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Hidden investors in controversial city janitorial contract

Richard SimPresident   CEO United Services Companies. | Courtesy Greater North Michigan Avenue Associatiwebsite

Richard Simon, President & CEO of United Services Companies. | Courtesy Greater North Michigan Avenue Association website

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Updated: February 16, 2013 6:06AM

The head of a janitorial company didn’t disclose that he had sold a major stake in the business during the time it pursued and landed a city contract worth almost $100 million, even though the city requires bidders to provide “current” ownership information.

Richard Simon was listed as United Maintenance Co. Inc.’s 100 percent owner when the company began bidding for the lucrative contract to clean O’Hare Airport in September 2011.

Simon sold a 50 percent interest in the firm in December 2011 but didn’t file a new disclosure statement with the city reflecting the change until last month.

The 50 percent share in United was bought by a downtown firm called Invision Capital I LP, records show. It’s not known publicly who owns Invision. The firm’s executives have told the city no one holds an ownership stake greater than 7.5 percent­­ — the threshhold for disclosing ownership interests under city purchasing rules.

In filing their original disclosure documents as a bidder in 2011, United officials agreed that the information they provided “must be kept current” and updated “in the event of changes . . . up to the time the city takes action on the matter.” Failure to do so can make a contract void.

Mayor Rahm Emanuel’s administration awarded the O’Hare deal to United on Oct. 31, and it took effect on Dec. 15. The updated disclosures that detailed the ownership change were filed by United and Invision on Dec. 21 and 26, according to city records, although a city spokesman says a lawyer for United informed officials of the matter on Dec. 5.

“Once the city became aware of the ownership change, it reminded United of its obligation to update its [disclosures], which they did,” said Bill McCaffrey, a spokesman for the city’s Procurement Services Department.

McCaffrey said the new filings from United and Invision “did not reveal any information that would lead the city to make a determination that United was not a responsive and responsible bidder or that the city should not proceed with the contract.”

A spokesman for United declined to comment. Invision’s managing partner, Robert Castillo, didn’t respond to calls seeking comment.

Since awarding the O’Hare contract, Emanuel and his aides have come under fire from union leaders who say United pays lower wages and benefits than the city’s previous unionized janitorial contractor.

Emanuel administration officials have accepted United’s response that it will pay more, and they dismissed reports that Simon had business ties with associates of organized crime as “rumor or innuendo.”

State records show that until about a year ago Simon was in business in another company with William Daddano Jr., who was described as an organized-crime associate by Illinois Attorney General Lisa Madigan. Madigan cited testimony from an FBI agent when she sued to block the Rosemont casino license in 2004.

The Sun-Times also has reported that United employs a man who was convicted of racketeering in a case in which the defendants included the late Chicago mob boss Anthony “Big Tuna” Accardo.

Simon boasts many more illustrious acquaintances in Chicago, including police Supt. Garry McCarthy, and he was part of a group of investors who bought the building that houses the downtown branch of Harry Caray’s Restaurant.

A former Chicago police officer, Simon has worked for United since he was a teenager in the 1960s. He rose to become a vice president and chauffeur for United founder Ben Stein, who died in 1996.

With headquarters on the Near South Side, United boasts more than 5,000 employees across the country. City officials say the company’s other clients include the United Center and the Hyatt hotel chain.

Until a few years ago, Stein’s daughter Carol and Simon were listed as officers of United on company filings with the state off Illinois.

The United spokesman told the Sun-Times last month that Simon “completed his purchase of United Maintenance in 2009.”

United’s general counsel in an email to the city indicated Invision bought its 50 percent stake in United’s corporate parent on Dec. 9, 2011. Invision was formed in Delaware in 2008 and has an office on Washington Street in the Loop.

Invision executives told City Hall last month that “there are no owners with greater than 7.5 percent ownership.”

City officials can require contractors to provide additional ownership information “which is reasonably intended to achieve full disclosure.” The Emanuel administration believes Invision has met all city requirements, McCaffrey said.

Castillo is listed in Invision’s disclosure documents as general partner. According to the private equity firm’s website, Castillo formed the company after co-founding Valor Equity Partners, where he worked for seven years.

Valor is headed by Antonio Gracias, who is on Emanuel’s World Business Chicago board and was among seven co-chairs of the mayor’s inaugural festivities in 2011. Gracias could not be reached for comment.

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