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Duff charges highlight city's deals with pals

 

September 28, 2003

BY FRAN SPIELMAN City Hall Reporter

 

Allegations of contract cronyism have been a steady drumbeat of Mayor Daley's 141/2-year reign at City Hall.

Last week, the beat got louder. It was almost deafening.

Members of the Duff family, owners of a controversial maintenance company with political ties to Daley and reputed ties to organized crime, were accused of masterminding a scheme to fraudulently obtain $100 million worth of government contracts by fronting as minority- and women-owned businesses.

Although long anticipated, the indictments hit City Hall like a bombshell. It was the first time anybody even remotely close to the mayor had faced federal corruption charges.

If that wasn't embarrassing enough, the feds also had managed to uncover an alleged 12-year pattern of fraud and deception by Duff-owned Windy City Maintenance that the Daley administration was either unable or unwilling to find.

"They used to say about his father that he was not personally corrupt. He didn't become wealthy from public service. I think the same is true for Richard M. Daley," said former Ald. Dick Simpson (44th), a professor of political science at the University of Illinois at Chicago.

"But his friends and associates have taken advantage of their connections to get contracts and deals at City Hall, and the mayor at least hasn't figured out how to stop it. He said early on he was going to set a new climate at City Hall -- that it was going to be run honestly and fairly. That hasn't been done. People still feel they can trade access for favors, jobs and contracts."

The fact that the Duffs were the first of Daley's associates to be indicted was no comfort to the Better Government Association, a taxpayers watchdog group.

The group is equally concerned about the millions of dollars in city contracts that have benefitted a parade of mayoral pals. They include: Oscar D'Angelo; Jeremiah Joyce; Michael Tadin; Michael Marchese; Patrick Harbour; Victor Reyes; Richard Crandall, and two friends of Maggie Daley whom D'Angelo helped to put in business at O'Hare Airport.

The mayor's brother John Daley, powerful chairman of the Cook County Board's Finance Committee, has acknowledged that he earned as much as $400,000 in annual commissions by brokering insurance through Near North Insurance, some of it for companies doing business at O'Hare Airport.

Michael Daley's law firm, Daley & George, has emerged as one of Chicago's preeminent firms on zoning and land-use issues.

Michael Daley also has been paid more than $1.2 million since 1995 by Salomon Smith Barney, a finance giant that has helped Chicago borrow billions of dollars for public works projects, including expansion plans at O'Hare and McCormick Place.

"The BGA . . . feels anxious when city contracts go to friends of those in public office. Even if it's not an ethical violation, it smacks of impropriety, and citizens lose confidence in their government," said acting BGA executive director Sue Walker.

Daley's longtime political consultant David Axelrod countered that the city has doled out thousands of contracts during Daley's nearly 15 years in office, and it's inevitable at least some of them go to "political friends" of the mayor.

"In all of the years I've been working with him and all of the discussions I've seen, I've never seen him ever talk about helping this person or that person get a contract. I've heard him talk incessantly about how to improve this neighborhood or that neighborhood or how to get the job done," he said.

Windy City was formed shortly after Daley took office and was placed in the name of Patricia Green. She is the wife of John Duff Jr., who has a criminal record. Duff Jr. and his son, John III, have a history of ties to organized crime dating to the 1960s.

A no-bid contract to clean up Taste of Chicago started the ball rolling on $100 million in government contracts for Duff-controlled companies that, the feds now allege, fronted as minority- and women-owned businesses.

Over the years, Daley has accepted campaign contributions and political foot soldiers provided by the Duff family and attended their Christmas parties at the Como Inn.

When the feds launched their investigation of the Duffs three years ago, Daley moved aggressively to tighten policing of minority business fronts by doubling site visits, requiring applicants to fill out no fewer than 30 forms and denying certification to 880 companies in the last two years.

The mayor also made it a point to severe his ties to the Duffs and cut off their contracts.

It's a pattern the mayor has followed repeatedly whenever his administration has run into an ethical land mine:

*In 1997, Daley forced the resignation of his City Council floor leader, Ald. Patrick Huels (11th), five days after the Chicago Sun-Times revealed that Huels had borrowed $1.25 million from Michael Tadin, a city trucking contractor for whom Huels had helped secure a $1.1 million city subsidy. Daley also declared that Tadin, a boyhood pal from Bridgeport, was "not my friend."

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*After a 36-year friendship with Daley, mayoral pal Oscar D'Angelo was frozen out of the mayor's inner circle after embarrassing the mayor in the spring of 2000. D'Angelo agreed to make $10,500 in interest-free loans to Deputy Chief of Staff Terry Teele and Teele's brother, forcing the resignation of the mayor's infrastructure czar, governmental alter-ego and close friend.

Cutting off those who get caught is a lesson learned from Daley's father, according to Simpson, a City Council thorn in the late mayor's side. "Once you've been disgraced, even the closest allies of the former mayor were left out on their own," Simpson said. "He wouldn't defend them. It was their job to clear themselves. And even if they did clear themselves, they never had power again in the administration."

 

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