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Workers for city contractor caught doing nothing, witness testifies

12-3-10 AurorVenegas leaves Dirksen after pleading guilty. phoby Jean Lachat/Sun-Times

12-3-10 Aurora Venegas leaves Dirksen after pleading guilty. photo by Jean Lachat/Sun-Times

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Updated: November 22, 2011 11:12AM

Workers at a minority-owned firm that took in millions of dollars in city contracts were allegedly caught on tape doing nothing as the firm farmed out the work elsewhere, federal court testimony alleged Thursday.

Federal authorities say they wired up an employee of Azteca Supply Co. — the largest female-owned subcontractor on former Mayor Richard Daley’s O’Hare Modernization Project — who recorded conversations at the firm over three months. Prosecutors are trying to prove that Azteca was little more than a shell that won minority contracts, then passed along the work to other firms.

A city investigator who testified Thursday in a lengthy sentencing hearing of Azteca’s owner, Aurora Venegas and her husband, Thomas Masen, said Azteca employees were heard on tape spending much of the work-day gossiping and watching TV.

“I got the sense that little business was being conducted,” said David Mitchell, assistant chief investigator with the City Inspector General’s Office. “A lot of gossip. A lot of talk about TV shows. TV was on in the background. I’d say the majority [of the recordings] was idle chatter.”

Defense lawyers objected, saying Mitchell was making generalizations from a snapshot captured on tape.

“This is trial by cherry picking,” said defense lawyer William Ziegelmueller.

Prosecutors accused Azteca of fraudulently receiving more than $9.5 million tied to contracts between 2001 and 2008.

Venegas pleaded guilty last year — but only to one count, involving a small $57,000 contract in Orland Park. Masen pleaded guilty to lying to the feds when he denied he wasn’t helping his wife run a phony business to get public work. Azteca is accused of selling millions of dollars in construction materials manufactured by National Concrete Pipe Co., where her husband worked as the comptroller.

In the hearing, which continues Friday, prosecutors are trying to prove there was fraud with two other major contracts where Venegas did not admit wrongdoing. Both were at O’Hare and could mean Venegas would face a stiffer sentence.

Azteca Supply is a longtime client of the law firm headed by former mayoral candidate Gery Chico. Azteca hired Chico’s firm to win certification from Chicago as a business owned and operated by a minority and a woman. The city has permanently banned Azteca and Venegas from getting any more city contracts.

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