Ex-partner of Daley son owes City Hall $428K in Chicago sewer scam
By TIM NOVAK Staff Reporter firstname.lastname@example.org July 22, 2013 12:21AM
Anthony Duffy (pictured in 2011) was president of now-defunct Municipal Sewer Services. | Sun-Times files
See past coverage including the Sun-Times’ 2007 report revealing the hidden ownership stakes.
Updated: August 23, 2013 6:05AM
Mayor Rahm Emanuel’s administration has sued a business partner of former Mayor Richard M. Daley’s son in a company that got lucrative city sewer deals — and won a judgment of $428,438.74.
But Anthony Duffy, who was president of now-defunct Municipal Sewer Services, has yet to pay up, which he agreed to do under a deal designed to stave off deportation to his native Scotland.
Initially facing charges that accused him of participating in a minority-contracting scam under the Daley administration, Duffy made a deal with prosecutors. He pleaded guilty last year to a single charge — lying to the FBI about why he failed to list the mayor’s son, Patrick Daley, and nephew, Robert G. Vanecko, as investors on documents he had to file with City Hall to keep getting city contracts.
Duffy’s plea deal allowed him to avoid conviction on a financial crimes charge — which would have made it likelier he’d be deported.
Because Duffy, 49, of Bartlett, wasn’t convicted of financial crimes, he couldn’t be required to make restitution. But he agreed not to fight City Hall when it sued him for 15 percent of the money involved in the scam.
Emanuel’s legal department sued Duffy in December, accusing him of helping minority-owned Brunt Bros. Transfer Inc. submit phony invoices between 2000 and 2005 for sewer inspections and cleaning that was done by non-minority-owned companies — including the one involving the Daley family members.
Daley’s son and nephew were investors in Municipal Sewer during the time the scam was going on. A Chicago Sun-Times report in December 2007 that revealed their hidden ownership stake touched off a federal grand jury investigation that resulted in the January 2011 indictments of Duffy and Brunt Bros. owner Jesse Brunt, a former sharecropper. Both men pleaded guilty.
Duffy, a youth soccer coach in the northwest suburbs, and Brunt, 77, of Chicago, face possible prison time when they are sentenced Wednesday by U.S. District Judge Milton Shadur.
The Daley family members have not been accused of any wrongdoing.
When Duffy first spoke with FBI agents, he said he’d omitted Daley and Vanecko’s names due to his own “carelessness and negligence.” In pleading guilty last year, Duffy admitted that was a lie. He said that at first he didn’t know about the involvement of Daley and Vanecko and that, when he found out, he wanted to amend the paperwork filed with the city but was “directed” not to do so and instead to “keep it the same” by a key investor, Joseph M. McInerney, a founder of the Chicago venture capital firm Cardinal Growth who was a friend of Patrick Daley, according to court records and sources familiar with the case.
McInerney hasn’t been accused of wrongdoing.
Duffy has long been involved in the city’s sewer cleaning and inspection program, which uses private contractors to do the work.
Duffy worked for Kenny Industrial Services, owned by the politically connected Kenny family, which had the two city contracts to inspect and clean sewers north of 63rd Street, and Brunt Bros. had the city contract for sewers south of 63rd Street.
But Brunt didn’t have any equipment to do the work. So he subcontracted most of it to Kenny, and Duffy oversaw the work.
When Kenny went bankrupt in 2003, Duffy started Muncipal Sewer with financial backing from Cardinal Growth, founded by Daley friend Robert Bobb Jr. and McInerney, and took over the city contracts.
Patrick Daley was working for Cardinal when he and his cousin invested $65,000 in Municipal Sewer, which then got $4 million in no-bid contract extensions from City Hall.