22 | CHICAGO SUN-TIMES | MONDAY, JUNE 13, 2011

THE WATCHDOGS

he year was 2004. The news in Chicago was filled with reports about the Hired Truck Scandal at City Hall and the citys 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 mayors 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 mayors 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 OHare and Midway airports. All of this took place against the backdrop of the mayors wife Maggie Daleys 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 Daleys 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-

FROM HIRED TRUCKS TO HOMICIDE

Patrick Daley Robert G. Vanecko R.J. Vanecko
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 Daleys patronage director, Robert Sorich. All but one end up getting convicted. Jan. 30, 2004 The SunTimes reveals that three of the largest companies in the Hired Truck Program bought insurance from the mayors younger brother, Cook County Commissioner John Daley, who also runs the familys insurance company in Bridgeport. Among John Daleys 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. Im angry, and Im 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 Daleys 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

THIS WEEK BY TIM NOVAK AND CHRIS FUSCO

Much that Daley faced in 2004 took years to surface

In 2004, Mayor Richard Daley was a man besieged with the Hired Truck Program and city budget problems, but also behind-the-scenes turmoil that wouldnt surface for years. | JEAN LACHAT~SUN-TIMES
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 Halls 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

of Daley cousin Mark Gyrion, the water departments superintendent of garages. Feb. 9, 2004 Daley fires Gyrion, whod been set to get a promotion that would have put him in charge of the water departments warehouses, equipment and trucks. Theres 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 wasnt 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 mailfraud indictment against Municipal Sewer Services president, Anthony Duffy, and Jesse Brunt, owner of the sewer companys key subcontractor, Brunt Brothers Transfer Inc., a trucking company, accusing them of engaging in a minority-contracting fraud scheme. April 25, 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

MONDAY, JUNE 13, 2011 | CHICAGO SUN-TIMES | 23

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. MAYOR RICHARD M. DALEY

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 dont know the two men who ran off. May 4, 2004 Federal prosecutors interview Al Sanchez, Daleys commissioner of streets and sanitation, whose department spent millions of dollars through the Hired Truck Program. Sanchez who was also a leader of Daleys largest patronage army, the Hispanic Democratic Organization will be indicted three years later on charges that he helped rig the citys 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 examiners 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 Koschmans death by Bridget Higgins McCarthy daughter of Jack Higgins, a mayoral friend who built the citys new police headquarters and who owns a North Side condo where the mayors 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 14, 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 OHare and Midway. May 20, 2004 R.J. Vanecko and his friends William 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 States Attorneys Office decide there isnt enough evidence to charge anyone in Koschmans death, and the case remains open and unsolved until the police reopen it six months ago, following a SunTimes request for records from the investigation. On March 1, 2011, the police announce theyve determined that Vanecko punched Koschman

Angelo Torres, who ran the citys Hired Truck Program for five years, was charged with extorting money from the owner of a trucking company. He was the first of 49 people 33 of them city employees charged in the scandal. | SUN-TIMES FILE PHOTOS
but close the case without filing charges or consulting with prosecutors. They say Vanecko acted in self-defense though they also say Koschman didnt 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 WalMart, 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 MilDaley lennium Park opens, the crown jewel of Daleys 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 Daleys aviation commissioner, John Roberson, and a panel of city employees to install the Wi-Fi system at OHare and Midway. The contract is signed more than a year later, in September 2005. City officials say the mayors son had no Oct. 9, 2004 Nick LoCoco, involvement in the deal. But nine a retired city employee and mob months later, Concourse will be sold bookie, is arrested by federal for $45 million, and Patrick Daley agents and accused of secretly got $708,999 from the sale, the Sun- owning one of the trucks he hired Times reported last week. while overseeing the Hired Truck September 2004 A year Program for the city Department after 13 young people died when an of Transportation. Of the 49 people apartment-building porch charged in the Hired collapsed in Lincoln Park, Truck Scandal, LoCoco City Hall hires Andy Ryan, ends up being the only one the 19-year-old son of a who escapes conviction carpenters union official dying that December from as a building inspector. head injuries after being Sun-Times columnist Carol thrown from a horse. Marin reveals that Ryan Oct. 22, 2004 apparently falsified his Tomczak by now retired John Daley application, claiming he after years as the secondhad completed a four-year highest-ranking official in apprenticeship. After less than a the water department is charged week on the job, Ryan quits, and with shaking down trucking compaDaley blasts city Building Commisnies for more than $500,000 over a sioner Stan Kaderbek for not havspan of at least a decade. Tomczak ing checked Ryans qualifications. later pleads guilty and testifies The union that Ryans father helps about the Daley administrations oversee was a major campaign illegal hiring schemes. He recently contributor to Daley. got out of prison. Oct. 6, 2004 A federal Oct. 27, 2004 The Chicago grand jury indicts two city emCity Council approves a 99-year ployees Gerald Wesolowski Jr. lease of the Chicago Skyway to and John Quarters Boyle on private operators for $1.82 billion. charges they shook down truckOne of the law firms that worked on ing companies seeking city work the deal Katten Muchin Rosenthrough the Hired Truck Program. man announced after Daley left Wesolowski, a key aide to top city office last month that its hired water official Donald Tomczak, and Daley as a rainmaker, to bring Boyle, a hoisting engineer, later in new business. The law firm was plead guilty and go to prison. Boyle paid $822,760 for its work on the landed his job with the city after a Skyway deal. 1992 conviction for stealing $4 mil Nov. 19, 2004 Another city lion from the state tollway system transportation employee Patwhile working for an armored-car rick Stillo is arrested and later company. 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 masters degree in business administration, with honors, from the University of Chicago. There are many paths of service policeman, fireman, political and the military but its an all-volunteer era, Patrick Daley says. Ive 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 Daleys tenure, to balance the citys $5.1 billion budget. Dec. 29, 2004 Patrick Daley leaves for basic training.