Tax debt no bar to tollway deal
Rezko pal runs oasis eateries despite owing state $359K
Al Chaib owes the state $359,639 in unpaid business taxes that date back five years.
But that hasn't kept the longtime associate of indicted ex-gubernatorial adviser Tony Rezko from being part of an exclusive Illinois Tollway deal, despite a law that bars tax deadbeats from getting state business, a Chicago Sun-Times investigation has found.
(Sun-Times files)
Chaib's firm, Morpheus LLC, owns Subway sandwich shops at all seven tollway oases. The deal includes his 23-year-old daughter, Alia, and a Schaumburg businessman, Adam A. Yala, records show.
Selling sandwiches on state property is just one of the perks Chaib's family has secured under Gov. Blagojevich.
In September 2003, the governor gave Chaib's wife a part-time job in a state agency charged with collecting more than half of her husband's tax debt -- a decision a government watchdog said "does nothing but increase suspicion of how the Blagojevich administration does business."
While the administration defended the hiring of Chaib's wife, it conceded Wednesday that the Sun-Times is raising legitimate concerns about Chaib's Subway franchises.
"We have asked the tollway and their lawyers from the attorney general's office to look into the ownership issue and make sure there is no conflict with state procurement rules," Blagojevich spokeswoman Abby Ottenhoff said.
Rezko -- a former top Blagojevich political fund-raiser and adviser -- and Al Chaib built a stable of Papa John's and Panda Express fast-food franchises after attending the Illinois Institute of Technology together in the late 1970s.
Chaib's wife, Lori, joined the state Department of Employment Security Review Board after being recommended by Rezko, who is awaiting trial on federal fraud and corruption charges. She left the $15,000-a-year post in January -- about three months after prosecutors accused Rezko of demanding kickbacks and Blagojevich campaign contributions from companies seeking state business.
It's not clear whether Chaib's tax woes -- revealed in recently filed public documents -- are connected to the fast-food franchises he ran with Rezko, to his tollway eateries or to other businesses. In October 2005, federal authorities subpoenaed records involving all tollway oasis vendors linked to Rezko, including Chaib's Subways.
Now, Blagojevich's administration is facing questions about whether it ignored Chaib's tax problems when vetting him for his tollway deal or screening his wife for her appointment to the employment security board.
Chaib gave $10,000 to Blagojevich's political fund in February 2002. He began falling delinquent in tax payments to the state that same year. His tollway deal came together in early 2004.
He now owes $193,227 in overdue unemployment taxes and $166,412 in sales taxes, according to state liens.
"The Blagojevich administration is either woefully blind to these issues, or they just don't care," said Jay Stewart, executive director of the Better Government Association, a government watchdog group. "Would you want someone on a board who's married to an individual who's been sanctioned by that body? I don't think you have to be a good-government expert to realize that's problematic."
The Blagojevich administration disagrees. Aides to the governor said that Lori Chaib never tried to influence officials about her husband's back unemployment taxes and that the board she sat on handled unemployment disputes, not tax collection issues.
"It's clear that the state agencies did their job by identifying and pursuing debt owed to the state," Ottenhoff said.
Chaib and Yala did not return calls seeking comment. Lori Chaib shut the door on a reporter who tried to talk with her at the couple's LaGrange Park home.
Wilton Partners, which manages the oases for the tollway, did not respond to questions about details of Chaib's deal, or how Chaib has been allowed to own the oases' Subways despite a 2001 state law that prohibits delinquent taxpayers from landing state business.
Representatives of the state agencies that issued the liens against Chaib would not comment, citing taxpayer confidentiality laws.
Joelle McGinnis, a tollway spokeswoman, said the toll authority has final approval of vendors at its oases, but it relies on Wilton Partners to screen those people.
"The tollway is not in the business of securing tenants or running restaurants, so the partnership allows the tollway to focus its resources on operating and maintaining safe and efficient roads," McGinnis said.
A Democratic state senator who helped craft the tax-deadbeat legislation said tollway officials should determine whether Chaib is repaying his state debt. If not, he said, Chaib's deal should be canceled.
"It's truly in violation of the intent of any law that we passed," said Sen. Terry Link (D-Vernon Hills). "If the intent of the law was . . . to have these deadbeats pay their dues, then why are we allowing someone who's not paying their dues to participate? That's my question."