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.
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?