FROM HIRED TRUCKS TO HOMICIDE: MUCH THAT MAYOR DALEY FACED IN 2004 TOOK YEARS TO SURFACE

Published June 13, 2011

By TIM NOVAK AND CHRIS FUSCO

Staff Reporters

The year was 2004. The news in Chicago was filled with reports about the Hired Truck Scandal at City Hall and the city’s budget crisis.

Anyone picking up a newspaper or watching the TV news could see Mayor Richard M. Daley had plenty to deal with.

It turned out he was facing even more turmoil behind the scenes that year, including these developments that would prove to be headaches for Daley after coming to public prominence years later:
The police investigated – and quickly, and without charging anyone, ended their investigation of – a homicide case involving the mayor’s nephew, Richard J. “R.J.” Vanecko, and Bridget Higgins McCarthy, the daughter of a close Daley friend;

City Hall awarded no-bid contract extensions worth millions of dollars to a company whose investors secretly included Patrick Daley – the mayor’s son – and another Daley nephew, Robert G. Vanecko;

The city reached agreement on a multimillion-dollar deal involving a company with financial ties to Patrick Daley to bring wireless Internet service – Wi-Fi – to O’Hare and Midway airports.

All of this took place against the backdrop of the mayor’s wife Maggie Daley’s fight with breast cancer and the pending federal indictment of James Duff, a key political supporter of the mayor who would plead guilty the following year to charges that he fraudulently obtained $100 million in city contracts that were supposed to have gone to companies owned by women and minorities.

Few knew then all that was going on in Daley’s world. Some of it has come to light only recently. Together, the pieces now known offer a more complete look at what Daley was facing in his political and personal lives in what turned out to be his unusually turbulent 16th year as mayor:

Jan. 23-25, 2004 – In a three-day, front-page series, the Chicago Sun-Times exposes what came to be known as the Hired Truck Scandal. The newspaper documents that trucking companies hired by the city in a $40 million-a-year program were “PAID TO DO NOTHING,” exposing City Hall’s Hired Truck Program as a hotbed of payoffs, sweetheart deals and questionable ties to city workers and the mob.

Jan. 26, 2004 – Federal authorities arrest Angelo Torres, a former gang member who ran the Hired Truck Program for five years. Torres – who has close ties to the Hispanic Democratic Organization run by former top mayoral aide Victor Reyes – is charged with extorting money from the owner of a trucking company. Torres later pleads guilty and goes to prison. He is the first of 49 people charged in the case, 33 of them city employees, including Daley’s patronage director, Robert Sorich. All but one end up getting convicted.

Jan. 30, 2004 – The Sun-Times reveals that three of the largest companies in the Hired Truck Program bought insurance from the mayor’s younger brother, Cook County Commissioner John Daley, who also runs the family’s insurance company in Bridgeport. Among John Daley’s trucking clients: Michael Tadin, a longtime friend of the mayor.

Jan. 31, 2004 – In his first public comments on the Hired Truck Scandal, Daley says: “I am embarrassed. I’m angry, and I’m disappointed because I feel I have let the people down. I am responsible for everything that happens in city government. . . . When problems occur and change is needed, it is my responsibility to ensure that it is complete. In the case of the Hired Truck Program, that did not happen, and, for that, I apologize.” The mayor would keep trying to reform the program – until he shut it down in October 2006.

Feb. 4, 2004 – Daley’s budget director, William Abolt, whose office had oversight of the Hired Truck Program, is forced to resign.

Feb. 6, 2004 – The Sun-Times discloses that the city water department spent about $1 million over five years hiring trucks from a company owned by the mother-in-law of Daley cousin Mark Gyrion, the water department’s superintendent of garages.

Feb. 9, 2004 – Daley fires Gyrion, who’d been set to get a promotion that would have put him in charge of the water department’s warehouses, equipment and trucks. “There’s no sacred cows or sacred anything in my administration,” Daley says.

April 8, 2004 – City Hall gives one-year contract extensions worth a total of more than $4 million to Municipal Sewer Services, a sewer-inspection and cleaning company secretly owned in part by Patrick Daley and Robert Vanecko. They invested in the company in June 2003. But their ownership interest wasn’t disclosed on documents the company filed with the city – a violation of city regulations – and remained unknown until it was revealed by the Sun-Times in December 2007. Six months ago, a federal grand jury returned a mail-fraud indictment against Municipal Sewer Service’s president, Anthony Duffy, and Jesse Brunt, owner of the sewer company’s key subcontractor, Brunt Brothers Transfer Inc., a trucking company, accusing them of engaging in a minority-contracting fraud scheme.

April 2 5, 2004 – A man – whom the police will positively identify only early this year as R.J. Vanecko – punches David Koschman in the face during a drunken confrontation on Division Street near Dearborn. Koschman, 21, of Mount Prospect, falls, cracking his head on the street. Vanecko and a friend, Craig Denham, run away. Two other Vanecko friends – Kevin McCarthy and his wife Bridget Higgins McCarthy – tell the police they don’t know the two men who ran off.

May 4, 2004 – Federal prosecutors interview Al Sanchez, Daley’s commissioner of streets and sanitation, whose department spent millions of dollars through the Hired Truck Program. Sanchez – who was also a leader of Daley’s largest patronage army, the Hispanic Democratic Organization – will be indicted three years later on charges that he helped rig the city’s hiring system to reward campaign workers with jobs, promotions and raises. Sanchez is now in prison.

May 6, 2004 – Koschman dies at Northwestern Memorial Hospital. His death, from brain trauma, is ruled a homicide by the Cook County medical examiner’s office four days later.

May 10, 2004 – Daley renews his call for a land-based casino in Chicago. Gov. Rod Blagojevich balks, and the proposal eventually dies.

May 13, 2004 – R.J. Vanecko is linked to Koschman’s death by Bridget Higgins McCarthy – daughter of Jack Higgins, a mayoral friend who built the city’s new police headquarters and who owns a North Side condo where the mayor’s son was registered to vote at the time. She tells the police that Vanecko and Denham were the men who ran away after Koschman was punched.

May 1 4, 2004 – William Daley, the current chief of staff to President Barack Obama, steps down as president of SBC Communications to become Midwest chairman of J.P. Morgan Chase. SBC is one of nine companies seeking a city contract to provide Wi-Fi service at O’Hare and Midway.

May 20, 2004 – R.J. Vanecko and his friends Denham and McCarthy appear in a police lineup, but no witnesses identify Vanecko as the man who punched Koschman. Vanecko refuses to talk with detectives. The police and the Cook County State’s Attorney’s Office decide there isn’t enough evidence to charge anyone in Koschman’s death, and the case remains open and unsolved until the police reopen it six months ago, following a Sun-Times request for records from the investigation. On March 1, 2011, the police announce they’ve determined that Vanecko punched Koschman but close the case without filing charges or consulting with prosecutors. They say Vanecko acted in self-defense – though they also say Koschman didn’t strike anyone and had been arguing with Denham, not Vanecko.

May 20, 2004 – Marco Morales – a crooked city contractor who fled the country rather than testify about having bribed city officials – is found in Mexico. Federal authorities later bring him back to the United States to serve his prison sentence on cocaine charges.

June 2, 2004 – Despite his long-standing support for Wal-Mart, Daley refuses to cast the deciding vote that would have allowed Wal-Mart to open a store on the South Side. Daley & George, the law firm headed by his brother Michael Daley, previously represented Wal-Mart on a separate zoning issue.

Juy 16, 2004 – Millennium Park opens, the crown jewel of Daley’s tenure in office – but, at $475 million, it ends up having cost three times more than expected and opens four years behind schedule.

August 2004 – Concourse Communications – owned by a venture-capital firm with financial ties to Patrick Daley – is chosen by Daley’s aviation commissioner, John Roberson, and a panel of city employees to install the Wi-Fi system at O’Hare and Midway. The contract is signed more than a year later, in September 2005. City officials say the mayor’s son had no involvement in the deal. But nine months later, Concourse will be sold for $45 million, and Patrick Daley got $708,999 from the sale, the Sun-Times reported last week.

September 2004 – A year after 13 young people died when an apartment-building porch collapsed in Lincoln Park, City Hall hires Andy Ryan, the 19-year-old son of a carpenters union official as a building inspector. Sun-Times columnist Carol Marin reveals that Ryan apparently falsified his application, claiming he had completed a four-year apprenticeship. After less than a week on the job, Ryan quits, and Daley blasts city Building Commissioner Stan Kaderbek for not having checked Ryan’s qualifications. The union that Ryan’s father helps oversee was a major campaign contributor to Daley.

Oct. 6, 2004 – A federal grand jury indicts two city employees – Gerald Wesolowski Jr. and John “Quarters” Boyle – on charges they shook down trucking companies seeking city work through the Hired Truck Program. Wesolowski, a key aide to top city water official Donald Tomczak, and Boyle, a hoisting engineer, later plead guilty and go to prison. Boyle landed his job with the city after a 1992 conviction for stealing $4 million from the state tollway system while working for an armored-car company.

Oct. 9, 2004 – Nick LoCoco, a retired city employee and mob bookie, is arrested by federal agents and accused of secretly owning one of the trucks he hired while overseeing the Hired Truck Program for the city Department of Transportation. Of the 49 people charged in the Hired Truck Scandal, LoCoco ends up being the only one who escapes conviction – dying that December from head injuries after being thrown from a horse.

Oct. 22, 2004 – Tomczak – by now retired after years as the second-highest-ranking official in the water department – is charged with shaking down trucking companies for more than $500,000 over a span of at least a decade. Tomczak later pleads guilty and testifies about the Daley administration’s illegal hiring schemes. He recently got out of prison.

Oct. 27, 2004 – The Chicago City Council approves a 99-year lease of the Chicago Skyway to private operators for $1.82 billion. One of the law firms that worked on the deal – Katten Muchin Rosenman – announced after Daley left office last month that it’s hired Daley as a “rainmaker,” to bring in new business. The law firm was paid $822,760 for its work on the Skyway deal.

Nov. 19, 2004 – Another city transportation employee – Patrick Stillo – is arrested and later convicted for taking bribes from a trucking company that authorities say used its trucks to steal asphalt from city job sites while federal agents were watching.

Nov. 29, 2004 – DV Urban Realty Partners, a real estate investment company, is created by Robert Vanecko and longtime mayoral ally Allison S. Davis. They get hired to invest $68 million from five city pension funds – and put the money into several risky real estate ventures that, so far, have lost money. Among them: the old headquarters of the Chicago Defender newspaper, which remains vacant and boarded up.

Nov. 30, 2004 – Sun-Times columnist Michael Sneed breaks the news that Patrick Daley has joined the Army, months after the 29-year-old was awarded a master’s degree in business administration, with honors, from the University of Chicago. “There are many paths of service – policeman, fireman, political and the military – but it’s an all-volunteer era,” Patrick Daley says. “I’ve always wanted to find a way to serve . . . just like my grandfather and my father.”

December 2004 – Patrick Daley and Robert Vanecko get a $13,114 “tax distribution” as they sell their interest in Municipal Sewer Services, and recouping their original $65,000 investment.

Dec. 15, 2004 – The Chicago City Council approves an $85.7 million tax-and-fee increase, the largest in Daley’s tenure, to balance the city’s $5.1 billion budget.

Dec. 29, 2004 – Patrick Daley leaves for basic training.