Pattern of Corruption| City Contracts | Self Policing: Chicago’s Inspector General | Meigs Field
Ethics and Corruption Grades
“It is simply unacceptable that people both in and out of government are using this process to enrich themselves at the expense of taxpayers. Whatever it takes to end the abuse, we’re going to do.”
Mayor Daley, February 2006
Chicago has some of the toughest city ethics laws in the nation, but its machine-style politics and laws allowing large campaign contributions have resulted in a significant number of indictments, guilty pleas and convictions of those entrusted with its governing. Over the last three decades, at least 79 elected officials in Illinois, many from Chicago, have been convicted of crimes related to their performance in office, including three governors, one mayor, and 27 aldermen.1
Since Richard M. Daley was elected mayor in 1989, federal investigations have continued to uncover widespread corruption in city government, including Operation Silver Shovel (1992-2001) and Haunted Hall (1995), and, most recently, the Hired Truck scandal (1996- present).2
But it’s not only political corruption scandals that have mired Richard M. Daley’s administration. Patronage remains a fixture in Chicago politics, and 2005 and 2006 illustrated its machinations as continuing abuse allegations came to light. Some abuses were banal, like discovery that nine employees of the city’s water department were paid for time they had not worked by having friends swipe their time cards in and out. But many indicate a deep-rooted corruption that stretches to the Fifth Floor. In July 2005 The Chicago Tribune found that nearly four of every 10 people conducting voter-registration on behalf of groups supporting Mayor Daley’s candidacy held city jobs (which prohibit “electioneering”), and City Hall employees were convicted of rewarding the mayor’s supporters and political workers with jobs and promotions.3 Even more revealing was release of a “clout list” during the trial of Daley’s patronage chief, Robert Sorich, in which the city was accused of creating an illegal list of more than 5,000 names of politicians, powerbrokers and mayoral friends vying for city jobs or promotions for their families, friends and supporters.4
Mayor Daley and the City Council responded to each of these controversies by passing ethics laws and promising to end corruption. But although today’s city administration is not run in quite the same way as his father’s was in the ’50s and ’60s, patronage, corruption, and questionable ethics persist. “Ubi est mea?”—”Where’s mine?” the unofficial Chicago motto coined by the late Chicago Tribune columnist and author Mike Royko, still seems to ring true today.5 As James L. Merriner put it in his book Grafters and Goo Goos.
The junior Daley’s funds tend to flow not from unions, organized crime, and industrialists so much as from lawyers, lobbyists and entrepreneurs of the new economy, all, at least on the public record, perfectly legally…no alderman, committeeman, or candidate since 1964 has been shot, pistol-whipped, kidnapped, dumped in the Sanitary and Ship Canal, or encased in concrete. This is progress.6
It is likely that every administration has issues with corruption, but with a reputation like Chicago’s it should seem reasonable for the administration and City Council to make every effort to rout out the systemic base of misconduct. Unfortunately, a high volume of federal investigations, some ongoing, indicates a lack of real interest in altering the pattern of corruption that plagues the city.
Operation Silver Shovel was one of the most extensive corruption probes in Chicago history, targeting political officials who permitted illegal dumping of tons of debris in predominantly low- income wards and allowing other environmental misuses to occur in exchange for bribes. An undercover operative made audio and videotape recordings, many of current or former alderman. The tapes were used to expose the environmental abuses, but also revealed purchases of cocaine and money laundering of more than $2.2 million between 1992 and December 1995. Eighteen corruption convictions were handed out, six to aldermen.7 Another 35 convictions in the mid-1990s, resulting from Operation Haunted Hall, stemmed from ghost-payrolling at City Hall. Four aldermen, a state senator, and a Cook County treasurer were convicted in the sting.8
But perhaps the best-known corruption scandal in Chicago today is the Hired Truck Program, which involved hiring private trucks to do city work. Established in 1996 and costing $40 million, the city paid selected truck owners and small companies $29 to $94 per hour to sit at city worksites all day and haul away debris from sewer reconstruction or curb repairs. The Chicago Sun-Times’ “Clout on Wheels” series revealed that some participating companies had mob connec- tions or were tied to city employees, who were barred from the program.9 Truck owners were known to pay bribes to get into the program.10
As of April 14, 2006, 44 people had been indicted in the Hired Truck scandal, including more than 21 city officials; 35 people have been convicted.11 In March 2006 the corruption was tied to City Hall, when City Clerk James Laski pleaded guilty of taking bribes totaling $48,000 in return for steering Hired Truck contracts to friends.12 In addition, Donald Tomczak, top deputy in the city’s water department, pled guilty to taking about $400,000 in cash, campaign contributions and gifts to steer contracts to private trucking companies.13
Since 1996, according to news reports in early 2004, the mayor and many of his supporters had received $800,000 in political campaign contributions from companies participating in the Hired Truck Program. More than a quarter of the contractors involved are from Daley’s Bridgeport neighborhood, and 25 percent of all Hired Truck funds went to companies from Daley’s 11th Ward power base. The Mayor’s brother, John Daley, sold insurance to the owners of the three biggest fleets, receiving $50,000 in contributions from Hired Truck firms while serving as a Cook County commissioner.14
Responding to fallout from the Hired Truck scandal, Daley passed an executive order that prevents Chicago’s mayor from receiving contributions from contractors; however, critics like the watchdog group Better Government Association have criticized the city for taking such measures only in response to scandals, rather than making efforts to prevent them.15
News reports by Chicago media have revealed numerous examples of city contracts awarded to the politically connected. Whereas it is not illegal for contractors to support political organizations, it is illegal for government officials to condition government action, such as the awarding or renewing of contracts, on political contributions. Such actions could be considered bribery or extortion under state or federal law. The following examples highlight some of the most egregious and questionable deals. Shirley McMayon, former director of natural resources for the Chicago Park District, accepted $137,000 in payoffs from 2000 to 2002 from the former CEo of Mundelein Landscaping in exchange for $8 million worth of contracts for putting up lights at Chicago parks and for construction and maintenance work at Millennium Park. amounts of $2,200 to $26,000 were deposited into the former director’s account from May 2000 through December 2002. according to court documents, Mundelein was awarded landscaping contracts and given Park District business despite doing “sub-par work.”16
The Chicago Housing authority awards millions of dollars in contracts each year. From 2001 to 2004, 63 companies donated to the CHA’s then-CEO Terry Peterson’s 17th Ward Democratic organization just before or just after being awarded CHa contracts. a full third of the 17th Ward Democratic organization’s total income came from CHa contractors from 2001 to 2004—and it must be noted that the 17th Ward contains no CHa family public housing developments, senior buildings or redevelopment sites.17
Several questionable activities directly involve the office of the Mayor.
- A lawyer who was a former Daley aide and head of the Hispanic Democratic Organization directed a $1 billion no-bid contract to a development team he represented.
- A top Daley fundraiser has received 90 percent of O’Hare construction work since 1989.18
- The Duff family, longtime Daley contributors with known mob ties, has received more than $100 million in minority and woman-owned set-aside contracts—despite being neither minority- nor female-owned. The Duffs were indicted in 2003 by the U.S. Attorney’s office on charges of racketeering, conspiracy, mail fraud and money laundering.19
- John Daley, the mayor’s brother, brokers insurance for a company under indictment for alleged fraud. He earns $400,000 annually in insurance commissions, and the majority of his clients are connected to the O’Hare construction project.
- Brother Michael Daley is paid $180,000 per year as a consultant by Salomon Smith Barney, the investment firm that floats the bonds that generate billions of dollars for city public-works projects.20
The city responded to public concern about the above conflict of interests by amending the ethics ordinance to forbid letting contracts to firms whose lobbyists had not yet registered. Daley also wrote an executive order to list the names of everyone involved with new city contracts and leases on the city’s Internet site—the first such action by a city government in the country.21
However, critics contend these moves do little to get at the root causes of corruption. Former ald. Dick Simpson, professor of political science at the university of Illinois at Chicago says, “Each time there’s a [new scandal], [the mayor] makes a little change to the ethics ordinance or fires someone. His theory is that there are only a few rotten apples, but the real truth is that the barrel is rotten, and he’s not ready to replace the barrel.”22
Self Policing: Chicago’s Inspector General
Whereas other cities have had self-policing policies for years (New York since 1873), Chicago is late in coming around to the idea. Prior to 1992, Chicago had investigative offices control led by the mayor, but in 1993 forces motivated him to create an “independent” Inspector General’s office. The IG, nominated by the mayor and approved by the City Council, has jurisdiction over the mayor, city clerk, city treasurer, all city employees, all contractors and subcontractors that provide goods or services to the city pursuant to a contract—but no jurisdiction over the City Council itself, a decision that dates back to a 35-15 vote by the council in 1989.23
Since the IG cannot investigate the City Council, its members are not held accountable for their actions. Further, the fact that Mayor Richard Daley can name aldermen to vacant seats diminishes the council’s independence, as well as the checks and balances that should exist between the executive and legislative branches of government. To date the mayor has appointed 22 of the 50 sitting aldermen,24 including three who took office in December.25
In October 2005, pressure pushed the mayor’s hand again, and 17 years after the launch of the Inspector General’s Office, Mayor Daley hired David Hoffman, the first truly independent inspector general ever to fill the office. Hoffman has ordered the office’s first independent audit, cleared a backlog of cases, recruited two lieutenants with unassailable reputations for honesty and professionalism, more than doubled the staff, and unveiled a new web site and toll-free tip hotline. While these changes are impressive, they are overdue. And the City Council is still not under his jurisdiction.
Late on March 30, 2003, under cover of darkness and not long after the local evening news signed off for the night, City Hall sent bulldozers to carve huge “X”s in the runway of Meigs Field, making the airport unusable and stranding 16 planes. The city long had eyed the property for the Chicago Park District, and Mayor Daley cited the growing threat of terrorism to validate t he city’s actions.26
The Federal aviation agency however, did not agree with the administration’s assessment of the threat, and fined the city $33,000 for closing Meigs Field without giving the required 30-day notice. Still pending is a proposed FAA order that would fine the city up to $4.5 million for allegedly misspending $1.5 million in airport funds to demolish Meigs Field. Besides the $33,000 fine to the FAA, and $1.5 million in repaid misspent funds, the city’s legal bills for the Meigs episode totaled nearly $550,000 through June 26, 2006. To make this event even more of a tangle, the Park District now is concerned that it does not have the money to finish the park that was to replace the airport.27
Pattern of Corruption
Chicago has done little to change the culture of corruption that pervades nearly every aspect of government, seemingly willing to institute change only when new evidence of wrongdoing is brought to light.
City Contracts
Although the mayor has enacted policies to bar contributions to his campaign chests by those holding city contracts, contract corruption pervades the rest of the system. Changes are made only when charges of fraudulent conduct are made public.
Self-Policing
The new Inspector General is off to a promising start, but concrete results have yet to appear and the City Council remains free from his jurisdiction.
Meigs Field
The destruction of runways at Meigs Field without prior warning was a costly and undemocratic decision by the mayor, which will cost taxpayers upwards of $1.5 million.
While the hiring of Inspector General David Hoffman is encouraging, continued investigations and indictments coming out of the U.S. Attorney’s office bear testimony to the corruption that continues to pervade nearly every aspect of city government. Each new affair provokes a response and promises of change, but all too often they are empty words. Overall, the work of rooting out corruption in Chicago has been left to federal prosecutors and district courts, and the city fails to make systematic change.
Chicago’s sole positive in this category is the work done by the Inspector General’s office, but unfortunately, that does not overcome the decades of misconduct in city government.
The City of Chicago earns: F
Until a drastic attitude adjustment is made, we project business as usual in Chicago, although there is hope that the Inspector General will fulfill the promise of his first few years.