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.

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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.

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.