Edit Module
Edit Module

O’Hare’s History of Connection and Corruption

This story was co-published with the Better Government Association.
RELATED: O’Hare’s Billions In Broken Promises

clip 1

1946

City acquires Orchard Field, which later becomes O’Hare International Airport, from the federal government. The city obtains the property at no cost.

News clipping: Chicago Tribune

clip image

1955

O’Hare Airport opens for domestic commercial traffic. The new airport is named after Edward H. “Butch” O’Hare, a World War II hero and pilot whose father was a mob lawyer gunned down after helping federal authorities convict Al Capone.

News clipping: Chicago Tribune

clip image

1961

A barrage of bullets from a would-be hitman rocks an ongoing corruption probe into the first multi-million dollar expansion program at O’Hare. A 52-year-old electrical supervisor at the airport narrowly escapes death as five shots hit his car. A day later, a federal grand jury issues a subpoena for his testimony about an alleged bid-rigging conspiracy for airport contracts. The criminal investigation ends with no charges related to the airport.

News clipping: Chicago Tribune

clip image

1974

Ald. Thomas Keane, 31st, longtime chairman of the Chicago City Council’s finance committee, is sentenced to five years in federal prison for conspiracy and wire fraud in an investigation of corrupt city real estate deals that began over allegations tied to a parking contract at O’Hare.

News clipping: Chicago Tribune

clip image

1974

Major car rental companies vying for O’Hare contracts come under scrutiny from the Cook County state’s attorney’s office after the companies hired political heavyweights to influence the negotiations. Among the firms hired was the law practice of the city’s revenue director, as well as Michael Daley, the then-31-year-old son of Mayor Richard J. Daley. No charges are filed, and both deny any wrongdoing.

News clipping: Chicago Tribune

clip image

1976

Former Daley press secretary Earl Bush is overturned in 1989 over a legal technicality.

News clipping: Chicago Tribune

1977

George Krug Sr., founder of one of O’Hare’s busiest runway-paving contractors and a major donor to the local Democratic Party, pleads guilty to bid rigging in a $3.5 million runway project. He is also found guilty of participating in a bid-rigging scheme on a project to pave a portion of the Stevenson Expressway. With Krug’s namesake company — Krug Excavating Co. — banned from bidding on future city contracts, his family forms a new company, K-Five Construction Corp., to seek city work. The family-owned company remains a major paving contractor at O’Hare to this day, collecting nearly $70 million in contracts at the airport since 2011, records show. Krug’s granddaughter, a K-Five executive, recently told the BGA: “I was six years old when it happened. K-Five is a different company altogether.”

clip image

1980

The owner of Airline Canteen Services Inc., the longtime exclusive operator of newsstands and novelty shops at O’Hare and Midway airports, is sent to federal prison for six months after pleading guilty to an income tax fraud in a case alleging at least $700,000 in unreported sales at O’Hare, records show. Two former law partners of the late Mayor Richard J. Daley were stockholders of the company when the contract was first awarded in 1962.

News clipping: Chicago Tribune

1984

A Cook County grand jury investigates a $2 million contract to operate video games at O’Hare, though no charges are brought. Owners of the concession are business partners with Ald. Edward M. Burke, 14th, in a similar arcade business not at O’Hare. Burke also did real estate appeal work for the company. More than three decades later, Burke is indicted in May 2019 on unrelated federal charges he used his public office to extort legal work from companies doing business with the city. Burke has denied wrongdoing.

1986

In an apparent mob hit, the bullet-riddled body of a railroad track contractor for the O’Hare Blue Line extension project is found in a Westchester parking lot. The execution is discovered three days before Richard N. DePrizio was set to be indicted on tax fraud charges. He had been under investigation by state and federal authorities on suspicion he was siphoning money from his $13 million city contract to pay politicians and mob figures, including Anthony “The Ant” Spilotro and John “Jackey the Lackey” Cerone. Also subpoenaed in the probe was an O’Hare advertising contractor.

clip image

1987

Federal indictments come down in Operation Incubator, a sweeping federal bribery probe — which included O’Hare contracts — that takes down four members of Chicago’s City Council, a Cook County clerk, a former mayoral aide, and a deputy water commissioner. A federal informant in the case doled out more than a quarter million dollars worth of cash bribes, cars and trips. Aldermen who went to federal prison included Perry Hutchinson, 9th, Marian Humes, 8th, Clifford Kelley, 20th, and Wallace Davis, 27th.

News clipping: Chicago Tribune

1990

Ald. William Henry, the flamboyant boss of Chicago’s 24th Ward on the West Side, is indicted on federal charges of extorting luxury cars, cash bribes and a 30 percent interest in a Roselle auto dealership in exchange for his help landing a car-rental contract at O’Hare. The charges are dropped mid-trial after Henry is hospitalized with terminal lung cancer.

clip image

1993

A partnership between the national fast-food giant McDonald’s Corp. and the operator of duty-free shops at O’Hare wins a coveted concessions contract worth millions of dollars at new International Terminal 5 after hiring Mayor Richard M. Daley’s top political strategist Jeremiah Joyce as its “expediter” at City Hall, according to a 2001 Chicago Tribune investigation. Joyce, a former 19th Ward alderman and state senator, then becomes an investor in the partnership, Chicago Aviation Partners. The partnership keeps its international terminal contract until Daley retired in 2011.

News clipping: Chicago Tribune

1995

Chicago’s inspector general launches a probe into allegations that Dominic Longo, a Daley political operative with a past conviction for vote fraud, muscled nearly three dozen O’Hare truck drivers for political kickbacks. The investigation blossoms to include allegations of job selling and ghost payrolling at the airport. Longo resigns his airport post but goes on to hold several other high-paying jobs in Daley’s administration. Longo is not charged.

clip image

1999

Disbarred lawyer Oscar D’Angelo, a longtime friend of Daley, improperly lobbies the mayor’s aviation commissioner to push for a contract extension for longtime O’Hare planning consultant Landrum & Brown, according to a secret city ethics investigation. The investigation reveals D’Angelo stood to make more than $1 million in commissions from the contract. He also brokers a deal at O’Hare with a British bookseller that benefits two close friends of Daley’s wife. Landrum & Brown, which remains an airport consultant to this day, was paid $19.7 million by the city under former Mayor Rahm Emanuel. No charges are filed.

News clipping: Chicago Tribune

2001

The Daley administration awards a contract worth as much as $1 billion for a new terminal — at the time the biggest public works project in Chicago history — to a firm that hired former Daley political operative Victor Reyes as its lawyer. The project stalled after the Sept. 11, 2001 attacks, but the contractor is paid more than $30 million for planning work on the abandoned project. To this day, Reyes remains one of the most influential and well-paid lobbyists at O’Hare. Years later, Reyes — who declined to be interviewed for this report — was named by federal authorities as a “co-schemer” in an illegal patronage operation in which city employees were deployed as a political street army for Mayor Daley and his supporters. He was never charged.

2003

A group opposing Mayor Daley’s $15-billion O’Hare expansion project accuses his brother, insurance broker and Cook County Commissioner John P. Daley, of using his family name to profit at O’Hare. At least 10 insurance clients of John Daley are O’Hare contractors, according to a report prepared for the group by former BGA head J. Terrence Brunner.

clip image

2005

Mob-connected businessman James Duff, a political supporter of Mayor Daley, is sentenced to 10 years in federal prison after pleading guilty to racketeering and fraud in a scheme to win more than $100 million in public contracts — including at O’Hare — by falsely portraying his companies as controlled by women and minorities. “I have no one to blame but myself,” Duff tells the judge at sentencing.

News clipping: Chicago Tribune

clip image

2005

Relatives of Mayor Daley’s transportation commissioner, Miguel d’Escoto, are part of several politically connected teams that win tens of millions of dollars in airport construction business as part of the latest airport expansion project. Among the connected firms winning business are D’Escoto Inc. Another of the firms, Harbour Contractors, continues to do business at O’Hare to this day.

News clipping: Chicago Tribune

clip image

2007

An assistant aviation commissioner at O’Hare abruptly resigns his $96,216-per-year post after an audit reveals his son worked for the company hired by the city to manage the airport’s international terminal. Jim Sachay oversaw the contract and sat on the evaluation committee that recommended his son’s firm for the five-year, $45.2 million contract.

(Chicago Sun-Times)

clip image

2009

Christopher Kelly, a former top fundraiser for Gov. Rod Blagojevich commits suicide days after pleading guilty to two counts of mail fraud as part of a kickback scheme on roofing work at O’Hare.

News clipping: Chicago Tribune

2010

The owner of a concrete pipe supplier is charged with fraudulently accepting $10 million in contracts at O’Hare through a set-aside program for women and minority firms without ever doing any of the work. Aurora Venegas, owner of Azteca Supply Co., wins the contracts with help from lobbyist Gery Chico, a former chief of staff to Daley. She is sentenced to two years in federal prison and banned from city contracts for life. “I would never do anything intentionally wrong,” Venegas tells reporters after her sentencing.

clip image

2011

Mayor Rahm Emanuel replaces a concessionaire at the international terminal tied to Daley with a company linked to other political power brokers, including Ald. Edward Burke, 14th. Within two years, a subcontractor in the deal — Lettuce Entertain You, Inc. — hosts a $59,000 political fundraiser for Emanuel, who had promised to rid City Hall of political favoritism, records show. The Emanuel administration says the fundraiser did not violate Emanuel’s self-imposed ban on donations from city contractors because the company is a “licensee” and not technically a city contractor.

News clipping: Chicago Tribune

clip image

2012

A multi-million dollar airport runway repair contractor pleads guilty to wire fraud and agrees to cooperate with federal authorities after fraudulently listing women and minority subcontractors in order to win city contracts. The investigation stems from a 2008 whistleblower lawsuit that accused several major contractors — including James McHugh Construction Co., Diamond Coring Co. and Perdel Contracting — of rigging more than $150 million in city contracts. McHugh agrees to settle the lawsuit for $12 million, but admits no wrongdoing. The firm and its partners have been paid more than $19 million on O’Hare contracts since 2011. The other two firms, Diamond Coring and Perdel Contracting, are barred from doing city business as a result of the case.

News clipping: Chicago Tribune

2013

Emanuel approves a controversial advertising deal with French firm JCDecaux Airport Inc., the lone bidder to sell ads on the airport’s in-house people mover transit system. The company — whose lobbyists include former Mayor Daley’s political chief Victor Reyes, as well as a Daley nephew — has already amassed $1.5 billion in city contracts to sell ads on bus shelters and expressway billboards.

2015

Emanuel signs a $310 million contract with Parsons Corporation on April 28, 2015 to overhaul O’Hare’s people mover shuttle. Two weeks later, he holds a news conference to announce a former Parsons vice president, Ginger Evans, as his aviation commissioner. In that role, she oversees the contract of her former employer. In a recent interview Evans told the BGA there was no conflict.

Emanuel also approves a $10.5 million change to a controversial digital advertising deal at O’Hare that clears the way for Clear Channel Outdoor to take over the airport’s lucrative luggage cart services. Clear Channel hires as its lobbyist Tim Dart, brother of Cook County Sheriff Tom Dart.

2017

Following a Better Government Association records lawsuit, Emanuel discloses his personal email communications that pertain to public business. As a result, $27,000 in city ethics fines are levied against United Airlines Inc. and its lobbyist, former 43rd Ward Ald. William Singer. United, O’Hare’s largest airline, and Singer are accused of breaking lobbying rules in their efforts to influence Emanuel’s O’Hare expansion. Two weeks after what the Chicago Board of Ethics described as improper contact, Emanuel announced United and other airlines had agreed to build a series of new airport gates, which would be funded with $300 million charged to passengers through a ticket fee.

clip image

2018

AOR Transit, a joint venture that has operated O’Hare’s people mover system since the 1990s, wins its latest no-bid contract extension from the Emanuel administration — boosting its potential payments on a five-year, $115 million contract to nearly $305 million, records show. The venture has long had ties to Chicago politicians, including former Mayor Richard M. Daley and his floor leader in the City Council, Patrick Huels, 11th. In 1998, members of the joint venture — suburbanNaperville-based Harbour Contactors and R.M. Chin & Associates — received federal grand jury subpoenas as part of a federal probe into a $1.25 million loan a Huels-owned company received from a city trucking contractor. That probe resulted in Huel’s resignation from council.

(Chicago Sun-Times)

2018

F.H. Pashen, S.N. Nielsen & Associates, one of O’Hare’s largest construction contractors, pays $2 million to settle allegations brought by the Illinois attorney general’s office accusing the company of using a minority-owned business to fraudulently secure two government contracts unrelated to the airport. As part of the settlement agreement, no wrongdoing is acknowledged by the company. It is the second time the firm came under scrutiny for allegedly abusing minority set-aside programs. The city sought to ban the company from city business for three years in 2005 over similar allegations, but the company won a reprieve after it fired an employee who forged a signature and put new safeguards in place, records show.

Share

Edit Module
Edit Module
Submit your comment

Comments are moderated. We review them in an effort to remove foul language, commercial messages, abuse, and irrelevancies.