Chicago’s biggest real estate corruption scandals over the last decade

Prominent political figures and local developers face accusations and charges of bribery and extortion

TRD CHICAGO /
Oct.October 01, 2019 07:30 AM
Foreground: Ald. Danny Solis, Ald. Ed Burke. Background: The Old Post Office and a rendering of the 78 development project (Credit: Facebook, Wikipedia, Google Maps)

Foreground: Former Alderman Danny Solis, Alderman Ed Burke. Background: The Old Post Office and a rendering of “The 78” development project (Credit: Facebook, Wikipedia, Google Maps)

A major corruption scandal that has unfolded in Chicago over the past year reveals how powerful real estate figures can become tied up in the city’s second-to-none corruption record.

In January, Alderman Ed Burke (14th Ward) was charged with bribing and extorting developers to win business for his property tax law firm. This came out of a yearslong FBI investigation into the connection between city politicians and real estate figures throughout the city. The findings, as told through court documents, exposed the two sectors entangled in a web of bribery, extortion and conflicts of interest.

In a study released less than a month after Burke was charged, the University of Illinois at Chicago found Chicago was the most corrupt city in America. Over the past 10 years alone, there have been several scandals that echo the patterns of corruption between real estate figures and politicians found in the most recent FBI investigation. Here are some of the biggest:

 

Ed Burke/Charles Cui/601W Companies

In May, Burke, the property tax attorney and 74-year-old kingmaker who headed the City Council Finance Committee, was indicted on 19 charges of extortion, racketeering and bribery. He was accused of trying to coerce developers into hiring his law firm in exchange for granting construction permits and approving their projects. He stepped down as committee chair in the face of the scandal, but was reelected as Alderman in February.

Developer and immigration attorney Charles Cui, who is also facing charges, allegedly bribed Burke. After the city denied a permit for a portion of his The Point at Six Corners retail complex in the heart of the city, Cui allegedly promised to bring work to Burke’s law firm in exchange for his help on approvals. The approval included a $2 million award in Tax Increment Financing funding for the complex. The case against Cui is ongoing. The City Council approved updated plans for The Point at Six Corners earlier in September.

Burke also allegedly approved 601W Companies’ West Loop redevelopment project The Old Post Office, after pressuring the company into using his property tax firm. 601W Companies had been seeking $18 million in TIF funding and a property tax break from Cook County, but in the beginning had resisted working with Burke. Finally, the New York developer relented and its project was approved by Burke’s committee in September 2018, and the full council a few days later. 601W is cooperating with the probe, and has publicly said it is a victim of Burke’s corrupt solicitation. In the months since the indictment, the West Loop office has since signed on a slew of new tenants to fat lease deals, including Uber.

 

Danny Solis/Brian Hynes/Fred Latsko/Cacciatore family

While former Alderman Danny Solis, who was head of the City Council Zoning Committee, was wearing a wire to help the FBI bring charges against Burke, he was also an actor in his own public corruption scandal. The scandal also ensnared developers the Cacciatore family and Fred Latsko, as well as lobbyist Brian Hynes, court documents revealed.

Hynes, a powerful Chicago real estate attorney, allegedly did Solis favors in exchange for his support on his clients’ development projects, according to court documents. In addition to the $30,000 Hynes donated to Solis’ company in 2011, the Chicago Sun-Times reported, he also arranged meetings between Solis and powerful developers whose projects would later pass with Solis’ approval.

Hynes once coordinated a meeting between Solis and developer Fred Latsko about a project that would later be approved by the Council. Solis also stayed at Latsko’s 180-acre Indiana farm for a weekend for free. Solis provided Latsko support over the years, according to court documents. Solis’ operatives also allegedly solicited the Cacciatore family, which owns property in his ward, for campaign donations in exchange for his aid in lowering their business’ water bill by $1 million. Solis, Hynes and Latsko have not been charged with a crime.

 

Calvin Boender/Isaac Carothers

In 2010, former Alderman Isaac Carothers and developer Calvin Boender were both charged with fraud and bribery. That followed an FBI investigation that found Boender allegedly paid $40,000 toward Carother’s home improvements, in exchange for Carothers’ support of zoning changes in 2006.

After allegedly buying Carothers’ support, Boender allegedly tried to wager that support for the project with powerful members of the Planning and Zoning Department. When the Department decided against making the entire lot open for commercial and residential development, Boender and Carothers met at a compromise — 10 acres of the lot could be developed for residential use and 15 acres could be developed for commercial use. This new zoning was passed.

Boender eventually sold the land — which is now home to a movie theater and residence — for almost double what he paid for it, according to The Chicago Reader. Boender personally profited nearly $3 million after the sale from the zoning change, according to FBI documents. Boender is still in the real estate business and now works primarily in agricultural real estate.

 

Tony Rezko/Rod Blagojevich

In one of the most famous recent corruption scandals, real estate developer Tony Rezko was one of several indictments to come out of the Rod Blagojevich trials in 2008. A political operative, fundraiser and businessman, Rezko was charged with 16 counts of fraud and bribery in 2008 and was sentenced to 10 years in prison. His most notable ties were to disgraced former Gov. Rod Blagojevich, along with former President Barack Obama. Court documents from Blagojevich’s trial showed that Rezko had donated over $1.3 million to Blagojevich’s campaigns. He recommended business associates to the then-governor and used his influence to demand hefty favors. Rezko also was fundraiser for Obama. The Obamas bought their family’s Chicago home from Rezko a few years before he was charged. Rezko was released from prison in 2015. Recently, he has become a part of his son’s business, DAC Developments, and will be involved in the firm’s latest project – a 24-story hotel on the North Side, according to Crain’s.

 

Department of Building and Zoning

In 2008, an FBI investigation found widespread corruption in the city Department of Building and Zoning, according to a University of Illinois at Chicago report. The investigation ended in indictments for 23 city officials. Most involved inspectors who were bribed to falsify inspection documents. Also indicted after the investigation was developer Dumitru Curescu, who was accused of over $10,000 worth of bribes and Beny Garneata, who was allegedly a key figure in a bribe-for-permit scheme.


Related Articles

arrow_forward_ios

Alderman Ed Burke spends $400K of campaign funds for his own defense, developer crowdfunds $10 million for office building buy: Daily digest

Danny Solis with 1052 W. Monroe St.

Solis sought campaign donations from Jerry Reinsdorf’s real estate firm: FBI tapes

Old Post Office and office brokers Allen Rogoway, David Burden and Lisa Davidson (Credit: Wikipedia)

Difference maker: Uber’s monster lease at 601 W Companies’ Old Post Office could transform local office market

Old Post Office and Uber CEO Dara Khosrowshahi (Credit: Wikipedia, Uber)

601W inks Uber to massive lease deal. Here’s what’s next at the $800M Old Post Office

Chicago Board Options Exchange and CBOE's Global Markets CEO Edward Tilly (Credit: Getty Images)

CBOE parent company eyeing big lease in 601W’s Old Post Office redevelopment

Alderman Ed Burke (Credit: Wikipedia)

Alderman Burke pleads not guilty to extorting developers

Alderman Ed Burke (14th) (Credit: iStock)

Alderman Burke indicted on charges he extorted developers

RSM CEO Joe Adams and CME Center at 30 South Wacker Drive (Credit: RSM and CME Center)

RSM adding to office footprint at new CME Center headquarters

arrow_forward_ios