The Mystery of Mayor Daley

After 15 years in office, his popularity and his power have never been greater. Insiders say Richard M. Daley could crack down on the cronyism and ethically questionable deals that threaten to undermine his legacy. Why doesn't he? A special report

By Shane Tritsch

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Richard M. Daley rode into office vowing to end business as usual in city government. In his 1989 campaign for mayor, he was highly critical of a deal giving a politically connected woman named Barbara Jones Green the popcorn concession at Midway Airport. The head of a minority-certified company, Green had been a major fundraiser for the late Mayor Harold Washington and was supporting acting mayor Eugene Sawyer. Daley suggested the deal hinged on "political cronyism" and "fundraising ability." In a Daley administration, he vowed, such contracts would go to "the most qualified person, period."

Daley won that election. And within a few years, another airport concession was at the center of controversy—only now it was Daley fending off the charges of clout and cronyism. In this case, W. H. Smith had snagged a ten-year extension on its newsstand license at O'Hare after cutting in two women who were friends of Maggie Daley, the mayor's wife, as 30-percent minority partners. When asked whether clout had wired that deal for Grace Barry and Barbara Burrell, who possessed little retail experience, Daley insisted that W. H. Smith could "hire or fire anyone they want. . . . That's their responsibility. I don't ask them to hire or fire anyone. I've never done that."

By the time Daley offered that less-than-satisfying denial, in 2000, he had long since mastered the art of evading questions about clout-heavy firms doing business with City Hall. Many of these deals have involved multimillion-dollar contracts for old chums and generous campaign contributors, often people with roots in the Daley ancestral neighborhood of Bridgeport. There are the fencing and airport door contracts that have gone to Crandall, whose family ties to the Daley clan go back decades. There is trucking boss Michael Tadin, a longtime Daley friend and big campaign contributor whose Marina Cartage took in more money than any other company in the Hired Truck Program. The Mob-connected Duff family, another clan with longtime ties to the Daleys, had received more than $100 million in city contracts before two Duffs were indicted late last year on federal fraud charges. Hundreds of millions of dollars in exclusive O'Hare building contracts have gone to construction czar Patrick Harbour, a longtime Daley family friend. And developer Michael Marchese, another Daley chum, bought a 17-acre parcel of West Side land from the city for a dollar and built a shopping center there.

Tracking other politically tied largess requires connecting more dots, often because it involves former Daley lieutenants acting as hired guns for companies seeking city business, especially at the supersize public trough that is O'Hare. Jeremiah Joyce, one of Daley's most trusted political advisers, has reaped millions of dollars brokering and investing in concession contracts at O'Hare. Veteran power broker Oscar D'Angelo received at least $480,000—and possibly much more—for helping arrange the W. H. Smith lease that enriched Maggie Daley's friends. Victor Reyes, Daley's former political enforcer, has represented companies that have won contracts for major construction projects at O'Hare and for the city's bus shelter program.

Then there are two of the mayor's brothers. Michael Daley, a partner with the Loop law firm Daley and George, has been paid $180,000 a year since the mid-1990s by Citigroup (and Salomon Smith Barney, which merged with Citigroup) to serve as a "consultant" on its bond business. Although Citigroup says in its disclosures that Daley's law firm does no business related to the city of Chicago, Citigroup has landed nearly $4 billion in bond deals at O'Hare since hiring him, according to the Aviation Integrity Project (AIP) report. (Michael Daley did not return a call seeking comment for this article.)

Meanwhile, John Daley, the Cook County Board finance committee chairman and 11th Ward committeeman, has built a lucrative insurance business serving many clients who do business with the city. He has acknowledged earning as much as $400,000 a year in commissions—much of it from companies doing business at O'Hare—on insurance he sold through Near North Insurance Brokerage, whose owner, Michael Segal, was still being tried in late May on criminal fraud charges. The mayor has insisted that everything is on the square in these arrangements because John is not doing business directly with the city. (Through a spokesman, John Daley declined to be interviewed.) While that is technically true, it's a "silly defense," argues Bryan Doyle, project manager of AIP, because it suggests that as long as John deals with private companies feeding on city contracts, there is no influence involved. At best, says Doyle, such arrangements constitute a conflict of interest. At worst, he says, they suggest companies "have to get insurance from John Daley in order to bid on contracts at O'Hare."

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In all fairness, people who have close ties to Mayor Daley are not necessarily unqualified to do good work. When clout-heavy companies have wound up in contracting scandals, the mayor has often defended them by saying what a good job they did. Indeed, surely one reason they get the work is that the administration trusts them to deliver and not embarrass the mayor with shoddy results. By nature an improver who loathes government bureaucracy, Daley is also said to relish the instant gratification of quick, tangible progress. If he passes a schoolyard that he thinks could benefit from a wrought-iron fence, he knows from experience that Crandall's company can have a new fence in place within days.

At least one former official backs up the mayor's claims that he has no influence in deciding who cashes in on the government spoils. "I am fascinated that the media and the public assume that every decision is made at the mayor's discretion," says a former top administrator who served under both Daleys. "That would be impossible. You're talking about a bureaucracy that, like most bureaucracies, carries on its own business."

But other insiders don't buy that line. For one thing, the sheer volume of city contracts that have gone to clout-heavy interests "shows otherwise," says a minority alderman. "It's not accidental that all these people close to the mayor in one way or another have been able to enrich themselves at the public trough. This is a system in which abuse of the public trust is par for the course. Contracts are steered to friends and supporters."

"This mayor could have stopped [the contract cronyism] long ago, after the first scandal, after the second scandal, after the third scandal, after the fourth scandal," says the legislator. "Long before the Hired Truck scandal, he could have stopped this stuff easily and still remained powerful because he is such an adroit politician. Yet he chooses not to."

Whenever these deals come to light—and they're almost always unearthed by news reporters or government watchdogs rather than the mayor's administration—Daley is put in the awkward position of denying that there is even the appearance of a conflict of interest or that political influence plays any role. "I have billions of dollars of work going out," he declared after the Chicago Tribune broke a story on a contract scandal involving Richard Crandall, the fencing mogul. "None of it can be clouted. They cannot be clouted!"

When a scandal causes enough political fallout, Daley shifts from denial to damage control. The standard drill is to "bring in a third-party auditing firm to review everything that was done and recommend new procedures," says a former administration veteran, who then recites the remainder of the drill: "Get rid of a few people. Mea culpa. He's done. Move on."

Over the years, Daley has imposed elements of reform. To promote greater "transparency," for example, all city contracts are now posted on the city's Web site. After the Better Government Association and the Tribune revealed that W. H. Smith had paid Daley's pal Oscar D'Angelo to broker its license extension at O'Hare but had not listed D'Angelo as a lobbyist, Daley pushed through a tougher ethics ordinance that, among other things, would fine unregistered lobbyists working to get city business.

These remedial measures are always specifically in response to the scandal at hand—though they never seem to prevent new scandals from blooming. "When he reacts, he defines the problem in the narrowest possible way," says the BGA's Jay Stewart. "But he never gets at the substance of the problem."

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