Council panel acts to avoid repeat of Duff slap on wrist

CITY HALL | Would detail official's power to punish contractors for violations

Two months ago, Chief Procurement Officer Montel Gayles embarrassed and infuriated Mayor Daley with kid-gloves treatment of James Duff, head of a mob-connected family that became the poster child for minority business fraud in Chicago.

Gayles banned Duff from doing business with the city for just three years, even though Duff pleaded guilty to fraudulently obtaining $100 million in janitorial contracts earmarked for minorities and women. When Daley and African-American aldermen raised the roof, Gayles switched the punishment to a lifetime ban.

On Wednesday, a City Council committee approved an ordinance designed to clear up the confusion that initially prompted Gayles to tread softly.

It clearly spells out the chief procurement officer’s power to cancel existing contracts and permanently disqualify contractors who have entered a guilty plea or been convicted of bid-rigging or bribing government employees. Violating the city’s living wage ordinance would also be grounds for the contracting equivalent of the death penalty.

The punishment would be spelled out in writing. A hearing would be held to guarantee the contractor due process. The chief procurement officer would also have the power to “waive the period of ineligibility” after providing a written explanation.

Finance Committee Chairman Edward M. Burke (14th) argued that, in an effort to avoid a repeat of the Duff embarrassment, the ordinance gives Chicago’s purchasing chief “almost unfettered discretion” over city contractors.

“I don’t know if that’s good for small businesses. … They can’t afford lawyers or lengthy court battles,” Burke said.

Since 2005, 19 companies have been “de-barred.” James Duff was the only recipient of a lifetime ban because he committed, what Gayles called the “atomic bomb of offenses.”

Shortly before his about-face, Gayles defended the three-year penalty, telling the Chicago Sun-Times, “I don’t know the Duff’s from the Diff’s … Under fraud or misrepresentation, three years was the penalty.”

On Wednesday, he said, “We wanted to clear up any ambiguity that may have existed.”