6 Streets & San workers tied to payroll scam

Three Chicago Streets and Sanitation Department employees could be fired -- including one whose name appears on the once-secret "clout list" -- a fourth has resigned and two more have been suspended for allegedly participating in a payroll scam in the Northwest Side's 45th Ward.

After a months-long undercover surveillance by the city inspector general's office, laborers Daniel Degnan and Michelle Allison and truck driver Scott Lorentz are accused of routinely working a three- or five-hour workday when they were supposed to be on the clock for eight hours.

Truck driver Robert Williams allegedly participated in the scam, but for a shorter period of time, after Degnan and Allison were transferred to Williams' garbage truck. Williams has been suspended for 60 days.

Refuse collection coordinator Louis Nava, who was supposed to be supervising the employees, resigned earlier this year after being interviewed by city investigators. Ward Supt. Nicholas Slywczuk was suspended for five days.

All of the employees were assigned to the sanitation office in the 45th Ward, whose alderman, Pat Levar, could not be reached for comment. They are accused of covering their tracks by clocking in as scheduled at 6:30 a.m. and working until either 9:30 a.m. or 11:30 a.m. After the abbreviated shift, they allegedly went home, only to return at their normal 2:30 p.m. quitting time to clock out.

The alleged scam was uncovered thanks to a tip to Inspector General David Hoffman, who has set up an encrypted Web site and a hotline staffed into the evening to field information from tipsters willing to tell what they know about City Hall corruption.

About 10 surveillances were conducted. The employees were observed falsifying their hours "almost every time" they were watched, sources said. On Fridays, the employees routinely stopped working at 9:30 a.m. to get an early start on the weekend.

The purported 45th Ward scam is surprising because it allegedly went on at a time when the Hired Truck, city hiring and minority contracting scandals have federal investigators swarming all over City Hall.

The Daley administration also is replacing punch clocks with biometric technology to prevent employees from swiping each other in and out, as they did last year in the city's Department of Water Management.

"It's insane. You have to have your head examined," one ward boss said of the timing.

Streets and Sanitation spokesman Matt Smith was tight-lipped about the scandal. He would only say that five Bureau of Sanitation employees "face disciplinary follow-up" after an inspector general's investigation "related to the falsification of work-time records by some of them."

"Three of them have been presented charges and face possible termination. Two others face lesser discipline," Smith said, refusing to say more until "personnel procedures" have been followed.

Daniel Degnan's name appears on the "clout list" of patronage workers released during the trial that ended in July with the conviction of Mayor Daley's former patronage chief and three others. State Rep. Harry Osterman is listed as Degnan's sponsor. Osterman could not be reached.

Degnan refused to discuss his firing, on the advice of his attorney. He insisted he is not related to Tim Degnan Sr., the mayor's former political enforcer and one of several former top mayoral aides who, prosecutors have warned, could be linked to a conspiracy to rig city hiring and promotions in favor of pro-Daley armies of political workers.

The other employees implicated in the scheme could not be reached.

Hoffman refused to comment.

fspielman@suntimes.com