ABC7 I-Team Exposes Daley Administration Incompetence, Negligence and Lies

The U.S. Department of Homeland Security said Chicago was one of the worst prepared when it came to emergency communications and being prepared for disasters.

Like many issues, this goes to the heart of the ongoing problem with the City of Chicago and King Daley's regime. The CITY of Chicago's obsession with control and doing things that are exclusively in their best interest as opposed to the best interest of the region.

The latest debacle involves the high-tech emergency communications vehicle the City of Chicago used for various media hype, except that is hasn't been operational. What does the Daley administration do when confronted with facts and questions?

They lie.

This time, they did it to ABC7's I-Team investgative reporter Chuck Goudie. We commend Mr. Goudie for not falling for the tricks of King Daley.

From the Daley administration's terrible management of Chicago O'Hare, making it the nation's WORST on-time performance to the crisis of the Daley-run CTA to having one of the WORST emergency communication systems, we think issues like transportation and communication for staging an Olympic Games are not to be taken lightly. This is what happens when you put Daley in charge or control of anything. That's the track record and that isn't even touching the whole corruption regime or torture scandals.

The question for us is whether the U.S. Olympic Committee (USOC) is going to fall for the Daley's smoke-n-mirrors on Saturday. That doesn't mean Chicago isn't a great choice to host the Olympic Games. It's just that a process controlled by King Daley has very serious issues and we've learned that the one thing we can count on of the Daley regime is a lack of integrity and honesty.

See inside for Mr. Goudie's transcript or see the video story...

Daley Throws Police Chief Under the Bus; What Did the Mayor Know and When Did He Know It?

In a classic situation of damage control and finding the fall guy for scandals that were meticulously supposed to be kept quiet until after the election and Olympic bid, Chicago Mayor Richard Daley threw the Police Superintendent Phil Cline under the bus in an attempt to save the Mayor from further worldwide embrassment from the revelation of videotaped beatings by Chicago Police officers.

What puzzles us about this situation is the presence of mayoral aide Monique Bond in the middle of all this. If you believe Mayor Daley at his strange press conference expressing shock and dismay at the misconduct, one would think this is the first he's heard of all this and he had no phone during the last two weeks of vacation to call up Cline. In a city where Daley micromanages and controls everything, apparently Ms. Bond either completely failed to inform her boss OR the entire cover-up of the scandal was orchestrated with knowledge of the mayor's office.

What does this have to do with the Olympic bid? Everything. We continue to be extremely concerned with any bid process that is controlled by the City of Chicago under Mayor Daley. There are very serious issues of integrity and credibility. It appears the best interests of Mayor Daley are put ahead of everyone and everything else, no matter what expense.

Lawyers Seek to Question Daley on Torture Scandals | Daley is Busy on Vacation

We thought this story was particularly interesting considering how "busy" Mayor Richard Daley has been the last two weeks on vacation in places like Ireland while the City of Chicago has had national attention skyrocket for police beatings.

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March 30, 2007
Chicago Tribune

Lawyers for a man Chicago police are alleged to have tortured to get a murder confession filed a motion this week to force the deposition of Mayor Richard Daley in a federal lawsuit.

The motion comes less than three weeks after lawyers for the City of Chicago filed a motion seeking to block Daley's testimony. They argued that requiring the deposition of a "busy public official" was premature and unnecessary.

See more inside...

Daley Manipulates City Council Races with Cash

For those not familiar with how Chicago politics work, there are various ways to get your way. As mayor, Richard Daley has exerted control over the city council. This time, he's using the method of buying support.

See inside for the Chicago Tribune's story.

Ex-top Daley Aide Pleads in Fraud Charges

While the U.S. Olympic Committee (USOC) may or may not understand the depth of the ongoing corruption investigation into Chicago Mayor Daley's administration, most people in Chicago understand the Feds are climbing up the ladder and its knocking out very close people to the mayor.

Of the almost 50 people who've been indicted and who knows how many other people will be or are under investigation, it's difficult to keep hearing the excuse from Daley that he had no idea that any of these things were happening under an admnistration that he micromanages with extreme control.

So, which is it? Is Daley an incompetent, aloof public official who rambles foolishly or is he slick, corrupt, manipulating public official who rambles foolishly?

While a Chicago Olympic Bid may the greatest idea ever, everyone should be prepared for the real possibility an international bid process could involve a mayor embroiled in corruption charges, not exactly the best face to show the world.

- - -

By Jeff Coen
Chicago Tribune

March 28, 2007, 7:54 PM CDT

Former Streets and Sanitation Commissioner Al Sanchez pleaded not guilty to corruption charges in federal court Wednesday, with his lawyer calling it a "sad day" for the longtime public servant.

Sanchez, a former top aide to Mayor Richard Daley, became the highest-ranking city official to be charged in an ongoing hiring investigation at City Hall when he was indicted last week. He was accused of doling out city jobs in exchange for political work through the Hispanic Democratic Organization (HDO), which backed Daley and other candidates.

Sanchez, 59, pleaded not guilty to nine counts of mail fraud. Also pleading not guilty was Sanchez co-defendant Aaron Del Valle, 34, an HDO organizer and Chicago police officer who was charged with lying to a grand jury that heard evidence in the alleged hiring scheme.

Neither man would comment Wednesday at the Dirksen U.S. Courthouse, speaking only to tell U.S. Magistrate Judge Sidney Schenkier that they understood the proceedings.

Defense lawyer Tom Breen said the former Daley Cabinet member is looking forward to clearing his name.

"He does look forward to a trial where he hopes he will be vindicated," Breen said.

"Many, many people I've spoken to in the last few days thought that Al Sanchez deserved a civic award for the hard work he has done for the city of Chicago over 31 years of service," Breen said. "So this is kind of a sad day for a very fine man."

Breen said that Sanchez's spirits are fine, and that he is trying to keep a good outlook.

"He's disappointed and sorry about all this, but I think he is very hopeful," Breen said.

Assistant U.S. Atty. Manish Shah said in theory, Sanchez could face more than 160 years in prison. Del Valle could be sentenced to as long as 5 years, Shah told the judge.

Both men are free on signature bonds and expected to return to court next month.

The indictments were the first since Daley's former patronage chief, Robert Sorich, was convicted with three other aides last year in a similar job-rigging case.

Prosecutors have said Sanchez rewarded political workers with jobs, promotions, overtime, pay raises and transfers, and that he was involved in falsifying hiring records.

City Council Video Excerpt | Don't Show This to the USOC!

At the Chicago City Council meeting to discuss the "sudden" $500 million financial guarantee the Daley administration pretended to be surprised about, there were voices of protest, but the public wasn't allowed to speak. Whether or not you agree with the financial guarantee issue, the protesters may have a point that the public has never had an opportunity to speak on the issue.

Please don't tell anyone about this video (and this is just a small version and not the major fireworks). City of Chicago officials don't want the USOC or IOC to know there are people unhappy with the way this process has been handled by Daley, even among those who want the Olympic Games to come to Chicago.

2 minutes, 12 seconds

Chicago's Transit System On the Brink Under Daley Management

The enclosed New York Times article should be a very important wake-up call to the U.S. Olympic Committee (USOC) before they proceed with a bid that has Mayor Richard Daley and the City of Chicago in control.

Transportation is CRITICAL to stage the Olympic Games anywhere. Chicago's system is crumbling and on the brink of serious crisis, but because of Daley leveraging the idea of having "compact venues" and "close proximity" to avoid as much as possible to share control or the Olympic Games with the metropolitan area, it makes the City of Chicago's transportation system that much more important to how an Olympic Games would function.

If the track record of the Daley regime is any indication, the CTA is a failure of economic, transport and practical proportions. Using the Olympic Games to lure federal funding to bailout the mismanagement of the Daley regime is a nice idea...IF we could be assured the control over the transit system would be removed from the City and instead given to a regional entity like the RTA.

There is legislation being propsed to do exactly that...unify the transporation agencies for the region, but that would mean less control by Daley's cronies. It would be foolish, if not irresponsible, to continue to allow the CTA to exist as a City of Chicago controlled entity. Not just for the Olympic Games, but unifying transportation agencies in a regional and metropolitan manner is a much smarter way to go considering approximately 8 million people will live in the Chicago area in 2016, not including the 2.5 million who live INSIDE the city limits or the potential visitors that would be spread all over.

SEE INSIDE FOR NEW YORK TIMES ARTICLE ON THE CRUMBLING CHICAGO TRANSIT SYSTEM UNDER RICHARD DALEY

Other Resources:

>RTA

>State Auditor's Report on Transit

>CTA Tattler (blog)

Police Brutality Under Daley | Can't Have This Type of Thing in Chicago

The protesters that voiced concern about how the Daley regime has looked the other way about police torture and brutality cases may have a point based upon the recent bar beating incident of a woman by a Chicago cop, but now we learn there's another major incident that was kept quiet back in December.

Monique Bond, spokesperson and aide to Daley, says whatever it takes for these stories to be diminished or go away, but when there is a video, it's pretty hard to ignore. If we want to bring the Olympic Games to Chicago, we need to address these type of things seriously and not pretend they don't exist.

Chicago Tribune | Another Daley Aide Indicted By Feds

EX-DALEY AIDE INDICTED BY FEDS

Chicago Tribune Staff Reports
March 22, 2007, 2:39 PM CDT

The U.S. attorney's office announced today that a federal grand jury has indicted former Chicago Streets and Sanitation Commissioner Al Sanchez on nine counts of mail fraud.

Sanchez, 59, was not only a former top aide to Mayor Richard Daley but was also a key leader in the mayor's Hispanic Democratic Organization (HDO).

The charges against Sanchez come amid a continuing investigation of hiring and promotion practices at City Hall.

Also indicted was Aaron DelValle, who once worked for Sanchez in Streets and Sanitation. DelValle, 34, was charged with one count of perjury for allegedly lying to a federal grand jury.

In return for his cooperation with investigators, DelValle received immunity from most of the charges under consideration, but was indicted on one count of perjury, prosecutors said.

Both men will be arraigned at a later date, the U.S. attorney's office said.

U.S. Atty. Patrick Fitzgerald said Sanchez rigged jobs to reward political workers and DelValle lied to authorities about assisting Sanchez. Sanchez "corrupted the hiring process on behalf of HDO," Fitzgerald said.

According to the U.S. attorney's office, Sanchez engaged in a systematic scheme to provide city jobs, promotions and other employment benefits as rewards for political campaign work for his organization.

Sanchez was HDO's Southeast Side leader. During the hiring trial last summer that resulted in the conviction of Daley's former patronage chief, prosecutors described Sanchez as a co-schemer in an ongoing hiring fraud scheme.

The son of a hot metal conductor at a steel plant, Sanchez sponsored many of his fellow East Siders for well-paying, blue-collar city jobs, according to court records.

Sanchez used to preside over HDO meetings in a banquet hall in the neighhborhood spanned by the Chicago Skyway toll bridge. Federal agents scoured the neighborhood last fall, questioning people about HDO.

Earlier this month, HDO members who work in Streets and Sanitation charged in a federal lawsuit they were demoted or passed over for promotion because another group now has the clout. Pablo Delapaz, Michael Sarkauskas and Joseph Nasella claim they were punished after Sanchez retired as commissioner of the department in 2005.

HDO members were mentioned at the corruption trial of Daley's patronage chief Robert Sorich as the recipients of city jobs for their political work on behalf of pro-Daley candidates.

The Associated Press contributed.

King Daley Forced to Issue Order Banning Patronage

City agrees to ban patronage

$12 million fund would pay victims of job bias

By Dan Mihalopoulos and Todd Lighty, Tribune staff reporters; Tribune staff reporter Mickey Ciokajlo contributed to this report

Chicago Tribune
March 22, 2007

Mayor Richard Daley's administration agreed Wednesday to a settlement that would end court oversight of City Hall hiring and pay millions of dollars to people who lost out because they didn't have the right political connections.

Daley had long sought to end the decades-old federal consent decrees that ban politics from most city personnel decisions, even after aides in his office were convicted last year of rigging hiring to favor pro-Daley political workers.

A court-appointed monitor will continue to help regulate city hiring for two more years. But after June 1, the city's inspector general--appointed by the mayor--will investigate complaints of politically based hiring, firing and promotions, according to the settlement announced in federal court.

The settlement, which requires City Council approval, calls for the mayor to issue an executive order against political hiring.

Michael Shakman, whose lawsuit led to the anti-patronage decrees, said the settlement could end his long legal fight--if City Hall is acting in good faith.

"The mayor has an opportunity here," Shakman said. "He's either going to be remembered by history as the mayor who presided over the last big-city clout machine or the mayor who fixed it. This gives him a chance to fix it."

The city will create a $12 million account for people who claim they have been discriminated against because they lacked clout to get a job, promotion, transfer or overtime. Shakman said he expects thousands to apply for damage awards of as much as $100,000 each.

While Shakman, city officials and the judge in the case hailed the accord as a landmark moment for local political ethics, this is not the first time that the city has vowed to root out the traditional political-machine practice of rewarding allies with jobs.

Some declared patronage dead more than 20 years ago, when Mayor Harold Washington signed the Shakman decree against political hiring. The federal investigation of corruption in the Daley administration shattered that illusion.

Though the Daley administration said it hired based on qualifications alone, federal prosecutors say officials in the mayor's office engaged in a "massive fraud" to get around the Shakman restrictions and enhance the mayor's political power.

The criminal hiring investigation yielded guilty verdicts last year against four former Daley administration officials, including longtime mayoral patronage chief Robert Sorich.

`It's a new day'

Mara Georges, the Daley administration's top lawyer, for years swore in court that the city was abiding by the hiring restrictions. After Wednesday's court hearing, Georges said the agreement would allow Daley "to demonstrate that he is truly committed to reform."

And Daley's chief of staff, Ron Huberman, said skeptics should know that "it's a new day."

The agreement was announced as Daley was traveling in Europe with local business leaders. He has denied any knowledge of wrongdoing in city hiring.

When the hiring scandal broke in 2005, Shakman's lawyers asked U.S. District Judge Wayne Andersen to hold the city and Daley in contempt of the federal hiring decrees. The city had tried to void the decrees, saying they were no longer needed.

The proposed settlement ends Shakman's quest to hold the city and Daley in contempt of the court orders.

The city and the mayor do not admit violating the Shakman decree but decided to settle "solely for the purpose of avoiding prolonged and expensive litigation and the drain on the city's resources and employees' time and energy," according to the settlement.

The city has paid $1.65 million to the monitor, Noelle Brennan, and her lawyers since Andersen appointed her less than two years ago, city officials said.

Brennan will remain to assess claims and approve damage payments for people who can demonstrate they were harmed since Jan. 1, 2000. The claim form will be available at www.shakmanmonitor.com.

Shakman said he and his lawyers would submit bills to the city for their work on the case over 20 years. He estimated the sum would exceed $2 million.

The city also agreed to pay $25,000 each to six current and former city workers who in 2005 joined Shakman's suit as plaintiffs. The workers alleged that their careers in Daley's administration suffered because they lacked the right connections to pro-Daley political organizations. The six workers from the Streets and Sanitation and Water Management Departments could still seek additional money from the $12 million fund.

Under the settlement, most of the nearly 40,000 spots on the City Hall payroll would have to be filled without regard to politics, with about 800 exceptions for policymaking positions.

Under the mayor's order, city employees would have a duty to report political job discrimination to the city inspector general, and they would get protection against retaliation for pointing out problems.

Inspector General David Hoffman would investigate and could recommend potential discipline or file criminal charges.

"This is an important milestone in creating a system of integrity," said Hoffman, appointed by Daley to a four-year term in 2005. "Given the proper resources, we will be able to become a strong, independent watchdog."

Brennan said City Hall eventually would have "an independent system that's within the city."

"We will all see what happens when we go away, but I am optimistic that things really are changing within the city."

In December, Brennan reported that the Daley administration was making strong progress in reforming hiring. Yet she also said she had encountered "pockets of resistance in the city, primarily from those individuals who benefited from the patronage system."

If the city convinces the court that it is in "substantial compliance" with the agreement, the Shakman decree would expire on Dec. 31, 2008.

More than 35-year battle

Shakman has fought City Hall over patronage since 1969, when Daley's father was mayor. As a candidate for the state Constitutional Convention, he said he had no chance against armies of patronage workers loyal to the Cook County Democratic Party.

The party's power withered over time, only for Daley's political organization to supplant it after he became mayor in 1989. Under Daley, the Democratic ward organizations that traditionally dispensed jobs to political workers became less significant.

Witnesses in the Sorich trial detailed how Daley aides instead funneled patronage through new pro-Daley groups such as the Hispanic Democratic Organization.

Regardless of the settlement in Shakman's civil case, it appears unlikely that the criminal investigation of hiring fraud is over. After Sorich's conviction, prosecutors warned they would pursue higher-ups in the Daley administration who participated in the scheme.

In the courtroom Wednesday, two prosecutors who have probed City Hall corruption observed the proceedings from the back row. Assistant U.S. Attys. Philip Guentert and Manish Shah declined to comment.

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dmihalopoulos@tribune.com | tlighty@tribune.com

Chicago Tribune Editorial | Toward an Honest City Hall

TOWARD AN HONEST CITY HALL

Chicago Tribune Editorial
March 22, 2007

Wednesday's agreement on a new protocol for enforcing rules against illicit patronage hiring and promotion at City Hall is an upbeat chapter in a decades-long legal drama. We could fill this page and many others with all of the background.

Or we could cut to the chase scene: No longer should federal prosecutors and FBI agents have to be the de facto enforcers of Shakman-decree rules and a host of laws meant to guarantee fairness in city employment. Instead, as of May 31 (barring the unexpected), that job will fall to the city's inspector general.

That makes sense, as this page argued last summer after the corruption convictions of four former City Hall officials. The current inspector general, former federal prosecutor David Hoffman, may not relish the idea of adding oversight of hiring to his anti-corruption duties. But with a beefed-up staff of 40 investigators, an aggressive focus on more substantial cases and protocols for seeing that wrongdoers get punished, his team is ideally equipped to do what the city administration hasn't: eradicate the widely held assumption that when the city hires or promotes, the fix is in.

Owing to City Hall's serial failures to halt illegal employment practices, a federal monitor is now responsible for city hiring--and also for probing alleged violations. She'll continue to oversee the former for two years, but investigation and enforcement now will shift to the IG.

It's crucial that future oversight not drift back to any of the politicized city departments that report to the mayor. Neither Mayor Richard Daley nor his successors should be monitoring their own compliance with rules intended to guarantee fairness to job applicants and employees seeking promotion.

Mayors, of course, appoint inspectors general, so the potential for mischief remains. But barring a permanent federal takeover of employment at Streets and San, the IG is likeliest to police employment with genuine independence. The inspector general has a four-year term, works from office space outside City Hall--and can only be fired "for cause" by a majority vote of the City Council. After years of relative inaction, the office is building a no-nonsense reputation: Last week, for the first time, federal criminal charges were brought on the basis of a joint IG-federal investigation, as six defendants were charged with accepting bribes to subvert building-safety rules.

Prior to Wednesday, Daley had long fought to void Shakman regulation of patronage hiring. Now he has agreed to issue an executive order intended to keep politics out of personnel decisions. The IG's job is to make that stick.

The settlement creates a $12 million fund for people who allege that they were victimized by the unfairness that has tarred City Hall. And the IG's office likely will need more staff if it's to handle all future employment complaints on top of its current busy workload.

Chicago will be a long time paying for the shabby practices that cheated many good people out of jobs or promotions they deserved. The hope here is that Wednesday's settlement keeps that from occurring again.

Sun-Times | More Daley Administration Bribery

Buildings project manager arrested, charged with bribery

(http://www.suntimes.com/news/metro/298650,bribe031507.article)

March 15, 2007
Chicago Sun-Times
Fran Spielman City Hall Reporter

An $85,308-a-year project manager in the city of Chicago’s Department of Buildings was arrested Wednesday night and charged with bribery, in a growing investigation into shakedowns in the two city agencies that are supposed to make sure buildings are safe.

Kurt Berger’s arrest came one day after the city inspector general’s office and agents working for the U.S. Postal Inspection Service raided the City Hall offices of the Department of Construction and Permits and left with computers and scores of documents.

On the same day that Inspector General David Hoffman led that raid, an electrical inspector assigned to Construction and Permits was charged with accepting $16,000 in bribes. In exchange for a pair of $8,000 cash payments allegedly stuffed in Wendy’s bags, Daryl Williams is accused of looking the other way while a contractor added residential units to an extensive remodeling project without obtaining the required zoning change or building permits.

The investigation against Williams was reportedly aided by a building inspector who was similarly accused but won’t be prosecuted in exchange for his undercover cooperation.

Berger’s arrest marks the latest in a series of scandals for the two city departments charged with guaranteeing building safety in Chicago.

Two years ago, a residential permit was issued in a planned manufacturing district to a developer who took then-Building Commissioner Stan Kaderbek’s top deputy no a spring break trip to Brazil.

The department also was at the center of the city hiring scandal for its role in hiring the 19- and 23-year-old sons of Carpenters Union officials as building inspectors. And another building inspector was accused of falsifying a report on a building where a porch railing snapped, killing a 9-year-old girl.

The Buildings Department has been without a permanent commissioner since December, after the resignation of John Knight. City Hall sources called Knight a bad fit from Day One.

Behind the Bid Note: Aside from the obvious chronic corruption under Daley, isn't building safety somewhat important for the Olympic Games?

Sun-Times | Aldermen OK Olympic Funding

Chicago Sun-Times
March 14, 2007

BY FRAN SPIELMAN City Hall Reporter

The City Council today kept Mayor Daley’s Olympic dream alive by putting Chicago taxpayers at risk — to the tune of $500 million — in the event that a 2016 Summer Games here loses money.

Beating a U.S. Olympic Committee deadline with 17 days to spare, aldermen also approved a series of intergovernmental agreements that put local tax dollars on the line, even if the games turn a profit.

The vote was 45 to 5.

Among other things, the agreements require the Metropolitan Pier and Exposition Authority to transfer to the city ownership of air rights over a truck staging area for McCormick Place that will be used to build a $1.1 billion Olympic Village.

Corporation Counsel Mara Georges disclosed last week that the air rights would be transferred to the Olympic organizing committee known as Chicago 2016 and sold to private developers for $100 million.

Half of that money will be used to build the 5,000- to 15,000-seat amphitheater that will be left behind in Washington Park after a temporary Olympic stadium there is torn down. The other half will be used to build an aquatic center in Douglas Park. The Chicago Park District has also agreed to contribute $15 million toward the aquatic center it will inherit.

So much for Daley’s promise to bankroll a Chicago Olympics with “not a dime” of taxpayers’ money.

The mayor has likened the $500 million guarantee from Chicago taxpayers to earthquake insurance.

The city would be left holding the bag, only if Olympic planners are dead wrong in, what they call their “conservative” assumption that a Chicago Olympics would generate a $525 million surplus.

If the Games lose money, there would still be a $200 million cushion. That would come from the sale of 117 luxury skyboxes at the Washington Park stadium and from an equity payment to the city from Olympic Village developers.

Chicago taxpayers come next on the financial totem pole — to the tune of $250 million. The five-layered approach then envisions $250 million in “third-party” guarantees--either from other public agencies or from private money, possibly insurance. After that, the city would be on the line for another $250 million.

Voting no were: Aldermen Dorothy Tillman (3rd), Toni Preckwinkle (4th), Shirley Coleman (16th), Arenda Troutman (20th) and Howard Brookins (21st).

Prior to the final vote, Preckwinkle blasted Daley for waiting until after the mayoral election to come clean about the need for the $500 million guarantee. “It’s very hard to believe that nobody knew prior to the election that $500 million would be required...and those same people want us to trust them that using these guarantees is a very remote possibility. It’s hard to believe,’’ said Preckwinkle, whose no vote came even though the Olympic Village would be located in her ward.

Ald. Leslie Hairston (5th) supported the guarantee but only after putting the mayor’s Olympic planners on notice: “We are a multiracial city and that should be reflected at every level in the planning of these Olympics. We need to err on the side of inclusion, not just smoke and mirrors,’’ she said.

Ald. Ed Smith (28th) took the $500 million leap of faith with his fingers crossed.

“I’m a little bit about shaky about this one. Actually, I’m ....really trepidacious about this one because we really don’t know what lies ahead. We could end up with some major financial problems. I understand that ‘nothing ventured, nothing gained.’ I just don’t want to end up with a lemon on my hands. ‘’

Several times during the more than hourlong debate, there were shouts from the gallery and banging on the glass that separates the third-floor balcony from the chamber. There were several threats to clear the chamber if order was not restored but only a few people were escorted out.

Ald. Pat O’Connor (40th) warned that the “acrimony’’ of the debate could send the wrong message to the U.S. Olympic Committee, which is scheduled to decide between Chicago and Los Angeles on April 14.

Today’s City Council vote in favor of the city’s share of a $1.47 billion financial guarantee marks a pivotal moment in Chicago’s heated competition against L.A. for the right to advance to the international stage. Without a guarantee against operating deficits by a March 31 deadline, Chicago’s bid was doomed.

Chicago 2016 Chairman Pat Ryan and Dana Levenson, the city’s chief financial officer, have said repeatedly that the chances of actually tapping Chicago tax dollars are “practically nonexistent.”

Daley agreed on the eve of the City Council’s historic vote.

“This is in case . . . everything breaks down completely…This would be like an earthquake. If an earthquake takes place and I doubt if it’s going to take place,” the mayor said.

Chicago taxpayers are on the line only because the federal government has refused to assume the risk, the mayor said.

“The U.S. Olympic Committee requires an insurance policy. In other countries, the federal government steps up and says, `We’re the insurance policy.’ Here in the United States, they’ve never done that. And that’s been a real question by the International Olympic Committee. Why wouldn’t the United States stand behind the Olympic movement?” he said.

If the USOC chooses Chicago over L. A. and Chicago is the International Olympic Committee’s choice in 2009, Levenson has said, the city could start building up cash reserves to cover any Olympic shortfall.

Ryan has said he expects to further insulate the city by raising more private money — on top of the $32 million in contributions already in the bank.

“All of the Games have been profitable…Nobody’s ever lost money on that operating line. We would have to be the first really incompetents to do that,” Ryan said last week.

“If we’re in the red — if we do something nobody’s ever done before — we have $200 million ahead of [the city]. We’re going to add to that…in private capital raising. We’ve got nine years to do this. We’re just at a point in time…where we have to have this in order to get to the next step. But once we win it, we’re going to move the city back” even further in the pecking order.

Chicago Public Radio | Listen to Council Voices and Was Daley Drunk at the End?

Chicago Public Radio's story link

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Listen directly to the audio

Beachwood Reporter | Examples of Daley Doubts

Beachwood Reporter takes a nice look at the flip-flops of King Daley:

"No we're not [breaking the promise] because we're not putting any actual money up," Daley said after it was revealed that city's Olympic bid will include a financial guarantee built from taxpayer money. "This is in case . . . everything breaks down completely . . . This would be like an earthquake. If an earthquake takes place, and I doubt if it's gonna take place."

Click here for other doubts and flip-flop examples...

Chicago Tribune | City, Daley Duck the Money Issue

City, Daley duck the money issue
Philip Hersh
On Olympic Sports

Chicago Tribune
March 12, 2007

It has been 10 months since Mayor Richard Daley announced Chicago would explore whether it made economic sense to bid for the 2016 Olympics.

Although the reply seems to be that the city will learn in a month whether it or Los Angeles is the U.S. candidate for 2016, some may wonder if the original question ever was answered.

Chicago 2016 has logos, T-shirts, a $30 million-plus war chest for the international phase of the competition and impressive, well-conceived plans for what the Summer Games would look like and where they would take place.

Even so, the Chicago bid story still has elements of an old folk tale about a man who didn't know how long it would take to roast a pig because he didn't know how much the animal weighed.

A friend told the man to put the pig on a board positioned like a seesaw and to find a rock that would exactly balance the pig. Having achieved that balance, there was only one problem: No one knew how much the rock weighed.

Chicago 2016 officials were caught between a sizeable rock and a hard place last week (yes, we're mixing metaphors) when the U.S. Olympic Committee insisted the city have a stake in the guarantee against financial shortfalls that the International Olympic Committee requires of bid cities. So they decided the Chicago pig weighed enough to feed the kitty, no matter how long it took to roast.

Chicago 2016 officials said Friday the city would never need to tap $500 million it would pledge to a guarantee because a Chicago Olympics would leave a $525 million surplus. But Chicago 2016 Chairman Patrick Ryan declined to give projected revenue and expense numbers to show how the balance would tip so heavily against any financial risk for the city.

And that brings to mind Charles Lamb's early 19th Century essay, "A Dissertation Upon Roast Pig," in which Lamb says that if there were ever a pretext to burn down houses, it would be to enjoy roast pig.

After all, we have Taste of Chicago. Why not enjoy a taste of the Olympics and assume it is a cash cow rather than Mrs. O'Leary's?

Give Chicago 2016 and the city credit for cooking up a fast response after USOC Vice President Bob Ctvrtlik insisted the city must have "some skin in the game" at a Wednesday news conference following the USOC's two-day evaluation visit.

Ryan insisted Chicago 2016 officials were caught off guard by the USOC's rejection of their plan to fund the guarantee from only the private sector. That surprise seems to explain what University of Chicago economist Allen Sanderson called a "deer-in-the-headlights" reaction by Mayor Daley at the Wednesday news conference, when he repeatedly dodged questions about his previous promise that no public funds would be used for the Olympics.

U.S. bidders start at a disadvantage. Everywhere but the United States, governments provide the financial guarantee. London had $3.8 billion in government guarantees against organizing committee shortfalls and an apparently limitless guarantee against other related costs when the IOC chose it as 2012 Summer Games host.

"I'm not opposed to spending public money for something beneficial to the city of Chicago," Sanderson said, "but the mayor should have made that case a long time ago. Maybe the benefits aren't that great."

Chicago 2016 officials are relying largely on Olympic finance theories posited by a German sports economist, Holger Preuss, in his 2004 book, "The Economics of Staging the Olympic Games, 1972-2008."

Preuss claims all those Olympics made a profit on organizing the Games if one removes "investments" from the final balance sheets. That will come as a shock to the citizens of Montreal, left with a white elephant Olympic Stadium and a $1 billion deficit.

Preuss' conclusions about profits for other recent Olympics, notably Atlanta '96, also are debatable.

"There are investments you have to make to have the Games," said Conrad Freund, chief financial officer of the 1984 Los Angeles Summer Games.

L.A. '84 became the economic model on which most future Olympic financial plans have been based. Privately financed, with corporations building the only two major facilities (aquatics center and cycling velodrome) the city lacked, Los Angeles turned an organizing profit of $232.5 million.

Freund sees the Los Angeles profit as a justification for Chicago's surplus projection, provided there is as much sponsor and TV excitement about a 2016 Olympics in the United States as both Ryan and LA 2016 bid Chairman Barry Sanders say they can expect.

"If you just multiply the L.A. profit by the inflation index, $500 million does not seem an unreasonable figure," Freund said.

Chicago plans to pay for its biggest Olympic projects—a $366 million largely temporary main stadium, a $78 million aquatics center with three permanent pools, a $1.1 billion Olympic Village—in a variety of ways, including Olympic revenues and investments by developers. All of it is to be private funding.

It very well could add up the way Chicago bid boosters claim. It just would be nice to see all the numbers before the bid dives from the frying pan it apparently escaped last week into the fire.

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