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Affidavit of Peter J. Wacks
Peter J. Wacks, on oath, declares as follows: BACKGROUND AND QUALIFICATIONS 1. I presently am employed as an Illinois licensed private investigator, working for Wacks & Associates, Ltd., as its President. I have been so employed since 1999.2. I am a member of both the Illinois State Crime Commission and the Chicago Crime Commission.3. I am 64 years of age. In 1962, I received a Bachelor of Science degree from Canisius College in Buffalo, New York. In 1965, I received a law degree from Syracuse University in Syracuse, New York.4. In 1966, I joined the Federal Bureau of Investigation (“FBI”) as a Special Agent and was initially assigned to the FBI’s Jacksonville, Florida Division. I spent a year in Jacksonville. I then was transferred to the FBI’s Chicago Division in 1967. I remained assigned to the Chicago Division until my FBI retirement in 1997.5. In approximately 1971, my work as a Special Agent in the Chicago Division began to focus on the criminal activities of persons belonging to or associated with the criminal organization known as the La Cosa Nostra (“LCN”) and, in particular, the Chicago “Family” of La Cosa Nostra, which is also known as the Chicago “Outfit.” My work as a Special Agent in the Chicago Division of the FBI focused on the LCN, including the Chicago Outfit, continuously from 1971 until my FBI retirement in 1997. I was the case agent on the investigation of LCN control of the pension funds of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America (the “IBT”). This investigation was code-named Pendorf and resulted in convictions in United States v. Dorfman, et al., 81 CR 269 (N.D. Illinois), aff’d sub nom., United States v. Williams, 737 F.2d 594 (7th Cir. 1984), cert. denied, 470 U.S. 1003 (1985) (the “Cannon Bribery Case”), and United States v. DeLuna, et al., 83 CR 124 (W.D. Mo.), aff’d sub nom., United States v. Cerone, 830 F.2d 938 (8th Cir. 1987), cert. denied, 486 U.S. 1006 (1988) (the “Argent Casino Skimming Case”). I was also the Chicago case agent in a civil racketeering and influenced corrupt organization (“Rico”) action filed by the United States against the IBT, Union States v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America, et al., 88 Civ. 4488 (DNE) (S.D.N.Y.), and in a civil action filed by the United States against the Laborers’ International Union of North America (the “LIUNA”) which resulted in a consent decree creating a trusteeship for the Chicago Laborers District Council. In the Matter of LIUNA, In Re Trusteeship Proceedings, 97-30T.6. Over twenty-six years, I was involved in hundreds of criminal investigations into the activities of members and associates of the LCN, including the Chicago LCN family, known locally as the Outfit.7. As a result of my involvement in the Pendorf investigation, the IBT civil RICO case, the LIUNA trusteeship civil case, and other FBI organized crime investigations, I have become knowledgeable about the structure and criminal activities of the LCN. I have testified as an expert witness on the LCN on several occasions. United States v. Dorfman, 81 CR 269 (N.D. Illinois), aff’d sub nom., United States v. Williams, 737 F.2d 594 (7th Cir. 1984), cert. denied, 470 U.S. 1003 (1985); United States v. Samuel Carlisi, et al., 92-CR-26 (S.D. Calif.); United States v. Panaro, CR-S-97 0082, (PMP-NA) (D. of Nev.) aff’d 266 F.3d 939 (9th Cir. 2001); United States v. International Brotherhood of Teamsters, 88 Civ. 4488 (S.D.N.Y). I also have lectured and instructed FBI agents and other federal and state law enforcement officers on conducting organized crime investigations at the FBI training center in Quantico, Virginia.8. I am fully familiar with and have had extensive experience with the use of investigative techniques employed by the FBI in organized crime investigations. These investigative techniques include physical surveillance, the development of confidential informants, the development of cooperating witnesses, undercover operations, and electronic surveillance, involving wiretaps and other listening devices. In addition, I have reviewed and am familiar with the Chicago Division’s extensive investigations of the criminal activities of the Chicago Outfit and its members and associates, both during and before my assignment to organized crime investigative work responsibilities in Chicago.9. The information that I have reviewed over the years includes court-authorized recorded conversations, sworn testimony, and other highly reliable information, including information obtained from physical surveillance, from confidential informants of proven reliability, and from former LCN members and associates who have become cooperating witnesses for the United States.10. The information that I have reviewed over the years also includes publications and source materials customarily and routinely relied upon by experts in the study and analysis of the LCN. The publications and source materials include:(a) Brashler, William. The Don – The Life and Death of Sam Giancana. Harper & Row, 1977.(b) Brill, Steven. The Teamsters. Simon and Schuster, 1978.(c) Cooley, Robert with Levin, Hilleh. When Corruption Was King: How I Helped the Mob Rule Chicago, Then Brought the Outfit Down. Avalon Publishing Company, 2004.(d) Demaris, Ovid. Captive City: Chicago in Chains. Lyle Stuart, 1969.(e) Demaris, Ovid. The Last Mafioso. Times Books, 1981.(f) Franco, Joseph with Hammer, Richard. Hoffa’s Man – The Rise and Fall of Jimmy Hoffa as Witnessed by His Strongest Arm. Prentice Hall Press, 1987.(g) Gosch, Martin A. and Hammer, Richard. The Last Testimony of Lucky Luciano. Little Brown & Company, 1974.(h) Johnston, David. Temples of Change – How America, Inc. Bought Out Murder Inc. to Win Control of the Casino Business. Doubleday, 1992.(i) Lindberg, Richard. To Serve and Collect. Southern Illinois University Press, 1998.(j) Lindberg, Richard. Return to the Scene of the Crime. Cumberland House, 1999.(k) Lindberg, Richard. Return Again to the Scene of the Crime. Cumberland House, 2001.(l) Mass, Peter. Underboss – Sammy the Bull Gravano’s Story of Life in the Mafia. Harper Collins, 1997.(m) Merriner, James L. Grafters and Goo Goos. Southern University Press, 2004.(n) Moldea, Dan E. The Hoffa Wars – Teamsters, Rebels, Politicians and The Mob. Paddington Press Ltd., 1978.(o) Neff, James. Mobbed Up. The Atlantic Monthly Press, 1989.(p) Reid, Ed and Demaris, Ovid. The Green Felt Jungle. Buccaneer Books, 1963.(q) Roemer, William F. Jr. The Enforcer. Donald I. Find, Inc., 1994.(r) Roemer, William F. Jr. Man Against the Mob. Donald I. Find, Inc., 1989.(s) Russo, Gus. The Outfit – The Role of Chicago’s Underworld in the Shaping of Modern America. Bloomsbury, 2001.(t) Salerno, Ralph and Tompkins, John S. The Crime Confederation. Doubleday & Company, Inc., 1969.(u) Wismer, Catherine. Sweethearts. James Lorimer & Company, 1980.(v) Zeller, F.C. Duke. Devil’s Pack – Inside the World of the Teamsters Union. Carol Publishing Group, 1997.11. The United States has established the existence of LCN, a/k/a the “Mafia,” “Outfit,” “Mob,” in several criminal RICO prosecutions, including, among others: United States v. Salerno, et al., No. SSS 85 Cr. 139 (RO) (S.D.N.Y.), aff’d in relevant part, 868 F.2d 524, 534-38 (2nd Cir.), cert. denied, 493 U.S. 811 (1989) (the “Salerno I” or “Commission” case); United States v. Salerno, et al., No. 86 Cr. 245 (MJL) (S.D.N.Y.), rev’d, 937 F.2d 797 (2d Cir. 1991), rev’d, 112 S.Ct. 2503 (1992) (“Salerno II” or the “Genovese family” case); United States v. Infelise, et al., No. 90 Cr. 87 (N.D. Illinois) aff’d sub nom., United States v. DiDomenico, 78 F.3d 294 (7th Cir. 1996), cert. denied, 519 U.S. 1006 (1996); United States v. Angiulo et al., No. Cr. 83-235 (D. Mass.), aff’d in relevant part, 897 F.2d 1169 (1st Cir.), cert. denied, 498 U.S. 845 (1990); and United States v. Scarfo, et al., No. 88-0003-1-19 (E.D. PA.), aff’d sub nom., United States v. Pungitore, 910 F.2d 1084, 1148-49 (3rd Cir. 1990), cert. denied, 500 U.S. 915 (1991). In the Commission case, the United States established the existence and structure of the LCN in part through the testimony of Angelo Lonardo, former underboss of the Cleveland LCN family.12. La Cosa Nostra, which name is based on an Italian phrase which translates as “this thing of ours” or “our thing,” is a nationwide criminal organization which operates in various cities throughout the United States. The LCN is composed of groups of men of Italian descent who are organized into units which are referred to as a “family.” A person becomes a member of a LCN family through a ceremony which is conducted in a manner designed to keep the existence of the family secret from persons who are not members of the family. Each LCN family is headed by a “boss,” who is assisted by an “underboss” and a “consigliere,” or counselor. The family conducts its criminal activities through entities known as “crews.” A crew is headed and supervised by a person referred to as a “capodecina,” “capo,” “captain,” or “street boss.” Each crew consists of formally inducted members of the family who are commonly referred to as “soldiers” or “made” members and persons who are not members, but who knowingly participate and cooperate in the activities of the family, who are referred to as “associates.” Importantly “associates” or “associating with” refer to individuals who are actively involved in some sort of LCN revenue- generating business, whether legal or illegal. There are LCN families headquartered in many large American cities including New York, Cleveland, Philadelphia, Kansas City, Milwaukee, Chicago, and Detroit.13. The affairs of the LCN are governed by a “commission” (hereafter “the Commission”) which is composed of the bosses of the most powerful families. The bosses of four of the five families in the New York City area, the Gambino, Genovese, Luchese, and Colombo families, have been members of the Commission since its creation. At various times, bosses or representatives from the LCN families in Cleveland, Philadelphia, Chicago, and Detroit have been members of the Commission. The Commission serves as the national ruling council of the LCN families and regulates relationships and settles disputes between and among the LCN families. It also has approved the admission of new members to the various LCN families and the selection other bosses of the families.14. The LCN engages in a wide variety of ongoing, income-producing criminal activity. This criminal activity includes illegal gambling, loansharking, extortion, prostitution, labor racketeering, and the collection of a “street tax” on the receipts from burglaries, armed robberies, “numbers” games, bookmaking, and other illegal operations conducted by individuals not associated with the LCN. Moreover, LCN sponsored criminal activity includes or has included historically businesses supplying various types of pornographic materials (adult bookstores, adult video stores, adult movie houses, peep shows, so-called Gentlemen’s Clubs a/k/a strip joints, and the like) and coin-operated amusement devices such as the present-day joker-poker machines and machines that in the past provided for any kind of amusement activity through the deposit of a coin or token including, but not limited to, phonographs, piano players, music boxes, juke boxes and pinball machines. Similarly, LCN historically sponsored businesses that provided for the distribution of cigarettes through coin-operated machines. In addition, certain LCN members and associates have engaged in the illegal narcotics trade, e.g., as sources of funding or as operators of distribution networks.15. The Chicago LCN Family, which again is referred to as the Chicago “Outfit” by its members and associates, is one of the largest and most violent LCN Families in the United States.16. Since well before the early 1970s, the Chicago Outfit has been engaged in a wide variety of ongoing, income-producing criminal activity referenced in paragraph 14 above.17. As with the other LCN families, the Chicago Outfit operates through groups called “Crews,” which engage in LCN-related illegal activities within loosely-defined geographical areas in the Chicago region. Crews consist of soldiers as well as associates connected to the Chicago Outfit and are under the immediate direction of a Street Boss or “Capo.” In terms of hierarchical structure, the Chicago Outfit includes (in descending order of power) the Boss, the Underbosses, the Consigliere (who advises the Boss), the Street Bosses and the Lieutenants.Retention, services and fees 18. On March 25, 2004, the Village of Rosemont (“Rosemont”), through its counsel, Foley & Lardner LLP, retained me through Wacks & Associates, Ltd., to work with Peter F. Vaira, the former Chief of the U.S. Department of Justice Chicago Organized Crime Strike Force and the former United States Attorney for Philadelphia, and Dan K. Webb, the former United States Attorney for Chicago, and to conduct an independent investigation of Rosemont to determine whether Rosemont was connected to, associated with, or allowed operation of LCN-sponsored businesses or was connected to or associated with LCN members or associates. My investigation also encompassed Rosemont’s Mayor, Donald E. Stephens, (“the Mayor”) to determine whether he was connected to or associated with LCN-sponsored businesses, members or associates, whether he knowingly allowed LCN-sponsored businesses, members or associates to operate in Rosemont, and/or whether he knowingly associated/interacted with LCN-sponsored businesses, members or associates.19. In addition, my investigation included certain allegations made in an April 7, 2004 Memorandum (the “Memorandum”), made public by the Chicago Sun Times, purportedly providing “updated information regarding organized crime influence in Rosemont.”20. Finally, my investigation addressed certain allegations made by the Illinois Attorney General against Rosemont and the Mayor in a March 25, 2004 letter to four members of the Illinois Gaming Board, Elzie Higginbottom, Chairman, Violet M. Clark, William E. Dugan and William E. Fanning. Specifically, the Attorney General claimed:(i) the Mayor pressured Donald Flynn of Emerald Casino Inc. to sell some of his shares in Emerald to friends of the Mayor;(ii) the Mayor caused shares of Emerald to be sold to friends that were affiliated with the LCN;(iii) Emerald utilized contractors connected to the LCN in the construction of Emerald’s facilities, apparently, at the suggestion of the Mayor, and(iv) some Rosemont official, inferentially the Mayor, provided inside bid information to the insurance broker, who with Nicholas Boscarino, a former friend of the Mayor and purportedly an LCN member or associate, defrauded Rosemont of money by charging it undisclosed inflated insurance premiums.21. To the date of this affidavit, Rosemont has paid Wacks & Associates, Ltd., $45,466.80 for their work.22. When I accepted this retention I advised Rosemont and the Mayor, through Rosemont’s above-referenced counsel, that my investigative findings, if any, would be based upon my analysis of the record as I eventually found it, including information known to me from my former position as FBI Special Agent and any other information, corroborated and verified, known to me or provided to me during my investigation. It was understood by Rosemont and the Mayor that the investigation would be conducted by Wacks & Associates, Ltd., as an independent inquiry in conjunction with Mr. Vaira, and at the conclusion of the investigation the results, whether negative or positive, would be reported, and Rosemont agreed to accept the results whatever the outcome. At the outset of my investigation, I understood that Rosemont and the Mayor intended to provide my work product to Isle of Capri Casino Inc., which, in turn, intended to provide my work product to the Illinois Gaming Board.23. Throughout my investigation, I received the full cooperation of the Mayor, all Rosemont officials and employees with whom I spoke, and third-party witnesses residing both in and outside of Rosemont with whom I spoke.24. My investigation included the following:(a) a review of the history of unincorporated Cook County, Illinois from which Rosemont was created in 1956;(b) a review of the businesses that presently exist in Rosemont;(c) a review of full-time and part-time Rosemont Public Safety employees;(d) a study of the Mayor’s purported relationships with identified LCN members or associates;(e) an analysis of allegations concerning Nicholas Boscarino, his reputed connection to or association with the LCN, and/or his reputed connection to or association with known LCN members or associates, Mr. Boscarino having been a friend of the Mayor;(f) a review of the Mayor’s business dealings with Mr. Boscarino;(g) an analysis of whether the Mayor’s former friendship with Mr. Boscarino constituted the Mayor knowingly associating with a person who either is connected to or associated with the LCN, LCN members or LCN associates, or with a person who associates with LCN members and associates;(h) an investigation of allegations made in the Memorandum, purportedly providing “updated information regarding organized crime influence in Rosemont;”(i) a review of questions raised by the Illinois Attorney General about (i) 1999 stock sales by Donald Flynn, purportedly orchestrated or ordered by the Mayor, to some of the Mayor’s friends; (ii) sales of Emerald stock to friends of the Mayor who are purportedly affiliated with the LCN; (iii) retention of contractors with alleged LCN connections or associations by Emerald Casino to work at the casino site, allegedly at the direction of the Mayor; and (iv) leakage of confidential Rosemont bid information to an insurance broker and Nicholas Boscarino that led to them illegally profiting from Rosemont insurance business (for which both Boscarino and the insurance broker were indicted and convicted);(j) a review of pertinent documentation relating to paragraphs (a) through (i) above, including sworn testimony, documents obtained through discovery proceedings, and the interviews of individuals having knowledge of the items detailed in paragraphs (a) through (i) above;(k) consideration of information related to me by other former Special Agents of the FBI knowledgeable about the LCN and particularly familiar with the area of unincorporated Cook County, Illinois from which Rosemont became a Village, the subsequent development of Rosemont after its 1956 incorporation and Mayor Stephens;(l) consideration of information obtained through the twenty-six years I worked as a Special Agent of the FBI specializing in the investigation and prosecution of LCN-related persons and activities, and(m) consideration of publications and source materials customarily and routinely relied upon by experts in the study and analysis of the LCN including:(i) Brashler, William. The Don – The Life and Death of Sam Giancana. Harper & Row, 1977.(ii) Brill, Steven. The Teamsters. Simon and Schuster, 1978.(iii) Cooley, Robert with Levin, Hilleh. When Corruption Was King: How I Helped the Mob Rule Chicago, Then Brought the Outfit Down. Avalon Publishing Company, 2004.(iv) Demaris, Ovid. Captive City: Chicago in Chains. Lyle Stuart, 1969.(v) Demaris, Ovid. The Last Mafioso. Times Books, 1981.(vi) Franco, Joseph with Hammer, Richard. Hoffa’s Man – The Rise and Fall of Jimmy Hoffa as Witnessed by His Strongest Arm. Prentice Hall Press, 1987.(vii) Gosch, Martin A. and Hammer, Richard. The Last Testimony of Lucky Luciano. Little Brown & Company, 1974.(viii) Johnston, David. Temples of Change – How America, Inc. Bought Out Murder Inc. to Win Control of the Casino Business. Doubleday, 1992.(ix) Lindberg, Richard. To Serve and Collect. Southern Illinois University Press, 1998.(x) Lindberg, Richard. Return to the Scene of the Crime. Cumberland House, 1999.(xi) Lindberg, Richard. Return Again to the Scene of the Crime. Cumberland House, 2001.(xii) Mass, Peter. Underboss – Sammy the Bull Gravano’s Story of Life in the Mafia. Harper Collins, 1997.(xiii) Merriner, James L. Grafters and Goo Goos. Southern University Press, 2004.(xiv) Moldea, Dan E. The Hoffa Wars – Teamsters, Rebels, Politicians and The Mob. Paddington Press Ltd., 1978.(xv) Neff, James. Mobbed Up. The Atlantic Monthly Press, 1989.(xvi) Reid, Ed and Demaris, Ovid. The Green Felt Jungle. Buccaneer Books, 1963.(xvii) Roemer, William F. Jr. The Enforcer. Donald I. Find, Inc., 1994.(xviii) Roemer, William F. Jr. Man Against the Mob. Donald I. Find, Inc., 1989.(xix) Russo, Gus. The Outfit – The Role of Chicago’s Underworld in the Shaping of Modern America. Bloomsbury, 2001.(xx) Salerno, Ralph and Tompkins, John S. The Crime Confederation. Doubleday & Company, Inc., 1969.(xxi) Wismer, Catherine. Sweethearts. James Lorimer & Company, 1980.(xxii) Zeller, F.C. Duke. Devil’s Pack – Inside the World of the Teamsters Union. Carol Publishing Group, 1997.findings 25. Based upon the above-described investigation, I conclude that the Mayor is not an LCN member or associate, that the Mayor, either in his official or individual capacity, has not associated knowingly with LCN members, associates, businesses, or persons who associate with LCN members and associates, and that neither Rosemont, through its officials, nor the Mayor, either in his official or individual capacity, have allowed LCN-sponsored businesses to operate in Rosemont. Rather than accepting, embracing, condoning, tolerating, promoting or facilitating LCN elements (members, associates or businesses), as some have suggested in unsupported or factually inaccurate statements, Rosemont and the Mayor, with the knowledge and approval of the FBI, extirpated any presence of LCN elements that existed prior to Rosemont’s 1956 incorporation as a village in the area of unincorporated Cook County, Illinois from which Rosemont became a village. Moreover, Rosemont, through the Mayor’s leadership, has developed over the years into a center of economic development that contains the locations of some of the most respected businesses, including preeminent financial institutions, in the country, if not the world. Today, Rosemont is among those few municipalities free of elements evidencing any indicia of LCN influence.26. In addition, I conclude that the allegations of the Memorandum that claim recent “Organized Crime” influences in Rosemont are totally unsupportable.27. Finally, I conclude that the allegations contained in the Illinois Attorney General’s March 25, 2004 letter are without merit. The first three of the four allegations are contradicted by the evidentiary record created by the investigative staff of the Illinois Gaming Board itself during the discovery proceedings that preceded the inception of the disciplinary hearing against Emerald Casino Inc. Unless the Attorney General has evidence independent of witness testimony from the investigative files of the Illinois Gaming Board (which has been withheld), I cannot explain the basis on which these allegations were made. The fourth and remaining allegation also is unsupported by credible evidence.The
creation of ROSEMONT and the 28. Prior to 1956, the year of Rosemont’s incorporation, unincorporated Cook County included the area that is now Rosemont. O’Hare Airport did not exist. Rather, the area that is now Rosemont abutted Orchard Field, an airfield with adjacent military facilities. The private businesses that existed in the area grew from a desire to serve the needs of military personnel. The businesses included liquor stores, bars, jazz clubs, motels and other less formal establishments that served as a base for prostitution, gambling and other illegal activities.29. The LCN and some of its members had significant business interests in the area surrounding Orchard Field including Sam Giancana, who operated a motel (titled in the name of his nephew, James Perno) that served, for the most part, as a house of prostitution, and Rocco Potenza, who owned a liquor store (licensed in his wife’s name). Most of the business establishments in the area provided coin or token operated amusement devices and cigarette vending machines, all of which served as a source of LCN revenue. These coin or token-operated devices came from companies controlled by known LCN members, Charles “Chuckie” English and Gus Alex. As a result, the FBI had a keen interest in the activities in the area and assigned numerous Special Agents of its Chicago Organized Crime Squad to monitor, track, and investigate various ongoing activities. Those agents included Robert Malone, Frank Ford, Ralph Hill, John Bassett, William Roemer and Lenny Wolf, with whom I worked during the course of my career.30. Tucked into the area around Orchard Field was a group of private residences that organized under the name Leyden Township Association (“LTA”). In 1954, LTA elected Donald Stephens as its President. During his presidency, the Mayor tried to address the problems that plagued the LTA, including the absence of sewers, paved streets, a water system, zoning laws and building codes. In addition, crime from the area surrounding Orchard Field – prostitution, gambling and the like – plagued LTA making life for families in the area, at best, difficult. The Mayor approached Des Plaines, Park Ridge and Schiller Park, all existing suburban municipalities neighboring what was to become Rosemont. On behalf of the LTA, the Mayor asked each municipality to annex the land on which LTA residences stood so that all the above-referenced problems could be addressed in some fashion. Each municipality rejected LTA’s annexation request.31. In response to the annexation rejection, LTA, through the Mayor’s initiative, held a referendum in 1955 to incorporate as a suburban municipality. Once incorporated, LTA then would be eligible to provide sewers, paved streets, a water system, zoning laws and building codes. The referendum passed. The LTA gave the newly incorporated area the name “Rosemont” and Rosemont’s citizens elected the Mayor as the first Mayor of Rosemont.32. Under applicable state law, LTA had to be at least one mile from any other municipality to incorporate as a municipality. As a consequence, the newly created Rosemont was less than 100 acres in size with large amounts of land separating Rosemont from neighboring municipalities. Incorporation as a municipality addressed the absence of sewers, paved streets, a water system, zoning laws, and building codes for the small housing area. Thus, Rosemont installed an area-wide sewer system by passing a special assessment. Rosemont also provided a water system financed by another special assessment. Rosemont thereafter purchased its water from the City of Chicago. Similarly, Rosemont installed paved streets through a $150,000 bond issue. While incorporation solved certain problems, it failed to solve the crime issues coming from the unincorporated areas between Rosemont, the surrounding municipalities and Orchard Field.33. To address the crime issues, Rosemont began a drive to annex all land between it and the boundaries of the surrounding municipalities. By doing so, Rosemont inherited existing businesses that were both illegal and legal. Even the legal businesses, such as licensed bars, jazz clubs, liquor stores and motels served as a breeding ground for crime. They also generated revenues to the LCN through prostitution, gambling and coin-operated amusement devices and cigarette vending machines. As a consequence, over the ensuing years Rosemont, through the Mayor and with the knowledge and approval of the FBI, began to eradicate businesses and practices considered to be undesirable for the area.34. Beginning in 1960, Rosemont sought to annex land on which Sam Giancana’s motel stood in an effort to rid the area of Giancana’s presence. Giancana resisted Rosemont’s annexation efforts since he obviously realized annexation meant government regulatory oversight. In response, Rosemont annexed all the land surrounding Giancana’s motel. Under applicable state law, annexing all property surrounding a particular land parcel allowed a municipality to forcibly annex property by referendum. As a result of annexing that surrounding property, Rosemont forcibly annexed Giancana’s parcel. The FBI was fully aware and approved of the involuntary annexation of Giancana’s property and the events that led up to it.35. After the annexation of the land on which Giancana’s motel sat, the Mayor and Pat Greco, a construction contractor in the Rosemont area, purchased Giancana’s motel. The purchase closed in February, 1963. The purchase removed Giancana from ownership of any land in Rosemont. He never returned to the area. The FBI was fully aware that the Mayor and Pat Greco bought Giancana’s motel and approved of the transaction. Pat Greco later sold his interest in the motel to the Mayor. After Orchard Field became O’Hare Airport, and as O’Hare Airport developed into a major international airport, and after the Mayor made substantial renovations to the motel’s structure, the motel became a profitable enterprise renamed the “Caravelle.”36. In 1967, Rosemont voted to prohibit the use of any coin or token-operated “amusement device” which included phonographs, piano players, music boxes, juke boxes and pinball machines. Similarly, Rosemont outlawed the use of coin-operated cigarette vending machines in 1967. Elimination of coin or token-operated “amusement devices” and coin-operated cigarette vending machines undercut LCN revenue derived from Rosemont and drove LLC members English and Alex out of Rosemont. The FBI was fully aware and approved of Rosemont’s actions to prohibit any coin or token-operated “amusement devices” within Rosemont.37. Rocco Potenza was a known LCN member. As stated in paragraph 29 above, he owned a liquor store in Rosemont in his wife’s name. In 1967, Rosemont initiated license revocation hearings against the Potenza liquor store. Upon a finding that the store underreported its gross income to Illinois, Rosemont revoked the license, a revocation that was affirmed on appeal. During the pendency of the revocation hearings, an iron pipe was hurled through the window of the then “City Hall” followed by a telephone call to the Caravelle Motel switchboard stating, “You can be put out-of-business too.” Like Giancana, Potenza never returned to Rosemont. The FBI was fully aware and approved of the revocation of the Potenza liquor license.38. The above-described activities show that Rosemont, upon its creation and thereafter, through the Mayor, moved against businesses that provided LCN revenue. As a result, LCN presence in the area disappeared and relocated to surrounding communities.39. Throughout the time Rosemont moved against businesses generating LCN revenue, the FBI was fully aware of Rosemont’s actions, monitoring them contemporaneously as they occurred, and remained available to assist when needed. When I joined the FBI’s Chicago Organized Crime Squad in 1971, I had numerous conversations with other Special Agents on the Squad, including, but not limited to, those referenced in paragraph 29 above – Robert Malone, Frank Ford, Ralph Hill, John Bassett, William Roemer and Lenny Wolf. In those conversations, those agents related to me the events described in the above and below referenced paragraphs. They instructed me that if any issue arose in Rosemont or the area surrounding Rosemont on which I needed assistance, I needed only to contact the Mayor who, they assured me, would be fully cooperative.40. The Mayor knew the FBI agents referenced in paragraphs 29 and 40, above, particularly Ralph Hill, William Roemer and John Bassett. At the invitation of the FBI, the Mayor attended John Bassett’s transfer party on Bassett’s promotion to FBI headquarters in Washington, DC.41. On at least one occasion, the Mayor solicited the help of the FBI from possible LCN activity. After Giancana sold the hotel to the Mayor and Pat Greco, Richard Cain, a well-known LCN figure, who reputedly was close to Giancana, led a staged raid on the Caravelle Motel while employed by the Cook County Sheriff. Allegedly, the Sheriff’s Office had a tip of ongoing illegal activity at the motel. When Cain executed the raid, Chicago Tribune photographers were present to capture a door being kicked down (it was a door to a closet). No evidence of illegal conduct was uncovered during the raid.42. After the raid, the Mayor contacted the FBI which referred him to Ross Spencer, an ex- FBI agent working for the Cook County State’s Attorney as his chief investigator. After a complete investigation, Cain and two others were indicted, convicted and sentenced to prison time for conducting the illegally-staged raid. The FBI was kept advised of the State’s criminal investigation of Cain. Cain was gunned down by fellow LCN members or associates several years after his prison release (Cain was convicted of a federal crime after his state prison release for which he served jail time) and Giancana’s assassination.43. I am aware that the Mayor was named in two federal indictments in 1983 and 1984, respectively. The first indictment charged the Mayor with filing false tax returns. The second indictment charged the Mayor with mail fraud for having an alleged undisclosed interest in property from which he profited as a result of Village action. The Mayor was acquitted in both instances. The first acquittal came about after a bench trial before United States District Court Judge, Charles P. Kocoras, now the Chief Judge of the Chicago District Court. Judge Kocoras found that the Mayor, contrary to the government’s claims, had disclosed all income items to his accountant. A jury acquitted the Mayor in the second case where, as I understand, former United States Attorney Thomas Foran testified that in his expert opinion he did not believe the conduct for which the Mayor was indicted constituted a crime. Foran testified as a government witness and rendered his opinion during cross-examination.44. In any event, neither case in which the Mayor was indicted had any connection to or association with the LCN, LCN members or LCN associates.45. During my tenure with the FBI’s Chicago Organized Crime Squad, nothing came to my attention about LCN influence in Rosemont, or about the Mayor associating with LCN elements (members, associates or businesses), or with persons who associated with LCN elements (members, associates or businesses), either in or outside of Rosemont, in any manner. Throughout the Pendorf investigation referenced in paragraph 5 above including, but not limited to, the numerous electronically monitored conversations, (literally thousands of hours) of LCN members, associates and persons who associated with LCN members and associates, there never was any mention of Rosemont or the Mayor being connected to or associated with known LCN members, associates, businesses or persons who associated with LCN members, associates or businesses. In fact, there was never ANY mention of the Mayor in the Pendorf electronically monitored conversations. That fact is particularly significant since one of the locations for electronically-overheard conversations was Amalgamated Insurance Company located just outside of Rosemont.ROSEMONT businesses 46. During my investigation, I reviewed the existing businesses in Rosemont. None bear any indicia of organized crime. To the contrary, the existing Rosemont companies constitute some of the most significant businesses in their particular field. Thus, in the restaurant field, there are Gibsons, Morton’s, Nick’s Fishmarket, Harry Carey’s, Carlucci’s and the Rosewood. In the banking industry, there are Cole Taylor Bank, Banco Popular, MB Financial, US Bank and Fifth Third Bank. In the hotel field there are the Westin, Hyatt, Marriott, Embassy Suites, Ramada, Radisson, Sheraton, Holiday Inn and Sofitel. In industry, companies like American Airlines, Xerox, and Target have chosen Rosemont as a business site. DePaul University chose Rosemont as its basketball venue. When contacted, all of these entities commended Rosemont as a municipality and a place to do business.47. Unlike surrounding communities, there are no businesses traditionally associated with the LCN. Thus, there are no businesses peddling adult “entertainment” in any form. There are no joker-poker outlets. Simply stated, the Rosemont business community is impeccable.ROSEMONT public safety employees 48. As part of my investigation, I reviewed the employee roster for Rosemont’s Public Safety Department. That Department is Rosemont’s largest employer employing about 400 persons either in permanent or part-time (auxiliary) capacities. My review involved requesting personnel files. I found that none of the employees raised a concern about an LCN connection or association.49. Parenthetically, Rosemont’s Public Safety Department has received numerous thanks from various law enforcement agencies for rendering assistance in various law-enforcement events. Based upon my review of its work and, just as importantly, the training to which it submits its members, I believe that Rosemont’s Public Safety Department is one of the finest in Illinois. As evidence of my point, the USA Today just published the results of a study in which Rosemont was found to be the safest locality for conventions. A total of twenty-five locations were studied, including New York, Washington, D.C., Miami Beach, Las Vegas, Detroit, and Chicago. Rosemont placed first in safety, a true testament to the Rosemont community.
Connections to or
associations with 50. Claims have been made over the years that the Mayor is an LCN member or associate, that the Mayor is or was connected to or associated with known LCN members and/or associates, or that the Mayor knowingly associates with known LCN members or associates. In this regard, I have reviewed public statements of certain individuals about this subject, print media reports that generally regurgitate the referenced public statements, and a deposition taken of the Mayor by the staff of the Illinois Gaming Board. I conducted the review to define the universe of claimed known LCN members and/or associates to or with whom the Mayor is or was purportedly connected or associated or with whom the Mayor knowingly associates. My review produced the following list of names:
51. Of the above eight individuals, the FBI listed or lists six as known LCN members – Sam Giancana, William Messina, John DiFronzo, Joseph Andriacchi, Joseph Lombardo and Jack Cerone, one as an LCN associate – Peter DiFronzo, and one as a “street tax” payer -- Anthony Daddino.52. The Mayor is or was neither connected to or associated with any of the above individuals, as those terms are defined in paragraph 12. My conclusion is based both on the substance of the published claims and my knowledge of the FBI’s investigative files concerning the criminal activities of the Chicago Outfit and its members and associates, said files covering activities both before and after I joined the FBI’s Chicago Organized Crime Squad in 1971.53. Sam Giancana (Deceased):(a) The FBI listed Giancana as an LCN member who served as Boss of the Chicago Outfit. As referenced above in paragraphs 28 and 46, there is no question that the Mayor knew Giancana. The question, however, is “in what capacity?”(b) The Mayor became acquainted with Giancana because of (i) Giancana’s ownership of a motel in unincorporated Cook County that abutted Rosemont after its creation and that subsequently was located in Rosemont as a result of annexation, and (ii) Rosemont’s efforts, through the Mayor, to rid the community of Giancana and the criminal activity that occurred at Giancana’s motel. After Rosemont forcibly annexed the property on which Giancana’s motel stood, Giancana sold the motel to the Mayor and Pat Greco. After the transaction, Giancana left Rosemont, never again having any kind of business interest in Rosemont.(c) Does buying a motel from a known LCN member make you connected to or associated with him? Does it mean that you are associating with a known LCN member? “No” is the simple answer to these questions when the underlying purpose and effect of the real estate transaction eliminated any presence of that LCN member in the community. Absent the private purchase of the motel, Giancana, his motel and the criminal activities attendant to both would have remained in Rosemont. Could Rosemont have condemned the property thus avoiding the Mayor’s/Greco’s purchase of the property? I suspect no at the time, since in 1963, only six or seven years after its incorporation, Rosemont’s financial position probably did not allow for it and, in any event, any threatened condemnation could have lead to litigation and an actual condemnation would have resulted in the expenditure of public funds to a known LCN member – a fact that probably also would have subjected the Mayor to criticism – if not the same claim that the Mayor was associating knowingly with an LCN member. Simply stated, the motel purchase rid Rosemont of Giancana.(d) The FBI knew of the sale of Giancana’s motel to the Mayor and Greco at the time it occurred and in no way believed that the transaction was intended or was, in fact, done either to benefit Giancana in his role as a known LCN member or to further criminal activities sponsored by Giancana. The FBI believed that the transaction was intended to and did eliminate Giancana from Rosemont.54. William Messina (Deceased):(a) The FBI listed Messina as a known LCN member of the Chicago Outfit’s Elmwood Park crew. After the Pritzker’s opened the Hyatt Hotel in Rosemont, Messina frequented the Health Club at the Hotel. It was there where the Mayor met Messina. Because of the known visits of Messina and Jack Cerone, another known LCN member, to the Health Club, the Mayor stopped attending the Club. The FBI knew about Messina’s utilization of the Hyatt Hotel health Club.(b) In addition to the Hyatt Health Club, the Mayor infrequently saw Messina at certain political fund-raising events. Other than possible greeting and parting pleasantries, the Mayor had only one substantive conversation with Messina. In that conversation, Messina asked the Mayor whether his, Messina’s wife, could work for Rosemont. The Mayor politely declined the request.(c) The Mayor’s contact – and I purposely use that word – does not establish that the Mayor is or was connected to or associated with Messina, a known LCN member. In fact, the Mayor’s incidental contact with Messina fails even to establish any kind of relationship with him.55. John DiFronzo:(a) The FBI lists DiFronzo as a known LCN member who presently serves as the Boss of the Chicago Outfit. Indeed, DiFronzo was a defendant (convicted) in United States v. Samuel Carlisi, et al, 92-CR-26 (S.D. Calif.), one of the cases in which I testified as an expert on the LCN (referenced in paragraph 7 above).(b) The Mayor has spoken to DiFronzo twice, both times in Rosemont restaurants (the Rosewood and Gibsons, respectively). DiFronzo initiated both conversations. Both conversations were brief involving DiFronzo introducing himself and exchanging greeting pleasantries. These two conversations obviously do not establish a connection to or association with a known LCN member. They were brief, incidental exchanges initiated by the LCN member. The Mayor disclosed both conversations to the Illinois Gaming Board.56. Anthony Daddino:(a) The FBI informant information reflects that Daddino, a low-level criminal type, may have made “street tax” payments to known LCN members or associates on receipts from his, Daddino's, illegal activities. He has never been listed as a known LCN member or associate. The Mayor and Daddino attended Leyden Township High School at the same time in the 1940s. Since high school, the Mayor has had little or no contact with Daddino over the years.(b) In the 1990s, Daddino was convicted of a federal crime. After his conviction, Daddino’ wife came to the Mayor. She requested that the Mayor write a letter to the Honorable Ann C. Williams, the United States District Judge who oversaw Daddino’s conviction, for the purpose of informing Judge Williams that, in the Mayor’s opinion, Daddino posed no danger to the community and, thus, was eligible for release on bail pending his surrender to the federal correctional institution designated as the place for Daddino’s confinement. The Mayor wrote such a letter based upon his prior knowledge of Daddino. Judge Williams released Daddino on bond. Daddino subsequently complied with all bond conditions and surrendered to his designated confinement facility without incident.(c) After Daddino served his sentence, he came to the Mayor to request a job, a requirement of his federal release provisions. Based upon their high-school relationship, the Mayor provided Daddino a low-level municipal job inspecting compliance with municipal occupancy requirements in multi-family residences. Daddino satisfactorily performed the job for a few years and then retired without incident.(d) None of the above facts reflects that the Mayor was or is connected to or associated with a known LCN member or associate or was knowingly associating with an LCN member, associate or a person who associates with LCN members or associates . First, Daddino is not a known LCN member or associate. Moreover, the Mayor never participated in, cooperated in, or facilitated in any manner the illegal activities in which Daddino might have engaged over the years. Indeed, nothing of the sort has even been alleged. The only thing that the Mayor did was write a letter for a former high school classmate expressing his opinion, based upon his knowledge of Daddino back in high school, about whether the former classmate posed a danger to the community and afterward provided the former classmate a job after he served a jail sentence.57. Peter DiFronzo:(a) The FBI lists DiFronzo as a known LCN associate of the Chicago Outfit’s West Side Crew. He also is the owner of, among other things, D&P, Inc., a waste-hauling firm. The Mayor has met DiFronzo on a few occasions at political fundraising events held by mayors of villages that are members of Leyden Township, the township of which the Mayor is the Committeeman. On some occasions, DiFronzo and the Mayor exchanged pleasantries – nothing else. DiFronzo also has contributed to the Leyden Township Committee Fund (the Fund no longer accepts his contributions). The contributions were unsolicited. In addition, Rosemont retained D&P, the company owned by DiFronzo, during the years 1999 and 2000 to provide some waste hauling services. The Mayor had nothing to do with the awarding of the jobs which totalled less than $20,000. According to the employee in Rosemont’s Public Works Department that awarded the contracts, he awarded the contracts after determining that D&P had submitted the lowest cost projection for the work.(b) The above-described facts do not show that the Mayor is connected to or associated with a known LCN associate. Incidental meetings with someone with whom you have no familiarity or relationship at which nothing substantively is discussed show nothing. Unsolicited political contributions also establish nothing. The fact that Rosemont without the Mayor’s knowledge or involvement provided D&P minimal work in 1999 and 2000 also establishes nothing. D&P does work and has worked for many high-profiled clients, such as Sears, Wal-Mart, and the United States government. Moreover, the Village department awarding the work did it through the usual process on a cost basis with no input from the Mayor. A partial list of D&P clients has been provided to the Illinois Gaming Board.58. Joseph Andriacchi:(a) The FBI lists Andriacchi as a known LCN member who is an Underboss for the Chicago Outfit. The Mayor has neither met nor spoken to Andriacchi. The Mayor is aware that Andriacchi fielded a candidate in an election for the Mayor of Elmwood Park against the Mayor’s candidate, Peter Silvestri. The Mayor’s candidate won the election. Election activity does not constitute a basis to establish a connection to or association with a known LCN member or associate.59. Joseph Lombardo:(a) The FBI lists Lombardo as a known LCN member who has held and now holds high level LCN positions. The Mayor neither has met nor has spoken to Lombardo. In fact, he has never heard the name, Joseph Lombardo.60. Jack Cerone (Deceased):(a) The FBI listed Cerone as a known LCN member who served as Underboss of the Chicago Outfit. Like William Messina, Cerone attended the Health Club at the Hyatt Hotel. Cerone used the name “Schwartz.” The FBI knew of Cerone’s use of the Hyatt Health Club. The Mayor never met Cerone at the Hyatt Health Club. He did meet him once in a restaurant when the Mayor’s female date introduced Cerone to him. That was the only time that the Mayor ever met or talked to Cerone. Obviously, these facts do not establish a connection to or association with a known LCN member or associate.
Nicholas Boscarino --
Whether he is an 61. Nicholas Boscarino and his relationship with the Mayor and the Mayor’s son, Mark Stephens:(a) IBT’s Local 714 provides labor to the Rosemont Convention Center in Rosemont. Local 714 is the certified collective bargaining representative of the workers who load and unload trucks at convention centers. Exhibition Halls and exhibitors are bound by federal law to recognize and deal with Local 714. The labor union also sets up the various trade shows that the convention centers book during a given year. It also loads and unloads trucks delivering materials to the convention centers. Boscarino worked at the Rosemont Convention Center as a Local 714 laborer in the late 1970s and early 1980s. He became a Local 714 steward in the mid-1980s. In that capacity, he met the Mayor and a friendship evolved between them. They occasionally socialized with each other. They also entered into varying business and financial relationships outside of Rosemont.(i) The Mayor, Boscarino, William Daddano, Jr., and William Daddano, Jr.’s children incorporated a company called Eastern Services/American Trade Show Services/SBD. The company rented equipment to trade show contractors at the Javits Center in New York and McCormick Place in Chicago. The company NEVER did business in Rosemont. The Mayor had no managerial participation in the company and acted solely as a passive investor. The Mayor withdrew from the company in 2002, giving up his initial investment of $25,000.(ii) Boscarino and the Mayor jointly invested in a co-generation plant in Massachusetts in 1987. The investment ended in 1988.(iii) Boscarino and the Mayor jointly invested in S&P Futures in the late 1990s.(iv) The Mayor jointly owned a condominium in Beaver Creek, Colorado with Boscarino. The Mayor withdrew from this investment selling his interest to his son, Mark Stephens in 1992.(b) Boscarino also met the Mayor’s son, Mark, while Mark was employed at the Rosemont Convention Center. Boscarino and Mark also entered into business relationships:(i) They formed a company called Bomark that provided cleaning services initially for the Rosemont Convention Center and later for other Rosemont-operated buildings and private buildings in Rosemont. Boscarino sold his interest in the company to Mark Stephens in 1999.(ii) Boscarino and Mark Stephens also jointly owned a condominium in Beaver Creek, Colorado (the Mayor sold his interest to Mark in 1992). Mark sold his interest in the condominium to Boscarino in 2002.(c) In addition to his business interests with the Mayor and Mark Stephens, Boscarino independently owned other businesses situated in Rosemont, including a forklift company and a restaurant. Both the forklift company and the restaurant rented space in Rosemont’s Village Hall. At the present time, Boscarino has no businesses operating in Rosemont. Moreover, he no longer has any business/financial relationship with the Mayor or Mark Stephens.62. The FBI does not and has never listed Boscarino as an LCN member or associate. Moreover, the Illinois State Crime Commission, the Chicago Crime Commission and the Chicago Police Department do not list Boscarino as an LCN member or associate on any LCN organizational chart. That Boscarino is not considered an LCN member or associate, however, does not end the inquiry.63. In the course of its work, the FBI produces what are colloquially called “92 reports.” These reports, prepared for pure intelligence purposes, contain a sundry of information from a variety of unidentified sources. Neither the collected information nor the sources are necessarily corroborated or verified. “92 reports” are not subject to any intelligence evaluation. For that reason, the FBI does not base recommendations or conclusions on the information gathered in “92 reports.” Indeed, the FBI specifically warns that the uncorroborated and unverified information “should be treated as such to ensure fairness” to the referenced person.64. Similar to “92 reports,” the FBI prepares “66 reports,” in this instance based upon the existence of a Memorandum of Understanding (“MOU”) between it and a fellow regulatory or investigatory agency. The FBI provides the “66 reports” to its fellow agency or agencies to cooperate in investigative efforts. As with “92 reports,” “66 reports” contain uncorroborated and unverified information received from uncorroborated and unverified sources. As with “92 reports,” “66 reports” are not subject to any intelligence evaluation. Again, as with “92 reports,” the FBI provides “66 reports” with the warning that the information contained therein should be considered as uncorroborated and unverified to “ensure fairness to the referenced person.”65. I am aware that the FBI, pursuant to a Memorandum of Understanding, provided a “66 report” to the Illinois Gaming Board on April 23, 2002 that concerned Boscarino. The FBI provided the report to the Illinois Gaming Board with the admonition that “[w]e wish to emphasize that the information being disclosed contains neither the recommendations nor the conclusions of the FBI. In fact, some of the information is uncorroborated and should be treated as such to ensure fairness to the referenced subject.”66. The Boscarino “66 report,” again submitted to the Illinois Gaming Board as late as April 23, 2002, does not claim that Boscarino is an LCN member or associate. That is consistent with the FBI not listing Boscarino as an LCN member or associate. The report, however, does state that “. . . Boscarino appears to be, at the very least, a close friend of a number of Chicago LCN members and associates.” The report then immediately qualifies this statement with the warning that the “source information contained herein may or may not necessarily be corroborated or verified.”67. Importantly, being “a close friend of” known LCN members or associates does not, in the FBI’s view, make you an LCN member or associate as described in paragraph 12. In addition, it does not mean necessarily that the associating person is cooperating or participating in any illegality in which the LCN member or associate may be engaged.68. The Boscarino “66 report” establishes the reason the FBI provides the reports with accompanying admonitions about the use to which they are put. At one point, the Boscarino “66 report” relates “that Nick Boscarino runs a company that is involved in and controls trade shows at the Rosemont Horizon. . .” This statement is false on its face. While Boscarino operated a forklift company, the company never performed trade show work at the Rosemont Horizon. That facility does not sponsor trade shows. Moreover, if the uncorroborated and unverified source confused the Horizon (now the Allstate Arena) with the Rosemont Convention Center, the claim still is erroneous since Boscarino’s company had nothing to do with contracting with trade shows, in determining the trade shows that would appear at the Rosemont Convention Center or in controlling the operation of the trade shows. Boscarino’s company only provided forklifts upon request by the Rosemont Convention Center. The forklifts moved items in and out of the Rosemont Convention Center and around it.69. Similar to the above-mentioned false statement, the Boscarino “66 report” also relates that Boscarino, along William Michael Daddano, Jr., “were co-owners of [a] business that sold souvenirs and refreshments at the Rosemont Horizon and that they also operated the parking facilities. . . [with] their company [funneling] pay-off money to public officials to obtain and keep these contracts.” (The FBI “66 report” misspells Daddano as “Daddono”). Neither Boscarino nor Daddano, Jr. ever had a company that provided souvenirs and refreshments at the Horizon or anywhere else or that controlled the Horizon’s parking facilities or any other parking facilities. As a consequence, Boscarino and Daddano, Jr. could not have funneled money to public officials as claimed. The company never existed. The contracts never existed.70. The remaining Boscarino “66 report” relates Boscarino purportedly interacting in one way or the other with known LCN members and associates or with persons who associated with known LCN members or associates. None of the claims are corroborated or verified. None of the sources are corroborated or verified. As a consequence, the truthfulness or accuracy of the claim is unknown. If judged by the earlier false claims, some doubt necessarily exists as to the veracity of it. Accordingly, under the circumstances, you cannot conclude from the Boscarino “66 report” that Boscarino associates with known LCN members or associates or with persons who associate with known LCN members or associates. Assume, however, that the association claim in the Boscarino “66 report” is true, you still cannot conclude that either the Mayor or Mark Stephens knew that Boscarino was associating with known LCN members and associates or with persons who associated with known LCN members and associates. Indeed, the Boscarino ”66 report” does not even claim that the Mayor or Mark Stephens knew that Boscarino associated with known LCN members or associates or with persons who associated with known LCN member or associates.71. Other than the Boscarino “66 report,” the only other basis upon which to base any claim that Boscarino is an LCN member or associate or a person who associates with known LCN members or associates is the fact that Boscarino’s father died after having been shot, purportedly because of LCN connections or associations This fact establishes nothing. First, when Boscarino’s father was shot, he had been divorced from Boscarino’s mother and had been living apart from his family for several years. More importantly, the fact that a divorced father is shot because of LCN activity does not mean that the son is in some way automatically associated with the LCN. Membership in the LCN or association with known LCN members and associates does not result from blood lineage. It comes about from a knowing decision of a particular person to engage in the illegal conduct controlled by LCN interests and the acceptance of that individual by the LCN.72. The Illinois Attorney General, in a March 25, 2004 letter to certain members of the Illinois Gaming Board (referenced more completely later in paragraphs 84 through 105), alleges that the Daddano family has been involved in organized crime for multiple generations, casting a taint over William Daddano Jr., William Daddano, III, Lou Daddano and John Daddano. (William Daddano, Jr., was a shareholder in Eastern Services/American Trade Show Services/SBD, the company referenced in paragraph 62(a)(i) and in which the Mayor was a shareholder). The fact of the matter is that the FBI has only listed William Daddano, Sr. (deceased) (known by the alias of “Potatoes”) as an LCN member. As of 1997, it did not list any other Daddano as an LCN member, LCN associate, or person who associates with LCN members or associates. As a consequence, as with Boscarino, the Illinois Attorney General, contrary to accepted law enforcement procedure, erroneously brands Daddano family members as being connected to or associated with the LCN based solely upon family lineage. Such action is inappropriate for law enforcement or regulatory purposes, since it is illogical, is without evidentiary support and is fundamentally unfair.73. Throughout the 1990s, Boscarino engaged in a scheme to defraud through charging Rosemont inflated insurance premiums. The Chicago United States Attorney’s office first advised Rosemont and the Mayor of Boscarino’s scheme in September 2001. After conducting an internal investigation into the contention, Rosemont and the Mayor cut all association with Boscarino in December 2001 while, at the same time, filing a civil lawsuit to recover the inflated premiums. After two years of litigation, Rosemont recovered all monies owed to it, including attorneys’ fees and interest on the inflated premiums. Boscarino was indicted for the fraud and subsequently convicted. The Mayor, other Rosemont officials, and Mark Stephens cooperated in the criminal case against Boscarino with Mark Stephens actually testifying for the prosecution at Boscarino’s trial. Boscarino’s criminal conduct, the Mayor’s severance of association from Boscarino, Rosemont’s filing of the civil suit, and the Mayor’s cooperation against Boscarino in the criminal investigation undercut the contention that the Mayor knew of any Boscarino LCN connections or associations if, in fact, they exist or existed.the APRIL 7, 2004 memorandum 74. On May 17, 2004, the Chicago Sun Times reported on the contents of the April 7, 2004 Memorandum purportedly providing “updated information regarding Organized Crime influence in Rosemont.”75. As part of my investigation of Rosemont and the Mayor, I examined the contentions made in the Memorandum about Rosemont and the Mayor and have concluded that they are incorrect.76. The Memorandum first identifies William Hogan, Jr. as the previous President of the International Brotherhood of Teamsters Local 714. It then represents that William Hogan, Jr. was permanently banned from the IBT “because of Organized Crime connections in Chicago.” Contrary to the Memorandum’s claims, William Hogan, Jr. never served as President of Local 714. Instead, he was Secretary-Treasurer. In addition, William Hogan, Jr. was expelled from the IBT on May 29, 2002 because he brought reproach upon the IBT through the improper award of contracts in violation of IBT rules. Mr. Hogan’s expulsion had absolutely nothing to do with “Organized Crime connections.” Indeed, the order expelling Mr. Hogan from Local 714, 46 pages in length, does not even mention “organized crime.”77. The Memorandum next addresses Rosemont Exposition Services (hereinafter “RES”), a company used by the Rosemont Convention Center to contract with and to service trade shows. According to the Memorandum, RES provides laborers to service trade shows when Local 714 is unable to provide workers. This statement is flatly untrue. RES contracts with Local 714 to provide labor for the trade shows at the Rosemont Convention Center pursuant to a recognized collective bargaining agreement. That labor contract requires Local 714 to provide labor for the trade shows. If Local 714 cannot provide union labor for a particular show, it is incumbent upon Local 714 to provide the necessary additional labor required for a show. The type and source of labor provided by Local 714 has been historically and is within the total authority of Local 714. Today, Local 714 only provides union labor at the Rosemont Convention Center.78. The Memorandum states that RES uses a company called Surestaff to provide additional labor at the Rosemont Convention Center and has done so since the early 1980s. The Memorandum further alleges that Michael Hogan, the brother of William Hogan, Jr., the alleged Organized Crime figure, was the original shareholder of Surestaff. The Memorandum next contends that Michael Hogan dissolved Surestaff in 1985 and sold its assets to a new company using the same name Surestaff. The Memorandum further contends that Michael Hogan allegedly retained a 20% stock ownership interest in the new Surestaff. The Memorandum additionally maintains that the other shareholders of the new company purportedly involved an “investment group” that included Mark Stephens, the son of the Mayor. According to the Memorandum, RES continued to utilize Surestaff after its reincorporation in 1985 to provide additional labor for the Rosemont Convention Center. Each of these assertions is totally false.79. Neither RES nor Local 714 ever used a company named Surestaff to provide labor to the Rosemont Convention Center in the 1980s through 1998. Indeed, Surestaff did not even exist until 1998. A simple review of Surestaff’s Illinois incorporation papers would show that neither Michael Hogan nor Mark Stephens were ever shareholders in Surestaff. The actual Surestaff shareholders and the years in which they became a shareholder follow:(a) David Mehr, March 10, 1998 and January 1, 2002;(b) Douglas Howard, January 1, 2002, and(c) Raymond Morelli, January 1, 2002.80. The Memorandum next states that a Louis Morelli serves as the registered agent of Surestaff. Specifically, the Memorandum alleges that Mr. Morelli “worked in the Elmwood Park Street Crew,” a reputed Organized Crime organization and owned property in a condominium complex in Wisconsin in which Organized Crime figures also owned property.81. It is true that a Louis A. Morelli is the registered agent of Surestaff, again a company which was first incorporated in 1998. However, contrary to the Memorandum allegations that Mr. Morelli is an LCN figure, Mr. Morelli is a licensed attorney in good standing with the Illinois Attorney Registration and Disciplinary Commission practicing law in St. Charles, Illinois. Mr. Morelli is in no way an LCN figure that participates in the “Elmwood Park Street Crew.” No investigative agency lists Mr. Morelli as an LCN member or associate or as a person who associates with LCN members or associates.82. The Memorandum next claims that William Hogan, Jr. meets Tuesday mornings with Nick Boscarino (hereinafter “Boscarino”), a former steward for IBT, and the Mayor at a restaurant in the Rosemont Convention Center. These meetings allegedly occurred after Boscarino was indicted in 2002 for perpetrating an insurance fraud on Rosemont and after William Hogan, Jr. was expelled from the IBT because of reputed Organized Crime connections. Simply stated, the Memorandum tries to falsely suggest that Mayor Stephens regularly meets with an alleged LCN figure and a person indicted for defrauding the Village. No such meetings occurred based upon corroborated and verified information.83. The Memorandum finally claims that William Hogan, Jr. traveled to Florida in February 2004 to report to certain IBT officials that he had been given assurances that he, Hogan, would be allowed to control the valet parking contract at the casino in Rosemont. From the preceding claim about the meetings between Boscarino, Hogan and the Mayor, the Memorandum infers erroneously that the Mayor was the source of the assurances without any support. No such meetings occurred based on corroborated and verified information. First, William Hogan, Jr. denies traveling to Florida in February 2004. In addition, the Mayor denies ever discussing a Rosemont casino with Hogan, let alone a valet parking contract at the casino. More importantly, the alleged purpose of Hogan’s February 2004 travel is nonsensical. There was no Rosemont casino in February 2004. The auction for the purchase of Emerald Casino, Inc. among the final three bidders did not even occur until March 10, 2004. Only one of the final three bidders identified Rosemont as a casino site. The other two bidders identified Des Plaines and Waukegan, respectively, as their proposed casino sites. Accordingly, there was no guarantee of a Rosemont casino in February 2004, and, thus, no basis even to discuss a valet parking contract at a Rosemont casino. Moreover, the licensee – not Rosemont – would choose the vendor for valet parking services. Even more importantly, a contract for valet parking services at any casino site would have to receive Illinois Gaming Board approval. As a result, there could be no control of that contract without the Board’s knowledge of it, another fact that seriously undercuts the credibility of the Memorandum’s claims. Finally, under Mr. Hogan’s ban from Local 714, any union official seen meeting or associating with Mr. Hogan would be subject to union ban. It is difficult to believe that an active union official would risk a ban from the union by meeting with Mr. Hogan – let alone over a subject concerning a future parking contract at a non-existent casino over which Rosemont had no control and of which the Illinois Gaming Board had to approve.ILLINOIS attorney general allegations 84. In a March 25, 2004 letter to the Illinois Gaming Board, the Illinois Attorney General alleged that:(a) The Mayor pressured Donald Flynn of Emerald Casino Inc. to sell some of his shares in Emerald to friends of the Mayor;(b) The Mayor caused the sale of Emerald stock to persons affiliated with the LCN;(c) Contractors connected with the LCN were used in the construction of Emerald’s facilities in Rosemont possibly at the Mayor’s assistance; and(d) The Mayor has failed to explain how Boscarino received “inside” bidding information that allowed a company with whom Boscarino allegedly was associated to receive inflated premiums on the award of insurance to Rosemont.85. I have investigated each of these allegations and find that they are totally undercut by existing sworn testimony or by objective documentation.DONALD FLYNN STOCK TRANSACTION 86. The Donald Flynn stock transactions on which the Attorney General based her claims occurred in September 1999. Mr. Flynn sold approximately four (4) percent of his stock to twelve (12) individuals.87. On four different occasions Mr. Flynn explained the above-described stock transactions to the Illinois Gaming Board. On those occasions, Mr. Flynn never contended that the Mayor caused him, Mr. Flynn, to sell stock in September 1999.(a) November 22, 2000 letter from Donald Flynn to Sergio Acosta· “You questioned why I purchased Emerald common stock shortly after [the September] sales. After the sales but before the purchase, the Illinois Gaming Board determined that the administrative law judge’s decision affirming he Board’s 1997 denial of Emerald’s license renewal was moot. In my opinion this determination substantially improved Emerald’s prospects. When several of my long-time partners in Emerald wanted to sell me their common stock, I agreed.” (b)
October 10, 2000 Interview of Donald Flynn
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