Robert Sorich challenges conviction for “honest services fraud,” testing federal corruption law
By David G. Savage | Washington Bureau
January 25, 2009
WASHINGTON—A case involving Mayor Richard Daley’s former patronage chief may prompt the U.S. Supreme Court to take up a key question of public corruption law: Is it a federal crime to give public jobs to campaign workers?
Robert Sorich, the ex-patronage chief, is appealing his conviction three years ago for “honest services fraud” for having “doled out thousands of city civil service jobs based on political patronage and nepotism,” as the 7th Circuit Court of Appeals in Chicago said last year.
In upholding the convictions, the judges agreed that Sorich and his two co-defendants—Timothy McCarthy and Patrick Slattery—had not received bribes, kickbacks and other “personal gain” in exchange for the jobs. And neither Congress nor the Illinois legislature had made it illegal to steer jobs to those with political connections.
But the appeals court said Sorich and his cohorts were guilty of a “massive scheme to defraud” the people of Chicago by running “an illegitimate shadow hiring scheme” out of City Hall.
The city had agreed in two federal consent decrees, known as the Shakman decrees, to remove political patronage from hiring, promotions and firings for most city jobs. Prosecutors said that Sorich and his co-defendants were well aware that patronage hiring was no longer acceptable, and that they shredded documents and erased computers to cover it up, according to the indictment.
Sorich, who comes from the Daley family’s Bridgeport neighborhood, was an assistant director of the mayor’s Office of Intergovernmental Affairs from 1993 to 2005, and federal prosecutors said he used that post to dispense jobs to campaign workers and political allies of Daley in violation of the Shakman decrees.
In addition to helping the mayor’s political organization, this patronage army helped elect President Barack Obama’s chief of staff, Rahm Emanuel, to Congress, and worked to elect scandal-plagued Gov. Rod Blagojevich.
Lawyers for Sorich and his two co-defendants are asking the Supreme Court to take up their appeal and to throw out their convictions on the grounds that their hiring scheme did not amount to a federal crime.
The justices considered the appeal in a closed meeting on Friday and may act on it as soon as Monday.
The case may draw the court’s attention because of persistent complaints that the notion of “honest services fraud” is too broad and open-ended. In recent years, federal prosecutors have made the anti-fraud statute their favorite weapon in combating public corruption.
To win a conviction, they need not prove that a city or state official took a bribe or got something in exchange for a favor. And they need not show the taxpayers suffered an actual loss. To crack down on public corruption, Congress in 1988 expanded the anti-fraud law to protect the public’s “intangible right” to honest government.
Northwestern University Law Professor Albert Alschuler said the Supreme Court should take up the Sorich case.
“This area of the law is a total mess,” he said. “Nobody knows what ‘honest services’ means. It’s extremely vague, and the courts are wildly split on how to define it.”
Alan Raphael, who teaches criminal law at Loyola University in Chicago, said he expected the high court to turn down the appeal.
Daley’s former streets and sanitation commissioner, Al Sanchez, is scheduled to go on trial this spring on charges he rigged hiring. In that case, however, prosecutors alleged Sanchez personally gained.
In December, U.S. Atty. Patrick Fitzgerald charged Blagojevich with conspiring to defraud the people of Illinois by withholding his “honest services.” But in that case, the prosecutor alleged that the governor was seeking something, such as campaign contributions, in exchange for selecting a candidate to fill the vacant Senate seat.
Tribune reporter Todd Lighty in Chicago contributed to this report.
Mike Quigley is fine for a Democrat but remember that all the crooks are crooks that you and a lot other people still support. Stop voting Democratic for one election cycle, get all republicans in there to clean house and then you and every other Democrat will have new and better candidates to vote for when you then throw the Republicans out of office. The Democrats have grown cozy that they are there regardless if they rape murder or destroy us. We need to shake things up. Every voter needs to.
(Response) Do you think that will happen here?
Never… Now that Daley has his brother and the puppet in the White House. Good Luck
I am hoping KARMA does what it does best!
Monday, January 26, 2009
The city of Chicago Daley administration infiltrates and enriches itself as it decimates Homeless Shelter
Read the below article courtesy of Chicago Suntimes.
Also bear in mind that mayor Daley’s very close friend Michael Marchese forced the Christian Industry League to sell it’s property to him so that he could build high rise condos on the property, now the Christian Industrial League and its homeless shelter are saddled with huge and heavy debts of over 10.8 million dollars as Daleys top men have made huge profits on the deal.
City official makes $300,000 on shelter
Daley appointee backed deal to provide financing for homeless project
January 26, 2009
A decade ago, David Ariola owned a South Loop gym where Mayor Daley worked out.
Today, the businessman serves on Daley’s Community Development Commission, making recommendations on every proposal for city tax-increment financing — the multimillion-dollar program Daley has used to build offices, stores, schools and other projects across Chicago.
» Click to enlarge image
David Ariola is a member of the Community Development Commission. He supported the mayor’s plan for funding the Chicago Christian Industrial League shelter, whose construction he was then hired to oversee.
Chico’s firm at a glance
David Ariola is a member of Mayor Daley’s Community Development Commission, which reviews all requests for city tax-increment financing. He ended up working on two TIF-funded projects, both involving the Chicago Christian Industrial League:
March 12, 2002 — Ariola and his fellow commissioners support City Hall’s plan to build a homeless shelter that will cost taxpayers $13.5 million, mostly from TIF funds.
Jan. 12, 2005 — Ariola’s two-month-old company is hired by the league’s executive director, Judith McIntyre, to oversee construction of the shelter. The contract calls for Ariola to be paid $8,000 a month during the 16-month construction project. Records show he ended up getting paid more — $301,700.
June 2005 — McIntyre hires Ariola to oversee construction of a $20 million single-room-occupancy apartment building at 618 S. Wabash, on land the city acquired with TIF money.
August 2006 — Ariola oversees demolition of the league’s former homeless shelter in Greektown, using contractors chosen by the mayor’s friend Michael Marchese. The city gives the league $1 million in TIF funds for demolition costs — $30,000 of it goes to Ariola.
As one of 15 members of the unpaid city advisory board, Ariola supported the mayor’s plan to spend more than $13.5 million to build a $25.2 million homeless shelter for the Chicago Christian Industrial League — a charity that had sold its longtime home in Greektown to Daley’s friend Michael Marchese for a luxury condo development.
Ariola’s Chicago Realty Co. was later hired by the league to oversee construction of the homeless shelter — a project that has left the league in financial trouble, unable to pay a $10.8 million loan it got to finish the project.
The charity paid Ariola $301,700. At least a third of that came from city TIF money — the funding Ariola’s commission approves — city records show. Ariola has served on the city board since 2001.
City Hall’s ethics ordinance prohibits appointed officials such as Ariola from making money on deals that come before them. “An appointed official shall not have a ‘financial interest’ in any contract, work or business of the city … if the expense or price is paid with funds belonging to or administered by the city,” the ordinance states.
The mayor’s office wouldn’t say if Ariola violated the ordinance. But city officials pointed out that Ariola and the commission approved the homeless-shelter project three years before his start-up real estate company was hired to oversee the city-financed project.
“We have asked the Board of Ethics to look into this situation,” said city spokeswoman Molly Sullivan. “And we’ve asked Mr. Ariola to seek an opinion from the Board of Ethics, as well.”
Ariola has also worked on another city TIF-funded project. The league hired him to oversee construction of a single-room-occupancy apartment building on land the city acquired with TIF money. Neither the city nor the league would say how much Ariola was paid for that project.
Ariola, 40, of Chicago, declined to comment.
Ariola got the shelter contract in January 2005 from the league’s executive director, Judith McIntyre. She’s a longtime friend of Ariola’s wife, Tina Esposito Ariola. The two women once worked together at City Hall. Tina Ariola’s late parents, grandfather and great-uncle were high-ranking officials with Laborers Union Local 1001, an organization with a long history of mob connections that represents city garbage collectors and pothole patchers.
The construction contract was the first job for Ariola’s two-month-old Chicago Realty Co., which specializes in “commercial development management financed with TIF and other government incentives,” according to Ariola’s profile on the LinkedIn Web site.
Ariola — a licensed real estate broker with a civil engineering degree from the University of Illinois and an MBA from Northwestern University — had previously worked for U.S. Equities, a clout-heavy firm that has gotten millions of dollars in contracts from City Hall. Ariola was working for U.S. Equities when Daley appointed him to the Community Development Commission.
McIntyre, who left the league last fall, said she hired Ariola because construction of the homeless shelter had fallen behind schedule.
“You turn to your friends when you’re facing challenges,” McIntyre said. “I turned to David, and he said, ‘Let me take a look at it.’
“His fee was probably half of what everybody else wanted,” she said. “Without his help, I don’t think we would have finished the project. He put us back on schedule, back on budget.”
It sure looks like GARY CHICO is going down…it seems he was caught on tape bribing gov Dead Meat Blago. Obama had better leave Fitzgerald in at the FBI. read on………
Chico firm’s lobbying deal lasted less than a day
Fifteen hours and 46 minutes.
That’s how long the clout-heavy law firm of Chico & Nunes spent as Springfield lobbyists for the Chicago Christian Industrial League, the homeless shelter where Gov. Blagojevich’s wife Patti worked as a fund-raiser until she was fired last week.
The law firm headed by Mayor Daley’s former chief of staff Gery Chico disclosed its lobbying relationship with the league on papers filed with Illinois Secretary of State Jesse White at 6:02 p.m. Dec. 4.
Chico’s firm ended the relationship the following morning — the day the Chicago Tribune reported that the feds had secretly recorded Blagojevich.
It was just a mistake, according to Chico’s partner, Marcus J. Nunes, who said the firm never planned to lobby state officials — only city officials — on behalf of the league.
“Our registration of the CCIL with the state was erroneously included in an electronic batch filing on Dec. 4 that included registration for other firm clients,” Nunes said. “The administrative assistant who made the filing realized there had been an error . . . the state filing was removed the very next day.”
Nunes did register to lobby city officials for the league, which gets city contracts to plant flowers in downtown median planters. Chico, the Chicago Park District president, is no longer registered as a lobbyist.
Chico helped the governor’s wife get her job at the league last summer. And his law firm hosted a campaign fund-raiser for Blagojevich the night before he was arrested by the FBI.
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