August 28, 2014
Chicago taxpayers spend $825,000 to learn crooked comptroller didn’t steal a dime
January 10, 2014 9:08PM
Chicago taxpayers spent $825,000 to find out that Mayor Rahm Emanuel’s now-convicted former City Comptroller Amer Ahmad did not cost them a penny beyond his $165,000-a-year salary.
The $825,000 was paid to the law firm of Drinker Biddle & Reath LLP and the accounting firm of Grant Thornton for a 47-page report that concluded that Ahmad did not defraud cash-strapped Chicago like he did in Ohio.
Ahmad pleaded guilty last month to conspiracy and bribery for his role in a kickback and money-laundering scheme that occurred when he served as Ohio’s deputy state treasurer. He faces up to 15 years in prison after agreeing to pay $3.2 million in restitution.
In the plea agreement, Ahmad, 38, admitted that he used his position to secure securities and brokerage work that netted his high school classmate and financial adviser $3.2 million in commissions.
In exchange, Ahmad and his co-conspirators got more than $500,000 in secret payments concealed by passing them through an Ohio landscaping company owned by Ahmad and another associate.
A rising star in the Emanuel administration, Ahmad abruptly resigned last summer, saying it was time to return to a private sector job he had not yet arranged. He was indicted a few weeks later.
An embarrassed Emanuel flatly denied that he should have known about Ahmad’s alleged wrongdoing in Ohio and promised an exhaustive investigation — with Inspector General Joe Ferguson and Corporation Counsel Stephen Patton overseeing the forensic audit.
Before sounding the all-clear in Chicago, Drinker Biddle and Grant Thornton conducted a painstaking investigation that began by determining that none of the individuals accused of participating in the Ohio scheme was doing business with or receiving payments from the city or its four employee pension funds.
Two databases of public records were used to identify individuals or entities associated with Ahmad and his three Ohio co-defendants. Again, no red flags were raised.
Next, consultants poured through Ahmad’s email account, his co-workers’ emails and scores of other electronic documents, shared drives and hard copies. Wire payment data was examined to identify “red flags.” None was raised.
Thirteen current and former senior level city employees, including Ahmad, were interviewed. None “observed or was aware of any facts that indicated wrongdoing” by Ahmad.
Drinker Biddle and Grant Thornton also examined Ahmad’s pivotal role as a pension fund trustee and found “no indication that Ahmad abused the influence of his position as trustee or caused financial harm” to the four funds.
The report did, however, note that Ahmad “initiated discussion” with Mesirow Financial about working for the firm, even as he knew Mesirow did business with the city’s four pension funds.
Ahmad recused himself from one vote involving a Mesirow subsidiary. But he voted on five other pension fund deals with Mesirow that took place after he began speaking with the firm about potentially working there.
Nevertheless, the report concluded it was beyond the scope of the audit to determine whether Ahmad broke city rules or other laws by taking part in those Mesirow-related votes.
Of the $825,000 payment, $464,615 went to Grant Thornton. The remaining $360,408 was paid to Drinker Biddle.
It’s not the first time Emanuel has spent something for nothing.
Privatizing Midway Airport could have left Chicago with $500 million — even after debt was retired — to shore up city pensions and build infrastructure projects.
Instead, it ended up costing Chicago taxpayers $3.5 million. That’s how much money Emanuel spent on a clout-heavy team of advisers, only to pull the plug after one of only two bidding teams left the runway.