Illinois Corruption Watch: November 2015
November saw Chicago’s City Council let the term of the legislative inspector general, who is tasked with overseeing City Council, expire without hiring a replacement, as well as several other instances of breach of public trust and influence peddling around the state.
Chicago officials were in the spotlight in November for instances of corruption and questionable actions. Chicago politicians let the term of the city’s Legislative Inspector General Faisal Khan expire without replacing him. Khan’s office provided the only public oversight of the Chicago City Council. Before leaving, Khan transferred files from ongoing criminal investigations to the FBI. The City Council made no moves to replace the legislative inspector general before his term expired Nov. 16, nor is there a replacement yet.
Oversight and accountability of government officials are imperative for open and transparent government. In addition to the departure of the Chicago legislative inspector general, here are additional stories of Illinois corruption:
1. Nov. 2, 2015 – ABC 7 Chicago: Illinois Lottery is not paying, but people still playing
Joe Joost and several other city truck drivers thought they won $1 million in September.
However, they have yet to see a dime because the state comptroller has said they can’t make payouts over $25,000 because the state hasn’t approved a budget.
One state lawmaker says the Illinois Lottery is committing fraud, but Joost simply can’t understand why people continue to play.…
While winners wait to be paid, the lottery is cashing in. A Lottery spokesperson tells ABC7 Eyewitness News that jackpot money now sitting in lottery accounts is earning interest, but that extra money won’t be shared with winners.
No comment on why the lottery isn’t sharing the interest earned on that money and the interest issue is the subject of several pending lawsuits.
Nearly one out of every three workers on the city of Chicago payroll made $100,000 or more last year — a far higher percentage of six-figure employees than in state or Cook County government.
That’s according to a Chicago Sun-Times analysis that for the first time combines city workers’ salaries, overtime and other extra pay.
Twenty-six city workers drew paychecks that eclipsed Mayor Rahm Emanuel’s pay of $216,210, the analysis found. They included a police detective, two fire department ambulance commanders and two water department operating engineers.
In another sign that Chicago Public Schools isn’t keeping good enough track of transit fare cards that are supposed to be distributed to homeless students, a Chicago man was recently arrested for allegedly hawking L and bus passes that were swiped from the school system.
Mohammed Abdullah, 24, was arrested on Oct. 15 and charged with theft of more than $500 and less than $10,000, according to court records. He sold paper CTA Ventra cards intended for homeless students to customers who turned out to be undercover police officers, the records show.
4. Nov. 8, 2015 – Chicago Sun-Times: CPS legal spending in Byrd-Bennett probe tops $280K
Chicago Public Schools’ lawyers’ bills for the corruption case that took down former CEO Barbara Byrd-Bennett have topped $280,000, though the district says its legal spending is winding down.
CPS spent twice as much money in September on preparing and forwarding documents than on billable hours for attorneys, according to invoices recently obtained by the Chicago Sun-Times.
A former religious services assistant at the downtown Metropolitan Correctional Center pleaded guilty today to providing sensitive information to inmates about fellow prisoners in the federal corrections system.
TOMMY HAIRE, 34, performed unauthorized searches on the MCC’s internal computer system to obtain personal information about several prisoners being housed elsewhere, and then relayed that information to inmates in the MCC, according to a plea agreement. The searches revealed various data, including the outside inmates’ psychological information, their status as sex offenders, their location within the prison system, and other personal identifying items. Haire admitted in the plea agreement that such information would be valuable to the MCC inmates as a means of extorting the other prisoners or for committing identity and tax fraud against them.
The ongoing impasse over the state budget has roped in dozens of other states’ lotteries into a lawsuit filed against the Illinois Lottery over its failure to pay its winners.
An attorney representing lottery winners who have not been paid has asked a federal judge to bar 38 other state lotteries — and the association that oversees the management of interstate games like Powerball and Mega Millions — from sending the Illinois Lottery any of the money they may owe to Illinois winners of those games.
A former Chicago State University vice president who allegedly hired her mother in a ghost payroll scheme and awarded a family friend an unauthorized consulting contract was charged with numerous felonies.
LaShondra Peebles, 43, the former director of compliance and interim vice president for enrollment management at the Far South Side university, and her mother, Shirley Kyle, 65, were charged.
8. Nov. 14, 2015 – Sauk Valley Media: Second Crundwell auction starts Tuesday
The federal government is selling off Crundwell assets it spent the summer seizing and obtaining the rights to sell. From Oct. 20 to Nov. 3, at the same website, it sold a large portion of Crundwell’s attire – from cowboy boots to horse show clothing.
That auction netted the government more than $47,000, all of which … [was] used to reimburse the city of Dixon for Crundwell’s embezzlement during her tenure as comptroller. She stole more than $53 million, and the government has thus far returned more than $9.5 million from its collection.
9. Nov. 15, 2015 – Better Government Association: Did state lawmaker’s charity break the law?
A charity run by state Rep. Thaddeus Jones, D-Calumet City, was barred from raising money and ordered to cease operations for more than a year and a half.
Yet Jones Foundation Inc. continued to accept donations – totaling at least $2,750 – since the Illinois attorney general’s office ordered a halt to its operation in April 2014 for failing to file required documents with the state agency.
With a $500-a-plate fund-raising luncheon planned Nov. 30 with Mayor Rahm Emanuel as guest speaker, the charity submitted the missing paperwork and was back in good standing as of Friday, according to the attorney general’s office.
The foundation has reported total revenues since 2008 of more than $140,000, with some of that coming from Jones’ political campaign funds.
Madigan’s office has the power to file a lawsuit against unregistered charities that continue to operate. That can result in civil penalties and even permanently shutting down an organization.
Chicago taxpayers paid almost $900,000 for three and a half years’ work by disgraced former Chicago Public Schools CEO Barbara Byrd-Bennett.
And though she’s a felon since pleading guilty in a contract rigging scheme at CPS, she still stands to cost taxpayers in districts that employed her more than $140,000 in annual public pensions.
11. Nov. 16, 2015 – Chicago Tribune: Lee County state’s attorney charged with DUI
Lee County State’s Attorney Anna Sacco-Miller was charged with driving under the influence after an accident Sunday morning.
The Illinois State Police said Sacco-Miller, 48, of Dixon, was arrested after she was involved in a vehicle crash at 8:05 a.m. in the 500 block of East Fellows Street in Dixon. She was charged with driving under the influence, driving under the influence with blood-alcohol content greater than .08 and failure to reduce speed to avoid an accident.
About 2,700 Illinois students of for-profit schools will receive about $3 million in debt relief under a national settlement with a Pittsburgh company running trade schools and colleges. …
Education Management Corp., the second-largest for-profit college chain, agreed to pay $95.5 million to resolve allegations that it paid employees based on student enrollment in violation of federal law.
13. Nov. 18, 2015 – Emanuel’s speed cameras issue $2.4 million in bad tickets.
Mayor Rahm Emanuel’s speed camera program improperly issued more than $2.4 million in fines to Chicago drivers, ticketing them when cameras were supposed to be off and when the required warning signs were confusing, obscured or missing, a Tribune investigation has found.
At the same time, City Hall has systematically ticketed drivers near schools without the legally required evidence of a schoolchild in sight. A Tribune random-sample analysis puts the number of those questionable tickets at about 110,000.
14. Nov. 19, 2015 – Alton Telegraph: Highland woman accused of stealing $160,000 from IDHS
A grand jury Thursday indicted an employee of the East Alton Illinois Department of Human Services office on 10 counts for allegedly taking about $160,000 intended for people in need of assistance.
Amy Mueller, 40, of Highland, is accused of creating fraudulent accounts under the Illinois Department of Human Temporary Assistance for Needy Families and Supplemental Nutrition Assistant Program and keeping the money for herself.
The Illinois Attorney General’s Office said she used the money for vacations, restaurant visits, massages, tanning sessions and nail salons.
15. Nov. 20, 2015 – Department of Justice: Former Labor Union Treasurer Charged With Embezzling
Jeffrey Magelitz, 44, of Chester, Illinois, was indicted by a federal grand jury in East St. Louis, Illinois, on November 18, 2015, for embezzlement and theft from a labor union and for filing a false report with the Department of Labor, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today.
The indictment alleges that Magelitz was the former treasurer of the American Federation of State, County and Municipal Employees, Local 415, in Vienna, Illinois, from January of 2012 through June of 2013. AFSCME Local 415 represents employees at the Vienna Correction Center, located in Vienna, IL. The indictment alleges that Magelitz embezzled $30,811.96 and prepared and cashed unauthorized checks for himself and forged the signatures of the president and vice-president of the union on the checks. The indictment also alleges that Magelitz submitted a false annual report for the union which contained the forged signature of the president and falsely reported the amount of money that he received during the year. If convicted Magelitz faces a prison sentence of up to 6 years, a fine of up to $350,000, and up to 3 years’ supervised release.
Joshua Lewis, 33, of St. Louis, Missouri, was indicted by a federal grand jury in East St. Louis, Illinois, on November 19, 2015, for filing a false report with the Department of Labor, the United States Attorney for the Southern District of Illinois, Stephen R. Wigginton, announced today. The indictment alleges that Lewis was the secretary-treasurer for the Brotherhood of Maintenance of Way Employees Division (BMWED) Lodge 212 from December 2011 until September 2012. The indictment alleges that during the time that Lewis served as Treasurer he converted to his own use, without authority, union funds in excess of $3,000. The indictment alleges that Lewis filed a false annual report for the union with the Department of Labor that falsely reported that he did not receive any union funds during the fiscal year ending March 31, 2014. The submission of the false annual financial report concealed the funds Lewis converted from the union. Lewis faces a prison sentence of up to 1 year, a fine of up to $100,000, and up to 1 year supervised release if convicted of the charge.
A Glenview man who was hired by the Cook County Circuit Court Clerk’s Office after purportedly loaning $15,000 to a company controlled by the Clerk’s husband lied under oath when testifying about it before a grand jury, according to a federal indictment announced today.
In August 2014, SIVASUBRAMANI RAJARAM purportedly loaned $15,000 to Goat Masters Corporation, whose president was the husband of the Cook County Circuit Court Clerk. The following month, Rajaram was hired by the Clerk’s Office as a level four Senior Clerk. Rajaram had previously worked in the Clerk’s Office but had been living in India for several years.
A senior accountant at the Illinois Medical District Commission pleaded guilty today to charges she embezzled more than $130,000 from the agency by misdirecting procurement funds into her personal accounts.
CYNTHIA FERNANDEZ-ALONSO, 42, of Berwyn, used her position to direct payments from the Commission’s bank account into three personal accounts, according to a plea agreement. Fernandez-Alonso recorded the payments in the Commission’s internal records, but attributed them as having been made to the agency’s energy provider and other vendors, the plea agreement states.
Suburban Cook County municipalities spent $244 million on private attorneys since 2010 with many of the largest bills being paid by suburbs suffering severe financial hardships brought on, in some cases, by police misconduct and corruption claims, according to a Better Government Association “Rescuing Illinois” analysis.
A significant amount of the suburban legal payout, nearly $98 million or 40 percent of the $244 million, is going to just seven law firms. Some small but influential practices go beyond legal work and double as fundraising powerhouses for municipal leaders, according to the analysis.
The suburban legal fee payout is more than twice the $110 million that Chicago paid to outside counsel during Mayor Rahm Emanuel’s first term, starting May 2011. Combined, Chicago and the 133 Cook County municipalities have spent a whopping $354 million for outside legal counsel over the past five years.
20. Nov. 25, 2015 – East Saint Louis Woman Sentenced On Healthcare Fraud-Related Charge
Stephen R. Wigginton, United States Attorney for the Southern District of Illinois, announced today, that Alfreda E. Perkins, 54, of East Saint Louis, Illinois, pled guilty in federal court to charges that she engaged in a scheme to steal from a health care program. Sentencing has been set for March 22, 2016. Perkins will face up to 10 years in prison, a fine of up to $250,000, and up to 3 years of supervised release.
During her plea hearing, Perkins admitted that she had submitted false and fraudulent bills in relation to her alleged performance of personal assistant services in the Home Services Program, a Medicaid Waiver Program designed to allow individuals to stay in their homes instead of entering a nursing home. Perkins admitted to falsely billing the program between November 1, 2013 and September 15, 2014, when she purportedly rendered personal assistant services to a customer when, in fact, she had not been with the customer.
Most people consider themselves lucky if their retirement income includes more than a Social Security check.
By that measure former Chicago Congressman Bill Lipinski is “killing it” – thanks to the lucrative lobbying contracts he secured after leaving the House of Representatives in 2004.
As the Better Government Association recently reported in the Sun-Times, the veteran Southwest Side politician – Lipinski was an alderman, ward committeeman and powerful Democratic organization insider before serving 11 terms in Congress – raked in nearly $5 million in the past eight years of lobbying.
But this column’s not just about another ex-pol cashing in on government connections after moving to the private sector – that’s business as usual – it’s about how he cashed in.
Roughly $4 million of the $4.8 million in lobbying income came from clients with funding and policy requests that are handled by the House Transportation Committee, which now includes Lipinski’s son, Dan, who took over his father’s Congressional seat and committee assignment to keep the family focus on transportation issues.
Among the groups hiring Bill Lipinski: Metra and the CTA, the Chicago area’s two main transit agencies.
For years, multimillionaire businessman Timothy Rand held exclusive rights to operate restaurants at Midway Airport under a contract supposedly meant to give a leg up to “disadvantaged” minority business owners.
After the Chicago Sun-Times revealed the clout-heavy African-American businessman’s $20 million personal net worth put his lucrative concession deal at Midway in jeopardy, City Hall decided to let him keep it, saying it had been awarded under earlier rules.
Now, taking a page from the politically connected operators of the Park Grill restaurant in Millennium Park, Rand has found a way to avoid paying years of property taxes on his restaurants at Midway – thanks to the way the city wrote the deal for airport concessionaires including his business, now called MAC One.
A lawsuit the company successfully filed to be exempted from property taxes has so far saved Rand’s company from paying more than $1 million in taxes. Those taxes were either lost to the cash-strapped city and the Chicago Public Schools system – which gets just over half of all property taxes paid in the city – or had to be made up by other taxpayers.