When are we going to start reviewing the contracts for Unarmed Security Guards? Or the portable dumpsters, or the lease contracts? So much corruption, clout, and crime in Chicago, Mayor Daley. I give Daley and his hoodlums credit, they protect their master. Make sure you click below as Fran Spielman and Tim Novak continue to scratch the surface of Daley’s corrupt empire. I have a feeling more missing taxpayer’s loot will show up soon. Patrick McDonough.
]]>The cost of corruption
HIDDEN TAX | City loses millions to clout, fraud
October 14, 2007
BY TIM NOVAK AND FRAN SPIELMAN Staff Reporters
When Mayor Daley asked Chicagoans to cough up $293 million more next year to finance the cost of city government, there’s one tax he failed to mention: The Corruption, Waste and Mismanagement Tax.
It’s almost impossible to calculate the cost of the Hired Truck, city hiring, minority contracting and police corruption scandals.
SCANDALS: YOUR TAX DOLLARS AT WASTE• • HIRED TRUCKS — In 2004, the Chicago Sun-Times blew the lid off this $40-million-a-year scandal, which called for the city to lease hundreds of dump trucks, whose owners often bribed city officials to get work on city job sites. The program had been around for decades, but was abolished in 2005. City employees now drive dump trucks leased from one company — not the 165 companies that cashed in on Hired Truck.
• • RIGGED HIRING FUND — More than 1,400 people have staked claims to the $12 million fund created to compensate victims of the city’s rigged hiring system. The fund was created to settle the long-running Shakman case. Daley’s former patronage chief was convicted last year of rigging city hiring to benefit the Hispanic Democratic Organization and other pro-Daley armies of political workers.
• • FEDERAL HIRING MONITOR — Well over $2 million in legal fees — and counting — have been paid to federal hiring monitor Noelle Brennan and her staff. Brennan was appointed in 2005 to oversee city hiring by a federal judge livid with the city for making a mockery of the decree that was supposed to end political hiring and firing, but never did. Hundreds of thousands of additional legal fees were spent on attorneys who represented Daley, the City Council and the Black Caucus in the Shakman case.
• • MORE LEGAL FEES — Chicago taxpayers coughed up $251,314 in legal fees in 2006 alone to represent non-targeted city employees drawn into federal investigations swirling around City Hall. And that’s not counting dozens of other city employees represented by the city’s Law Department. Tens of thousands more were paid to Vince Connelly, the former federal prosecutor hired to quarterback the city’s response to the federal investigation.
• • JON BURGE — More than $10 million in legal fees have already been spent to defend the former Area 2 commander and his cohorts against charges they tortured criminal suspects for decades while police brass looked the other way. The city is on the brink of a settlement with three men allegedly coerced into murder confessions. The settlement is expected to duplicate or exceed the $14.8 million tentative deal reached last fall. Two other torture victims are still attempting to negotiate with the city.
• • 50/50 SIDEWALKS — A Sun-Times investigation found that the city overcharged 60 percent of taxpayers, who ended up paying more than half the cost of their new sidewalks. Senior citizens were overcharged the most. The program has since been renamed the “Shared Cost Sidewalk Program.”
• • WORKERS COMPENSATION — One of every five patronage workers on the secret clout list kept by the mayor’s former patronage chief filed at least one worker’s compensation claim against the city, a Sun-Times analysis found. That incredibly high injury rate would make patronage work one of the most dangerous jobs in America. Chicago taxpayers pay those claims.
• • MINORITY BUSINESS FRAUD — The parade of white-owned minority fronts that have cashed in on this program is led by the Duff family. But it also includes a host of other political insiders, including Tony Rezko, Gov. Blagojevich’s now-indicted former fund-raiser, and the sister of Hispanic Democratic Organization chieftain Victor Reyes.
• • STOLEN ASPHALT — Federal officials charged in 2005 that city employees had been using Hired Trucks to steal asphalt from city paving jobs since at least 1999. Those thefts cost taxpayers about $100,000. But the loss was likely greater. The Sun-Times found that the city used an extra 16,000 tons of asphalt — about 840 truckloads — during the 2004 construction season. Many of the extra tons came from jobs run by city foremen who went to prison for stealing asphalt.
• • VACANT LOT CLEANING — The city spent more than $3.5 million in 2004 to have Streets and Sanitation crews use Hired Trucks to clean privately owned vacant lots. Some were owned by politically connected people, including former Illinois Gaming Board Chairman Elzie Higginbottom, the mayor’s chief fund-raiser in the black community.
• • TOWING PROGRAM — Shortly after taking office, Daley turned towing over to EAR, a company whose owners have close ties to Jeremiah Joyce, one of the mayor’s closest friends in politics. Three years ago, the Sun-Times exposed how the city sells about 70,000 cars each year to EAR for no more than the going scrap-metal price, regardless of the vehicle’s age or condition. Owners get nothing for the car, even though they’re still on the hook to the city for fines and towing fees. The towing company resold the cars through private auctions held at city auto pounds and kept the proceeds. The city ended up paying more than $100,000 to a dozen people whose cars were towed and wrongly sold for scrap before owners could rescue them from the pound.
• • SOS SCANDAL — Legal fees and settlements tied to this burgeoning police scandal could drag on for years and mirror Burge totals. Seven members of the Chicago Police Department’s newly disbanded Special Operations Section stand accused of home invasions, kidnappings and robberies. Their alleged ringleader has been charged with trying to hire someone to kill a former SOS officer who was serving as a government witness.
• • BUILDING DEPARTMENT BRIBES — Nearly a dozen city building inspectors have been accused of accepting bribes to ignore building code violations, as part of an ongoing joint investigation by the inspector general and the federal government. It’s the same department that hired the teenaged sons of Carpenters Union officials to serve as city building inspectors in 2004.
It’s even harder to determine how much more it costs taxpayers when employees and contractors with clout are hired over more qualified competitors and then watched less closely.
But one thing is certain: Chicagoans pay a price for corruption, waste and fraud.
If they didn’t, Daley would never have agreed to establish a $12 million fund to compensate victims of the city’s rigged hiring system after the conviction of his former patronage chief. And the mayor would not have abolished a $40-million-a-year Hired Truck program so tarnished by scandal, a federal investigation has already resulted in 45 convictions, 29 of them city employees.
“There’s still a corruption tax in Chicago,” said Jay Stewart of the Better Government Association.
Pointing to the Hired Truck scandal that branched out into city hiring, he said, “On one, you had millions in contracts that never needed to be let in the first place. On the other, thousands of people were hired on the basis of clout vs. qualifications.”
Ald. Ricardo Munoz (22nd), one of Mayor Daley’s most outspoken City Council critics, said there’s “no way of measuring the corruption tax” until “somebody gets caught with their hand in the cookie jar.”
“A lot of it isn’t necessarily corruption. It’s waste and inefficiency — what I call the lazy bureaucracy. We’re not sometimes getting a full day’s work for a full day’s pay,” he said.
Ald. Joe Moore (49th) noted that Inspector General David Hoffman asked for 22 additional employees and got only four in Daley’s proposed 2008 budget. Hoffman has been at odds with the mayor over Daley’s $2.5 million-a-year proposal to create a new Office of Compliance to monitor city hiring after the departure of a federal monitor.
“Every time I read your paper or watch TV news, I see stories about the Shakman decree being routinely violated,” Moore said. “I see stories of rogue police officers costing the city tens of millions of dollars in court damages and attorneys fees. I see tens of millions of dollars wasted — literally stolen on Hired Trucks.”
“At the same time, the mayor is apparently unwilling to give the IG the tools he needs to root out, not only outright corruption, but waste and inefficiency.”
To his credit, Daley is the one who chose Hoffman, a highly touted former federal prosecutor, to clean up city government from within. Last year, the mayor even agreed to beef up the inspector general’s budget — by adding a six-member team to audit city departments.
But that was before the latest flap over who should pick up where a federal hiring monitor leaves off.
‘Pretty aggressive action’
Ald. Pat O’Connor (40th), the mayor’s unofficial City Council floor leader, acknowledged that there was a cost to corruption. But that was before Daley abolished the Hired Truck program in 2005 and cleaned up a minority contracting program that allowed white members of the mob-connected Duff family to fraudulently obtain $100 million in janitorial contracts earmarked for minorities and women.
“I don’t think we’re still paying for a lot of that stuff that went on all those years. There was some pretty aggressive action taken to correct it,” O’Connor said.
“Obviously, we’re spending some money for monitors and hiring. But, that’s not the reason we’re in such bad shape. The economy, changes in the housing market. These holes are not created by us spending off the charts.”