STUMP » Articles » The Undeniable Corruption of Chicago and Illinois: News Round-up » 13 February 2019, 04:40

So this isn’t really a theme post, other than to grab a bunch of corruption-related stories from the news, encompassing mainly Chicago but also a few other places.

Burke has yet to be actually prosecuted, who knows if Solis will be arrested for anything, and what about everybody else involved?

PITY THE POOR ALDERMEN

Revelations about Ald. Daniel Solis wearing wire for FBI have created ‘a toxic atmosphere’ at Chicago City Hall

In the days since his federal cooperation came to light, rumors about whom City Council Ald. Daniel Solis may have caught saying something stupid on tape have created a parlor game of whispering among aldermen.

“I was pulled aside by a reporter at City Hall who told me, ‘I just want to let you know as a courtesy that this alderman is putting you out there as the next shoe to drop in the federal investigation,’” said an alderman, who spoke on condition of anonymity. “Since I was made aware of that, other colleagues have said they’re aware of similar situations playing out, where aldermen are simply putting forward names of people they don’t like for one reason or another.”

Ah, paranoia, just like the inner circle around Stalin.

That the latest federal incursion into City Hall and resultant public hand-wringing over government corruption are taking place just weeks before aldermen fight for their political lives in the quadrennial blood sport of city elections ratchets up the anxiety exponentially. It’s not a good moment to be an incumbent alderman in Chicago even if you’ve done nothing wrong. Add in the whiff of a scandal and it’s a cold February to face the voters.

So far, I’m not seeing anything concrete.

Again, they all know each other, and the top people got money via the help of both Burke and Solis.

“There have always been aldermen willing to pass on unfounded rumors,” veteran Ald. Joe Moore said. “I think what some of us are worried about now is that voters are going to say, ‘A pox on all your houses,’ and vote against those of us who are trying to do the right things for our constituents just because we’re associated with what’s going on.”

Get off your high horse. Even if other aldermen are strictly within the law, Chicago politics has been built on a web of favors, as you usually get with this sort of mess. It doesn’t require any specific corruption at all, but you will still end up with favored people and groups, even if legal. Those shut out of that cozy arrangement are not going to be pleased. Those getting the goodies don’t want it to stop.

Several seemed more dismayed with Solis than with anyone his secret recordings might have caught in wrongdoing. “We’re a family” was a common refrain from council members who felt betrayed by Solis siding with federal agents against them. That familial bond only goes so far, though.

South Side Ald. Roderick Sawyer, 6th, said Solis shouldn’t have cooperated. “You would like to think someone would just take their punishment like they should take their punishment and not try to spread it to other people. It could be entrapment. It could be ensnaring somebody in something they would not normally do,” Sawyer said.

And Southwest Side Ald. Matt O’Shea, 19th, said: “Where I come from, if you wear a wire someone’s going to kick your ass.” O’Shea later wrote a letter to the editor that ran in the Tribune, apologizing for what he said was “an ill-advised and poorly timed attempt at humor.”

Snitches get stitches, didn’t you hear?

It’s been brought up before, but this ain’t the City Council’s first corruption sting.

During the Operation Silver Shovel investigation in the 1990s that eventually landed six council members in prison, South Side Ald. Allan Streeter, 17th, secretly tape-recorded conversations with City Council colleagues after federal authorities confronted him with evidence that they knew he had pocketed bribes from government mole John Christopher and others.

Upon learning Streeter had worn a wire, North Side Ald. Bernard Stone, 50th, labeled him “a procurer” and “a pimp.”

And Ald. William Beavers, 7th, said of Streeter, “If he’s wearing a wire, I have no mercy.”

“I feel that he’s a rat. OK? Some people just can’t stand pressure. There’s men and there’s boys, and he’s a boy,” said Beavers, who later was sentenced to six months in federal prison for income tax evasion for failing to pay taxes on money he took out of his campaign fund and used for gambling and other personal expenses while he served on the Cook County Board.

How ever would the public get the impression that all the people on the Council were crooks?

In the wake of the Solis news, an alderman looked back this week on the big talk of reform following Silver Shovel and the Hired Truck scandal that led to convictions against former city Clerk James Laski and officials in Mayor Richard M. Daley’s administration for taking bribes and rigging city hiring to benefit pro-Daley political workers.

“Now they’re all talking about reforms. You can’t reform people,” the alderman said. “If somebody’s trying to do something illegal they’re going to find a way to do it. They always talk about reforms. After Silver Shovel they said the same (expletive). After Hired Truck they said the same (expletive).”

Here’s a reform: throw the bums out. But if Chicagoans keep voting them in, we can assume they’re just fine with this behavior, as long as they get a bit of the largesse.

CHICAGO THE MOST CORRUPT IN THE U.S.

They need a study for that?

Chicago Is The Most Corrupt American City: Report

CHICAGO (CBS)–The Chicago metropolitan area was ranked as the most corrupt U.S. city in a new report from the University of Illinois at Chicago.

Along with Chicago, Los Angeles topped the list of the most public corruption convictions in America, based on the number of federal corruption convictions between 1976 and 2017. Chicago had 1,731 convictions during that time period, while the Central District of California had 1,534. The Manhattan area had 1,327 and Miami had 1,165, according to the report. Washington, D.C. had 1,159.

Oh, they’re going by convictions. And shouldn’t it be based on a rate — you know, number of convictions per number of officials?

More than 30 Chicago City Council members have been tied to corruption cases since the 1970’s, with Ald. Edward Burke (14th) becoming the latest Chicago politician to make headlines after being charged with one count of attempted extortion on Thursday, Jan. 3 for allegedly trying to use his power on the City Council to solicit business for his private law firm.

The charge against Burke, Chicago’s most powerful and longest-running City Council member, comes on the heels of two FBI raids carried out in his offices late last year. After serving the city’s Southwest Side for 50 years, the charge puts Burke on the ever-growing list of disgraced city officials.

Although Chicago accounts for 82 percent of the state’s public corruption convictions, according to the report, federal corruption is a statewide problem.

Well… duh. Federal offices are spread throughout the state.

So I went to the research site, and downloaded the report. They did look at per capita numbers.

Since the DOJ provides public corruption statistics by state and because state population figures are available, we are able to make state-to-state per-capita comparisons

On a per capita basis, Illinois is the third most corrupt state. While California, Texas, Florida, and New York each have more public corruption convictions than Illinois, their populations are larger than Illinois,’ and therefore, they rank lower on a per capita basis. Pennsylvania’s rank is lower both because its total number of convictions is lower and its total population is larger.

Well, there ya go.

If you want to know who is ranked higher on a per capita basis… it was D.C. and Louisiana.

TECH SOLUTION DOESN’T ACTUALLY SOLVE CORRUPTION

Governmental corruption, obviously, isn’t restricted to Chicago. China has had a huge issue with it (it comes with being a communist country, no matter how many “capitalistic” veneers put on), and they thought they could try a tech solution to their problem.

South China Morning Post: Is China’s corruption-busting AI system ‘Zero Trust’ being turned off for being too efficient?

Hmmm, does this suffer from Betteridge’s Law? (or did my question…)

What would you do if you had a machine to catch a thief? If you were a corrupt Chinese bureaucrat, you would want to ditch it, of course.

Resistance by government officials to a groundbreaking big data experiment is only one of many challenges as the Chinese government starts using new technology to navigate its giant bureaucracy.

According to state media, there were more than 50 million people on China’s government payroll in 2016, though analysts have put the figure at more than 64 million – slightly less than the population of Britain.

….
The challenge is implementing that vision on the ground. Look no further than an anti-corruption AI system dubbed by the researchers working it as “Zero Trust”.

Jointly developed and deployed by the Chinese Academy of Sciences and the Chinese Communist Party’s internal control institutions to monitor, evaluate or intervene in the work and personal life of public servants, the system can access more than 150 protected databases in central and local governments for cross-reference.

According to people involved in the programme, this allows it to draw sophisticated, multiple layers of social relationship maps to derive behaviour analyses of government employees.

This was “particularly useful” in detecting suspicious property transfers, infrastructure construction, land acquisitions and house demolitions, a researcher said.

Man, one could see the usefulness in Chicago…though it may be a bit more complicated there.

The system can immediately detect unusual increases in bank savings, for instance, or if there has been a new car purchase or bidding for a government contract under the name of an official or one of his family or friends.

Once its suspicions have been raised it will calculate the chances of the action being corrupt. If the result exceeds a set marker, the authorities are alerted.

A computer scientist involved in the programme who asked not to be named said that at that stage a superior could then contact the person under scrutiny and perhaps help him avoid “going down the road of no return with further, bigger mistakes”.

See, Chicago pols need corruption mentors, to make sure their self-dealing is all legal. That’s why I don’t think anything will happen to Madigan, and I won’t be surprised if Burke is acquitted.

The Zero Trust experiment has been limited to 30 counties and cities, just 1 per cent of the country’s total administrative area. The local governments involved, including the Mayang Miao autonomous county in Hunan province, are located in relatively poor and isolated regions far away from China’s political power centres.

Another researcher involved in the programme said the idea was to “avoid triggering large-scale resistance among bureaucrats”, especially the most powerful ones, to the use of bots in governance.

….
Still, some governments – including Mayang county, Huaihua city and Li county in Hunan – have decommissioned the machine, according to the researchers, one of whom said they “may not feel quite comfortable with the new technology”.

None of the local authorities responded to requests for comment.

Zhang Yi, an official at the Commission for Discipline Inspection of the Chinese Communist Party in Ningxiang, Hunan province, said his agency was one of the few still using the system.

“It is not easy … we are under enormous pressure,” he said, insisting that the main purpose of the programme was not to punish officials but to “save them” at an “early stage of corruption”.

Reminds me of various religious programs, too… but I don’t think the “let us save you from a near occasion of corruption” is going to be too popular. The analogue in the Catholic Church was never a big winner, either.

Since Xi rose to power in 2012, more than 1.4 million party members and government employees are estimated to have been disciplined, including leaders like former security tsar Zhou Yongkang and former Chongqing strongman Bo Xilai.

A party disciplinary official in Xiushui county, Jiangxi, who took part in the Zero Trust project said no government officials were willing to provide the necessary data.

“But they usually comply with a bit of pressure,” said the official, who asked not to be named because of the sensitivity of the issue.

Disciplinary officials need to help scientists train the machine with their experience and knowledge accumulated from previous cases. For instance, disciplinary officials spent many hours manually tagging unusual phenomena in various types of data sets to teach the machine what to look for.

Some officials might fabricate data, but the machine can compare information from different sources and flag discrepancies. It can even call up satellite images, for instance, to investigate whether the government funding to build a road in a village ended up in the pocket of an official, the researchers said.

Anyway, it’s a “nice” thought. I’m sure China will perfect it one day.

MORE ON THE SOLIS WIRE

The story behind the Solis revelations that rocked Chicago

Of all the corruption stories that have rocked the race for mayor, none is juicier than the Sun-Times’ Jan. 29 piece on a secretly taped meeting between City Council Zoning Committee Chairman Danny Solis, 25th, and Illinois House Speaker Mike Madigan in which Madigan pitched hiring his law firm to a developer seeking Solis’ approval for a project in his ward.

Equally juicy were details about how federal prosecutors likely got Solis to later wear a wire: by leveraging seedy personal details about massage parlors, sex acts, Viagra and more.

The story behind the story turns out to be almost as juicy. According to multiple insiders close to the matter who asked not to be named, it includes a bungled court filing that inadvertently became public, an angry federal magistrate judge and a newspaper that decided to print what it knew despite the judge’s directive not to.

Here’s the story.

For several years now, federal investigators have been tightening the noose on Solis, who had so-far-unexplained personal financial woes but was in a prime position to potentially seek favors as the head of a panel that can kill or give life to real estate deals that sometimes are worth billions of dollars.

As part of that effort, the Sun-Times reported, FBI agents secretly taped a meeting involving Solis, Madigan and a developer and unearthed embarrassing personal details about the alderman. A rundown of those events was included in an affidavit filed as part of an FBI request for a search warrant on Solis, a request that had to be filed in federal court here but was supposed to be kept under seal.

But somehow the explosive document was posted on the court’s document website, known as Pacer. In other words, the entire document was inadvertently made public for the world to read. And either because of smart reporting or a tip from someone—or both—the Sun-Times quickly downloaded the search warrant and proceeded to go to town on what would become one of the best stories in Chicago media in years.

None of that sat well with Magistrate Judge Young Kim, who court records indicate has been presiding over the Solis matter.
….

Fusco arguably doesn’t have to say anything; his paper already has spoken. But the impact of that story is rocking the city’s business establishment like nothing else in years. One example: One of the candidates running for Solis’ aldermanic seat wants to shelve plans for “the 78,” a mega-development in the South Loop, until investigators determine that absolutely everything was above board.

Expect other news like that soon. This classic Chicago tale appears nowhere near ending.

Well, it will end eventually. But I can see this one limping on for quite a long time.

A SCANDAL OLDER THAN ME: DALEY’S INSURANCE EXAM

This is really digging way back.

Inside Bill Daley’s insurance exam scandal: Beers, an altered test and a passing grade

Bill Daley has passed the bar to practice law and cleared security checks to work in the White House. But when he tried to pass the state exam to sell insurance in Illinois as a young man, he faced failure, scandal and embarrassment.

First, the youngest son of Mayor Richard J. Daley flunked. And when he passed on his second try, in 1973, the validity of the insurance test later was questioned amid allegations he received inside help.

The evidence? An expert handwriting analysis and different inks pointed to two people filling in test answers. And then there was the colorful and damning account of the state employee who had administered the insurance tests and taken them home over the weekend.

The worker described being paid a Sunday visit by Robert Wills, a recently fired colleague who took a particular interest in Bill Daley’s test. As the two drank beer, Wills noticed that Daley had not answered several questions.

Wills, the worker testified, had a request: “I’d like to do a favor for a friend of mine and fill them in.”

Okay, that one is wayyyy old (look, it was from the year before I was born… and I’m middle-aged.)

But not all of Daley’s past is that far in the past:

During a 2006 federal trial on hiring fraud inside the mayor’s office, Bill Daley was listed as sponsoring four people on a once-secret clout list of those who were seeking positions and promotions in his brother’s City Hall. Many of the people on that list had done political work for the then-mighty Hispanic Democratic Organization, which worked to elect Mayor Daley’s political allies and punish his enemies. Later, evidence at a 2009 federal corruption trial linked Bill Daley to the creation and rise of HDO.

Beyond Chicago, Daley’s name surfaced in the business world as part of a scandal involving JPMorgan Chase and other banks giving coveted jobs to relatives and friends of Chinese government officials. Daley was an executive at JPMorgan.

The Wall Street Journal, citing internal bank emails, reported in 2015 that JPMorgan, at Daley’s suggestion, hired the son of a Chinese commerce minister even though the son was unqualified for the position.

The following year, the bank agreed to pay more than $264 million in sanctions, including a $72 million fine, for “its role in a scheme to corruptly gain advantages in winning bank deals by awarding prestigious jobs to relatives and friends of Chinese government officials,” according to the U.S. Securities and Exchange Commission. Daley was not accused of any wrongdoing.

Okay, maybe there’s nothing there.

Back to the insurance issue:

The Daleys entry into the insurance business began in 1971, when John Daley got his license and went to work for an Evanston company. Mayor Daley steered millions of dollars in city insurance business to the firm, and John Daley received more than $100,000 in commissions. The mayor defended his actions, famously telling his critics, “If I can’t help my sons, then they can kiss my ass.”

Bill Daley first took the state insurance exam in July 1972 but failed. He took the test again in March 1973 and received a passing grade. That summer, Bill and John Daley set up shop as Daley & Daley Insurance in Bridgeport, at the time an Irish neighborhood that had been home to the Daley family for decades.

Here’s my question: how hard was that exam?

Maybe too hard for Bill:

Daley had left six questions blank which Wills filled in with the correct answers, according to a report from the handwriting experts to Cook County prosecutors. Those included questions on topics about contractual liability, fire liability insurance, and loss payable. In addition, the experts found that Wills changed another of Daley’s wrong answers to the correct one. The changes bumped Daley’s failing test score of 55 to 75, state records showed.

Nicholas Iavarone was the Cook County prosecutor who investigated the test-fixing allegations. Some handwriting was “slanted to the left,” and some “slanted to the right and was straight up,” Iavarone recalled recently about the test penmanship.

Iavarone summoned Wills to appear before the grand jury. Wills told Iavarone that he had no experience in the insurance business before being hired, and suggested that he may have inadvertently misgraded test papers.

….
In June 1974, the grand jury indicted Wills on perjury charges for lying about tampering with Bill Daley’s test.
…..
When Wills went to trial later in 1974, the prosecution’s first witness was Bill Daley.

Prosecutors asked Daley if he left any answers blank on his test. “I don’t recall,” he replied. When they asked if the handwriting in the disputed answers was his, Daley replied, “It may or may not be. I can’t be sure,” according to news accounts of his trial testimony. “I’m not an expert. I can’t be sure.”

Wills, who has since died, did not testify. A judge convicted Wills of perjury for lying to the grand jury, and sentenced him to four years of probation.

The guilty verdict was thrown out, however. An appeals court noted that Wills told the grand jury he never filled in blanks or changed answers on anyone’s exams “while he was employed” with the state’s insurance department. That, the court found, was literally true.

Dear lord, save me.

BURKE HAD PERSONAL POLICE FORCE

Why?

Ald. Edward Burke built ‘special police’ force after Rahm cut bodyguard detail

After he was elected in 2011, Mayor Rahm Emanuel, facing budget problems and a shortage of officers on the streets, said he’d cut the bodyguard detail for Ald. Edward M. Burke (14th), paring it from four active-duty Chicago police officers to two retired cops.

So Burke began hiring former Chicago cops and getting them certified through an obscure city program, records obtained by the Chicago Sun-Times show.

Since 2014, the city has certified nine “special police” officers at Burke’s request, allowing them to carry guns and make arrests.

Six of those former cops remain on the payroll of the Chicago City Council Finance Committee, even though Burke relinquished his position as head of the powerful aldermanic committee after federal prosecutors announced early last month they had charged him with attempted extortion.
….
Just what the special police officers did under Burke isn’t clear. They were given job titles that included clerk, legislative aide and investigator, but city personnel records don’t describe their duties.

They will soon be out of jobs (Burke ain’t on the Finance Committee any more…)

NEWS LINK DUMP

I think that’s enough at looking at things in detail.

Here’s a bunch of links:

• Chicago Magazine: In 1997, We Profiled Ed Burke. He Was in Trouble Then, Too
• Chicago Tribune: Mayoral candidates spar over anti-public corruption credentials during newspaper debate
• Chicago Tribune: Shakedown allegations could have chilling effect on Chicago real estate
• NYT: ‘It’s the Human Way’: Corruption Scandals Play Out in Big Cities Across U.S. – Atlanta, Los Angeles, Chicago, and Philadelphia (what’s common? All the officials under investigation are Democrats — NYT mentions “dominated by a single party” …funny that party name isn’t in the headline)
• John Kass at the Tribune: Chicago corruption and the race for mayor
• Second City Cop: Wire Catches Little Luis?
• Chicago Maroon: Mendoza Talks Social Reform, Burke Corruption Scandal at IOP
• Chicago Sun-Times: Lightfoot TV ad shines light on “Burke Four” she says are “like cockroaches” – the four are Bill Daley, Gery Chico, Susana Mendoza, and Toni Preckwinkle
• Chicago Sun-Times: Archdiocese awaits outcome of Burke case before deciding about keeping $10K gift
• Could Alderman Solis’ corruption scandal derail Related’s The 78 megaproject?

So, the next couple things I’m waiting on are the mayoral election (which likely will have to go to run-off) and the results of the forensic audit of the Workers Comp program.

PRIOR POSTS

• The Undeniable Corruption of Chicago and Illinois: Effects on Public Finance, part 1
• The Undeniable Corruption of Chicago and Illinois: part 2 – Workers Compensation Fund
• The Undeniable Corruption of Chicago and Illinois: part 3 – Who Sent You?
• The Undeniable Corruption of Chicago and Illinois: part 4 – Unpaid Vendors Program