Chicago City Council finance chairman exits after attempted extortion charge

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CHICAGO – Chicago City Council Finance Committee Chairman Edward M. Burke stepped down from the post that holds sway over city bond deals Friday, one day after being charged by federal authorities with attempted extortion.

“I have spoken with Alderman Ed Burke, who agreed that the best course of action is for him to resign as chairman of the Committee on Finance,” Mayor Rahm Emanuel said in a statement Friday. “Because of his affection for the city, deep respect for the institution of City Council and the needs of his constituents, Alderman Burke took the appropriate step to put the interests of the city above all else.”

A mayoral aid had made clear on Thursday that Emanuel would push for Burke’s removal if it did not come voluntarily. He has held the chairmanship since 1989 and previously was chairman between 1983 and 1987.

The vice chair of the panel — Emanuel’s floor leader Patrick O’Connor — will take over management of the committee where city bond deals and other pivotal fiscal transactions are vetted and either tabled, held for further review, or advanced to the council for a vote.

Key pieces of Emanuel’s agenda are still pending before Emanuel leaves office in May. The committee may consider early this year Emanuel’s proposal to lay the legal groundwork for a future $10 billion pension obligation issue, although the borrowing would probably fall on Emanuel’s successor to pursue. He is not seeking re-election in the February municipal elections.

The ordinance introduced by Emanuel last month would establish a special bankruptcy-remote entity to securitize up to $7.7 billion of bonds. The ordinance also provides the framework for the city to sell $2.3 billion of Water and Sewer Excise Tax Receipt revenue bonds.

If approved, further consideration from the committee and council would still be needed for the actual financing.

Emanuel is also aiming to win final approval for $1.5 billion in tax-increment financing subsidies for big development projects that have received public and council pushback and the city is still working on a contract with Elon Musk’s Boring Co. on an express rail line from downtown to O’Hare International Airport.

Burke was charged in a 38-page criminal complaint with one count of attempted extortion. The complaint was filed in the U.S. District Court for the Northern District of Illinois, Eastern Division on Wednesday and unsealed Thursday.

Burke is accused of shaking down a fast food restaurant that was seeking remodeling permits. According to the complaint, Burke used his power as an alderman to “corruptly solicit unlawful personal financial advantage in the form of fees arising from retention of Burke’s law firm, Klafter & Burke.” The firm is a prominent player in property tax assessment matters.

Burke also is accused of soliciting a campaign donation from an executive at the restaurant for a local politician. Although not named in the complaint, that politician is Cook County Board President Toni Preckwinkle who is a mayoral candidate. Her campaign confirmed the information.

Burke appeared before a federal magistrate Thursday and was released. “The actions described in the complaint does not make out extortion or an attempt to extort. We look forward to a prompt day in court to prove the innocence of Alderman Burke. We have no further comment,” said Burke’s attorney Charles Skalrsky, of Jenner & Block.

If convicted, the charge carries a maximum prison sentence of 20 years and a $250,000 fine. A federal grand jury indictment is expected within the next month and Burke could face more charges. “Our office’s investigation remains active and ongoing,” Joseph Fitzpatrick, an assistant U.S. Attorney for the Northern District of Illinois, said in a statement.

Burke’s city hall and ward offices were raided by authorities in late November. Some wondered if it were tied to his previous representation of President Trump in challenging the assessment for the Trump Tower in downtown Chicago. Burke has also faced other federal probes, including investigations over ghost-pay rolling and over the committee’s management of the city’s $100 million annual worker’s compensation program.

Previous investigation did not result in any charges.

Burke, 75, is nearing his 50-year mark as alderman, making him the longest serving member ever of the 50-member council. He is often referred to as the “dean” and “council historian” known to provide history lectures as he seeks passage of resolutions.

He faces several opponents for his seat in the February election.

Burke’s power over city finances lies in his ability to hold up ordinances, leaving city officials scrambling to answer questions or make alterations in order to finalize approval for a city deal. He’s also sponsored or supported proposals that impose rules on banking firms.

Municipal participants seeking work on bond deals are told that a visit to the “Chairman’s” office is part of their cultivation of city relationship.

Burke also holds sway over judicial selections as chairman of the county’s judicial slating committee and he’s amassed a $12 million campaign war chest.

Burke won election as alderman of the 14th ward on the city’s southwest side in 1969. It was a post his father had long held before his death a year earlier.

Burke was a key figure in what was known at the time as the “Vrdolyak 29,” a group of mostly white aldermen led by then Alderman Ed Vrdolyak who fought the city’s first African American mayor — Harold Washington — at every turn after his 1983 election in a period known as “Council Wars.”

Burke took the reins of the finance committee during Washington’s first term but was stripped of power after Washington won re-election and a council majority.

Although Burke had run against Richard M. Daley for mayor and the two had a frosty relationship, Daley gave Burke the chairmanship after his election in 1989. While Emanuel had threatened to weaken the Finance Committee’s role after his 2011 election, Burke has largely held on to all his powers and helped steer Emanuel’s agenda.

He co-sponsored with the mayor an ordinance last year requiring banks to shed business ties with retail business clients that don’t adopt various gun control policies such as banning the sale of firearms to those under 21. That ordinance has stalled in part over concerns that it could harm the city’s market access by limiting its pool of underwriters.

In October he proposed an ordinance that would ban financial institutions and other businesses with ties to Saudi Arabia from doing business with Chicago in response to the killing of journalist Jamal Khashoggi, who was a Saudi national and permanent resident of United States.

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