Category Archives: Investigations

Old-School Politics In New-Age Community?

State Sen. Don Harmon

Oak Park has a reputation as a progressive place, where education and the arts matter, where voters care about social issues and aren’t afraid to challenge the status quo.

They’d be “lakefront liberals” if the Eisenhower was water instead of exhaust-stained pavement.

Don Harmon, the state senator who represents the near western suburb and lives in town, says he takes pride in embodying Oak Park’s values and independent spirit.

But after researching how much state-government business his law firm has been getting, among other subjects, we have to wonder: is Harmon really a Machine Democrat in (organic, grass-fed) sheep’s clothing?

The Better Government Association recently found that the small Chicago law firm that employs Harmon has been paid millions of dollars over the years to provide legal services for state agencies – which Harmon, as a member of the General Assembly, helps oversee. He’s also voted on a piece of gaming legislation that his firm helped craft.

That’s a clear conflict of interest.

But even beyond all that, Harmon’s street cred as a “reformer” or progressive has to be questioned.

Why does his law firm advise public-sector clients not to speak to the media?

Why did he vote to water down the Illinois Freedom of Information Act, which ensures journalists and regular citizens can access most government documents?

Why did he accept $300 in campaign donations just a couple months back from D & P Construction, a waste-hauling company that’s repeatedly (and publicly) been linked to the Chicago mob?

Why did he introduce a piece of legislation that would allow office holders to “double dip” – hold two elected positions at once?

Peter Silvestri, a Cook County commissioner and Elmwood Park’s village president, told the BGA that Harmon fronted that bill at his request. After the BGA learned of the legislation, Harmon relayed that he changed his mind and was withdrawing his support.

But about a month later he quietly resurrected the bill in the form of an amendment to an unrelated piece of legislation. When we tried to ask him about the flip-flop, Harmon wouldn’t return our calls. He later told the BGA he regretted getting involved in the matter. The legislation was never approved.

Lastly, although we’re not into branding people with “guilt by association,” it’s worth noting Harmon started out his career as an aide to Illinois House Speaker Michael Madigan, a Chicago Democrat who is the ultimate Machine guy – one of the most powerful political figures in the state and one of the largest obstacles to reforming our troubled government system.

This isn’t to say Harmon hasn’t done good things. In fact, he’s worked with the BGA on legislation, including a successful effort to kill the misused and abused “legislative scholarship” program.

But judged through a larger prism, Harmon isn’t challenging the status quo. He is the status quo.

This blog post was written and reported by the Better Government Association’s Andrew Schroedter, Patrick Rehkamp and Robert Herguth. They can be reached at aschroedter@bettergov.org or (312) 821-9035.

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Mayor’s Office Employee Arrested Twice For Allegedly Soliciting Sex

When Chicago Mayor Rahm Emanuel holds a news conference, Gene Mc Neil is the city employee who makes sure the sound system runs smoothly.

But the veteran city employee was a little too smooth with the ladies, police reports indicate.

Mc Neil was arrested twice since 2005 for allegedly soliciting undercover cops who were posing as prostitutes. One of those arrests came while he was on the clock for taxpayers, he acknowledged.

Mc Neil, 55, was not convicted in either case; the arresting officers didn’t show up for some reason, so the cases were thrown out, court records show.

Reached just before a mayoral news conference a few weeks ago, Mc Neil said the arrests were misunderstandings. He said he was simply in the wrong place at the wrong time.

In 2005, Mc Neil was arrested for allegedly soliciting oral sex for $10, court records show. In 2007 he allegedly offered $25 for sex, records show. In the second instance, Mc Neil relayed to us that he was on the clock and en route to buy a newspaper when a woman approached him on the street and starting walking with him.

Referring to the Chicago Police Department, he said, “I understand they’re trying to get their numbers up. . . . I didn’t make any overtures.”

Whatever the truth, it’s interesting to consider Mc Neil’s proximity to a politician known for such a carefully crafted image.

When asked about Mc Neil, an Emanuel press aide said this was the first she heard of his troubles. But within an hour, word came down that Mc Neil was being transferred to other duties, at least for the time being.

Mc Neil, who’s been on the government payroll for 25 years and worked for Richard M. Daley as well, has a salary of about $84,000 a year.

This blog post was written and reported by BGA Senior Investigator Patrick Rehkamp. He can be reached at prehkamp@bettergov.org or (312) 386-9201.

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Before the Fall, Cellini Firm Feasted on Fees

It would appear that William Cellini’s reign as a state powerbroker is over, especially since he’s probably headed for jail.

That’s in sharp contrast to a few years before his conviction last November in federal court of extortion conspiracy and soliciting a bribe. At that time, the real estate investment firm he ran was flush with tens of millions of dollars in fees provided by the Teachers Retirement System (TRS) of Illinois.

Cellini’s Commonwealth Realty Advisors received $30 million between 2001-2010, the Better Government Association found.

It was Cellini’s influence on the state’s largest public pension fund that helped lead to his downfall. Cellini was convicted of scheming to pressure a co-owner of investment firm Capri Capital in 2004 to make campaign contributions to then-Gov. Rod Blagojevich in return for Capri’s managing some TRS investments worth $220 million.

Federal authorities have alleged in court documents that Blagojevich insiders Tony Rezko and Christopher Kelly were also part of the scheme to force Capri to make payments to the ex-governor’s campaign fund.

The plot backfired when Capri co-owner Tom Rosenberg, a Hollywood producer whose films include “Million Dollar Baby,” refused to give money to Blagojevich, according to court documents.

Rosenberg threatened to go to the authorities.

To try to prevent that from happening, Cellini, Rezko, Kelly and TRS board member Stuart Levine decided Capri should get the $220 million investment stake anyway. But they vowed to use their influence to block Capri from receiving future state business, federal authorities alleged in court documents.

In October 2008, a federal grand jury indicted Cellini on charges of conspiracy to commit mail fraud, extortion conspiracy, attempted extortion and soliciting a bribe.

Cellini was subsequently convicted in federal court, where Rosenberg was a key government witness.

Cellini’s family still has property and business interests in Springfield and downstate, so a comeback for the resilient political powerhouse is always a possibility.

But that’s a long shot: Cellini faces up to 30 years in prison and his firm, Commonwealth Realty, has closed. His sentencing is scheduled for June 15.

This blog entry was reported and written by BGA Investigator Andrew Schroedter, who can be reached at (312) 821-9035, or at aschroedter@bettergov.org.

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Filed under Fiscal Issues, Investigations

IMRF Vs. TRS: Getting More For Less

Over the past decade, another major public employee pension fund reaped a higher investment return, paid less in financial fees and used fewer advisers than the Teachers Retirement System (TRS) of Illinois.

The Illinois Municipal Retirement Fund (IMRF), which had $24 billion in assets at the end of 2010, had an average annual return of 5.4 percent (not including fees) for the 10-year period ending in 2010.

The fund couldn’t provide a net return for the 10-year period.

During that period, IMRF paid $594 million in fees to money managers, significantly less than TRS’ $1.3 billion payout. Eighty vendors were paid more than $1 million each by IMRF compared to more than 200 TRS vendors.

Another difference: IMRF, which manages pensions for local governments and school districts, is not state-funded as is TRS and four other major state-backed pensions.

IMRF was about 80 percent funded at the end of last year, according to a preliminary estimate.

In comparison, TRS is less than half funded.

Brett Chase is a Chicago-based freelance reporter and BGA investigator.

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Chicago Tribune, EveryBlock Follow Up on BGA Investigation of Deteriorating Brown Line Platforms

Paul Beaty/Chicago News Coop; Emily Jurlina/BGA

Today the Chicago Tribune picked up on a BGA and Chicago News Cooperative investigation from late 2010 about the deteriorating Brown Line renovation project. The Brown Line recently underwent a $530 million overhaul that officials claimed would minimize maintenance. Fewer than two years since the renovation, planks are warping, rotting and growing mold.

The Chicago Transit Authority (CTA) initially installed wood pre-treated with only a fire-retardant. On the advice of a wood expert and former employee of the federal government’s Forest Products Laboratory, the CTA later applied a weather-resistant preservative to the platforms between April and August 2009. It turns out that the preservative does not work well when applied over the fire-retardant, and deterioration ensued.

As a result, taxpayers have spent more than $350,000 in replacing planks. The CTA ensures that rider safety is not at risk. Read our Dec. 31, 2010, investigation here.

Citizens Take to the (Digital) Streets

This investigation has led to a new kind of citizen engagement the BGA is excited about: An Albany Park resident took to EveryBlock this August to find out how her public officials are responding to the problematic planks on the Brown Line platforms. As you’ll see, a community is forming around the issue: http://chicago.everyblock.com/announcements/aug16-deteriorating-cta-platforms-4186225/#comment-32128

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City Workers Goof, Leave Warehouse Unattended

Exterior views of a City of Chicago Warehouse, where copper coils were stolen. Signs mounted on the fence, This building under T.V. Surveillance. (Scott Stewart/Sun-Times)

Yet another security breach was reported at a South Side municipal warehouse that earlier this year saw two tons of copper-lined cable vanish in a still-unsolved theft.

Days after the Better Government Association publicized the cable heist at 940 W. Exchange—home base for city crews that install and maintain security systems at local government facilities—workers left open a garage door when they departed for the day.

The building, located in the old stockyards area, was left wide open on June 14 for roughly seven hours, with no workers present, until about 10:30 p.m., when an employee showed up and tripped an alarm that sent police to the scene, according to police and city officials.

Although the cable theft is being investigated as a possible inside job, the latest incident is considered a mistake, city officials said.

It could have been an expensive misstep, especially since the warehouse is filled with pricey equipment and materials—the cable stolen in March was worth at least $20,000—and equipped with surveillance cameras and alarms that, city officials have acknowledged, don’t always function.

Apparently, nothing was stolen while the door was open, but this is another black eye for Chicago’s Department of General Services, which runs the facility and whose chief told the BGA he’s considering shuttering the site and consolidating operations elsewhere.

“We’re certainly taking all of this very seriously,” David Reynolds, General Services Commissioner, said. “Part of what we’re doing is looking at remote locations and putting them in places where there’s better control. Our ultimate goal is better inventory control.”

An employee who works at the Exchange building and asked not to be identified told the BGA: “There’s going to be some procedures put in place so this doesn’t happen again. It’s usually the last guy out [securing the building.] It was kind of a miscommunication.”

This story was written and reported by BGA Senior Investigator Patrick Rehkamp. He can be reached at (312) 386-9201 or at prehkamp@bettergov.org.

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$20K Worth of Copper Cable Stolen from ‘Secure’ City Warehouse

Exterior views of a City of Chicago Warehouse, where copper coils were stolen. (Sun-Times)

The warehouse at 940 W. Exchange should be one of the most secure municipal buildings in Chicago.

Not only is it home base for city crews that install and maintain security systems at local government facilities, it’s outfitted with surveillance cameras and an alarm.

So, how could four spools of copper-lined industrial power cable that weigh more than 1,000 pounds apiece disappear in March in a still-unsolved theft?

Turns out the building’s alarm system was on the fritz at the time, and many of the security cameras weren’t working, several sources told the Better Government Association.

The interior of the city warehouse, where equipment and materials are often left unsecured. (BGA)

What’s more, the cable (worth at least $20,000) had been left out—and wasn’t kept inside a locked storage area like it was supposed to be, the sources said.

The city’s inspector general now is investigating, and exploring the possibility that the heist was an inside job, the sources said.

Among the city employees questioned by investigators: a man who was interviewed about a separate theft of cable at O’Hare Airport years ago.

The BGA is not naming the man because he has not been charged with a crime, but he confirmed to the BGA that he was questioned in both instances. He denied involvement.

Officials with the inspector general’s office and the City of Chicago’s Department of General Services, which operates the warehouse in the old stockyards area of the South Side, wouldn’t comment.

The cable that was stolen was lined with copper and coated with rubber. It presumably was stolen for the value of the copper, which has been a popular target of thieves in recent years.

Sources familiar with the situation said a forklift and truck surely would have been needed to make off with the electrical cable.

Security has since been beefed up, sources said. But theft has been a problem there in the past, one employee told the BGA.

“You might use the copy machine and make a personal copy, who cares,” the employee said. But, referring to the cable disappearing, he added: “This is just like, ridiculous. Totally ridiculous.”

This story was reported and written by BGA Senior Investigator Patrick Rehkamp and BGA Sophia Bairaktaris. They can be reached at (312) 386-9201, or at prehkamp@bettergov.org.

This BGA investigation was published in the weekend Chicago Sun-Times

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