Another City Council Stealth Budget

By Hugh Devlin, From Lake Effect News

An ongoing, well documented investigative series by the Chicago Tribune into various City Council expense accounts turned up numerous instances of city taxpayers’ largesse to the friends and family members of Chicago aldermen.

In November 2009, Lake Effect News filed a Freedom of Information Act request with the Chicago Office of Budget and Management inquiring into the expenditures of the Vice Mayor of Chicago, a position currently held by Ald. Bernard L. Stone of the 50^th Ward.

Although the original purpose for requesting these expenditures was not fulfilled, the information that Lake Effect News did receive revealed what may be another overlooked fund being used by Chicago aldermen further enrich friends and relatives already being paid for out of their aldermanic expense accounts as well as the city’s “regular payroll” and the recently-revealed Finance Committee chair-controlled expense account. (Better Government Associate Payroll Database).

The Vice Mayor of Chicago is an unpaid office established in state law following the death of Mayor Richard J. Daley in office in 1976. The vice mayor’s sole duty under law is to serve as interim mayor only long enough to chair a special City Council meeting to select an acting mayor.

While the vice mayor himself is unpaid and the office has no ongoing duties or programs, the Chicago City Council routinely appropriates $100,000 a year to the office of vice mayor. The line item in the city’s budget for the vice mayor’s expense account, coded “9701,” is described as follows:

“Contingent and other expenses for corporate purposes not otherwise provided for. To be expended under the direction of the Vice Mayor.”

City records obtained by Lake Effect News revealed at least eight persons being paid out of the vice mayor’s expense account that is being used entirely to pay individuals, and not for the purchase of office supplies or vendors’ services.

Allocations for the vice mayor’s office generally increase each year. Expenditures routinely exceeded annual allocations by 15 percent to 22 percent from 2002 through 2006. But overages increased sharply at the beginning of 2007 with a budget overrun 0f  86.4 percent, and in 2008, the vice mayor’s office had expenditures of $888,112 against an allocation of $108,792, a 713-percent budget overrun, according to Mayor Daley’s 2010 budget recommendation. [pdf page 57, budget page 49].

The records of 2009 expenditures from the vice mayor’s expense account, obtained through FOIA in late 2009, are incomplete, but show that the account is already over budget.

The sharp increase in expenditures by the vice mayor’s office was “due to bookkeeping issues in the City Comptroller office,” according to Peter Scales, spokesman for the Chicago Office of Budget and Management.

Acct	Short Description	2010 Allocation	Per Alderman	Reference
0017	Aldermanic Staff	$8,824,000	$176,480	Better Government Association
9001	Finance chair-controlled expenses	$1,326,000	$26,520	Chicago Tribune (local copy)
9008	Aldermanic expenses	$3,664,000	$73,280	Chicago Tribune
9071	Vice Mayor’s expenses	$111,232		Lake Effect News

Known City Council accounts used for wages and salary, including the Finance Committee chair-controlled expenses, aldermanic allowances, aldermanic staff accounts or “regular payroll,”  and the vice mayor account, are established in the city operating budget within cost center “2005,” the City Council.

An examination of the beneficiaries of these four accounts reveal a distinct pattern of considerable overlap and frequent juggling of payees between accounts, including many instances of double, triple and even quadruple dipping among the payees.

The vice mayor’s expense account also demonstrates sharp increases in the number of payees in the second halves of 2007, 2008 and 2009. In many cases, a payee was apparently moved to the vice mayoral expense account in the second half of a calendar year, which corresponds to the city’s fiscal year.

Stone’s employees were the biggest beneficiaries of vice mayoral cash. Alan E. Crown received bi-monthly payments amounting to $73,991 in 2007, $70,943 in 2008, and $65,749 in 2009. Crown is also carried on the regular payroll of as a “legislative aide” at a monthly salary of $6,184 or $74,208 annually.

Another beneficiary of the vice mayor’s expense account was Mary Ann Roti-Walz, the daughter of former 1^st Ward Ald. Fred Roti, who was convicted on charges of racketeering, extortion and bribery 1992.

Roti-Walz received bi-monthly payments amounting to $53, 904 in 2006; $59,134 in 2007; $59,931 in 2008; and $57,648 in 2009. Roti-Walz is also carried on the regular payroll as a “legislative aide” at a monthly salary of $5,224 or $62,688 annually.

Between Sept. 16, 2008 and Jan. 1, 2009, Stone employee Beligh Sraieb received eight payments totaling $9,656. Sraieb was also paid $9,886 out of Stone’s aldermanic expense account in 2008.

But starting in the second half of 2007, aldermens’ friends and families from the length and breadth of Chicago’s 50 wards found gainful employment, as well as a certain amount of concealment from the usual Freedom of Information Act requests, on the vice mayor’s staff. Select and far from exhaustive illustrative examples follow. Stone did not return calls for comment.

10^th Ward, Ald. John Pope: A Quadruple Dip

For example, the Chicago Tribune reported that Ald. John Pope (10^th) paid a former streets and sanitation worker, Thomas Sadzak, who resigned after allegations he sexually harassed a co-worker and banned from future employment by the City of Chicago, nearly $18,000 from January 2009 to July 2009. Sadzak was also allegedly placed on a “no hire” list.

According to city records obtained by Lake Effect News, Sadzak was paid $1,059 on Dec. 1 and Dec. 16, 2008, and Jan. 1, 2009, amounting to $3,177 out of the vice mayor’s expense account. Sadzak was also paid $11,289 out of the Finance Committee expense account, and earned $2,254 per month as a “legislative aide,” about $27,048 per year from the City Council pay roll.

The Tribune’s web application provided with its investigation into aldermanic expense accounts also show Sadzak being paid $3,177 out of Pope’s expense account in 2008. In total, city records show Sadzak earning $44,693 in 2008. Pope did not return calls seeking comment.

19^th Ward, Ald. Virginia Rugai: A Triple Dip

In addition to paying 19^th Ward Democratic Committeeman Matthew J. O’Shea more than $43,000 over 2008 and early 2009 to work for Ald. Virginia Rugai, the Chicago Tribune reported, Rugai paid O’Shea from her separate aldermanic expense account.

An examination of the vice mayor’s fund shows O’Shea was paid $23,757 in six payments between Aug. 16, 2008 and Jan. 1, 2009, according to city records. In 2008, O’Shea was paid $13,940 out of the Finance Committee expense account, and $24,451 in 2008 out of Rugai’s aldermanic expense account. Considering funds from all sources known at this time, O’Shea earned $62,149 in 2008. Rugai did not return calls seeking comment.

18^th Ward, Ald. Lona Lane: A Triple Dip

In 2008, Rosalba Lopez was paid $17,852 out of the vice mayor’s expense account in regular, bi-monthly payments, city records show. Since at least Jan. 2, 2009, Rosalba Lopez has also worked for the Chicago City Council as “aldermanic aide,” currently earning $1,613 per month, or $19,356 per year (Better Government Association Payroll Database). In 2008, Lopez was also paid $18,130 out of the aldermanic expense account of Ald. Lona Lane (18^th).

20^th Ward Ald. Willie Cochran: A Triple Dip

On Aug. 18, 2008, Angela Moore was hired by the City Council as an “aldermanic aide” at an annual salary of $30,804. Between Sept. 1, 2008 and Jan. 2, 2009, aldermanic aide Angela Moore was paid $10,696 out of the vice mayor’s expense account in regular, bi-monthly payments. Moore was also paid $2,000 in 2008 out of the aldermanic expense account of Ald. Willie Cochran (20^th).

27^th Ward Ald. Walter Burnett: A Triple Dip

In 2008, Dorothy Burnett was also paid $25,936 out of the Vice Mayor’s expense account in regular, bi-monthly payments. Since at least Jan. 2, 2008, Dorothy Burnett, the mother of Ald. Walter Burnett (27^th) has also worked for the Chicago City Council as a “legislative aide,” currently earning $2,344 per month/$28,008 per year (Better Government Association Payroll Database). Dorothy Burnett was also paid $19,692 out of Ald. Burnett’s aldermanic expense account in 2008, the Chicago Tribune reported. Considering funds from all sources known at this time, city records show Dorothy Burnett earned $73,637 in 2008. Ald. Burnett had no comment.

31^st Ward, Ald. Ray Suarez: A Double Dip

In 2008, Fernando Martinez was paid $12,749.98 out of the vice mayor’s expense account, and one penny more out of the expense account of Ald. Ray Suarez (31^st), city records show.

47^th Ward, Ald. Eugene Schulter: A Triple Dip

Monica A. Schulter, daughter of Ald. Eugene Schulter (47^th), was paid $31,216 out of the vice mayor’s budget in bi-monthly payments between July 1, 2008 and Dec. 1. 2008. According to city records, Monica Schulter is paid $40,368 per year out of the aldermanic staff account as a  “staff assistant to the alderman” (Better Government Association Payroll Database). In addition, Monica Schulter was paid $31,614 out of Schulter’s aldermanic expense account in 2008, according to city records obtained by the Chicago Tribune. Considering funds from all known sources, Monica Schulter earned $103,199 in 2008, nearly as much as her duly elected alderman father ($104,100 in 2008). Schulter did not return calls for comment.

49^th Ward, Ald. Joe Moore: Triple Dip With Side of Political Funds

Since at least Jan. 2, 2008, Wayne Frazier has worked as an “aldermanic aide” to Ald. Joe Moore (49^th) currently earning $36,840 per year (Better Government Association Payroll Database). In 2008, Frazier was paid $33,970 in regular, bi-monthly payments out of the vice mayor budget of Moore’s desk mate on the City Council, Ald. Berny Stone (50^th).  Frazier was also paid $34,500 in 2008 from Moore’s aldermanic expense account, according to city records obtained by the Chicago Tribune.

Frazier is also an employee also an employee of one of Moore’s political action committees, Citizens for Joe Moore (Illinois State Board of Elections Campaign Disclosure). Moore did not return calls for comment.

2008 Payees

Ward	Alderman	Payee	Title	Annual Salary	Aldermanic Expense	Finance Chair Expense	Vice Mayor Expense	2008 Total
10	Pope	Thomas Sadzak	Legislative Aid	$27,048	$3,178	$11,290	$3,178	$44,693
18	Lane	Rosalba Lopez	Aldermanic Aid	$19,356	$18,131	–	$17,852	$55,339
19	Rugai	Matthew J O’Shea	–	–	$24,451	$13,941	$23,758	$62,149
20	Cochran	Angela Moore	Aldermanic Aid	$30,804	$2,000	–	$10,697	$43,501
27	Burnett	Dorothy Burnett	Legislative Aid	$28,128	$19,692	–	$25,937	$73,757
31	Suarez	Fernando Martinez	–	–	$12,750	–	$12,750	$25,500
47	Schulter	Monica Schulter	Staff Assistant	$40,368	$31,615	–	$31,217	$103,200
49	Moore	Wayne Frazier	Aldermanic Aid	$36,840	$34,501	–	$33,970	$105,311
50	Stone	Alan E Crown	Legislative Aid	$74,208	–	–	$70,944	$145,152
50	Stone	Beligh Sraieb	–	–	$9,886	–	$9,656	$19,543
50	Stone	Mary Ann Roti-Walz	Legislative Aid	$62,688	–	–	$59,931	$122,619

City Council Amends Ethics Ordinance

The Chicago Ethics ordinance specifically exempts the personal staffs of aldermen from the prohibition against hiring relatives:

2-156-130. Employment of Relatives or Domestic Partners.

(a) No official or employee shall employ or advocate for employment, in any City agency in which said official or employee serves or over which he exercises authority, supervision, or control, any person (i) who is a relative or domestic partner of said official or employee, or (ii) in exchange for or in consideration of the employment of any of said official’s or employee’s relatives or his domestic partner by any other official or employee; provided that the prohibition in (i) applies to City Council Committee staff  but not to personal staff of an alderman. (Emphasis added.)

The Vice Mayor’s budget serves aldermen as a mechanism for adding relatives to the public payroll while avoiding the prohibition against hiring relatives into posts over which a city official has direct authority.

The Chicago City Council reacted to the Chicago Tribune’s investigative reports by passing an amendment to the city’s  ethics ordinance that purported to restrict the hiring of relatives of aldermen with expense account funds. Those already on the payroll can stay there.

Effective April, 2010, the above application clause is amended to:

… provided that the prohibition in (i) applies to city council committee staff and independent contractors who are paid from funds appropriated to the Alderman for contractual services, provided that those individuals who are relatives and are currently retained as contractors shall be allowed to continue to renew their service contract on an ongoing and annual basis: but not to personal staff of an alderman.

Chicago aldermen carefully preserved their right to hire relatives on their personal staffs by “grandfathering” relatives currently on expense account payrolls. Five aldermen, Beale (9^th), Lane (18^th) Cochran (20^th) , Suarez (31^st) and Stone (50^th) voted against the measure.

Issues

Unclear is whether this new language prohibits parking relatives of aldermen in the vice mayor’s budget: is the vice mayor’s budget fund appropriated to an alderman?

Also unclear is whether job descriptions, performance evaluations, or background checks exist to the extent the expense account payees are employees, and whether written contracts exist to the extent that expense account payees are independent contractors. To what extent taxpayers are picking up benefits, including health insurance, for these many expense account payees?

FOIA Compliance

The request to the City for information regarding expenditures from the vice mayor’s budget was filed Nov. 17 under the Illinois State Freedom of Information Act (5 ILCS 140). The City did not comply until Dec. 21. The act mandates a response within seven working days (”A Guide to the Illinois Freedom of Information Act,” Attorney General Lisa Madigan, September, 2004).