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Bribes Cited in Awarding of City Pacts : Nine Indicted in Chicago in Public Corruption Case

May 15, 1987|LARRY GREEN | Times Staff Writer

CHICAGO — Nine persons, including a top Cook County elected official, one of his aides, two former Chicago City Council members and two former aides to Mayor Harold Washington, were accused by the Justice Department Thursday of taking part in a massive public corruption conspiracy.

Together the nine allegedly received more than $225,000 in cash bribes and a variety of other items of value, including travel and automobiles, to help a New York bill collection agency win city contracts. The indictment is part of a wide-ranging, controversial 18-month federal sting operation--Project Incubator--that resulted in 19 earlier indictments of public officials and businessmen in New York City and Chicago.

Mail, Wire Fraud Alleged

Those named in the one-inch thick, 67-count grand jury indictment Thursday are charged with conspiracy, mail and wire fraud and racketeering. In addition, several are charged with extortion, tax violations and making false statements to federal investigators.

"These defendants, it is alleged, defrauded the citizens of the City of Chicago out of their right to an honest government," said Anton R. Valukas, U.S. attorney for the Northern District of Illinois.

Specifically, the nine are accused of taking part in a two-year conspiracy to help Systematic Recovery Services Inc., a New York collection service, obtain contracts with the City of Chicago. The agency did win one contract to collect delinquent water bills and earned about $450,000 in commissions, according to federal investigators.

Valukas said that the nine engaged in such activities as introducing City Council resolutions calling for investigations of Systematic Recovery Services' competitors, holding press conferences criticizing those competitors, releasing misleading information to the news media and obtaining confidential internal city documents to help SRS in bidding for contracts.

False Information Cited

One novel charge against them involves wire fraud for providing false information at press conferences, which was later disseminated electronically by television stations. Valukas said that similar charges had been brought in other cases but could not cite examples.

Although the investigation has already resulted in 11 convictions in New York City and six in Chicago, controversy swirls around the FBI sting because a swindler, ex-convict and murder suspect operated as a government "mole," bribing public officials. He is Michael Raymond (also known as Michael Burnett), who is now accused of murder in Florida and who has a long history of involvement in other crimes.

Thursday, in one of the rare comments about Raymond's involvement, James D. McKenzie, head of the FBI office in Chicago, said that Raymond was already working for SRS, allegedly bribing public officials, when the federal investigation began. He said that while the FBI was aware of Raymond's criminal background, the agency was not aware that Fort Lauderdale authorities were investigating his alleged involvement in a murder. Raymond has since been charged in that case.

Informant Since 1984

Raymond became a government informant, according to the indictment, in July, 1984--eight months after the alleged conspiracy began--as part of a plea-bargain on federal gun charges in Nashville, Tenn.

"As part of his agreement, (he) consented to the making of audio and video recordings as he continued in the role of an SRS representative who was interested in obtaining city and county contracts," the indictment said.

Among the current or former elected officials charged Thursday are Morgan M. Finley, 61, the elected chief administrator of the Circuit Court of Cook County and former City Council members Perry Hutchinson, 43, and Marian Humes, 52. They are the third and fourth City Council members indicted in this particular federal investigation.

Former appointed public officials in the alleged conspiracy include John Adams, 32, the city's former deputy director of revenue, Melvin G. DuBrock, 53, former assistant commissioner of Chicago's department of streets and sanitation, and Michael Lambesis, 62, a former Chicago police officer and chief investigator in Finley's office.

Also named was Clarence McClain, 45, a neighbor and unofficial adviser to Mayor Washington, who operated, according to the government, as an influence peddler.

Law School Officials

Two others named were Charles Knox, 42, who is president of an unaccredited law school, and David Hammond, 44, who is identified as an officer of Knox's law school.

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