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Pension Dispute Latest Windy City Political Intrigue : An argument that could be a bore about city boards is laced with charges of ethnic snubs and influence-peddling.


Pension matters are usually as riveting as the keynoter at an actuary's convention. But, this being Chicago, politicians have managed to turn a squabble over obscure pension boards into a full-blown potboiler spiced with hints of back-stabbing, influence-peddling, ethnic snubs and even a star-crossed romance.

The drama has the potential to help make or break political dynasties. At the least, it has Mayor Richard M. Daley sputtering and defensive only months after his landslide reelection, which had appeared to have quelled years of partisan and racial chaos.

At the center of this tempest in a spreadsheet is Miriam Santos, the 35-year-old city treasurer and ostensibly a protege of the Democratic mayor. Santos, a glib and aggressive attorney of Puerto Rican descent, first worked as an assistant to Daley when he ran the Cook County prosecutor's office.

After he won the mayor's job in a special election two years ago, Daley appointed Santos treasurer, making her the highest-ranking Latino in the history of city government here. In April, Daley and Santos stood for reelection as a team, and her presence helped solidify Latino support.

Last summer, the symbiotic relationship began to unravel. By virtue of her office, Santos serves as a trustee on boards that administer $8-billion worth of city worker pension funds. But at Daley's behest, the Illinois Legislature took up legislation to bounce her off those boards and transfer to the mayor the power to appoint all trustees.

After Santos complained, Daley promised to reappoint her to the pension boards once her ex-officio trusteeship was terminated, making the switch appear more technical than substantive. Asserting that it was important to have independent oversight of pension money, Santos balked.

Then, late last month, after state lawmakers unanimously passed the change, things got nasty. Urging Republican Gov. Jim Edgar to veto the bill and check Daley's "political greed," Santos claimed that the mayor's chief fund-raiser had once tried to put the squeeze on her to supply $5 million in pension money for a hotel deal he was putting together. She refused, she said. Edgar has yet to act.

Next came allegations that top Daley operatives pressured her to hire political hacks in the treasurer's office as well as "grease" pension deals for cronies, then tried to squeeze her budget as punishment when she would not play along. And by the way, she suggested, how come nobody ever thought to ease the treasurer off the pension boards until the office was in the hands of a Latina.

For his part, Daley dismissed the charges as "complete fabrication," said Santos is constantly bickering with his staff and accused her of ingratitude.

For Daley, the controversy has the potential to undermine the image he has tried to craft as a pragmatist who rejected the heavy-handed machine-style shenanigans winked at by his famous father, the late Mayor Richard J. Daley. At the same time, Daley also has sought to portray himself as a healing influence in a city long paralyzed by racial and ethnic strife. With whites now a minority voting bloc, a loss of Latino support could undermine his chances to win reelection in 1995.

Santos' critics say she could be slapping Daley to raise her profile before announcing her candidacy for a new Latino-dominated congressional district due to be created here before next year's election. Or, perhaps, the speculation goes, she is scheming to build a base before taking on Daley himself in 1995.

So far, the only clear loser in all this is Santos' onetime boyfriend, Ray Hanania. He was the City Hall reporter for the Chicago Sun-Times when the two started dating a few years ago and was quickly moved by the paper to another beat to avoid a conflict of interest. As things heated up last week, the rival Chicago Tribune discovered that Hanania, although no longer dating Santos, was still advising her on tactics in her feud with Daley.

Hanania resigned from the Sun-Times and blasted Daley and his aides for dragging him into the controversy as part of a smear campaign to get at Santos and the paper, which has been uncovering shaky pension fund deals. Then, curiously, a few days later he turned around and blasted the Sun-Times for allegedly issuing him a "resign or be fired" edict, something officials at the paper deny.

Indeed, the only thing that can be said for certain about the state of political affairs in the Windy City is that the good old days of back-room intrigue and treachery are alive and well and, from all indications, will be for a good long time to come. And you can bet your pension on it.

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