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THE WATCHDOGS: Emanuel nemesis’ law firm sued over ex-suburban chief’s $129,192 disability pay

Timothy Balderman. | Joseph P. Meier~Sun-Times Media

Timothy Balderman. | Joseph P. Meier~Sun-Times Media

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Updated: October 25, 2012 6:08AM

The attorney who waged a losing battle to keep Rahm Emanuel out of the Chicago mayoral race last year now finds his law firm enmeshed in another court fight, this time over a former southwest suburban police chief’s six-figure yearly disability pay.

Odelson & Sterk Ltd. — the Evergreen Park law firm headed by onetime Emanuel nemesis Burt Odelson — is being sued for malpractice by the Chicago Ridge police pension fund over the $129,192 a year that former chief Timothy A. Baldermann has been getting in disability pay since April 2010.

Odelson’s firm and his partner, Mark H. Sterk, were “careless and negligent” as the pension board’s legal counsel in signing off on the final salary figure that was used to calculate Baldermann’s disability pay, the board says in court papers.

In response, Odelson says he wasn’t personally involved in the disability case. And Sterk says he was never asked to calculate Baldermann’s disability pay, only to conduct Baldermann’s disability hearing and certify the paperwork.

The board wants to undo the generous disability deal that it gave Baldermann, as well as to scale back the retirement benefits it awarded a month later to his former deputy chief, Dennis Kapelinski.

State officials have told Chicago Ridge village government officials that the benefits awarded to Baldermann and Kapelinski were erroneously based in part on vacation time that both men had accumulated but never used, as well as 20 percent raises each was given on his last day on the job. Such vacation “buybacks” and bonuses should not be used in calculating officers’ disability pay or pensions, according to the Illinois Department of Insurance’s public pension division.

Baldermann, 46, and Kapelinski, 56, are suing the board to block it from cutting their benefits.

Baldermann’s disability pay is the highest the Chicago Sun-Times has found in an investigation into police and firefighter disability benefits being paid by cash-strapped public pension systems. And it’s set to increase to $191,204 a year after he turns 60.

In addition to his tax-free disability pay, Baldermann makes $127,000 a year as the superintendent of the tiny Union School District 81 in Joliet and $18,000 more as the elected mayor of New Lenox.

Odelson has long ties to Baldermann’s father, Albert C. Baldermann, a banker Odelson says handled the mortgage on his first home in the early 1970s.

In 2003, Albert Baldermann and Odelson were among the investors who were awarded a state permit to open New City Bank in downtown Chicago. Baldermann was the bank’s chief executive officer, and he and Odelson sat on the bank’s board, records show.

Albert Baldermann had left the bank by August 2009, when New City gave a $1 million mortgage to 8850 Archer LLC, another Odelson company. Odelson says he has a financial stake in Greco’s restaurant in Willow Springs, which operates at that address.

When New City made that loan, Odelson’s fellow bank board members included Cook County Commissioner William Beavers, who has since been indicted for tax evasion, and retired Illinois Supreme Court Justice Mary Ann McMorrow.

Federal and state regulators shut down the failing bank in March.

Odelson says he had nothing to do with Tim Baldermann’s disability case, which was handled by his partner, Sterk, who says he had no role in the calculations that led to Baldermann’s six-figure annual disability pay.

Odelson, who specializes in election law, says he’s done only a small amount of work for the village of New Lenox, where Tim Baldermann is mayor. In 2009, the New Lenox election board — which included Baldermann — hired Odelson to assist it with nominating-petition challenges to two trustee candidates, according to the SouthtownStar.

“They called me in because of my expertise,” Odelson says. “I only know Tim through his father.”

A lawyer representing Baldermann and Kapelinski sent a letter Friday to the Sun-Times saying Tim Baldermann “resents any insinuations that he exerted any influence on Mr. Sterk on this or any matter related to the Village of Chicago Ridge Pension Fund.”

The police pension fund’s malpractice suit against Odelson & Sterk says Kapelinski calculated the final salaries for his pension and for Baldermann’s disability pay.

The law firm “failed to advise the board that it should seek an independent calculation of the respective salaries,” according to the lawsuit.

The suit also says Sterk wrote a letter maintaining that the benefits were legal even though Sterk had been “advised by certain active-duty and retired police officers of issues related to the calculation of the initial pensions” for Baldermann and Kapelinski.

The malpractice allegations “are just not true,” says Odelson.

Kapelinski declined to comment. Attempts to reach Tim Baldermann and Albert Baldermann were unsuccessful.

Both court cases involving Baldermann’s disability pay are pending.

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