Chicago Alderman Ed Burke Charged with Extortion by Federal Prosecutors #Corruption

Federal prosecutors on Thursday filed a corruption case against Edward M. Burke, who has been Chicago’s most powerful alderman for decades, just weeks after FBI agents dramatically raided his offices at City Hall and on the city’s Southwest Side.

As the longtime chairman of the Council’s Finance Committee, Burke built far greater clout than any alderman and a long list of private law clients who do business with City Hall. But his historic tenure now comes to the same place where so many of his colleagues have found themselves: in Chicago’s federal courthouse, with authorities alleging he abused his power to enrich himself. And like so many other aldermen with far less clout, Burke apparently got caught on a wiretap saying something he would not dare utter in public.

Burke’s spokesman did not return calls seeking comment. Nor did Anton Valukas and Charles Sklarsky, the two prominent defense lawyers who have represented Burke since the initial federal raids at his offices on Nov. 29.

On that day, the windows of Burke’s offices were covered in brown butcher paper as investigators spent hours executing search warrants. And the feds raided the Finance Committee offices, on the third floor of City Hall, again on Dec. 13, indicating the urgency of the probe.

The criminal case hits as Burke is seeking to extend his record tenure in the City Council, running for another term in the February election in the 14th Ward, which he has represented for half a century.

The investigation of Burke began at the office of City’s Hall independent inspector general, Joe Ferguson. Burke and many other aldermen long had resisted allowing the I.G. to have oversight of the Council, but Ferguson finally won authority to investigate aldermen in 2016.

Burke, 75, has been an alderman since 1969, when he succeeded his father in the council during the tenure of Mayor Richard J. Daley.

In his time as alderman, Burke has watched as more than 30 fellow aldermen who served alongside him were convicted of corruption. And the charges against Burke come as yet another alderman, Willie Cochran (20th Ward), continues to fight a two-year-old federal corruption case. But Burke is clearly the most powerful alderman the feds have targeted since Thomas Keane -- another Finance Committee chairman -- was convicted in 1974.

With his finely tailored pinstripe suits and emerald-green ties, Burke long has been the personification of the South Side Irish Democratic Machine that ruled City Hall for generations.

While he presided over the Finance Committee, Burke frequently had to recuse himself from voting on hundreds of pieces of legislation that benefited the dozens of corporate clients of his law firm.

An investigation published last month by WBEZ and the Better Government Association found that Burke recused himself from voting on City Council measures 464 times in the last eight years. That’s four times as many “abstentions” for Burke as for the the rest of the aldermen combined. But even in some cases where Burke did not vote, WBEZ and the BGA found that the veteran alderman had exercised his clout to make sure his clients got what they wanted from City Hall.

At times, Burke has guided legislation through the council process, writing letters to city bureaucrats or even chairing meetings on the ordinances and motioning for his colleagues to vote them through -- only to recuse himself at the last moment due to his conflicts of interest.

In the case of a multi-billion-dollar bond deal at O’Hare Airport a year ago, no less than three banks that are Burke clients stand to benefit from the transaction.

The Burke firm’s work focused mostly on winning property tax appeals for its clients from Cook County authorities who determine the valuations of downtown high rises and other real estate.

His most prominent client in recent years was Trump Tower Chicago, for which Burke reportedly won millions of dollars in tax breaks. Earlier this year, Burke stopped representing the building amid criticism for doing the bidding of President Trump who is deeply unpopular in Chicago, especially among Latinos who are often the target of his anti-immigrant rhetoric.

With election challenges looming for the first time in many years, Burke even began criticizing Trump recently.

While his private law practice made his very wealthy, Burke is probably best known for his role in the turbulent “Council Wars” period in the 1980s, when he and fellow South Side Ald. Ed Vrdolyak spread-headed the mostly white block of aldermen that frequently thwarted Chicago’s first black mayor, Harold Washington. Due to his notoriety from that era, Chicago politicos have long believed that Burke could never get elected mayor. But Burke has enjoyed his greatest power since then as a loyal and crucial Council ally of the last two mayors, Rahm Emanuel and Richard M. Daley.

When both Emanuel and Daley took office, they had been at odds with Burke. Still, both mayors decided to make deals with Burke, rather than confront him.

Under Emanuel, Burke has maintained his chairmanship of the Council’s most powerful committee and continues to enjoy the most visible and expensive perk of his clout: a police bodyguard detail that costs taxpayers hundreds of thousands of dollars a year.

In return, Emanuel appears to have gotten Burke’s loyalty. The alderman voted with Emanuel’s agenda on 100 percent of divided roll-call votes at the Council, according to a recent study by political scientists at the University of Illinois-Chicago.

Burke had endorsed Gery Chico, his former aide and ex-president of Chicago’s school board, to succeed the retiring Emanuel in the upcoming Feb. 26 election.

The alderman himself faces four challengers. All of them are Latinos, reflecting the changing demographics of the Southwest Side’s working-class neighborhoods.

On Wednesday, Democratic U.S. Rep. Jesus “Chuy” Garcia threw his backing to 28-year-old Burke challenger Tanya Patino, deriding the incumbent as “a walking conflict of interest for decades.”

As Mexican immigrants and their families have become the largest ethnic group in his ward, Burke has sought to adjust for the changing times, recruiting Latino precinct captains for his powerful ward organization and even speaking a bit of heavily accented Spanish. Talking to one constituent recently, he joked in Spanish that his command of the language was not that bad for “an older gentleman.”

Yet, the alderman’s once-absolute power had weakened in recent years. In the March primary election, his brother, Dan Burke, lost his seat in the Illinois House to a young Hispanic challenger.

Burke owns a fortress-like, three-story home that looms over his constituents’ bungalows and ranches in the Gage Park neighborhood, next to the elevated tracks of the CTA’s Orange Line. The home is surrounded by wrought-iron fencing.

His influence was so great that city crews strayed far from their normal routes during blizzards to plow the side street in front of the Burke home, even before more heavily trafficked roads got cleared. And Burke’s clout extended far beyond the Southwest Side.

Burke also long has enjoyed the central role in the Democratic Party’s process for placing judges on the Cook County bench. And his wife, Anne Burke, has a spot on the Illinois Supreme Court.

He has more than $12 million in campaign accounts that he controls. That’s a sum that far exceeds the political cash of all of his 49 Council colleagues combined.

In the weeks since the initial FBI raids at Burke’s offices, it was unclear what exactly the feds suspected.

Burke said he did not know what the agents were investigating. But he said he would cooperate fully and was confident that the probe would end as so many other investigations he has faced – with no charges against him.

Thanks to Dan Mihalopoulis.

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Ed Vrdolyak indicted for 2nd Time in Last Decade

Former Chicago Ald. Edward Vrdolyak earned the nickname "Fast Eddie" for his bare-knuckled ability to work the angles. But for the second time in the past decade, Vrdolyak has been indicted on charges of using his influence to shoehorn his way into a big-money deal and turn a handsome profit for himself and his connected friends in spite of doing little or no work.

In charges made public Tuesday, federal prosecutors alleged Vrdolyak muscled in on one of the biggest bonanzas of them all — the record $9.2 billion settlement with the tobacco companies from the late 1990s.

Prosecutors charged that Vrdolyak worked out a secret deal with other attorneys to collect as much as $65 million even though he'd done no work on the tobacco case. The indictment did not make clear just how much the former alderman actually pocketed. The case was unsealed last week without fanfare by low-key U.S. Attorney Zachary Fardon's office. His spokesman, Joseph Fitzpatrick, declined comment Tuesday.

Vrdolyak, who turns 79 next month, could face up to five years in prison if convicted of both counts of impeding the IRS and income tax evasion. His lawyer, Michael Monico, said he was dismayed by the government's decision to charge Vrdolyak. He said the former longtime alderman will plead not guilty to the two-count indictment Tuesday in federal court.

Vrdolyak was added to an indictment against attorney Daniel Soso, a former Chicago police officer who once ran for alderman with Vrdolyak's backing. Soso was originally indicted alone in May 2015 on charges of failing to pay about $780,000 in taxes related to the settlement money.

Despite Vrdolyak's reputation for skirting criminal probes, the case marks the second time in less than a decade that the onetime political powerhouse faced criminal charges. In 2010, Vrdolyak was sentenced to 10 months in prison for his role in a $1.5 million real estate kickback scheme that had links to the federal probe that felled then-Gov. Rod Blagojevich.

Like many Chicago politicians, Vrdolyak got his start by working precincts at election time and within a few years he had grown a formidable ward organization. In 1970, he survived scandal when his brother, Peter, was indicted on charges of gambling and using prostitutes as door prizes during Vrdolyak ward events, according to Tribune stories from the time. Peter Vrdolyak was convicted; his brother was not charged.

First elected alderman of the Far Southeast Side's 10th Ward in 1971, Vrdolyak, the son of Croatian-born tavern keepers, quickly earned a reputation as a consummate Chicago politician, brash at times but with a keen sense of how to do business the old-fashioned way. A Tribune editorial from his freshman term called Vrdolyak an "influence-peddler and backroom wheeler and dealer almost without peer in a city noted for them."

In an interview that year, Vrdolyak said he lived by the axiom that "if you're good to people, they reciprocate."

"They send business your way, so you get jobs for people," he said. "That's the way it's done. Me — it's the only place these people can go. I'm the committeeman, alderman, father confessor, cop, lawyer, employment agency. Me. I'm the man."

In the 1980s, Vrdolyak became Cook County Democratic chairman, led the "Vrdolyak 29" block of white aldermen who frustrated Mayor Harold Washington and twice ran unsuccessfully for mayor. After Washington's death, Vrdolyak ran as a Republican for mayor but made his worst showing ever — and the bitterness of that race still showed years later as Mayor Richard M. Daley tightened his grip on City Hall.

"You've got to understand something about the Irish, the Daley Irish," he told the Tribune in 1996. "It's the Irish first, and everybody else is a Polack."

Through the years, Vrdolyak has had to defend himself against allegations he was cozy with the Chicago mob. In 1983, Vrdolyak wrote a letter to the Tribune detailing his close relationship with Joe Salas, a reputed hit man who was convicted in the 1979 abduction and murder of a Florida agriculture inspector. Vrdolyak, who had sponsored Salas for a city job, wrote that he'd been friends with Salas' family for years and "attempted to counsel (them) against any anti-social behavior."

Later, after his power at City Hall waned, Vrdolyak found political refuge in the alleged mob stronghold of Cicero, where he was paid millions of dollars in taxpayer-funded fees under then-town President Betty Loren-Maltese, who was later convicted of corruption.

The indictment made public Tuesday alleges Vrdolyak was in the middle of a scheme that stemmed from a series of lawsuits brought by some 46 states seeking to recover Medicaid funds the state had spent treating smoking-related diseases from tobacco giants such as Phillip Morris. The tobacco companies eventually negotiated a series of settlements totaling $206 billion.

The $9.2 billion settlement in Illinois' suit sparked controversy after it was revealed that then-Attorney General Jim Ryan had negotiated a contingency arrangement promising 10 percent of the payout to four law firms that handled the litigation. That figure was dramatically reduced after years of court arbitration, but in the end, Ryan agreed to pay a total of $188.5 million to several law firms.

One of those firms was the Seattle-based Hagens Berman, which was headed by attorney Steve Berman. According to the indictment, Berman entered into a secret agreement in 1996 to pay Vrdolyak and Soso fees from the settlement and hide the payments from the attorney general and tobacco companies. Under the final deal struck in 1999, Vrdolyak expected to receive about $65 million from Berman. The firm has denied any attempt to conceal payments.

In 2005, while investigating Soso for failure to pay income taxes, the Internal Revenue Service learned that he had been receiving large payments from Vrdolyak and failed to report the income, the charges alleged. The IRS then served Vrdolyak with a levy notice requiring him to pay the IRS instead of Soso because of all the back taxes owed.

That November, Vrdolyak sent a fax to an IRS investigator claiming that he was no longer paying Soso and therefore he owed them no money. The fax stated that if there were any payments made in the future he "intended to honor the 2005 levy served on him" and remit the funds to the IRS, according to the charges. But according to the indictment, money again began changing hands two years later, with Soso hiding funds paid to him by Berman and Vrdolyak in accounts used by his relatives and girlfriend.

In 2011, Vrdolyak sent payments totaling $170,000 to Soso, including checks that a Vrdolyak relative wrote, the indictment alleged.

The indictment comes five years after Vrdolyak was released from prison on his 2007 case. He pleaded guilty to fraud for his role in a kickback scheme in which a Gold Coast real estate deal was rigged so he could secretly split a $1.5 million finder's fee with corrupt insider Stuart Levine, a close friend who later secretly wore a wire on Vrdolyak.

In 2009, U.S. District Judge Milton Shadur spurned prosecution calls for prison and sentenced Vrdolyak to probation for a fraud conviction, but prosecutors appealed.

The 7th Circuit U.S. Court of Appeals later ordered that a different judge resentence Vrdolyak, calling Shadur's punishment a "slap on the wrist" that ignored Vrdolyak's status as one of Chicago's most influential insiders. The appeals court also held that Shadur gave too much weight to dozens of letters — including one from then-Bears linebacker Brian Urlacher — attesting to his acts of generosity.

In October 2010, U.S. District Judge Matthew Kennelly sentenced Vrdolyak to 10 months in prison as well as five months in a work-release center and an additional five months in home confinement.

Reported by Jason Meisner and Jeff Coen.

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FBI Says Mob Eyed Rosemont Casino

The reputed head of the Chicago mob and his half-brother were caught more than two years ago on FBI surveillance videotape discussing organized crime's efforts to infiltrate a casino in Rosemont, the head of the FBI's organized crime unit in Chicago testified Tuesday.

A portion of the grainy and muffled videotape, recorded surreptitiously in the visiting room of the federal prison in Michigan where James Marcello was incarcerated at the time, was played openly for the first time. It was part of the Illinois Gaming Board's ongoing public hearing aimed at stripping the Emerald Casino once planned for Rosemont of its riverboat gambling license. But attorneys for Emerald attempted to cast serious doubt about the relevance of the tape and whether FBI Special Agent John Mallul's opinion of what Marcello, the reputed boss of the Chicago mob, and his half-brother Michael Marcello were discussing in the coded conversation was accurate.

Emerald attorney Robert Clifford also pointed out that the portion of the tape played was only a two-and-a-half minute piece of a five-hour conversation and that the testimony was part of the gaming board's effort to yank Emerald's license by sullying Rosemont's reputation. "Is this fair to produce this?" Clifford said. "I don't think so."

According to Mallul's testimony about the discussion, James Marcello asked Michael Marcello what influence and control organized crime would have in a Rosemont casino. They also discussed what role longtime Rosemont Mayor Donald Stephens would have in the casino deal.

"Are we gonna be in there at all?" James asks on the tape as he sits next to his half-brother in the crowded visiting room.

"I don't ... MGM or one of them companies will wind up with it," Michael responds. "I mean he ain't gonna get it like he wanted it before."

Mallul testified that the "he" Michael Marcello referred to was Stephens. In July Mallul testified that an informant had placed Stephens in a suburban restaurant meeting with several high-ranking members of organized crime to discuss what control the mob would have over contracts at the casino.

"It's my opinion based on this conversation, Donald Stephens had a special interest in having Emerald itself be a casino in Rosemont," Mallul testified.

When asked to describe "special," Mallul said he thought the mayor had an "extraordinary interest" in Emerald being selected as the casino in Rosemont as opposed to another casino firm, in part to have more control over the casino.

Rosemont attorney Robert Stephenson questioned Mallul's opinions about what the vague conversation between the brothers was actually about. "The guy is either a liar or incompetent," Stephenson said. "In either case, he should be immediately fired by the FBI."

In April federal prosecutors charged the Marcello brothers, along with more than a dozen other alleged members of organized crime, with an array of crimes. James Marcello is charged with the murders of Anthony Spilotro and Michael Spilotro in 1986, and Michael is facing charges that include conducting an illegal gambling business.

The March 24, 2003, conversation between the two brothers also included a new allegation that former Chicago alderman and Cicero village attorney Edward Vrdolyak played a role in getting former Chicago Crime Commission investigator Wayne Johnson to settle a defamation lawsuit Stephens had filed. The two brothers implied that because of the settlement, Rosemont was allowed to continue to seek a casino.

The suit stemmed from comments Johnson made in 2001 about a "troubling ... litany of associations" between Stephens and six people the commission considered to have criminal or mob ties. The month after Johnson accepted the job of Cicero police chief in 2003, Johnson and Stephens privately settled the suit when Johnson said in a letter that he had "no personal knowledge about Mayor Donald E. Stephens' business dealings."

"The V guy put his arm around him," Michael Marcello said, referring to Vrdolyak, according to Mallul. "Put 'em over there in that town [Cicero]. He backed off the other guy [Stephens] out there."

Johnson and Vrdolyak both flatly denied the assertion, saying they never met each other until after Johnson became police chief, a job he left this year. "Ed Vrdolyak had nothing to do with that letter," Johnson said.

"It's absolute folly to say that anything like that ever went down," Vrdolyak said. "LSD must be coming back. It's nuts."

The testimony came on the second-to-last-day of testimony in the hearings. The administrative law judge overseeing the case, former federal judge Abner Mikva, is expected to rule no sooner than next month.

Thanks to John Chase and Brett McNeil

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Courtroom Tapes of Mob Boss Claim Cook County Undersherriff Accepted Payoffs to Protect Chicago Outfit

Three years after Cook County Republicans were giddily riding an unprecedented wave of popularity and political opportunity generated by President Ronald Reagan and an ex-cop named James O`Grady, the whole movement has spectacularly collapsed.

The Cook County sheriff, once the toast of the White House, a popular politician who happily fended off talk of a future in the mayor`s office or the governor`s mansion, faces the growing likelihood that his political career might be near an end.

The latest and most significant blow came on Friday when federal prosecutors in a court hearing played a tape of a reputed Chicago mob leader`s allegations that O`Grady`s former undersheriff, James Dvorak, chairman of the Cook County GOP, was taking payoffs to protect organized crime activities from the law.

The allegations are the unsubstantiated talk of a crime syndicate figure, and political leaders quickly rallied in support of O`Grady. But they hit him at a time that his political star has already been tarnished by previous incidents that raised questions about corruption in his office and political meddling by Dvorak.

Republican leaders, including Gov. James Thompson and Secretary of State Jim Edgar, remained publicly loyal to O`Grady. They suggested that the allegations by reputed gambling boss Ernest Rocco Infelice weren`t true, but should be investigated.

Sources close to O`Grady said that the allegations haven`t shaken the sheriff`s resolve to seek re-election. O`Grady huddled with advisers Friday afternoon-Dvorak was noticeably absent-and the subject of stepping down reportedly never was broached. But O`Grady allies anticipate that the allegations might force the sheriff to finally cut his ties to Dvorak, a longtime friend and business partner. They anticipate that Dvorak, who resigned only recently as undersheriff, would have to step down as party chairman, at least while an investigation of the matter is pending.

Even at that, some of O`Grady`s friends despaired that the unconfirmed allegations have killed his political fortunes. ''This is the final nail in the coffin,'' one O`Grady loyalist said.

As recently as six months ago, O`Grady was still the brightest light in local GOP politics. Although his political apparatus, led by Dvorak, had suffered a string of campaign losses after O`Grady`s election in 1986, he was still considered a strong favorite to win a second term. But O`Grady has spent the last few months fending off charges of corruption and political interference in his office that many local Republicans say have undermined his popularity. For O`Grady, the deluge seemed to be over, and the time to start repairing the damage had arrived. Then came Rocco Infelice.

The recording of Infelice`s remarks was played by government prosecutors as they sought to convince a federal magistrate that their racketeering case against him and four others is so strong that they should not be freed on bond.

The five co-defendants are among 20 people who were indicted Wednesday on charges they used murder, extortion and bribery to build bookmaking and casino-style gambling operations in the Chicago area.

In the tape, Infelice told William Jahoda, a bookmaker working as a federal informant, that his organization paid $35,000-a-month to law enforcement officials and imprisoned mobsters.

''Between you and I, 10 goes to the sheriff,'' Infelice told Jahoda.

''Yeah, with the Bohemian?'' Jahoda replied, in what a federal agent testified was a reference to Dvorak.

''Yeah,'' Infelice responded, ''five goes to another guy.''

Later in the discussion, Jahoda said, ''I got no right to ask you the question, what . . . do you get for 10 thousand a month.''

Infelice replied: ''Sheriff never bothers us, then we got a guy at the state`s attorney`s office. We got another guy downtown.''

Later on the tape, Infelice suggested that Chicago Police Supt. LeRoy Martin would consider transferring officers out of the vice crimes unit at his request and that organized crime figures aided the mayoral campaign of Richard M. Daley by scuttling former Ald. Edward R. Vrdolyak`s mayoral campaign in 1989.

O`Grady, Daley, Dvorak and Martin each flatly denied that Infelice had any influence in their agencies. O`Grady called on Chief Judge Harry Comerford to appoint a special prosecutor to investigate the charges. ''I am troubled and incensed by the allegations spread so broadly from the mayor`s office to the office of the superintendent of police and from the sheriff of Cook County to the state`s attorney of Cook County and all the way over to the federal building,'' O`Grady said. ''I take these allegations seriously because they definitely undermine the confidence of the people of this county and the confidence they should have and expect in their government officials.''

Dvorak, at a separate press conference, said: ''I have made countless arrests of major gambling operations, major call girl operations and prostitution and obscene matter investigations. There has never been a hint of impropriety in my 25-year work record as a Chicago police officer or as undersheriff.''

Gov. James Thompson, who launched his political career by investigating official corruption as U.S. attorney, also called for an investigation. ''To rock my faith in O`Grady`s office, it would have to also rock my faith in LeRoy Martin and Rich Daley, and I certainly don`t believe that about the three of them,'' Thompson said.

There has long been speculation about how pervasive the influence of organized crime is in the Democratic organization that has long ruled Chicago politics. Mayor Richard J. Daley, the present mayor`s father, once told reporters that his own telephones were tapped, although he suggested the eavesdroppers would only hear his conversations with his children and grandchildren.

And talk of the mob`s demise has surfaced almost routinely. It`s been nearly 20 years since Justice Department officials claimed that the mob had been nearly snuffed out in Chicago. And Richard J. Daley, as well, claimed the mob was dead, at least within the city limits. ''It isn`t here anymore,'' he said in 1976. ''It`s all out in the suburbs.''

Of course, it wasn`t gone from the city, and, in recent years, organized crime has publicly surfaced in political waters like the tell-tale fin of a predator.

The 1987 campaign for mayor was rocked by allegations that Vrdolyak had met with the late mob chief Joseph Ferriola, a charge that brought an angry denunciation from Vrdolyak.

In the tapes revealed Friday, Infelice says that Vrdolyak had ''good taste'' in his 1987 campaign, but when he ran again in 1989, Infelice boasted, the mob shut down his political fortunes by forcing a major contributor to abandon him.

For weeks, attention has been drawn to a federal investigation of corruption that has focused on several Democratic political figures, including Ald. Fred Roti (1st).

Ironically, after years of Democratic domination of Chicago politics-and corruption investigations spurred by Republican-appointed prosecutors-the most sensational charges are now leveled at two Republicans.

Although the Infelice tape also raises the names of Mayor Daley and Martin, suggesting that crime figures boosted Daley`s election chances and had a conduit to Martin, neither has been in the position of having to fend off such allegations in the past, as O`Grady has.

The immediate reaction from O`Grady`s political adversaries within his own party was that, at the least, Dvorak would have to resign. Some believe O`Grady, too, won`t survive until the November general election.

''The talk in the party right now is we need a couple of replacements,'' said Donald Totten, the former county GOP chairman who was ousted by Dvorak.

''The decision on a chairman is probably going to have to come from Jim Edgar.''

Edgar, a Republican candidate for governor, said through a spokesman that the allegations should ''be thoroughly investigated and resolved quickly, because there is nothing more important for a public official or party leader than to maintain their integrity and the public trust.''

Although O`Grady`s adversaries might consider pressing for him to step aside, the political reality is that the party almost certainly couldn`t elect anybody else as Cook County sheriff. O`Grady was the first Republican to win a countywide office in a decade, and he narrowly won in 1986 largely because Democratic Sheriff Richard Elrod was dogged by repeated instances of corruption in his department.

But several allies of O`Grady noted that his consultations with top aides Friday afternoon did not include Dvorak, and some speculated that the sheriff wants to put even more distance between himself and the party chairman, who has been the focus of charges that he has heavily politicized the sheriff`s office.

Republican leaders quickly floated three possible replacements for Dvorak as party chairman: Totten, 42nd Ward Committeeman Ron Gidwitz, and Northfield Township Committeeman Richard Siebel. But after the weeks of political battering that O`Grady and county Republicans have taken, culminating with the Infelice tapes, it`s not clear that anyone will be clamoring for the job.

Thanks to R. Bruce Dold.

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