New corruption charges against former finance kingpin of Chicago council

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A former gatekeeper for Chicago's bond business, already facing one federal charge, was accused in a 19-count indictment of abusing his power as both alderman and chairman of the Finance Committee to nab work for his personal law firm and secure an internship for a friend’s child.

A federal grand jury indicted Edward M. Burke Thursday on federal racketeering and bribery charges, attempted extortion and conspiracy to commit extortion. The 59-page document lays out a series of corrupt schemes dating back to 2016. The charges add to a corruption charge of attempted extortion early this year that led Burke to step down as finance chairman in January. He remains on the City Council after winning re-election in February.

Burke “used his positions as alderman and chairman of the Committee on Finance to solicit and receive from persons and parties having business with the City of Chicago, or otherwise subject to the authority and powers vested in Burke and Alderman A….bribes and financial advantage in the form of fees arising from the retention of his law firm, Klafter & Burke, as well as private benefits for Burke’s personal associates,” reads the indictment.

“Alderman A” is Danny Solis, who led the council’s zoning committee. He did not seek re-election this year.

“Unbeknownst to Burke and others, Alderman A was cooperating with the Federal Bureau of Investigation, and acted at the direction of law enforcement in connection with Burke’s efforts to obtain business for his private law firm,” says the indictment filed in the U.S. District Court for the Northern District of Illinois, Eastern Division. The Sun-Times had reported earlier this year that Solis was cooperating and had taped calls with Burke.

Burke is the longest serving alderman, in office for 50 years, leading the Finance Committee for the last 30 of those years and four previous years before a two-year break. He is a fixture in the local public finance community due to his long tenure and the power he wielded over bond deals.

Bankers, financial advisors and bond lawyers cultivated relationships with Burke; deal teams filled the council chambers and were expected to be prepared to receive a grilling from Burke as part of the bond approval process in committee. New Mayor Lori Lightfoot won approval Wednesday for her choice of Alderman Scott Waguespack to lead the committee. Approval of tax-increment financing subsidies was moved to another committee earlier this year.

Burke is accused of shaking down companies involved in redevelopment projects at the Old Main Post Office in downtown Chicago, and a Burger King restaurant in Burke’s ward that was the subject of the original charge. Burke attempted to steer work to his law firm in exchange for his support for permits being sought by the restaurant owner in his southwest side ward, according to the indictment. The post office project was seeking tax increment financing and other special classification subsidies that needed Finance Committee approval.

Another alleged scheme related to the bribery charge involved Burke’s assistance for TIF subsidies, overseen by the Finance Committee, being sought by a business owner with a project on the city’s northwest side. Burke agreed to help the owner after he hired Burke’s law firm for real estate work, according to the indictment.

Burke also allegedly threatened to withhold support for a fee increase at a downtown museum, which appears to be the Field Museum, after it failed to respond to his request about an internship for the child of a Burke friend.

Burke’s attorneys at Jenner & Block issued a statement saying: “Any suggestion that Alderman Burke abused his position as a public official for personal gain is simply not true.”

While Burke can’t be removed from office unless he is convicted and there is a presumption of innocence, Lightfoot called on Burke to resign.

“Given the serious criminal liability he faces, Alderman Burke can no longer continue to do his job honorably or effectively. It is in the best interests of all that he step aside so that the residents of the 14th ward can be properly represented,” Lightfoot, a former federal prosecutor, said in a statement.

Lightfoot has also directed city attorneys to investigate whether any current city employees or vendors were complicit in facilitating the crimes alleged in the indictment.

The allegations are expected to bolster Lightfoot’s efforts at ethics reforms and measures reining in aldermanic powers; it's a balancing act, because she may need to tread cautiously so as not to alienate aldermen who will be called upon to take tough financial votes on new taxes to deal with the city’s red ink. On her first day in office, she signed an executive order limiting some powers on permits but is working on limiting their ward zoning powers also.

Burke, 75, will be arraigned on Tuesday before U.S. Magistrate Judge Jeffrey Cole. Burke faces one count of racketeering, two counts of federal program bribery, two counts of attempted extortion, one count of conspiracy to commit extortion, and eight counts of using interstate commerce to facilitate an unlawful activity.

Racketeering, attempted extortion, and conspiracy to commit extortion are each punishable by up to 20 years in prison. Federal program bribery is punishable by up to ten years. Using interstate commerce to promote unlawful activity is punishable by up to five years.

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Corruption State and local finance Sell side City of Chicago, IL Illinois