inspector general overseeing the work of an independent third-party — to make certain the $500,000 kickback and money-laundering scheme Ahmad stands accused of engineering with state investments in Ohio was not repeated in Chicago.
But, the mayor summarily dismissed the notion he should have steered clear of Ahmad at a time when Ahmad’s relationship with a longtime friend and now indicted co-conspirator Mohammed Noure Alo was already generating headlines in Ohio.
“I will say this having worked for two [U.S.] Presidents, it’s not like the Justice Department gives you a heads up . . .. They don’t provide you that” about pending federal investigations, Emanuel said.
“I appreciate that you think I should have known. . . . [But], the head of Key Bank, the head of the Treasurer’s office in Ohio gave him a clean bill of health and a thumbs-up.”
Hours after Emanuel offered his first public comment about the embarrassing scandal, the mayor’s office announced the hiring of two outside attorneys to oversee the exhaustive and costly investigation: Gordon Nash and Dan Collins of Drinker Biddle.
Nash is a former Chicago Bar Association president who once served as chief of the special prosecutions division in the U.S. Attorney’s office. He now defends accused white collar criminals and specializes in securities, antitrust and commercial litigation while conducting internal investigations for corporate clients.
Collins spent ten years in the U.S. Attorney’s office investigating: white collar crime; commodities, securities, bank, mail, wire and computer access fraud; public corruption; tax evasion and money laundering.
Their investigation is expected to take “several months” and utilize the services of a forensic accounting firm.
The Chicago Sun-Times reported this week that two former federal prosecutors questioned Ahmad — and interviewed others in Ohio — about investments there that culminated in Ahmad’s indictment 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 then-Mayor-elect Rahm Emanuel’s transition team.
On Tuesday, Emanuel was asked whether he felt “let down” by Connelly and Scott. The answer was “no.” The mayor said Connelly and Scott “did their job as best as they could do, given what he [Ahmad] provided and what other people said about him.”
He also noted that the federal investigation came later and centered around a different investment deal than the one that generated campaign headlines in Ohio.
Instead of blaming the two former federal prosecutors, Emanuel unleashed his anger at the most convenient target: Ahmad.
“Where do we think we were let down? . . . He let the mayor’s office and the mayor down. Having worked for two Presidents, he had an obligation when he started to get asked to say he was under questioning,” Emanuel said.
“You have an obligation when something like that happened . . .when you’re starting to get questions, to inform the people who you work with who have entrusted you with the public trust. That is where he violated the trust and that’s the first place he violated.”
The mayor was asked Tuesday what Ahmad told him at that time to explain his abrupt departure.
“He said he wanted time with his family. I understand that, having worked for two Presidents and in Congress. He wanted personal time. And he wanted the ability to go to the private sector to make some money, given that he had a young family. That’s what he asked for,” Emanuel said.
And when did the mayor find out there was another reason—that Ahmad was under federal investigation?
“When I read it in the paper,” the mayor said.
A cursory review over the weekend concluded that the city and its four underfunded city employee pension funds — where Ahmad served as a board member — did no business with the cast of characters indicted along with Ahmad in Ohio.
But, the mayor has asked Corporation Counsel Stephen Patton and Inspector General Joe Ferguson to conduct a more extensive review along with an “independent third party” with expertise in conducting forensic audits.
The Patton-Ferguson tag team is ironic, considering the fact that Ferguson is on his way out and because 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.
Aldermen Bob Fioretti (2nd) and Scott Waguespack (32nd) have demanded 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 re-route the investigation,” Fioretti said.
On Tuesday, Emanuel did not explain why he felt it necessary to have Patton “looking over Ferguson’s shoulder,” as Fiorettii put it.
He would only say, “Never should the taxpayers of the city of Chicago be violated as the people in Ohio were when Amer worked there.”
Ahmad, 38, plead not-guilty Monday to charges that he 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 personal 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.