Hidden in the sewers
tracking the daleys | Mayor's son, nephew had another government deal -- for $200,000 with Water Reclamation District
During the year that Mayor Daley's son had a hidden ownership stake in a sewer company, the business not only landed lucrative deals at City Hall, it also got work from another local government -- the Metropolitan Water Reclamation District of Greater Chicago.
Records show the Water Reclamation District paid the company, Municipal Sewer Services, more than $200,000 to inspect sewers under a contract awarded in 2004. At the time, the agency's top administrator was John Farnan, a longtime member of the 11th Ward Democratic organization run by the mayor's brother, Cook County Commissioner John Daley. Farnan, who has since retired, did not return calls seeking comment.
(Sun-Times file)
(Rich Hein/Sun-Times file)
Water Reclamation District officials say they didn't know the mayor's son, Patrick, and nephew, Robert Vanecko, owned 5 percent of the company, whose biggest customer was City Hall. Neither man's name was listed in contract documents obtained from the Water Reclamation District, the agency that treats sewage in Cook County. But the papers do contain the name MSS Investors LLC, a company the Sun-Times previously reported was owned by Patrick Daley and Robert Vanecko.
"I didn't see the Daley name on any of the disclosure statements,'' said Richard Lanyon, the district's general superintendent, who replaced Farnan. "That's the only thing we have, unless one of the commissioners knew he was involved with that company."
Two of the district's elected commissioners -- President Terrence J. O'Brien and Finance Chairman Gloria Alitto Majewski -- said they approved the contract but never knew the mayor's son was involved.
Mayor Daley had a similar reaction two months ago, when the Sun-Times exposed his son's hidden interest in the company and that it got millions of dollars in work from the city. That report prompted an investigation by the city's inspector general that is ongoing.
Under its contracts with the city and with the Water Reclamation District, Municipal Sewer Services was required to disclose the company's owners.
But what the company told the city about its ownership, in papers filed Feb. 24, 2004, was different from what it told the Water Reclamation District about a month later. And Patrick Daley and Vanecko's names are omitted from both documents, even though they were owners.
In a phone call, Anthony Duffy, who was president of Municipal Sewer Services at the time, declined to explain why he filed two different ownership forms, saying, "I understand there is an investigation being carried out." Duffy is no longer with Municipal Sewer Services.
A company spokesman said the Water Reclamation District filing was correct, adding: "That said, we are currently reviewing everything related to the company's work on behalf of the city of Chicago. Out of respect to that effort and the efforts of the city of Chicago's inspector general, it would not be appropriate to address any details regarding past contracts at this time."
Duffy and majority owners Robert Bobb and Joseph McInerney created Municipal Sewer Services in 2003, buying a bankrupt company and taking over its two expiring contracts to inspect city sewers with video equipment. The mayor's son and nephew were original investors, the Sun-Times has reported. Rather than seek new bids, City Hall extended the contracts for a year -- extensions worth $3 million to Municipal Sewer Services.
The company got the Water Reclamation District contract a few months later.
Patrick Daley and Vanecko left the company after about a year, amid the federal investigation of the city's Hired Truck Program. One of the trucking companies hired by the city also was a subcontractor for the sewer company.
Municipal Sewer Services still does business with the city and the Water Reclamation District.
Shortly after cashing out, Patrick Daley enlisted in the Army. Still in the Army, he couldn't be reached for comment. A spokesman for Vanecko said he knew nothing about the water reclamation contract.
Mayoral press secretary Jacquelyn Heard said, "The mayor's response has not changed since he last told you that he wasn't aware of his son's investment, and he wishes his son had made wiser choices."
• *July 2003: Patrick Daley signed a lease on behalf of Municipal Sewer Services.
• *February 2004: The company filed an ownership disclosure statement with the city of Chicago that failed to include Patrick Daley and Robert Vanecko.
• *March 2004: The company told the Metropolitan Water Reclamation District that its owners included MSS Investors LLC without naming its owners -- Patrick Daley and Robert Vanecko.