Scandals, cronyism cloud Daley’s legacy
By Fran Spielman City Hall Reporteremail@example.com May 8, 2011 6:50PM
Mayor Daley “expressed outrage after the disclosures” that his aides, friends and even family members were involved in corruption, but was “never comfortable confronting institutional aspects of corruption,” one observer says. | John H. White~Sun-Times
Updated: August 25, 2011 12:29AM
For 22 years, corruption and contract cronyism have been the dark clouds hanging over Mayor Daley’s administration.
“This is his Achilles heel — the black mark on what is overall a stellar record. This is the part of his legacy he’s probably the most unhappy with, yet he did the least to change,” said Andy Shaw, president and CEO of the Better Government Association.
“He nibbled at the margins,” Shaw said. “He expressed outrage after the disclosures. He initiated minor reforms after the scandals. But because of his roots and friends and family members, he was never comfortable confronting institutional aspects of corruption and doing what was necessary to cut this off.”
The seminal moment came in 2004, when the Chicago Sun-Times blew the lid off the Hired Truck Scandal, which branched out into city hiring and produced an eye-popping 49 convictions, 31 of them city employees.
That forced the city to pay millions to a federal hiring monitor and set up a $12 million fund to compensate victims of City Hall’s rigged hiring system.
But corruption and cronyism were a steady drumbeat at Daley’s City Hall long before the newspaper exposed a program that paid clout-heavy companies — some posing as women and minorities, others with ties to organized crime — to do little or no work.
There was the 1997 resignation of Ald. Patrick Huels (11th), the mayor’s former City Council floor leader, five days after the Sun-Times disclosed that Huels’ security company had received a $1.25 million loan from perennial city trucking magnate Michael Tadin.
Tadin’s company had received a $1.1 million city subsidy with Huels’ help. Huels needed the money to settle a $1 million Internal Revenue Service problem.
A few weeks later, Daley forced the resignation of Police Supt. Matt Rodriguez after reports of the superintendent’s long-standing friendship with convicted felon Frank Milito.
Police Department rules prohibit police officers from associating with felons.
In 1999, members of the Duff family—with political ties to Daley and reputed ties to organized crime—were exposed by the Chicago Tribune for defrauding the city of $100 million in contracts earmarked for minorities and women.
The following year, Daley was rushed to the hospital with what he thought was a heart attack, but turned out to be hyper-tension.
It happened on the same day that the Sun-Times and BGA lifted the veil on mayoral pal Oscar D’Angelo’s backstage maneuvering at O’Hare Airport.
The newspaper reported that D’Angelo, an unregistered lobbyist, had collected at least $480,000 to broker a 10-year contract extension for British bookseller W.H. Smith. The 1996 concession deal put two friends of the mayor’s wife, Maggie, in business at O’Hare: Economic Club President Grace Barry and public relations maven Barbara Burrell.
D’Angelo had earlier embarrassed Daley by making $10,500 worth of interest-free loans to the mayor’s deputy chief of staff.
The hiring scandal born from Hired Truck culminated in the conviction of Daley’s former patronage chief and Streets and Sanitation commissioner. They were accused of rigging city hiring and promotions to benefit the Hispanic-Democratic Organization and other pro-Daley armies of political workers.
David Hoffman, the former federal prosecutor hired by Daley in 2005 to restore public confidence shaken by the Hired Truck Scandal, said, “Arguably, one silver lining from these scandals was that they resulted in the development of a truly independent and robust inspector general’s office that citizens now expect in city government.”
The scandals have also hit home for the mayor — literally.
In 2007, the Sun-Times disclosed that Daley’s soldier son Patrick, then deployed overseas, and the mayor’s nephew Robert Vanecko had a hidden interest in a sewer inspection company whose city business rose sharply while they were owners.
Their former business partner has since been charged with three counts of mail fraud after being accused of engaging in minority business fraud.
An emotional Daley called his son’s investment a “lapse in judgment” and declared, “I wish he hadn’t done it.” But Daley said he didn’t know about the deal until the Sun-Times started asking questions.
Daley sang a similar tune after the Sun-Times disclosed his nephew’s risky real estate venture involving $68 million in city employee pension funds.
The mayor insisted that he had tried to get his nephew out of the deal nearly two years earlier, only to be ignored.
“I love my nephew. It’s difficult for me to have my disappointment in him made public,” Daley said at the time, offering an explanation that was difficult for many Chicagoans to swallow.
The nephew problems have continued until the end.
Daley leaves office May 16 under a cloud created by a Sun-Times investigation into the 2004 death of a 21-year-old man who got into a Division Street altercation with a group that included the mayor’s nephew.
Inspector General Joe Ferguson is investigating the Chicago Police Department’s handling of David Koschman’s death to determine whether the mayor’s nephew Richard J. “R.J.” Vanecko received favored treatment.
In between the big stuff, there has been a string of lesser scandals:
† BUILDING DEPARTMENT BRIBES: Twenty-nine people, 17 of them city employees, have been charged with participating in the scheme to ignore building code violations and expedite permit plans. The joint investigation by the inspector general and the federal government has already resulted in 21 guilty pleas. It’s the same department that hired the teenage sons of Carpenters Union officials to serve as city building inspectors in 2004.
† 50/50 SIDEWALKS: A Sun-Times investigation found that the city overcharged 60 percent of taxpayers, who ended up paying more than half the cost of their new sidewalks. Senior citizens were overcharged the most.
† WORKER’S COMPENSATION: One of every five patronage workers on a secret clout list filed at least one worker’s compensation claim against the city, a Sun-Times analysis found. That incredibly high injury rate would make patronage work one of the most dangerous jobs in America.
† STOLEN ASPHALT: Federal officials charged in 2005 that city employees had been using Hired Trucks to steal asphalt from city paving jobs since at least 1999. A Sun-Times investigation found that the city used an extra 16,000 tons of asphalt — about 840 truckloads — during the 2004 construction season alone.
† VACANT LOT CLEANING: The city spent more than $3.5 million in 2004 to have Streets and Sanitation crews use Hired Trucks to clean privately owned vacant lots. Some were owned by politically connected people, including former Illinois Gaming Board Chairman Elzie Higginbottom, the mayor’s chief fund-raiser in the black community.
† TOWING PROGRAM: Shortly after taking office, Daley turned towing over to EAR, a company whose owners have close ties to Jeremiah Joyce, one of the mayor’s closest friends in politics. The Sun-Times subsequently exposed how the city sells about 70,000 cars each year to EAR for no more than the going scrap-metal price, regardless of the vehicle’s age or condition. Owners get nothing for the car, even though they’re still on the hook to the city for fines and towing fees. The towing company resold the cars through private auctions held at city auto pounds and kept the proceeds.
† MINORITY BUSINESS FRAUD: The parade of white-owned minority fronts is not limited to the Duffs. It also includes Rod Blagojevich’s now-convicted chief fund-raiser Tony Rezko. Sun-Times stories have also shined the light on a company brokering plumbing supplies owned by the sister of Daley political enforcer Victor Reyes; a minority telecommunications company partially owned by Mayor Richard J. Daley’s longtime patronage chief Tom Donovan, and an O’Hare Airport restaurant owned by Billy Goat tavern owner Sam Sianis that was placed in the name of Sianis’ wife, apparently at the city’s direction.
† CRONYISM: The law firm of Daley & George —which once included the mayor and still includes his brother Michael — emerged from relative obscurity to become the city’s preeminent zoning firm during Daley’s 22-year reign. County Commissioner John Daley, another mayoral brother, sold insurance to city contractors. City contracts have also benefitted a parade of mayoral pals, including D’Angelo, Tadin, Joyce, Reyes, Michael Marchese, Patrick Harbour and Richard Crandall.
The BGA’s Shaw thinks he knows why Daley has struggled mightily with the revelations about his son and nephews.
“How can you tell the next generation you can’t do this when your own brothers are in the middle of leveraging government, politics and business?” he said.