Illinois corruption watch: March 2016

Several instances of corruption and mismanagement of public property and trust came to light in March and included new developments in cases involving Chicago Public Schools’ former CEO Barbara Byrd-Bennett and former Gov. Rod Blagojevich.

Illinoisans are no strangers to corruption, as it runs deep in Illinois’ political history.

The month of March solidified that familiarity even more. When cases of fraud and abuse happen, taxpayers feel the pain for extended periods of time. On top of having to pay for stolen and mismanaged property, taxpayers are also stuck footing the bill for legal proceedings connected with convictions. This month, several Illinois corruption cases have resurfaced, including:

• The Supreme Court rejected former Gov. Rod Blagojevich’s appeal of his 2011 corruption convictions, which included an attempt to sell a vacant U.S. Senate seat.
• Chicago Public Schools, or CPS, filed a lawsuit against former CPS CEO Barbara Byrd-Bennett, seeking $65 million in damages. Byrd-Bennett was convicted in October 2015 for a scheme involving an exchange of $2.3 million in kickbacks for ensuring a certain company would receive $23 million in public contracts.

Some of March’s other corruption cases include:

• Bruce Rauner forced out Joseph Galvan, an Illinois Housing Development Authority chairman, for allegations of misconduct related to his government position.
• A Chicago Sun-Times FOIA investigation recently uncovered a spending spree by Chicago’s United Neighborhood Organization, or UNO, an organization that receives public funds to run a network of charter schools serving low-income students in Chicago. The spending spree included more than $88,000 for employee training at Disney Resort Destinations and $600,000 to a lobbying firm.

When instances of fraud and abuse occur, taxpayers are always the losers. Here are other stories of corruption and mismanagement for the month of March:

March 1, 2016 – NBC Chicago: Missing state property costing taxpayers millions

Every year, millions of dollars worth of state property goes missing: Tens of thousands of items, which supervisors in state agencies say they simply can’t find.

Don’t care about it? You should: You paid for it.

What’s missing? You name it: From hundreds of radios and radar units at the Illinois State Police, to a stolen ATV, missing boats, canoes, and a mini-submarine-like craft at the state’s Department of Natural Resources. Cars are missing. Furniture, light bars for the tops of squad cars, even an entire police radio console.

March 7, 2016 – Chicago Sun-Times: BGA public eye: Feds subpoenaed Cicero on insider deals

The U.S. attorney’s office in Chicago has subpoenaed the town of Cicero for records of deals with two politically connected companies, the Better Government Association has learned.

Federal authorities asked for invoices, payment records and other documents relating to You & Me and the Woodridge promotional products company’s owners, Rosemary Walsh Konz and her husband Daniel Konz, since 2008, according to a copy of the subpoena obtained from Cicero through a public records request made under the Illinois Freedom of Information Act.

Last year, the town spent $19,061 to buy items including lip balm, nail files and pencil sharpeners from You & Me — all imprinted with the name of Cicero Town President Larry Dominick, records show.

Since Dominick took office in 2005, Cicero has spent more than $890,000 on merchandise bought from You & Me Inc., whose co-owner Rosemary Konz is the daughter of Cicero Trustee Lorraine Walsh, a longtime Dominick supporter.

March 7, 2016 – Chicago Now: Chicago forces city, state taxpayers to shell out tens of millions of dollars for DePaul basketball arena

Chicago government officials are scrambling to justify spending millions in city- and state-backed dollars to construct a brand-new DePaul University basketball arena and accompanying hotel in the South Loop.

The latest news on the controversial project came when Chicago City Council last month waived $2.6 million in construction fees after Metropolitan Pier and Exposition Authority, or McPier, leadership complained of a “tight budget.” McPier is the public-private hybrid managing the DePaul project in addition to controlling Navy Pier and McCormick Place.

It’s also served as a patronage haven with a poor record of transparency.

City taxpayers will pony up $55 million in tax increment financing dollars for the project and have already spent $2 million on a public park near McCormick Place and $57 million to build a new Cermak-McCormick Place stop on the CTA’s Green Line. McPier is financing most of the project with hundreds of millions of dollars in borrowing – maxing out its debt limit – and kicking the can on interest payments. Illinois taxpayers have contributed $50 million in sales taxes to fund McPier debt since 2008, according to the Chicago Tribune.

March 10, 2016 – Chicago Sun-Times: CPS files lawsuit against former CEO Barbara Byrd-Bennett, others

A broke Chicago Public Schools filed a lawsuit Thursday seeking $65 million in damages and losses against its corrupt former CEO, Barbara Byrd-Bennett, and two co-defendants also accused of trying to defraud the school system in the SUPES contract scam.

The filing in Cook County Circuit Court came a day after the school district told principals to stop spending through the end of the school year. The district is frantically stockpiling cash to pay a nearly $700 million pension payment due June 30.

March 11, 2016 – Chicago Tribune: Chicago poised to pay $830,000 to settle 2 police misconduct lawsuits

The city is poised to pay a combined $830,000 to settle separate Chicago police misconduct lawsuits involving a man wrongfully convicted of rape and three motorists who alleged they were illegally strip-searched in broad daylight during a South Side traffic stop.

The City Council’s Finance Committee is scheduled to consider the payouts at its monthly meeting Friday, according to the committee’s online agenda. If approved, the settlements would go before the full council for a vote Wednesday.

March 13, 2016 – Better Government Association: Cited for safety, company still wins juicy city contracts

The Emanuel administration gave 10 contracts worth as much as $43 million to a Chicago sewer and excavation company after federal inspectors cited the business twice for serious workplace-safety violations on city jobs.

City officials say they hadn’t been aware of the safety citations and resulting fines, totaling $150,000, on the two sewer jobs when they gave Pan-Oceanic Engineering Co., Inc. the millions of dollars in additional business.

Pan-Oceanic, which opened in 1998, also had been cited for safety violations five times before, starting in 2007, and placed in a federal program for “severe violators” that’s designed to trigger stepped-up inspections and enforcement.

March 15, 2016 – Chicago Tribune: New Lawyer, new delay in DuPage Forest Preserve District corruption trial

The former information technology director of the Forest Preserve District of DuPage County showed up in court Monday with new legal counsel, a move that will further delay his trial on corruption charges.

The move frustrated Judge Liam Brennan, who called the change “ridiculous” and questioned Mark McDonald about why he was hiring new counsel now in a case that was charged in 2012 and appeared to be close to resolution via a plea agreement.

McDonald and his subordinate, IT manager David Tepper, along with a forest district vendor were charged in 2012, with McDonald and Tepper indicted on a 142-count felony charge. McDonald had been scheduled to stand trial with the vendor and Tepper but was allowed to separate his case from his co-defendants due to health issues.

Authorities alleged McDonald and Tepper set up a side business and billed the district for equipment and services that they did not deliver, and that they took kickbacks from the vendor.

March 15, 2016 – Chicago Tribune: Employee in Dorothy Brown’s office to plead guilty to lying to grand jury

An employee in Cook County Circuit Court Clerk Dorothy Brown’s office accused of lying to a federal grand jury investigating pay-to-play allegations intends to plead guilty next month.

A lawyer for Sivasubramani Rajaram made the announcement Tuesday during a hearing for Rajaram in federal court as voters in the Democratic primary were deciding whether Brown deserves a fifth term as the county clerk.

Rajaram, 48, of Glenview, was indicted in November on a charge that he lied during an Oct. 1 appearance before a federal grand jury that was investigating “possible criminal violations in connection with the purchasing of jobs and promotions” within Brown’s office. The indictment came weeks after the FBI seized Brown’s cellphone as part of the ongoing probe into the possible “purchasing” of jobs and promotions.

The charge alleges that Rajaram was rehired by Brown’s office in September 2014, just weeks after he purportedly lent $15,000 to a company controlled by Brown’s husband, Benton Cook III.

March 17, 2016 – Chicago Tribune: Judge orders College of DuPage foundation to turn over records to Tribune

In what could be a precedent-setting case, the Chicago Tribune won a ruling Thursday that orders the College of DuPage’s foundation to turn over a federal subpoena that it and the school had fought to keep private.

DuPage County Judge Robert Gibson’s decision is widely believed to be the first of its kind in Illinois dealing with the public disclosure of records in the possession of a public college’s support organization.

As part of a yearlong investigation into college spending and contracts, the Tribune sued COD and the foundation in April to obtain various documents that reporters were refused after they filed open records requests. The college later provided most of the records, but the issue regarding a request for a federal grand jury subpoena to the foundation remained outstanding.

March 17, 2016 – Chicago Sun-Times: Rauner ousts clout-heavy board chair after anonymous allegations

Gov. Bruce Rauner has forced out his Illinois Housing Development Authority chairman — a clout-heavy figure with past ties to the UNO community group — amid anonymous allegations that the Rauner-appointee, Joseph Galvan, engaged in misconduct related to his state-government post.

The accusations were detailed in an anonymous letter claimed to be written by a long-time developer.

Galvan, who’s been serving as IHDA’s chairman since last May, wouldn’t comment directly on allegations, other than to note his previously unblemished public service and to say he stands behind the governor’s decision.

Two days before Galvan was forced out, the Better Government Association – prompted by the allegations in the letter, which was mailed to the BGA – sent a Freedom of Information Act request to IHDA asking for Galvan’s official schedule, as well as information on IHDA spending and other records. They have not yet been turned over.

March 17, 2016 – Chicago Tribune: DuPage prosecutors sue College of DuPage board over Breuder contract vote

DuPage County prosecutors sued the College of DuPage board of trustees Thursday, alleging that it violated the state open meetings law when trustees voted in secret to extend the employment contract of the school’s controversial president.

State’s Attorney Robert Berlin asked a judge to invalidate a contract extension awarded in 2014 to then-President Robert Breuder, arguing that the board failed to make the decision in public. Berlin, after listening to recordings of closed-door meetings, determined that the board instead voted by hand, outside of public view, when it authorized extending Breuder’s contract an additional year, taking it to 2019.

March 18, 2016 – The Southern: Illinois Legislator exempts self from open records review

When Illinois lawmakers revamped the Freedom of Information Act in 2009 and created an outside appeals process for public records requests denied by state government, they made an important exception — themselves.

Records requests denied by the General Assembly are not subject to review by the attorney general’s public access counselor, the counselor’s office said in a letter this week to The Associated Press.

That exception for the Legislature means that even as Republican Gov. Bruce Rauner routinely discloses his appointment calendars in response to AP requests, the leaders of the Legislature could deny a similar AP request for their calendars and emails — with no right of appeal. Democratic Speaker Michael Madigan — who has been in that post for more than 30 years — doesn’t even keep a calendar or use email, his spokesman Steve Brown said.

March 22,2016 – Madison Record: Illinois officials admit firearm owners were charged extra $1 for FOID cards

The Treasurer of Illinois and the Firearms Services Bureau chief admit that residents were charged $1 more than state statute allows when they applied for a firearm owner identification card (FOID).

Jessica Trame, Firearms Services Bureau chief, and Michael Frerichs, Illinois Treasurer, answered the class action complaint on Feb. 2 after several extensions of time.

The defendants admitted that the $11 fee is more than the $10 fee set forth in the FOID Act, but they deny the remaining allegations.

By charging an additional $1, Trame is unilaterally imposing without statutory authority a 10 percent surcharge on FOID cards, he claims.

He further claims it is impossible to get a FOID card without paying the extra fee on top of the $10 mandatory cost (except for certain members of the military who are exempt all together) because the Firearms Services Bureau some time early this year stopped accepting paper applications that allowed people to mail $10 checks or money orders.

March 23, 2016 – Chicago Tribune: Prosecutors drop charges against couple targeted by corrupt Chicago cop

Cook County prosecutors on Wednesday abruptly dropped narcotics charges against a man and his wife who alleged they were framed more than a decade ago by a corrupt Chicago police sergeant and his crew.

The announcement came five days after Ben Baker and Clarissa Glenn filed a post-conviction petition alleging Sgt. Ronald Watts planted drugs on them during a 2005 arrest at the now-shuttered Ida B. Wells public housing complex. The case was highlighted in a Tribune story on Sunday.

The development marked the latest fallout over the corrupt squad led by Watts, who in 2012 was charged along with one of his underlings, Officer Kallatt Mohammed, with shaking down a drug courier who turned out to be an FBI informant. Both were convicted and sentenced to federal prison.

According to the couple’s petition Baker was targeted because he had refused to pay Watts a protection payoff of $1,000. In retaliation, Watts and his crew tried to pin a drug case on Baker by tying him to heroin found in a mailbox, but he beat the charges in court, court records show. Months later, Baker was again arrested by Watts’ crew after the officers claimed he was found inside a building at Ida B. Wells with heroin in his pocket packaged for sale.

March 25, 2016 – Oak Leaves: Fired employee files lawsuit against Oak Park, alleges fraud

A former human resources employee who was fired by the Village of Oak Park for allegedly taking personal employee information has filed suit against the village, alleging fraud allegations.

In a complaint filed March 23 with the Circuit Court of Cook County, Jacquelyn Jamison said she learned that “monies appeared to be missing from Oak Park’s health insurance fund” and she intended to “use the data as a whistleblower to corroborate and prove her allegations that Oak Park and/or its employees were engaged in a fraud upon the citizens of Oak Park.”

Jamison, who worked for the Village of Oak Park for more than 18 years, was fired in February after allegedly taking personal employee information by sending it to her personal email account.

March 26, 2016 – Chicago Sun-Times: The Watchdogs: UNO’s secret spending spree

Even as they ran a network of charter schools for thousands of students in low-income neighborhoods across Chicago, United Neighborhood Organization leader Juan Rangel and other UNO officials were piling up big bills at fancy restaurants and for travel on the taxpayers’ dime, records obtained by the Chicago Sun-Times show.

In the year before a contracting scandal led to Rangel’s forced resignation, the clout-heavy Hispanic community organization and charter-school operator spent more than $60,000 for restaurants on his American Express “business platinum” card, according to the records, which UNO fought for nearly three years to keep secret.

The spending spree included $1,000-or-higher tabs at Gene & Georgetti, Carmichaels, Vivo Chicago, Rosebud Prime, the East Bank Club, Carnivale, a downtown hotel’s rooftop bar and Soldier Field’s concessions during a soccer game featuring Mexico’s men’s national team.

And UNO spent more than $60,000 a year on travel in 2010 and 2011, the internal records show. Rangel alone flew out of town 31 times in four years.

March 28, 2016 – Northwest Herald: Supreme Court rejects former Illinois Gov. Rod Blagojevich’s appeal in corruption case

The Supreme Court on Monday rejected former Illinois Gov. Rod Blagojevich’s appeal of his corruption convictions that included his attempt to sell the vacant Senate seat once occupied by President Barack Obama.

The justices let stand an appeals court ruling that found Blagojevich crossed the line when he sought money in exchange for naming someone to fill the seat. Blagojevich, 59, is serving a 14-year sentence at a federal prison in Colorado.

A federal appeals court last year threw out five of his 18 convictions and Blagojevich was hoping the Supreme Court would consider tossing the rest. His lawyers argued in an 83-page November filing that the line between the legal and illegal trading of political favors has become blurred, potentially leaving politicians everywhere subject to prosecution.

March 28, 2016 – Chicago Tribune: Chief judge mum on completed inquiry into Cook County probation agency

Cook County Chief Judge Timothy Evans promised the public a swift and thorough investigation into the county’s probation department in 2014, following allegations that rogue officers had planted drugs, stolen money and trampled on the civil rights of probationers.

Nearly two years later, that review recently concluded, but Evans refuses to say what, if anything, was found.

Evans, who as chief judge runs the probation department, would not say if he had disciplined any employees, made changes to policies or referred any criminal wrongdoing to law enforcement authorities. He cited two pending federal civil-rights lawsuits against him, probation officers and other law enforcement authorities in declining to comment, according to his spokesman, Pat Milhizer.

Evans’ silence stands in stark contrast to the outrage he expressed in May 2014 following a Tribune investigation into how the probation department had for years quietly worked with the FBI and Chicago police to conduct questionable searches.

The Tribune found that wayward weapons units within the probation department conducted searches of homes and prompted accusations that drugs had been planted, money stolen and people threatened with jail if they refused to work as informants for the FBI or Chicago police.

March 29, 2016 – Illinois Policy: Governments in Illinois can take your property without charging you with a crime

Law-enforcement officials are supposed to protect innocent people’s private property – not take it away from them.

But most states, including Illinois, allow the police to take private property they suspect was related to criminal activity, even without having to prove the owner of that property used it in a crime. This practice, known as civil asset forfeiture, has come under attack in recent years from Americans across the political spectrum.

March 30, 2016 – Department of Justice: Former EMI owners sentenced for multi-million dollar fraud scheme

Brothers Joel and Eric Andrews, former principal owners of Environmental Management of Illinois, Inc. (EMI), Springfield, Ill., were sentenced today to three years and two and one-half years, respectively, in federal prison for a scheme that defrauded the Illinois Environmental Protection Agency of millions of dollars. Co-defendant Michael Keebler, who bought the business in 2006, was sentenced in August 2015 to five years in prison for the scheme, which, over a period of 12 years, from 2001 to 2013, swindled money from a fund administered by Illinois EPA to clean up sites contaminated by leaking underground storage tanks.

March 30, 2016 – Chicago Tribune: Chicago businessman pleads guilty in state grant fraud scheme

A Chicago businessman at the center of an investigation into millions of dollars in allegedly fraudulent state contracts has pleaded guilty to money laundering and mail fraud.

George E. Smith’s plea in federal court this week was the culmination of a years long investigation into a financial scheme that rocked the state’s Department of Children and Family Services and led to the resignation of its director.

Over many years, Smith held multiple contracts worth millions of dollars with numerous Illinois agencies including DCFS, the Illinois State Board of Education and the Department of Human Services, as well as with Chicago State University.

Kane’s investigation accused Smith’s company of double- and triple-billing different government agencies for the same services, forging records and keeping ghost positions and expenses.

Mar. 31, 2016 – Chicago Tribune: Middle school principal pleads guilty in PTO, sports league thefts

A former middle school principal who was accused of stealing tens of thousands of dollars from two school-related funds apologized in court Thursday after pleading guilty.

Jerome Wakitsch had resigned from his job as principal of Northwood Middle School in Woodstock last August after school officials told police they suspected he’d taken the money from the school’s Parent Teacher Organization and its sports league, the Fox Valley Middle School Conference.