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Last week, this column related the story of Keith Underwood, a young small-business owner prevented from plying his craft because of the powerful special interest "community organization," the UVA, hard-wired into City Hall. Some readers may have been outraged, some indifferent, and some may just have thought, "Well, that's capitalism."

Later, Gapers' Block reported that the FBI had finally brought an indictment against the well-known Duff clan, who operate the sprawling Windy City family of city service companies. The Duffs are "old friends" of the Mayor -- but don't tell him that. They have held numerous fundraisers for him and contributed at least $30,000 directly, but they're not friends. He "knows" them. Once, when they were referred to as his friends, he answered, "Huh, you guys use the word 'friends,' you just use the word 'friends'" then he trailed off, his face shaking with anger. But maybe they're not friends. Richard M. Daley, Mayor, is foremost a politician and it's pretty difficult for a politician to say no to money. Even money that comes from a mobbed-up family that has won over $100 million in contracts by installing phony women and minority presidents over corporations owned by a group of white Irishmen. But these indictments won't touch the Mayor, because the Mayor isn't greedy. The Mayor has learned perfectly the lessons of his father: corruption just a step or two away from you may give you the occasional black eye, but it can keep you in power for a long, long time.

I'm a fan of capitalism. But as Mr. Underwood's problem and the Duff indictments illustrate, Chicago isn't purely capitalist. It has reached the next logical step after capitalism, something political scientists have dubbed "crony capitalism."

The term was originally coined, it is believed, to describe the regime of former Phillipine dictator Ferdinand Marcos. Rather than explain crony capitalism in this space, it may be better to delve into some of its meaty facts -- the latticework of cronyism in our fair city.

Think of all the little, wrought-iron fences that have popped around Lincoln Park and Jefferson Park. They seem to be everywhere, don't they? The thinking is, little decorative fences enhance the city's European feel and make it more, well, quaint. Less "urban," and therefore less threatening to tourists and small-town or suburban new arrivals. But a lot of these fences look eerily alike, don't they? You can thank Richard Crandall, a Daley friend and campaign contributor. Crandall's company, G.F. Structures, had the lowest feasible bid to put in all of these fences. For phase one of the plan, the city needed 15,000 sections of fence, and G.F. Structures made a $15,000 bid. Which means they would have been able to buy the fence, pay their workers for installing it, and still turn a profit at $1 per section. The next lowest bid was $90,000. You may be thinking, well, why did they want to put them all in at once? Why have a city-wide Fence-Putting-In Contract, worth all that money, when you can do it neighborhood by neighborhood and spread the money around and make sure the fencing is neighborhood-friendly?

Good question. Unfortunately, it's unanswerable. Crandall got the contract and then replaced the materials in the quoted bid with more expensive materials without a re-bid. Which isn't necessarily illegal, but it could be. And should be.

Then, of course, there's the case of Patrick Huels, former Bridgeport Alderman (11th) and Daley's floor leader. Once considered a model civic leader, Huels must have been thrilled when he found out that Michael Tadin, a contractor who had made hundreds of millions from city contracts and a friend of Richard M. Daley, Mayor, was willing to float him a low-interest, long-term "loan" of $1.25 million.

Oscar D'Angelo, the so-called Mayor Of Taylor Street, was disbarred after the completion of the federal government's Operation Greylord which targeted corruption and organized crime links to the Cook County judicial system. What could better qualify him, then, to arrange for loans for Daley aide Terry Teele, and broker O'Hare newsstand concessions for a friend by cutting two of Maggie Daley's friends into the deal.

These kinds of things must happen in lots of big cities. Besides, these people all know each other through the Mayor; what's the harm of friends doing business with each other? Isn't that why people set up small-business clubs, join fraternities, and so forth?

There is little to suggest that Richard M. Daley, Mayor, has any active role in this Crony Capitalism. But it is sinister, and it hovers around him. The case of Morgan Murphy, a former U.S. representative from Chicago, provides a good case study of how deep this cronyism runs.

The Chicago Crime Commission, a non-profit, non-governmental Mob-watcher, lists on its organizational chart of the Chicago mob all the members thought to be involved in the giant Laborers International Union of North America (LIUNA). And there are many -- of the 150 men listed, 15 are affiliated with LIUNA. Included in this chart is John Serpico, a high-ranked Union boss. Serpico and Murphy, a loyal Machine politician, used LIUNA funds and kickbacks to finance a television/movie studio that went up on the West Side. You may have heard of it: it's now called Harpo Studios. The studio was part of Mayor Daley's plan to bring big-time television and movie production back to Chicago, the city where they started. Since making that pledge, Serpico had arranged for at least $86,600 in campaign contributions to the Mayor up to 1999.

Later, another such studio was to go up at 2200 West Madison. When it was revealed that William Galioto, brother-in-law of Jimmy "the Man" Marcello, who is believed to be the current boss of the Chicago mob, was financing the studio, Mayor Daley put a halt to it. Noble, but it seems fishy that Daley could have been unaware of just who was behind the deal until the last possible moment.

This is how business is done in Chicago. Ask any long-time business owner, and they can tell you a story. Like the commercial/residential building owner on the city's Near Northwest Side that told me he was hassled for putting his Alderman's campaign poster on the window facing the side street as opposed to the one facing Grand Avenue. Or the industrial architect from River North who informed RotSC that it was habitual to hire "consultants" who knew who needed to be cut in on deals or handed envelopes in order for zoning ordnances to be by-passed.

This all seems familiar, doesn't it? An old political family with upperworld associations tied to underworld associations who hand out lucrative government business to those same very connections? A family with a father-son combination who have both achieved the highest office? A real American story.

The Chicago mob, known as the Outfit, is not the real enemy here. They aren't a sinister cabal who undertake to pilfer the city's coffers. They are just astute businessmen -- they have made a long walk from muscling in on the black policy rackets to coordinating tens of millions of dollars in funding to snag enormous city contracts. It is the Upperworld -- the world of legitimate business -- that sees Chicago as The Business Opportunity. The Upperworld has kept Chicago the country's only completely corrupt city, and the underworld has merely adapted. Removing Daley from office wouldn't end this cycle, which partially began with Mayoralty of William "Big Bill" Thompson -- a Republican -- and has survived administration changes and reformist movements. Both Anton Cermak and Harold Washington pledged to destroy Crony Capitalism, and both failed to do so -- and in fact both indulged in it themselves. Ousting the Democratic Party won't do it, either. John Serpico, the aforementioned mobbed-up union leader with ties to a congressman, coordinated close to $120,000 in campaign contributions to Gov.'s Thompson, Edgar, and Ryan. All Republicans.

And the council independents? Like who? Dorothy Tillman, who steered business and handed licenses to relatives? Or Helen Schiller, who in 1991 was classified as an "anti-Daley vote on any substantial issue," but endorsed Daley for Mayor in 1999 and 2003, and is nowhere to be seen in the "Nay" column of any Daley legislation? Or Ricardo Munoz, the independent darling who has voted "Yay" for every piece of important Daley legislation in the last year?

This coterie of cronies is equal opportunity: blacks (such as Jesse Evans, Virgil Jones, Allan Streeter), Latinos (Ambrosio Medrano, Ray Frias) as well as women have all had their hands in the till.

The Crony Club is not a cancer in Chicago's polity. It is its skeleton, its beating heart.

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Comments

northsidesoxfan / October 2, 2003 9:32 AM

And yet you wrote such glowing things about the incumbent candidates leading up to the february elections. Praised some of the very people you mention here for being "compentent" and having worked hard to help their communities. How is it that contracts like the one for GF Structures are so common (and they occur in every branch of city government, at every level - check out some of the park district landscaping contracts) and yet you seem so comfortable with the status quo?

The people who worked to elect folks like Rey Colon in the 35th and Manny Flores in the 1st are trying to take back their city from these insiders and to get some independent voices on the city council who can bring attention to these problems. Can they do it alone? Of course not. Can Colon and Flores be trusted to be incorruptable? Nope. Can a heightened awareness of what's going on, and an understanding of the effect it has on our neighborhoods and our pocketbooks bring a few more people to action? We hope so.

There are journalists in Chicago who write about the same topics you do, but take the time and effort to spur people in to action. It isn't enough, but it's something. What are you doing, besides sitting idly by and remarking about how well the redevelopment of the latest "cool" neighborhood is going?

WizOfOdds / October 2, 2003 12:51 PM


Fair enough. I did, in fact, write "glowing things" about some of the people I criticized above, if by "some" you mean "one." Exactly One (1) of the people I criticized above: Mayor Daley. As for the other incumbents, I merely rated the job they'd done, not gave an opinion as to how much better they're opponent would do.

I don't think you have any grounds to say that electing Manny Flores, or anybody like him, is going to improve anything, or give a "heighted awareness" of anything. The same Flores who barely lived in his ward for a year? The reason I endorsed so few non-incumbents (and I did endorse a few) is that none of them showed any real policy initiative. Manny Flores was known to call himself "anti-development" and then "pro-growth," in the same breath. He was running for the sake of running. If you read what I wrote leading up to the Feb. elections and afterwards, I referred to the election of Rey Colon as a "bright spot for independents."

Interesting that you accuse me of sitting idly by and paying attention only to "cool" neighborhoods, while arguing about the two young aldermen from Wicker Park/Bucktown and Logan Square. The focus of almost all the Chicago-centered things I write is the need to stop provincializing the city and reallocating funds, police, and infrastructure resources to the poorer neighborhoods. Much of my coverage of local politics before the elections focused on the 24th Ward, for example, for which I received many emails thanking me and giving me valuable advice.

My reason for writing in length is that you're making some serious allegations. Accusing me of not having a social conscience because I think Manny Flores is a no-account? Accusing me of only paying attention to "cool" neighborhoods? I got news for you: Wicker Park started gentrifying long before Granato got there and it had nothing to do with him. He was representing the constituents he had. And I suppose you're over in Lawndale every day organizing block meetings? Don't confuse yourself with a revolutionary because you handed out fliers and got signatures for a flimsy candidate with hip glasses and absolutely no real vision.

And besides that, you missed the entire point. Contract cronyism has survived reform administrations, has used reform aldermen, and party changes. I'm not going to endorse somebody over a capable and honest administrator like, say, Walter Burnett, Jr. or Tom Murphy just for the sake of it.

And, yes, I do like Mayor Daley. His broad vision of the future, I feel, is good (little things like "cleaning up pollution" and "eliminating homelessness" and "getting increased state funding for schools"--all of which he has laid out feasible plans for). When he does something wrong (like firing city workers instead of cutting non-labor costs, or resisting police reallocation) I do criticize him for it. FDR, Harry Truman, JFK, LBJ, and Bill Clinton, some of the greatest presidents of their century, all handed business to their friends. That pales in comparison to the good they did, generally. And part of the reason GWBush got elected is that so many people wanted nothing to do with Clinton so they voted for whoever was running against him. That kind of attitude is dangerous.

Your accusations are groundless and hurtful to reputations, pal. Over the years I've been writing I've committed thousands of hours to research both academic and on the street to try and paint a better picture of this city and bring to light the little injustices that go on in huge tracts of it. There's more to saving this city than shouting Stop The Yuppies and voting for the second name on the ballot.

Oh, and Go Sox.

northsidesoxfan / October 2, 2003 4:55 PM

"Glowing things" was hyperbole, and if that wasn't clear, I apologize. As you say, you did endorse a group of encumbants - several of whom you mention again in this piece. Please note as well the order in which I mentioned the candidates - Rey before Manny, and for a reason. It seems we agree on Colon, so if I seem to focus on the 1st, it's because I think that's where we lack some common ground.

As for considering myself a revolutionary, I certainly don't. I'm comfortable with the work that I did in both of those wards. Logan Square and Wicker Park are places I've lived, worked and played in for over twenty five years. I'm also proud of the work I've participated in along the lakefront from Jarvis Ave to the South Shore Cultural Center, in Little Village, Homan Square, Bridgeport, Roseland / Pullman, Marquette Park, Humboldt Park, Austin and plenty of other places that I've been. I'm not an expert in half of them, I am comfortable that my experience - depth and breadth - is more than simply passing out flyers.

The 35th and 1st wards are interesting precisely because they've voted in the way they have - as a repudiation of the choices made by the aldermen serving them. Both areas have a 20+ year history of activism and independent movements which you seemed to (in your pre-election and pre-runoff coverage from your blog) dismiss. Colon was backed by a keenly interesting group of neighborhood organizations and individuals, and the support that put Flores over the top cetainly had its seedy sides, but was based in the same community you seem to think Granato served so effectively.

There's more to being an effective manager than bringing the property values up and turning the Damen/North/Milwaukee area into a new hub for 20-somethings. If an alderman is serving his or her constituents, isn't there an obligation to work to do more than get them the highest price possible for their house when selling and leaving is the only option left?

I've agreed with many of your writings about gentrification being a natural process and the changing nature of neighborhood populations. Negative effects are not automatic, but what you hint at and many people in the independent political movement worry about is the greater effect on the city. When the working class is beginning to have greater troubles accessing housing within range of or with access to public transit to downtown, that threatens the economic base of the city.

What bothers me so much about your work - in this piece and in some of your old blog posts - is the sense I get that you're content to write in an almost detached way. The trains run on time (ok, bad example), but the core is - as your point out - rotten. The effects of contract cronyism on local budgets and the availability of the very resources you talk about reallocating are huge, and the socio-economic distribution of public resources and city attention is even worse. The great writers, academics and pioneers for justice and equity in our city have always been people of action, people who beat the drum and offer ideas and solutions with their observations.

The Mayor's vision is a good one, and I'll be among the first to say that he's done a lot of good things for the city. But the fact of the matter remains that his greatest achievements came during a period of unprecedented growth for the city. He deserves credit for both the growth and the good works. He deserves blame for creating structural problems in the city budget and the budgets of the sister agencies he controlls, too. Daley had the chance to prepare for a downturn, had the chance to spend money in ways that would build the base of the city even more than he did - and he missed it.

There is no alternative to Daley's leadership today, and in many wards there is no alternative to the alderman in place. It's my hope that the next four years will show some progress in bringing more independent people to the table city-wide.

Less than perfectly eloquent, but not too awful.

And yes, go Sox.

WizOfOdds / October 2, 2003 5:53 PM

Well, it seems we've reached an amicable compromise. Proof that rational debate always trumps ad hominem attacks and vitriol, so for that I should thank you. Also I should thank you for taking time out of your day to post a thoughtful response, which I consider a great honor and compliment.

Your record of activism and involvement in the community speaks for itself, so I should apologize for the cheap swipe. Nevertheless, I don't think it's a fair characterization to call my attitude "detached"; perhaps "pragmatic" is more accurate. I am not an activist, and do not consider myself politicized. For the record, I've been asked to assist on Aldermanic campaigns and work for a group attached to a US Rep., and turned down all such offers. There are certain injustices that I consider of paramount importance and those are the ones I concentrate on. The targeting of crime, for example, and the redistribution of the city's wealth. I take these issues very seriously and do my part by writing about them with (hopefully) well-reasoned, persuasive essays. I'm certainly not cavalier about social/political trends in Chicago.

You make excellent points which would need longer dissection and discussion. Thank you again for sharing them in this space. If you would like to discuss further, please email me. If you would like to contribute to future essays or provide information that you think would help, I would surely appreciate that. But please, don't think that it's okay to equate "non-activism" with "acceptance of the status-quo."

Cinnamon / October 3, 2003 11:06 AM

Ramsin, while your refusal to work with candidates takes you out of the "political activist" sphere, your writing here, on your own weblog, and to candidates is an activism of sorts.

 

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