A Northwest Side woman is suing the city of Chicago and her former boyfriend, a Chicago police sergeant she says goaded her into shooting herself in the face with his service weapon a year ago.

Sgt. John R. Schuler should have been fired years ago because of his two convictions for driving drunk and his involvement in violent incidents including one in which he threw a beer bottle at a bartender who refused to serve him, according to the lawsuit Theresa Birt Byrne filed in federal court in Chicago on Monday. That was exactly a year after she shot herself at Schuler’s Northwest Side home after a night of drinking and arguments.

Byrne, a 50-year-old mother of four, said she has needed repeated surgeries to reconstruct her face and jaw.

She blames the city’s “broken disciplinary system” for repeatedly failing to fire, otherwise punish or retrain Schuler, who has had 55 complaints filed against him since 1992.

Schuler — who in 2017 was paid more than $130,000 — couldn’t be reached. He was placed on desk duty after the shooting and placed under investigation by IPRA’s successor, the Civilian Office of Police Accountability.

Police spokesman Anthony Guglielmi said Tuesday that Schuler has been stripped of his police powers “in response to a COPA request and their pending investigation.”

Tommy’s on Higgins, the Northwest Side bar where police Sgt. John R. Schuler was accused of striking a female bartender in the head with a full bottle of beer in 2012. | Tim Novak / Sun-Times

According to Byrne’s lawsuit, Schuler has “had several intoxicated and violent incidents with fellow bar patrons, such as throwing a pool cue, making threatening remarks and displaying his service weapon to them, which he typically wore to bars tucked into his waistband.”

According to her lawsuit, Schuler “verbally and physically abused Byrne” prior to the shooting on Feb. 25, 2018, when she shot herself with his 9mm Smith & Wesson semi-automatic handgun. She says Schuler left his gun on the coffee table in his living room and told her “words to the effect of ‘you should use this on yourself.’ ”

Byrne told a detective she thought the safety was on when she put the gun under her chin and fired.

Schuler, 50, is the son of a retired high-ranking Chicago police officer. His three siblings also all became Chicago cops. One brother, Nicholas Schuler Jr., left the department and is now the inspector general for the Chicago Public Schools.

Byrne’s lawsuit says that, in November 2016, Schuler had “physically abused Byrne by dragging her down the stairs of his home and throwing her out the door, injuring her.”

Chicago police Sgt. John Schuler. | Facebook

“This incident was reported to IPRA” — the city’s old Independent Police Review Authority, the now-defunct city agency that investigated police misconduct — “by Schuler’s own brother, who is or was a member of the Chicago Police Department assigned to the Bureau of Internal Affairs.”

But the lawsuit says Schuler wasn’t disciplined over that incident.

Byrne’s lawsuit says the city “failed to identify or act on the fact that Defendant Schuler was one of a small category of Chicago police officers who have the highest number of [complaints] in the department, despite knowing that such failure could cause Schuler to feel he could act with impunity and without fear of retribution.”

At the time of the shooting, Schuler was assigned to the 25th District station, but the lawsuit says his duties required him “to conduct investigations of complaints against other police officers that were not being investigated by the Independent Police Review Authority or the Bureau of Internal Affairs.”

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Under fire from Mayor Rahm Emanuel, the Chicago Park District and Supt. Mike Kelly “mutually decided” Thursday to trash a three-plus-year golden-parachute contract that Kelly was given just over two months ago.

Mayoral candidates were nearly universal in condemning Kelly’s contract as one of several given to city agency chiefs that would saddle a new mayor with Emanuel’s appointees or force beleaguered Chicago taxpayers to spend nearly $1 million to get rid of them.

Emanuel wasn’t happy, either. City Hall sources said the mayor was blindsided. His handpicked park board didn’t clear the agreement with City Hall prior to approving it in December at the final meeting headed by Jesse Ruiz, then the park board president, who since has left the board to join the administration of newly elected Gov. J.B. Pritzker.

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Making matters worse was that a state law passed in August whcih took effect Jan. 1 would have capped Kelly’s severance payout at 20 weeks — or about 4 1/2 months of salary.

Under his contract, though, Kelly would have been guaranteed nearly twice that if he were terminated without cause.

“The mayor is very proud of Mike Kelly and all that he and the board have accomplished, including winning the gold medal of excellence,” said a top mayoral aide, who spoke on the condition of not being named. “However, the contract issue was not handled well. Mike realizes that and made the right decision to walk away from it.”

Emanuel is intensely loyal and notoriously reluctant to throw his allies and appointees under the bus.

But sources said he was so angered by Kelly’s contract and how it was handled that he’s been pressuring the park district to trash the agreement ever since the Chicago Sun-Times revealed it.

On Thursday, parks spokeswoman Michelle Lemons told the Sun-Times that the board and Kelly had “mutually decided to terminate” Kelly’s contract. That means he will not receive severance if he is replaced.

Kelly could not be reached for comment.

Ruiz defended the contract Thursday as a “common practice for CEOs” and refused to comment on the termination, saying “I’m not on the board anymore.”

But he confirmed that no one in the mayor’s office was consulted before the board voted on Dec. 12, though he said he did consult with the Illinois Association of Park Districts.

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Asked whether the timing of the new state law had any effect on his decision, Ruiz would only say that “assuming the severance is ever going to be utilized” was a hypothetical. A new mayor or the holdover board members she inherits — who are very pleased with Kelly’s work — may decide to retain him, Ruiz said.

One of that law’s co-sponsors, State Sen. Bill Cunningham (D-Chicago) said “that obviously is not in keeping with the spirit of the law if (parks officials) did it specifically to get it done before the law went into effect.”

The Sun-Times reported last week that Emanuel had tied the new mayor’s hands with contracts for the heads of the parks, City Colleges, Chicago Public Schools and the Chicago Housing Authority that — if all four are let go early — would cost about $820,000 plus benefits to undo. Taxpayers would pay more for their replacements’ salaries.

The most egregious example was Kelly.

Unlike the others who signed contracts when they took over their agencies, he’s been serving as superintendent without one since 2011.

If at least four board members voted to get rid of Kelly — as was required if he did nothing meriting termination — taxpayers would have owed Kelly eight months of his salary, plus health insurance for his family.

The contract locked in Kelly’s pay at $222,000 for this year, increasing it to $230,000 in 2020, through Dec. 31, 2022.

What’s more, Kelly would have automatically been entitled to an additional year if the board failed to give four months’ notice that it wouldn’t renew his contract.

Ruiz said then he offered Kelly a written deal like other agency heads to make sure Kelly wasn’t replaced “cavalierly” by a mere “political supporter” of the new mayor.

The golf course at the South Shore Cultural Center would merge with a one at Jackson Park under a park district proposal. | Colin Boyle/Sun-Times

The move was an apparent attempt to make certain that the $500 million Obama Presidential Center and a companion plan to merge the Jackson Park and South Shore golf courses goes smoothly long after Emanuel, the project’s No. 1 cheerleader, leaves office. The merger gained momentum when Obama chose Jackson Park for his presidential center, but the $30 million plan hit a fundraising snag, derailing Kelly’s plan to quickly begin construction.

In a letter released by newly-elected Park Board President Avis LaVelle, the board defended Kelly’s contract and characterized the “golden parachute” label as a “gross distortion.”

The contract was offered to Kelly to “provide continuity and stability to the Park District on a number of important endeavors,” including pension reform, moving Park District headquarters to Brighton Park and more than $200 million in ongoing and imminent capital projects, it states.

The letter praises Kelly for his “thoughtful, tangible approach to programming” at parks across the city, saying, “he has done so with no assurances or guarantees when it is customary for park agency executives across Illinois to operate with employment contracts.”

The unfolding federal investigation of Ald. Danny Solis (25th) has exposed the behind-the-scenes machinations over a 2.7-acre parcel of state-owned land in Chinatown.

For nearly four decades, the property has been one of the main parking lots handling the throngs who come to Chinatown to eat and shop.

The site’s convenient location at Cermak Road and Wentworth Avenue, adjacent to the CTA Red Line’s Chinatown station, also has made it an object of desire for developers looking for a fresh toehold in the landlocked neighborhood.

Two developers made the parking lot a topic of conversation in 2014 when they met with Solis and Illinois House Speaker Mike Madigan — a chat that the FBI arranged to secretly record.

Then, last year, another developer — with support from Solis — tried to slip legislation through the Illinois General Assembly that would have transferred the property from the state to the city to clear the way for a project he was proposing.

That’s intriguing because, by then, Solis was cooperating with federal authorities as part of an investigation in which he secretly recorded Ald. Edward M. Burke, then the powerful chairman of the Chicago City Council’s finance committee.

Ald. Danny Solis. | Sun-Times files

The Chicago Sun-Times broke the story of Solis’ cooperation with federal authorities shortly after Burke’s arrest. It’s unclear whether the Chinatown parking lot sale is part of the ongoing federal probe, but a Sun-Times investigation has found that Solis had numerous meetings with developers and city officials to promote the project — both before and after he is believed to have started operating as a government informant around June 2016.

During that time, Solis raised more than $1.3 million in campaign money while moving hundreds of measures through the City Council.

The Chinatown parking-lot saga includes a deep cast of characters involved in city and state politics and has all the earmarks of something that would have attracted the interest of federal investigators. And the FBI definitely was on alert when the two developers — See Y. Wong and Kin Kuong Chong — met with Madigan and Solis on Aug. 6, 2014.

As the Sun-Times also previously has reported, their conversation was recorded by Wong and spelled out in a 2016 court affidavit sworn out by federal investigators seeking a search warrant for Solis’ homes and offices.

Wong had begun cooperating with authorities in May 2014 in hopes of getting a reduced sentence for his involvement in an unrelated fraud scheme.

Wong was dealing with Solis as part of his efforts to help Chong put up a small hotel at Archer and Clark Street in Solis’ ward. The project required a zoning change.

Illinois House Speaker Michael Madigan. | Justin Fowler / The State Journal-Register via AP

Solis, the council’s zoning committee chairman, arranged the meeting with Madigan at the speaker’s Loop law office. According to the affidavit, the House speaker used the opportunity to pitch the men on hiring his law firm to represent the hotel in its real estate tax appeals.

But, at the first lull in the conversation, Wong jumped in with another agenda.

“[Businessman A], he just want to use this opportunity to meet, uh, Mr. Madigan and Alderman, and he is very interested in the Chinatown parking lots project,” Wong said, according to the affidavit, which identifies him as CS-1 and Chong as Businessman A.

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The document suggests that Wong did all the talking because Chong doesn’t speak English.

Wong then showed them a site map for a proposed commercial development separate from their hotel site. He went on to say that Chong “wants to know if there is any opportunity, uh, he can work with the state and the city to, to get a nice project, uh, a nice commercial project in Chinatown.”

“OK,” Solis said.

Madigan grunted, “Uh-hmm, uh-hmm,” and asked whether the parking lot was owned by the state. Solis told him it was.

After more discussion about who owned what, the conversation returned to whether the hotel developer would be interested in hiring Madigan’s law firm. Later, outside Madigan’s presence, Solis assured Wong the hotel project would get the necessary zoning approval if they hired Madigan’s firm.

There’s no further mention of the Chinatown parking lot in the FBI affidavit about Solis. But the project remained an active pursuit of the alderman, the Sun-Times found.

In April 2016, the city Department of Planning and Development was approached by another developer-associate of See Wong, also with ambitious plans to develop the parking lot. The developer, Eddie Ni, president of the Windfall Group in Cleveland, proposed building a 30-story combination apartment-hotel-shopping mall with two high-rise towers rising above an eight-story base.

Eddie Ni. | Windfall Group

Ni and Wong previously had tried and failed to develop vacant land just across the street as a six-story retail-office building that also would have housed the Chinatown branch of the Chicago Public Library. Those plans collapsed when the city decided to acquire the land for a stand-alone library.

Around that time, Ni turned his sights to the parking-lot property, which the state had acquired in the late 1960s as part of a highway construction project.

To try to shepherd his project through City Hall, Ni’s company hired the law firm of former Ald. William J. P. Banks (36th), Solis’ predecessor as zoning committee chairman.

Banks and his law partner Jerome Schain, in turn, retained the consulting services of Carmen Iacullo, who ran a patronage army of city workers during Mayor Richard M. Daley’s administration before moving to an administrative post with the Illinois Department of Transportation, where he landed in the middle of another patronage scandal.

Carmen Iacullo. | LinkedIn

Iacullo said he attended a meeting with Solis and others at the alderman’s City Hall office to strategize over the best approach to obtain the property from IDOT.

That’s the first of several indications that the alderman was a major advocate for the development.

Campaign-finance records show Ni and his companies have given $41,000 to Solis’ political funds since late 2015.

In April 2016, Banks and Iacullo joined Ni’s team at a meeting to pitch the project to city planning officials.

A letter to Banks from a city planning official that documented their discussion advised them to revise their plan and took note of the project’s glaring problem — Ni couldn’t apply for the zoning he needed until he could show he controlled the site.

By December 2017, Ni had accelerated his efforts to solve that problem by hiring Nancy Kimme, former chief of staff to the late Illinois Comptroller Judy Baar Topinka, sources told the Sun-Times. Kimme had become a go-to lobbyist in Springfield for people trying to influence Gov. Bruce Rauner’s administration, on whose transition team she had served, while also keeping peace with Democrats.

Nancy Kimme in December 2014. | Ashlee Rezin / Sun-Times files

Kimme’s assignment was to arrange for IDOT to sell the Chinatown property, which would require state legislation.

But Kimme ran into trouble when she tried to push the project forward last spring. IDOT didn’t want to sell. And state Rep. Theresa Mah, the Chicago Democrat who represents Chinatown, declined to sponsor the legislation Kimme wanted.

Mah, who has received $7,500 in campaign contributions from Ni, told the Sun-Times she opposed the project because of community members’ concerns that it would compound the neighborhood’s parking problems and also eliminate a source of funding for community groups. Since 1981, the state has leased the property to the Chinatown Parking Corp., a not-for-profit corporation that shares its proceeds with community organizations.

State Rep. Theresa Mah. | Rich Hein / Sun-Times

Darryl Tom, Chinatown Parking Corp.’s current managing director, said the group had offered conditional support for Ni’s project. Tom said that was based in part on the developers compensating the organization for lost revenue but that they never reached a final agreement.

After the rebuff from Mah, another member of Kimme’s lobbying team brought the proposed sale of the Chinatown parking lot to state Rep. Avery Bourne, a downstate Republican, in the final days of the spring legislative session. Bourne was already the House sponsor of a bill to sell other surplus state land.

Bourne agreed to an amendment directing IDOT to sell the Chinatown property to the city “in consideration of no more than the negotiated fair market value,” to be determined by an appraisal. But Bourne said she withdrew her support after finding out that IDOT still opposed selling the land, and the bill stalled.

Solis, meanwhile, had been participating in strategy sessions on how to push the measure through Springfield and keeping close tabs on its progress, sources say. As recently as August, Solis and the developer’s team met with city planning officials at City Hall as the land sale remained stalled in the Legislature, according to those sources.

Months later, during the Legislature’s November veto session, the state land-sale measure was finally approved — but without the Chinatown land.

The Sun-Times found no evidence of any involvement by Madigan in the parking lot property other than the 2014 discussion that was secretly recorded by Wong. Madigan’s spokesman wouldn’t comment.

In response to an earlier Sun-Times’ story about the 2014 recording, a lawyer for Madigan said the speaker recalled attending several meetings with Solis over the past five years, didn’t know whether they were recorded but has no concern if they were.

Ni, who also is in the process of converting the former Yorkshire Plaza shopping center in Aurora into an Asia-themed mall, said that’s the end of his four-year effort to develop the Chinatown parking lot.

“I don’t think it will work out,” Ni said. “So many issues. We don’t need this. We giving up the project.”

Artist’s rendering of a 2016 proposal for a development on the site of a state-owned parking lot at Cermak Road and Wentworth Avenue in Chinatown.

Contributing: Fran Spielman, Jon Seidel

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While serving as a priest in the Chicago area in the 1970s, 1980s and 1990s, James M. Ray engaged in disturbing conduct, according to allegations contained in church records, from having children sit on his lap while he had an erection to grabbing a boy’s penis and helping a disabled man masturbate in an airport bathroom.

The Catholic church didn’t kick him out of the priesthood but in the 1990s moved him into a supervised setting to live away from children — at the Cardinal Stritch Retreat House adjacent to the Mundelein Seminary where, in 1975, Ray had been ordained.

He wasn’t alone in living at the north suburban retreat center, which the Archdiocese of Chicago for years used to house troubled priests, as well as for spiritual gatherings for prelates and the public. Church records show Ray and eight others were staying there in 2008, a year before he left and quit the clergy.

The last of the priests accused of sexual abuse there were moved in 2013. But the stigma lasted.

The archdiocese — the Catholic church’s arm in Cook and Lake counties, overseen by Cardinal Blase Cupich — recently changed the name of the Cardinal Stritch Retreat House. It’s now called the Joseph and Mary Retreat House.

The church’s explanation for the change, outlined on the retreat center’s Facebook page, says: “We want the name to reflect a more inclusive retreatant, moms, dads, young adults, grandparents as well as maintaining a spiritual renewal place for priests” and deacons.

“We feel that the name Joseph and Mary” — Jesus’ stepfather and mother, according to the Christian Bible — “reflects that new mission of inclusive spiritual renewal. We have made many new improvements to reflect the needs of our retreatants.”

But records obtained by the Chicago Sun-Times indicate that a governing body within the archdiocese approved the name change late last year in part to try to distance the facility from its past.

“There are misconceptions about the Cardinal Stritch Retreat House because it has been associated with men who have been removed from the priesthood,” according to the minutes of a September meeting of the Presbyteral Council, which is comprised of priests and bishops and is described as “a major consultative body” to Cupich. “There has been some discussion about changing the name.

“After a discussion regarding the pros and cons . . . the Presbyteral Council took a vote and it was decided that the name should be changed.”

The retreat house — which for decades bore the name of the late Cardinal Samuel Stritch, Chicago’s Catholic archbishop from 1940 until his death in 1958 — “was built in 1952 with the mission of giving retreats for the priests” in the archdiocese and the Diocese of Joliet, which includes Will and DuPage counties, according to a church website.

“For many years the retreat house served its mission well. Over time, as we all have seen, the Catholic landscape has changed and continues to change. The research coming from those who we talk too, those who come for retreats, the impact of . . . Renew my Church” — Cupich’s plan to close and consolidate Catholic schools and churches in the Chicago region — “and the information coming from our website all tell us that the time has come to look at the mission a little different but still keeping a mission of spiritual growth.”

Cupich’s spokeswoman Paula Waters and the Rev. John Canary, who runs the retreat center, didn’t respond to calls and emails seeking comment on the name change.

While published reports have said troubled priests lived at the facility from 2000 to 2013 — in a different part of the building from visitors — church records show Ray was there off and on from the early 1990s until 2009.

For years, the church kept the presence of the men there quiet. But eventually word got out, and there were complaints in part because Carmel Catholic High School is nearby.

Ray taught at that school part-time while studying to become a priest, records show.

At the Stritch house, Ray was subject to rules that required him, among other things, to provide a written account of his whereabouts when he wasn’t on the grounds.

But his restrictions were relaxed at times — until the church tightened up protocols in the early 2000s, after a new wave of priest sex abuse cases and cover-ups by bishops came to light around the country — and he was allowed, on occasion, to officiate at funerals, weddings and baptisms.

One of the biggest customers of a failed Bridgeport bank, accompanied by a gun-carrying attorney, forced his way into his former office after losing the office in bankruptcy, federal prosecutors say.

After Robert M. Kowalski’s attorney flashed a gun at a maintenance worker on Feb. 21, the worker unlocked the office in the 1900 block of West Cermak Road, according to a criminal complaint unsealed Tuesday that says Kowalski took a hard drive and tried to drive off before being arrested.

The maintenance worker managed to take video of the incident, prosecutors say. And now Kowalski is charged with bankruptcy fraud. Also charged: Kowalski’s sister Jan R. Kowalski, an attorney who ran for Cook County clerk last year.

The Kowalskis couldn’t be reached for comment.

Robert Kowalski’s bankruptcy attorney Ernesto Borges says he withdrew from the case the day after the arrest.

Robert Kowalski’s divorce attorney Frank Avila says he was with Kowalski when he went to his office on the night of Feb. 21 but was not carrying a firearm. Avila says Kowalski wanted to get inside the office to get a pair of dress shoes, not a hard drive. Avila is not named in the complaint and wasn’t charged.

Robert Kowalski — a lawyer and Chicago housing developer who calls himself “Bob the Builder” — filed for Chapter 11 bankruptcy protection after federal regulators said he owed more than $20 million on loans obtained from Washington Federal Bank for Savings and its president, John F. Gembara.

The bank was shut down by federal regulators in December 2017 — less than two weeks after Gembara was found hanged inside a customer’s home in Park Ridge. The federal government is trying to recover millions of dollars in outstanding loans, including money lent to Robert Kowalski. The bank failure remains under investigation.

Robert M. Kowalski.

In a bankruptcy petition filed last March 29, Robert Kowalski said he “believes” that a couple of the loans, totaling as much as $27 million, which the Federal Deposit Insurance Corp. wants repaid already have been.

Many of the properties in Robert Kowalski’s bankruptcy case had been collateral on loans from Gembara’s bank. Those real estate holdings are also the subject of a contentious divorce case in Cook County circuit court between Kowalski and his wife Martha Padilla, who helped oversee their holdings.

The federal criminal complaint says Robert Kowalski and his sister hid about $360,000 from the bankruptcy trustee and creditors largely by passing cashier’s checks back and forth between themselves. It says he hid his interest in Mountain Duck Properties LLC by saying the company was owned by his daughter.

Prosecutors say Robert Kowalski sold two jetskis without telling the bankruptcy court and hid federally subsidized Section 8 rent payments that he received from tenants of his properties. Many of those buildings were financed with loans from the bank founded by Gembara’s grandfather a century ago.

A bankruptcy judge ordered Robert Kowalski to turn over the office he shared with his sister in the 1900 block of West Cermak on Jan. 18. On Feb. 21, a bankruptcy trustee had a maintenance worker change the locks, according to the complaint.

Afterward, someone who said he was Jan Kowalski’s lawyer asked the worker for access to the building, prosecutors say. At the time, Jan Kowalski was in federal custody, having been held in contempt of court for refusing to tell authorities where to find hundreds of thousands of dollars they say are part of the bankruptcy estate.

The maintenance worker let the lawyer enter and take pictures. When the attorney left, the worker also tried to leave. But a truck driven by Robert Kowalski and a sedan in which the attorney was a passenger suddenly blocked the maintenance worker’s vehicle, according to the complaint.

Prosecutors say Robert Kowalski asked the maintenance employee to let him in to the office and that the lawyer displayed a gun in his waistband and told the worker to let them in.

The worker did but also activated a video recorder as he reached for his keys.

After taking the hard drive from the office, authorities say Robert Kowalski drove away in his truck but was stopped by deputy U.S. marshals who arrested him on a bankruptcy court warrant and found $9,700 in money orders labeled “rent.”

Editor’s note: This article was corrected after publication to note that Jan R. Kowalski ran for Cook County clerk. 

READ MORE

• Why did Bridgeport bank president kill himself in customer’s Park Ridge home? March 4, 2018
• After Bridgeport banker found dead, top debtor tries to avoid repaying $20M, April 8, 2018
• Feds find massive fraud at shuttered Bridgeport bank whose president was found dead, Nov. 9, 2018

The city of Chicago paid more than $85 million last year to settle police misconduct lawsuits and another $28 million to private attorneys to defend City Hall in those cases, records show.

The $113 million-plus total is more than in any year since at least 2011, according to an analysis by The Chicago Reporter of data from the city’s law department.

The payout last year is more than what the city paid in the previous two years combined and brings Chicago taxpayers’ tab for police misconduct to well over half a billion dollars in the past eight years.

There were several high-profile cases settled last year, including $16 million paid to the family of Bettie Jones, shot and killed by Officer Robert Rialmo in December 2015.

Among the other payouts last year: $15 million to the families of two men killed by off-duty detective Joseph Frugoli in a 2009 drunk-driving accident; $9.5 million to the family of Jose Lopez, gravely injured when Chicago police officers used a Taser on him in 2011; and $3.5 million to the mother of Niko Price, fatally shot by former Officer Marco Proano in 2011.

There were also multimillion-dollar payments last year in several wrongful-conviction lawsuits, including $9.3 million to James Kluppelberg, who was released after nearly 25 years in prison for an arson he says he confessed to after being tortured by police Cmdr. Jon Burge’s notorious “Midnight Crew,” $4 million to two men wrongfully convicted of a 1992 double murder and $3.5 million in the case of Patrick Hampton, who was released after 20 years in prison for sexual assault after his conviction was thrown out as a result of claims that detectives fabricated and withheld evidence.

The number of police cases for which the city paid settlements was down slightly from the previous years.

Still, the number of lawsuit payouts by City Hall for police misconduct came to nearly one every two days, on average. Most of them were in the tens of thousands of dollars, with a median payout of $50,000 and the smallest for $500.

The Chicago Reporter

The $113 million doesn’t include cases of property damage, minor car accidents, vehicle pursuits or employment-discrimination lawsuits.

The cost is more than five times what the city budgeted for police lawsuits last year.

The sum also does not include the cost of private attorneys City Hall hired to represent the city in negotiations over a federal consent decree that will govern police reform efforts for years. In 2017 and 2018, the city paid more than $4.2 million to outside lawyers involved in the consent decree and related lawsuits.

Last month, a federal judge formally approved the consent decree and appointed a monitor to oversee its implementation. The monitor is expected to cost the city $2.85 million a year.

Jonah Newman reports for The Chicago Reporter.

The Internal Revenue Service is investigating a bizarre case in which hundreds of taxpayers were wrongly flagged as having received millions of dollars in income from a north suburban car dealer, according to the dealer and an attorney for three of the people affected.

Skokie Motor Sales — which operates as Sherman Dodge Chrysler Jeep Ram at Howard Street and Skokie Boulevard in Skokie — says it doesn’t know how the errors occurred. It says the amounts of misreported income were as high as $8 million.

The dealership’s financial controller says about 300 taxpayers were affected.

In one case, a Beach Park couple who had bought a car at the dealership in 2017 discovered that an IRS Form 1099 was on file with the tax agency under the husband’s name and the wife’s Social Security number. It indicated that Russell Fritz and Carmen Ortiz-Fritz had been paid $4.1 million by Skokie Motor Sales — a huge sum that the couple never received and didn’t want to have to pay taxes on.

Form 1099 is used to report income earned outside regular employment. There are various types of 1099s, covering freelance income, dividends, interest and other earnings.

The $4.1 million on the Fritzes’ IRS record came from a 1099-MISC form. The “MISC” type of document is for miscellaneous income, such as from prize winnings or awards.

The couple hadn’t won any prize. But they say they ended up with a big and costly headache.

Ortiz-Fritz says she was getting their small company, Business Wired Technology, ready to do government work when her tax preparer called to point out the $4.1 million mistake.

The couple say they spent several weeks trying to straighten out the wrong information and, as a result, missed a crucial deadline to get financing for a government project they’d won.

They say they ended up having to bow out of the project — and losing about $55,000.

“It’s been a freakin’ nightmare,” Ortiz-Fritz says.

Another taxpayer, Majidah Saleem of Chicago, worked at Sherman Dodge for about one week toward the end of 2017 before quitting. Yet, in December, Saleem got a letter from the IRS informing her that a 1099-MISC had been filed showing she had received $3.4 million from the dealership in 2017.

Saleem initially worried the IRS might come after her for taxes on the huge sum. She disputed the filing and is hoping it gets resolved.

“I’ve just been waiting,” she says.

An IRS spokesman in Washington declined to comment on the cases, citing federal taxpayer privacy rules.

But a spokeswoman for Sherman Dodge and a tax attorney representing the Fritzes and Saleem say the IRS has told them it has opened an investigation.

Lissa Druss, hired by the dealership to speak on its behalf, says anyone who has gotten an erroneous Form 1099 should contact Sherman Dodge and ask for a letter stating that the reported income is incorrect.

Druss says that not all of the 300 or so people and business that have been affected by the mixup are Sherman Dodge customers or employees — adding to the mystery of how their names and Social Security numbers became linked to 1099s for purported income from the dealership.

“The attorneys for the dealership have talked to the IRS, and there was literally a glitch in the system,” Druss says. “We’ve been told by the IRS that it was a glitch on their end.”

Chicago tax attorney John Buchmiller, who is representing the Fritzes and Saleem, says the IRS told him the incorrect 1099s will be flagged by the agency as invalid. Anyone who got one should dispute it and file their taxes without including the 1099 income, Buchmiller says.

“The IRS will recognize it and not collect on it,” he says.

A reality TV show that transforms Chicago fixer-uppers into million-dollar homes is creating lots of buzz — but angry residents and an alderman say the show is a bad neighbor.

Complaints abound from residents upset about trash, noise and unsecured work sites — and how the older homes rehabbed by HGTV’s “Windy City Rehab” have changed the character of neighborhoods.

One of the show’s projects got slapped with two stop-work orders for doing work outside the scope of city permits.

The city Department of Buildings said Friday it will ask the show’s co-star, builder Donovan Eckhardt, to meet with department officials “to make sure they are meeting our standards and to bring the concerns of neighbors to their attention,” spokesman Gregg Cunningham said.

“We will continue to monitor their work closely and will take further enforcement action if necessary,” Cunningham added.

Besides the complaints, some viewers are scratching their heads over the reality show’s purported profits, wondering in online forums how the rehabbed homes, some of which haven’t sold yet, could be making profits in the hundreds of thousands of dollars for the developers.

The show wrapped up its first season on HGTV this past week and signed on for a second season. HGTV says it’s one of its most popular new series, claiming 9.3 million viewers in its first month and a half on the air.

Taking over Chicago

The show follows luxury home designer Alison Victoria and her rehabbing pal Eckhardt, president of Greymark Development Group, as they buy and rehab properties with the goal of flipping them to sell to wealthy buyers. Victoria — whose full name is Alison Victoria Gramenos and who grew up in Chicago and the suburbs — previously hosted “Kitchen Crashers” on the DIY Network.

All 11 of the homes featured in the show’s first season are on the North Side, in neighborhoods such as Wicker Park, Bucktown, Ukrainian Village, Lincoln Square and Lincoln Park.

GUIDE TO ALL ‘WINDY CITY REHAB’ PROPERTIES

NOTE: Purchase date is when developers bought the property. Rehab costs are according to information presented on the show. Sources include Illinois property transfer-tax records, the Cook County recorder of deeds and the Multiple Listing Service. The public recording of property closings can be delayed.

Victoria, whose own home is in Bucktown, describes her goal as “taking over Chicago.”

“Bringing sexy back to the city is what I’m doing, why I got into this business. To make sure that I’m putting my stamp on every neighborhood in Chicago,” Victoria says in one video promoting the show called “High Heels, High Stakes.”

“A hundred years from now, people will be saying my name. I absolutely think I’m changing Chicago one house at a time.”

The two declined to comment to the Sun-Times, saying they’d consider an interview after next season premieres.

While the show has plenty of fans, critics have flocked online to skewer what they say are clumsy techniques and an arrogant attitude toward long-established neighborhoods.

“This show is everything that is wrong with Chicago,” one viewer wrote online. Wrote another: “Chicago does NOT need more 2 flats turned into million dollar single family homes, driving out renters.”

A spokeswoman for HGTV responded: “We respect the concerns of neighbors who are impacted by common renovation-related issues that come up during home transformations. Issues linked to ‘Windy City Rehab’ are carefully reviewed so that we can bring them to resolution with input from local officials and continue to follow Alison on her journey to buy, renovate and sell homes in Chicago.”

1929 N. Leavitt. | Nader Issa / Sun-Times

‘You guys couldn’t clean this up?’

But some residents wish the TV show had stayed away from their neighborhoods.

Neighbors of a “Windy City Rehab” home at 1929 N. Leavitt St. in Bucktown — featured in an episode that aired March 5 — say the construction crews swept in like they owned the block.

“The work crew that cut bricks, they didn’t use anything to block the dust,” said Robert Baran, who rents next door. “One of the neighbors came out and just started yelling at them.

“One crew left a bunch of saw dust and debris. It was a mess, and it snowed and then everything froze. One of the guys was out there with a big blow torch melting the snow to clean up this area, but really they just pushed it over to the side in front of the neighbor’s property so it wouldn’t be in view of the camera,” said Baran, a retired information technology worker.

“It was noticeable, and it was like, ‘You guys couldn’t clean this up?'”

Jane Kasper, a teacher whose great-grandparents bought the building next door to 1929 N. Leavitt around the late 1800s, said “it’s crazy the stuff they’ve been doing.”

Besides the trash, other inconveniences included noisy work on a holiday, leaving scaffolding and bricks in the gangway and ringing her tenant’s bell to access her building’s water. The rehabbers also added a 20-foot extension that blocks her view.

Kasper said she complained to Ald. Scott Waguespack (32nd) and was told she wasn’t the first to call.

“Honestly, these people make me sick — they’re so annoying,” she said.

A lifelong resident of the block, Kasper says the arrival of the uber-wealthy in Bucktown has brought some beautiful renovations to old homes — but a lot of downsides, too.

“It doesn’t feel good to me,” she said of her neighborhood, which she said used to be more family-friendly. “Everybody knew everybody and took care of everybody. Now I don’t know most of my neighbors, truthfully.”

An episode featuring a home at 2123 W. Thomas St. in Ukrainian Village ended with a beautifully furnished home with immaculate front and back yards. Victoria and Eckhardt even built a custom-made chicken coop in the back.

In reality, the project still isn’t done. A little over a week ago, there was a small patch of fake green turf in front, strewn with trash. The parkway and back yard were a muddy, littered mess. The chicken coop was gone.

The block of historic landmarked worker’s cottages has seen other rehabs, but this one drew residents’ ire.

“Pain in the ass,” said next-door neighbor Tony Ruiz. “It’s been a nightmare.”

Ruiz ticked off a list of complaints he’s experienced since April 2018: trucks double-parking on the street or taking up the alley; construction debris littering the front yard, parkway and gangway; damage to his garage and fence repaired only after he threatened to close the gangway; the back area left open and unsecured; workers using loud equipment early in the morning.

And worst of all, he says, a huge 20-foot long addition tacked onto the back of the home that blocks light to Ruiz’s backyard.

Neighbor Patricia Campos, a homeowner on the block since 1987, says flipping has disrupted the once-serene block.

“I think it’s a bonanza for developers and for people that want to flip property and just make a buck off things. But I don’t find it beneficial to me,” Campos says.

In the Thomas Street episode, the rehabbers claimed they made a profit of $255,000 flipping the house for a sale price of $1.3 million.

But it’s unclear whether the house has sold; state records do not reflect a new buyer. A building permit was still posted in the front window earlier this month and workers were busy in back.

Ruiz grew up near the block and bought his historic 1898 home two decades ago. He’s annoyed that the show claims it’s enhancing old, broken-down buildings. In many cases all that is salvaged is the outer walls.

“Ukrainian Village doesn’t need any enhancement. We love our homes,” Ruiz said.

A sense of ‘arrogance’

Ald. Brian Hopkins (2nd) says the reality show stars have operated with a certain sense of “arrogance” that’s prompted him to rethink the rules of engagement.

“If they seek to do another project in my ward, I’ll insist on a firm commitment from them to focus on neighborhood relations and take steps to mitigate the complaints that are typically associated with a construction project in a residential neighborhood,” Hopkins told the Sun-Times.

Hopkins says he soured on things after a meeting between Eckhardt and neighbors of the home on Thomas yielded little progress.

“Donovan was conciliatory, but the complaints continued afterward,” Hopkins says. “Indications from neighbors seemed they weren’t responsive any longer. They knew they had their permits … and didn’t feel the need for any continued negotiations.

“There was a certain amount of arrogance involved — ‘This is a TV show and we can do what we want,’ ” Hopkins says.

For her part, Victoria believes she deserves a warmer welcome for her efforts at preserving some of the homes’ historic elements.

Her greatest surprise, she told an interviewer for People, is “that we don’t get the support that I was hoping we would get. … We are trying to make the neighborhood great and better. We are trying to bring the history back with the builds. So it’s not like we are coming in making crap and just trying to make a buck.”

‘Total disaster’

To its credit, the show gives an honest account of some of the problems that plague rehab projects, especially as Victoria and Eckhardt run from job to job (Victoria told an interviewer the crew had 14 going at once, although the first season only features 11). It also documents some head-scratching mistakes that got the attention of city inspectors and irked neighbors.

In a rehab of a home at 1800 W. Wabansia, Eckhardt — who lives nearby — tells how a neighbor woke him up one night to tell him there was “water pouring out of the basement.” It turns out a water line cracked and a shut-off valve failed. The burst pipe also flooded a neighbor’s basement.

The mishap came after several days of freezing temperatures; it was unclear if crews were running heaters during the project.

“This is a total disaster,” Eckhardt says on the show. “ … In the winter you put in a contingency for bad weather. I just assumed we were going to be running a furnace the whole time. … I made a mistake there.”

Other mistakes led the city to halt construction at another “Windy City Rehab” project.

At 1803 W. Wabansia, the city issued two stop-work orders in 2017 after crews erected a new frame garage with a roof deck and removed several walls of the home.

On the show, Victoria and Eckhardt had made plans to save the exterior walls and facade of the house, but the structure fell while they were gutting the house. The two can be seen sitting on the home’s front porch, the entire house in rubble behind them.

While she calls the accidental teardown “a letdown,” she also says “it’s kinda nice … we really get a fresh start.”

City officials said the wall removal was outside the scope of the permit but said the rehabbers later secured the necessary approvals.

A city official said the buildings department has been aggressively going after violators after a “bad actor” ordinance enacted in 2017 gave it greater ability to clamp down on rogue rehabbers. The department has suspended permitting privileges for nearly 75 contractors whose illegal work was cited as compromising safety and has issued cease-and-desist orders to 15 unlicensed contractors.

Affordable housing concerns

Apart from construction hassles and other problems, some critics say the show glorifies flipping, which drives out affordable housing and destabilizes neighborhoods.

In its episode featuring a home at 2308 W. Giddings St. in Lincoln Square, the show claimed it was restoring a two-flat “back to a single-family home” — even though brick two-flats around Lincoln Square and elsewhere in Chicago were never built for one family.

A quintessential Chicago type of residence, two-flats, typically built between 1900 and 1920, allow middle-class homeowners to also be landlords, renting out the second unit for income.

In recent years, affordable housing advocates have decried the conversion of two-flats to single-family homes, saying it’s one reason rents are skyrocketing in places like Lincoln Square and North Center.

The renovated home at 2308 W. Giddings. | Stephanie Zimmermann / Sun-Times

Ald. Ameya Pawar (47th) says turning two-flats into luxury homes is partly why his ward has lost 4,000 units of housing over the past 15 years.

While he doesn’t begrudge people wanting beautifully rehabbed, large homes, with that loss of housing comes fewer school children – and lower per-pupil funding for schools.

“I see a school funding crisis in gentrifying areas,” Pawar says. “This is all connected.”

The show’s Giddings Street episode, which aired in January, ended with a gorgeous rehabbed home filled with elegant furnishings. For the show’s big reveal at the end, a couple of stand-ins substituted for the real buyers, who didn’t want to go on-camera, a relative said.

Even though the project looked finished on the show, months later workers were still completing details and the backyard was a mess of winter mud.

Ruth Egofske, the mother of buyer Anna Morrissey, told the Sun-Times the TV show spent more on the rehab than planned and tried to get the couple to pony up more money. They refused (“They’re both lawyers,” Egofske said), but the deal finally closed earlier this month.

In another episode, Victoria ends up turning down a buyer that offered more than they sought — but wanted to change elements of Victoria’s designs (the rejection led Eckhardt to question on air whether he should continue the partnership). The home, at 1906 N. Hoyne, still hasn’t sold, according to state records. It, too, has an unfinished backyard, and the beautifully staged furniture inside — featured at the end of every show — is gone.

So are some incredibly pricey doorknobs she put on doors inside a 1820s-era hand-carved golden, giltwood door frame from southern France that she had installed on the front of the house. The doorknobs — which she said cost $2,000 — were taken down shortly after she revealed their cost on the show.

“Is it weird to be inspired by your own design? I inspired myself today,” Victoria says on the show.

Neighbors, though, aren’t too excited by the house.

“We’re not in love with it,” said neighbor Chris Gashoff. “It doesn’t really fit with the neighborhood. It’s just not our style.” Said another neighbor: “It certainly wouldn’t be the front of the house I would choose.”

Big profits?

Money is a big focus of every episode, with Victoria and Eckhardt touting the cash they’re pocketing on each project.Each episode highlights the purchase price, rehabbing cost, selling price and net profits of up to 35 percent.

Though figures like that might make viewers run for the nearest Home Depot, one longtime Chicago rehabber says he suspects some of the numbers are overblown. “There’s a lot of different ways you can calculate ‘profit,’” says Dan Zolkowski, vice president of CA Development and former owner of Artifex Builders with more than 30 years in Chicago rehabbing.

After deducting all the construction and closing costs and then subtracting fixed costs such as liability and worker’s comp insurance, office space, attorney and accountant fees — not to mention your vehicle, gas and phone — an experienced contractor could expect to earn 10 to 12 percent of the purchase price as profit, Zolkowski says.

“Flipping” houses may look easy on TV, but the reality is a lot more complicated.

“I get it — it’s TV. It’s dramatic and it looks awesome,” Zolkowski says.

What’s more, if a house doesn’t sell quickly, the interest on the loans “just eats away your profit so there’s nothing left,” he says.

Some of the TV show’s houses haven’t sold, even months after they were originally listed.

In on-screen info graphics, the show claimed seven of the 11 properties did sell. However, state property transfer tax records and the Multiple Listing Service only confirm four of them have closed, although the recording of sales can be delayed. A spokeswoman for HGTV did not respond to questions about sales.

The show’s biggest claimed success came at a 130-year-old home in Lincoln Park at 2433 N. Janssen Ave. Among other flourishes, developers used reclaimed wood from a barn outside Chicago in some of the units.

After they rehabbed it and turned it into four apartments, they showed several potential renters praising the quality and value.

“Janssen was a huge success,” Victoria says on the show, which aired Jan. 8. “… We ended up closing at $2.2 million” — resulting in an “unreal” profit of $780,000.

She also boasted that the developers “ended up getting one-year signed leases on all four renters” — which made it attractive to buyers.

“I knocked it out of the park,” she said.

According to records on the Multiple Listing Service, three of four units sat unrented for more than four months. Rent has been dropped by hundreds of dollars since the units went on the market in the fall.

Neighbors haven’t seen anyone going in or coming out of the building, which includes some boarded-up windows, for weeks.

“They said they rented all four, which is laughable,” said neighbor Tim Johnson, who watches the show and praised how the building now looks.

Annie Schweitzer, a broker for the property, says they recently signed two more leases — including one this past week — but the renters haven’t moved in yet.

The building was sold but has yet to close, said Schweitzer, who declined to give more details.

Past owner praise changes

For all its critics, the show — which is airing reruns through April — has plenty of fans.

Charles Janda, the previous owner of the 1929 N. Leavitt St. home, said his house was “pretty dilapidated” and “ripe for tear-down” when the show bought it for rehab.

“I am thrilled they built a home that stayed true to the feel of the original house, on the exterior at least,” Janda says.

Janda says he enjoyed watching his old house star in the show.

“Alison Victoria kind of obsesses over my front door, she took it and turned it into something spectacular,” he says. “And she obsessed on this little light fixture that I probably would have thrown into the garbage in a heartbeat. It was interesting to see her focus on the details.”

And the show won some props from Mary Lu Seidel, director of community engagement for Preservation Chicago, who said what Victoria and Eckhardt are doing is better than the “terrible alternative” of tearing down the houses and replacing them with “McMansions.” She also appreciates how the show features local artifact and restoration businesses, including Urban Remains in West Town and Hammer Design on the Near West Side.

“We are always thrilled when someone is growing an audience of people who see the value of restoring older buildings instead of knocking them down, especially in this show’s market of more luxury homes,” she said.

But like some critics, Seidel wishes they didn’t supersize the homes or make changes like painting the brick exteriors — and tried harder to get along with the communities they target.

“We all know flippers are about turning a profit, but it would be great to see this show model a flipper who seems to have more respect for neighbors of the houses they flip,” she said.

Contributing: Nader Issa

Alison Victoria. | HGTV

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For a year, the University of Illinois at Chicago has downplayed problems in its oversight of the work of a prominent child psychiatrist who violated research protocols and put vulnerable children with bipolar disorder at risk.

But newly obtained documents show UIC acknowledged to federal officials that it had missed warning signs that Dr. Mani Pavuluri’s clinical trial on lithium had gone off track — problems that resulted in the university having to repay a $3.1 million federal grant.

The records show UIC’s Institutional Review Board, the university committee responsible for protecting research subjects at the school:

• Improperly fast-tracked approval of Pavuluri’s clinical trial.
• Didn’t catch serious omissions in the consent forms parents were required to sign.
• And allowed children to be enrolled in the study even though they weren’t eligible under the research guidelines.

The review panel’s shortcomings violated federal regulations meant to protect human subjects, putting it in “serious non-compliance,” according to one of five letters UIC officials sent federal officials.

The university released those letters only after a nearly yearlong appeal by ProPublica Illinois under public records laws.

Despite what the letters say, UIC continues to place blame for the problems solely on Pavuluri. As it did last year when ProPublica Illinois revealed Pavuluri’s research misconduct and the university’s failures of oversight, the university now says that “internal safeguards did not fail” and that its researchers are “responsible for the ethical and professional conduct” of their own projects.

The stories last year, co-published with the Chicago Sun-Times, revealed that, in a rare rebuke, the National Institute of Mental Health ordered UIC in November 2017 to repay millions in grant money it received for one of Pavuluri’s lithium studies.

But the University of Illinois system withheld or redacted some documents, citing federal and state privacy laws. After the university declined to turn them over, ProPublica Illinois appealed to the Illinois attorney general’s public access counselor. The agency decided last month that the school had improperly refused to release all or parts of five letters UIC sent the National Institute of Mental Health and the U.S. Department of Health and Human Services’ Office for Human Research Protections. Other requested records remain under review by the attorney general’s office.

In one of the newly released letters, dated March 22, 2013, James Fischer, then UIC’s director of the Office for the Protection of Research Subjects, told the Office for Human Research Protections an initial internal audit had determined that the university review panel’s shortcomings had “the potential to compromise the integrity of the human subjects protections program.”

Another letter from Fischer, sent in October 2015, explained why a university investigative panel concluded children probably were harmed by Pavuluri’s studies. The university has refused to release the panel’s report, but a summary — which the October 2015 letter refers to — says children were found to have been harmed based on reports from parents and “a preponderance of evidence.”

“It is clear that it is not because of [Pavuluri’s] actions that harms may have been avoided,” the panel concluded, according to part of the report Fischer included in his letter. “It is despite her actions that no subject came to worse harm.”

Pavuluri’s “Affective Neuroscience of Pediatric Bipolar Disorder” study began in 2009, aiming to use imaging to examine how the brains of adolescents with bipolar disorder functioned before and after taking lithium. The brain scans were compared with images from healthy, unmedicated children.

The study was almost complete, and the money spent, when it was shut down in 2013. That was after one of the young subjects became ill after withdrawing from other medication to begin receiving lithium for the study.

According to the study protocol the National Institute of Mental Health had approved, subjects should not have been able to participate if they previously had taken psychotropic medication. The university’s review board did not approve medication withdrawal, records show.

The child’s hospitalization was reported to the review board and to federal officials, who requested more information. UIC conducted the initial audit and then an investigation, keeping federal officials informed of its findings over the next two years.

The National Institute of Mental Health ultimately found that Pavuluri and the UIC review board failed in numerous ways and demanded the $3.1 million be refunded. They determined that the study had been compromised and that its results had no scientific merit.

UIC’s $3 million repayment check to the National Institutes of Health.

The university previously had returned about $800,000 for two of Pavuluri’s other federally funded projects that also were shut down early when similar problems were uncovered.

The newly obtained documents regarding Pavuluri’s work describe poor record-keeping that included missing dates and identification numbers for the research subjects, among other problems, making it difficult for university officials who reviewed the research to tell who took part in the trial and the details of their participation.

The records also contain details that explain why 89 of the 103 children who participated should have been ineligible, for reasons including a history of substance abuse, seizures or suicidal tendencies.

Though the federal grant limited the study to teenagers between 13 and 17, the university review board approved Pavuluri’s request to also include 10- to 12-year-olds despite a prohibition by the National Institute of Mental Health against doing this and a lack of proper documentation by Pavuluri about the reasons for the expansion.

Pavuluri veered even further from the protocol, records show, enrolling 8- and 9-year-olds in the study.

In another significant violation, the university review board approved the inclusion of study subjects as long as they hadn’t taken lithium, though the federal grant barred participation of anyone who previously had taken any psychotropic medication. Nearly 25 percent of the children and teenagers in the study withdrew from or tapered off other medications before participating, including the girl whose illness ultimately led the study to be shut down.

The federal mental health agency has said it was not informed about the eligibility changes to allow younger participants and those who had been on other medications. It said “the changes were significant because they increased risk to the study subjects.”

In written responses to questions, a UIC spokeswoman said no university employees were disciplined for the noncompliance and that the university did not fail in its oversight.

UIC officials have said they took appropriate steps once they realized there were problems with Pavuluri’s research, including reporting the concerns to the federal agencies, suspending her research and ultimately ordering her to retract journal articles. They have said UIC “does not allow non-compliance” and that research on human subjects “was performed upholding the highest standards in ethical and responsible research conduct.”

In its only university-wide communication about Pavuluri’s research, sent last spring, days after the initial story about the problems, school officials discussed Pavuluri’s missteps but did not mention the review board’s failings, saying UIC “did not have any systemic issues of lax research oversight.”

But “corrective actions” were taken, including changes to the university’s review process, records show. Review board panels were instructed to focus on the research protocol when reviewing researchers’ requests to make changes to ensure compliance with the approved criteria.

UIC did an audit to determine whether consent documents research subjects in other studies were given followed the rules. The UIC spokeswoman wouldn’t discuss the results of that audit, but one of the documents indicates the audit found deficiencies in consent forms for 11 of the 28 protocols examined.

Pavuluri, who founded UIC’s Pediatric Mood Disorders Clinic when she joined the university in 2000, retired in June and has opened a private practice, the Brain and Wellness Institute, in Lincoln Park.

She didn’t respond to an interview request. But last year she said her mistakes were oversights and that she made decisions in the best interests of her patients. She said she received minimal research guidance and training from the university, though she received $7.5 million in National Institutes of Health grants while at UIC.

Read the newly obtained documents.

Pavuluri said then that she expanded the criteria for who could enroll in the study because it was difficult to find enough subjects within the narrow age range who were not taking other medication.

She said university officials placed too much blame on her, rather than recognizing those responsible for oversight also were responsible.

“It was in their interest to kind of maybe see this as one person’s mistake [rather] than the responsibility of the IRB as well,” Pavuluri said.

READ THE INITIAL INVESTIGATION

• $3 million research breakdown at UIC, where a star psychiatrist put kids at risk

UIC officials have said that although there were problems with Pavuluri’s research, a review of her medical practice found she provided “high-quality patient care.”

Still, after the reports last year, the Illinois Department of Financial and Professional Regulation opened an investigation into Pavuluri, issuing three subpoenas to UIC in August and September seeking records related to Pavuluri and her research.

Results of state investigations of doctors aren’t made public unless the department imposes discipline.

Pavuluri’s research also has been under investigation by two divisions of HHS, according to subpoenas, emails and other documents: the inspector general’s office, which examines waste, fraud and abuse in government programs, and the Office of Research Integrity, which reviews claims of scientific misconduct.

Redacted documents before and after

Above are examples of a document that ProPublica Illinois originally received, all blacked-out, followed by a less heavily redacted version UIC now has released. Click here to ee what the originally redacted and later version of the documents look like.

Jodi S. Cohen is a reporter for ProPublica Illinois.

Eleven years ago, a Cook County prosecutor decided not to pursue a criminal case against Joseph Cunningham, a Northwest Side man who had been arrested twice in the strangulation death of a coworker.

The now-retired prosecutor says he didn’t think there was enough evidence that Cunningham strangled Dean Goldufsky since Cunningham’s girlfriend said Goldufsky fell down the stairs. And Cunningham’s attorneys hired a pathologist who agreed that’s how Goldufsky died.

Now, Cunningham, 39, has been arrested in Melbourne, Florida, for domestic battery by strangulation, accused of trying to strangle a different woman outside a restaurant on Feb. 19.

“He put me up against a wall and started strangling me,” the woman told the Chicago Sun-Times. “Another customer saw him and called 911.”

According to the police report, the customer had just left the restaurant and saw Cunningham “place both his hands on the victim’s neck/throat in an attempt to strangle her. She saw the fear in the victim’s eyes when the victim tried to pull the defendant’s hands from around her neck. She was able to separate the victim from the defendant and she called 911.”

A Florida judge has granted the girlfriend a two-year order of protection against Cunningham, who has been placed on an electronic monitor and allowed to return to his family in Chicago while the criminal case against him in Florida is pending.

The woman, a 45-year-old nurse, says she met Cunningham last June after he was hired as a nurse at the hospital where she worked. She says she let him stay in her apartment and that there had been previous physical altercations.

Cunningham was arrested the night after the woman says she decided to look up her live-in boyfriend on the Internet and discovered that he had been accused by the police in Chicago of first-degree murder. They said he strangled Goldufsky, a friend who worked for his brother’s company. Goldufsky’s body was found on Feb. 26, 2008, at the bottom of the stairs inside Cunningham’s home at 6511 N. Natoma Ave.

Reached by phone, Cunningham hung up on a reporter. His attorney declined to discuss the Florida charges or Goldufsky’s death.

No one else has ever been charged with killing Goldufsky, whose death remains classified as a first-degree homicide. Chicago police have closed the case, classifying it as “CCX” — short for “cleared, closed exceptionally” — because they believe they solved the case even though the Cook County state’s attorney’s office wouldn’t charge Cunningham.

“The state’s attorney’s office previously reviewed this incident and concluded that, based on the evidence and the law, we would not meet our burden of proof to sustain criminal charges,” says Tandra Simonton, spokeswoman for State’s Attorney Kim Foxx. “We are open to review any new or additional information provided by law enforcement.”

Goldufsky lived in an apartment owned by the Cunninghams and worked for a moving company owned by Cunningham’s brother William Cunningham, a Chicago Fire Department lieutenant.

Joseph Cunningham lived in the upstairs apartment of a home he owned around the corner from Goldfusky’s apartment. They had been drinking at Cunningham’s apartment on the night Goldufsky died, according to police reports that say officers found Cunningham had several scratches on his face that night.

Cunningham’s girlfriend at the time, Katherine Dillon, told police she was in the apartment when Goldufsky left. Dillon told police they heard a noise in the stairwell, found Goldufsky at the bottom of the stairs and that she had scratched Cunningham while trying to get him to stop giving CPR to Goldufsky once paramedics arrived.

The downstairs tenant told police her ceiling fan was shaking and that she had heard “loud banging and things dropping” in Cunningham’s apartment around 6 p.m., a few hours before Goldufsky’s body was found at the bottom of the stairs. She said she heard a noise in the stairwell around 9:15 p.m. and heard Cunningham say, “Don’t do this to me, wake up, wake up,” and then a woman ask, “Should we call the police?”

Dr. J. Lawrence Cogan, who was a pathologist for the Cook County medical examiner’s office, found that Goldufsky was strangled, saying he based that on injuries to the larynx that include a fractured cornua — part of the hyoid bone.

“It usually breaks during strangulation,” says Cogan, now retired. “It takes force to break the cornua.”

Cogan also found other injuries, including a separated cervical disc.

Cunningham’s lawyers brought in another pathologist, Dr. Shaku Teas, who once worked for the medical examiner’s office, to review Cogan’s findings. Teas’ finding was that Goldufsky died from spinal injuries suffered by falling down the stairs.

Dr. Shaku Teas. | File photo

“Apparently, these two guys would get together and drink,’’ Teas says. “Because [Goldufsky] was blind in one eye, and he had a lot of alcohol in him, it would be easy for him to fall. If you looked at the staircase, you realized how easy it would be to fall down the stairs.”

Though she disputes the official finding of strangulation, Teas says she never examined Goldufsky’s larynx because it had been removed by the medical examiner’s office.

Without examining the larynx, Cogan questions how she could dismiss his conclusion that Goldufsky was strangled.

“There’s deep-tissue injuries to the neck that you shouldn’t get if you fall down the stairs,” Cogan says. “I don’t know how she can say the conclusion is incorrect since she didn’t examine the larynx. She didn’t see the fracture.”

Robert Heilingoetter, the assistant state’s attorney on the case who declined to charge Cunningham, says it would have been a difficult case to prosecute because of “the battle between the medical examiners.”

Goldufsky’s family filed a wrongful-death lawsuit against Cunningham, settling for $150,000.

Dean Goldufsky (center) with his family. | Provided photo

Since Cunningham’s arrest in Florida, Goldufsky’s family has contacted law enforcement authorities in Chicago and Florida in hopes of getting the investigation into Goldufsky’s death reopened.

“We’d like nothing more than for them to open the case and take another look at it,” says Shari Kvistad, Goldufsky’s mother.

Click here to read Nov. 11, 2013, Sun-Times report on Chicago police “cleared, closed exceptionally” cases.

Cook County Circuit Judge Mauricio Araujo attended the wake for the mother of Chicago cop David Salgado.

Araujo dropped by Salgado’s bachelor party — in South America.

And Araujo was invited to his wedding.

But are they friends? Not according to the judge, when the FBI asked him.

Araujo told the FBI that Salgado — who is now facing federal corruption charges — was “more than an acquaintance but not quite a friend,” according to an FBI summary of the interview.

Araujo certainly saw Salgado frequently. As a judge, he approved nearly half of the search warrants issued to the officer’s gang crimes unit in the past three years, according to records and interviews.

Cook County Circuit Judge Mauricio Araujo signed 82 search warrants for a Chicago police gang crimes unit at the center of a federal corruption case. | Rich Hein / Sun-Times

The FBI questioned Araujo about a month before Salgado and his supervisor, Chicago police Sgt. Xavier Elizondo, were indicted in May 2018, accused of stealing cash from drug dealers during searches. Salgado and Elizondo are charged with presenting false information to judges to obtain search warrants.

Araujo hasn’t been charged with any crime.

On March 27, 2018, an FBI agent and a federal prosecutor visited a courtroom in the Leighton Criminal Court Building at 26th and California after Araujo finished hearing cases for the day.

Records reviewed by the Chicago Sun-Times show the judge asked them, “Are you here for me?” They asked to speak with him in private, and he said no.

Araujo asked the FBI agent to confirm that he wasn’t a target of the investigation — but the agent declined.

The judge also is quoted as telling the authorities, “You’ll be hearing from the attorney general about this.”

Then, on April 11, Araujo was interviewed at the U.S. attorney’s office. That’s when he described his relationship with Salgado as “more than an acquaintance but not quite a friend,” according to an FBI summary that says the judge talked about when he socialized with Salgado.

The Leighton Criminal Court Building, where Judge Mauricio Araujo was assigned until last year, when he was accused of sexual harassment. | Sun-Times files

He told them he went to a wake for Salgado’s mother and that he had met with Salgado in Cartagena, Colombia, at Salgado’s bachelor party, which overlapped with the 80th birthday party for Araujo’s father there, according to the summary.

Araujo also told the authorities he was invited to Salgado’s wedding and reception in 2017, according to the document, which quotes the judge as saying the situation involving Salgado and Elizondo was sad and that it had damaged the trust that people have in the police.

Shortly after Salgado and Elizondo were indicted on May 9, 2018, Chief Cook County Judge Timothy Evans changed the rules for judges to approve search warrants. Police officers now must call a randomly assigned duty judge when seeking approval of a warrant after hours or on weekends, court spokesman Pat Milhizer said. Officers seeking warrants during regular court hours are sent to the chambers of Judge LeRoy Martin Jr., chief of the court’s criminal division, where they’re sent to a randomly assigned judge. Officers also can seek approval from one of the six judges in the rotation who preside at preliminary bail hearings.

Araujo approved 82 search warrants for the officers’ Area Central gang enforcement unit from 2015 to 2018, records show. That’s nearly four times more than any other judge.

Though Araujo won’t comment, a source close to the judge said he was just “accessible” to officers.

A few dozen other Cook County judges also have signed warrants for the gang team in the past three years, records show. Nearly all the other judges signed just one or two warrants for the unit. One judge signed 22.

The Sun-Times reviewed 188 search warrant “data forms” obtained through a public records request. The newspaper asked the police department for information about searches involving Elizondo and Salgado and three other officers who’ve been stripped of their police powers but haven’t been charged.

Sgt. Xavier Elizondo when he appeared in federal court last May. | FOX32

Salgado was the “affiant” who requested many of the warrants, and Elizondo supervised many of the searches, the records show.

In December 2017, Salgado presented Araujo with an informant who gave a false story so the gang unit could obtain a warrant to search an apartment in Humboldt Park, according to federal court records.

The officers discovered $15,000 — which the FBI had secretly planted in a stove at the apartment as part of a sting operation on the cops. The officers also found surveillance equipment that the FBI had installed in the apartment, court records show.

The officers properly placed the entire $15,000 in evidence, the court records show. But the following month, according to court records, the officers stole $4,200 in another search that also was monitored by the FBI. That’s at the center of the federal indictment against the officers.

Araujo no longer signs off on search warrants after being assigned last year to administrative duties in response to a sexual harassment complaint made by a Cook County prosecutor. Araujo is accused of calling the prosecutor a “bitch” and suggesting that he had sex with her when they were law students.

He is now limited to performing marriage ceremonies and conducting legal research at the Daley Center.

The harassment complaint remains under investigation by the Illinois Judicial Inquiry Board.

Many of the warrants Araujo signed for the Area Central Gang Enforcement Unit 311 were “John Doe” warrants, meaning an anonymous informant provided information to justify the need for a raid.

Officers are supposed to bring unnamed “John Does” before a judge so the judge can question the informant and verify that the source is a real person and decide whether the information seems trustworthy, according to Dan Locallo, a retired Cook County judge.

“With a warrant, you are authorizing police to go in to someone’s home, so you want to make sure that there is good, constitutional reason for them to violate that privacy,” Locallo said.

A source close to Araujo said the judge questioned every John Doe informant before he would approve any search warrant. During the day, he’d often meet cops and their John Doe informants in parking lots outside the courthouse at 26th and California where he worked, according to the source, who said the officers didn’t want their informants seen by criminals in the courthouse.

At night, the judge would drive to meet officers and their John Doe informants because he didn’t want snitches with criminal backgrounds coming near his home, the source said.

It’s not uncommon for judges to do that.

But the number of warrants Araujo signed for the gang enforcement unit seems “unusual,” according to a Cook County judge who spoke only on the condition that he not be identified by name.

The Dec. 20, 2017, raid that led to the $15,000 seizure by the gang unit involved a John Doe informant. Authorities say Salgado presented Araujo with false information from the John Doe. An FBI informant wearing a hidden microphone was recorded telling Elizondo and another officer that he bought marijuana in the apartment, according to court records.

But the affidavit for the warrant, prepared by officers, said something different: that the informant saw two bricks of heroin on a kitchen table while buying the drug there, records show.

Then,on Jan. 28, 2018, an informant secretly working for the FBI gave the cops a tip about a Hyundai parked at a hotel near Midway Airport. The informant told the officers they’d find cocaine and cash in the car.

FBI agents hid $18,200 in marked bills in the car to see whether the officers would make a proper inventory. The officers seized the money, keeping $4,200 and turning over the rest to the police department, according to the FBI.

The officers are accused of lying in their police report that they “observed the vehicle to be open,” though it was locked, according to the FBI, which said the informant told the officers a key was hidden in the bumper, which they used to open the car.

At least 14 people have pleaded guilty to charges after they were arrested as part of Area Central Gang Enforcement Unit 311 raids authorized by Araujo, records show.

Five went to prison. The rest got probation. Seventeen others were arrested, but the charges against them later were dropped, court records show.

Cook County prosecutors have said the corruption charges against Elizondo and Salgado have prompted them to dismiss dozens of cases in which the officers had a role in an arrest. And in the past three years, the city has paid out at least $200,000 to settle lawsuits against officers on their gang unit.

For decades, a colorful and changing cast has been angling to build on 62 vacant acres along the Chicago River just south of the Loop, a project City Hall now hopes to jump-start with money from taxpayers before Mayor Rahm Emanuel leaves office next month.

Some of the names involved have been widely reported. Like Tony Rezko, the political fixer who spent more than eight years in prison after being convicted of kickback schemes under Gov. Rod Blagojevich. And Nadhmi Auchi, an Iraqi billionaire living in London who was convicted of accepting illegal commissions in an oil deal in France, fined and sentenced to probation.

The property also attracted interest, the Chicago Sun-Times has learned, from Felix H. Sater, a Russia-born New York developer with ties to President Donald Trump. Sater, a convicted felon who worked for the Trump Organization on a proposed skyscraper in Moscow, is now a figure in the federal investigations of Russian interference in the 2016 presidential election.

Rezko’s former business partner Daniel Mahru says, he had a deal set to sell the land at Roosevelt Road and Clark Street to Sater in the early 2000s for $175 million.

At the time, Sater was managing director of Bayrock Group LLC, the New York City firm that helped finance the Trump SoHo hotel.

But Mahru says Rezko rejected the deal.

“I wanted to sell it because the development was going to be huge, and it was beyond the capacity of my company,” Mahru says. “Felix never represented he had the money to buy it but that he had clients who had the money. Our total cost in it was $125 million, and we were going to sell it for $175 million. It would have been a tidy profit. Tony wouldn’t sell.”

“I wanted to sell it because the development was going to be huge, and it was beyond the capacity of my company,” says Tony Rezko’s former business partner Daniel Mahru, seen here leaving court in 2014. “Tony wouldn’t sell.” | Sun-Times files

These talks occurred while Sater was a cooperating witness with the federal government, something Mahru says he was unaware of.

Sater, a longtime friend of Trump’s former attorney Michael Cohen, joined Bayrock in late 2002. That was about four years after a federal grand jury in New York indicted him on charges of stock manipulation and money-laundering as part of a $40 million scheme involving the New York mafia.

Much of Sater’s federal criminal case still remains sealed, though federal officials are urging a judge to unseal parts of the case as part of the Trump investigation — including Sater’s efforts to build a Trump skyscraper in Moscow, about which he testified before Congress last month.

Following his indictment, Sater immediately pleaded guilty in 1998 and began cooperating with the FBI and other federal agencies, though that was kept secret for over a decade.

Sater provided “information crucial to national security and the conviction of over 20 individuals, including those responsible for committing massive financial fraud and members of La Cosa Nostra,” former Attorney General Loretta Lynch said at her confirmation hearing in 2015.

Sater’s sentencing was delayed until 2009, when he was fined $25,000 and sentenced to probation.

Sater, 53, says his cooperation with federal authorities included investigations of organized crime and, as he testified before Congress in 2017, providing information about Al-Qaeda and Osama bin Laden.

But Sater says his cooperation with authorities never involved Rezko or Mahru, who got millions of dollars in government funding to develop low-income housing in Chicago before they bought the 62-acre site in 2002.

“Nobody from any agency ever talked to me about Rezko,” Sater says.

The massive proposed development being marketed as “The 78” would be built with millions of dollars of Chicago taxpayers financing on 62 vacant acres at Roosevelt Road and Clark Street in the South Loop. | Leslie Adkins / Sun-Times

Rezko and Mahru faced federal charges in separate crimes. Mahru was charged with wire fraud in late 2004, ultimately pleading guilty to defrauding his mother’s estate of $10,000 and serving three years of probation. Rezko was indicted in 2006 for using his influence with the Blagojevich administration to cut deals with companies seeking state business. He was found guilty and ended up serving about eight years in prison.

Sater and Mahru say they don’t remember how they met.

“He was recommended to me as someone who could put the deal together,” Mahru says. “He said he had a couple big investors who could put the deal together. He made me an offer. It was contingent on” tax-increment financing from City Hall. But Mayor Richard M. Daley never approved that taxpayer support for the property.

Sater says he remembers visiting Chicago a few times to look at the 62 acres after 2002, when he joined Bayrock, operating from the 24th floor of Trump Tower in Manhattan.

“I don’t know if we discussed purchasing it, but we discussed developing a project there,” Sater says. “The truth is I don’t remember every deal. But I do remember Dan. It was preliminary. On the preliminary side, it was serious.”

Asked about Bayrock and Sater, Rezko says: “I do recall the names. I just had nothing to do with them.”

Rezko and Mahru acquired the property in February 2002 for $72.3 million from Robert Wislow and Joseph Cacciatore, politically connected developers who maintained a stake in the deal through a mortgage on the property, public records show.

Rezko says he bought out Mahru in 2004, taking on a new partner in November 2005. Records show the property was sold that year for $65 million to Riverside District Development LLC, owned by Auchi.

Tony Rezko, seen here in 2008. | AP

Within a year, Rezko was indicted for shaking down companies that wanted to invest state pension funds under Blagojevich.

Auchi still owns the 62-acre site. His attorneys say neither Rezko nor Mahru has any financial interest in the land.

For the past three years, Auchi has had a new partner, Related Midwest. They plan to build homes, offices and retail around 11 acres of parks and open space on the 62-acre site that they’re marketing as “The 78,” proclaiming it will become Chicago’s 78th neighborhood.

They are awaiting approval of more than $550 million in city financing from the Emanuel administration to build a river wall, relocate Metra tracks, erect a new CTA station on the Red Line and make improvements to Clark Street.

The status of the project is uncertain. Emanuel is leaving office in May, and the land is in the 25th Ward, whose alderman, Danny Solis, hasn’t been seen at City Hall in weeks since the Sun-Times revealed in January that Solis has been cooperating in a federal investigation of Ald. Edward M. Burke (14th). Burke has been charged with trying to shake down a Burger King owner.

The City Council Finance Committee, which Burke headed until his arrest, meets Monday. A city planning official says it’s expected to consider approving taxpayer financing for the 62-acre project.

The Trump SoHo hotel was built in partnership with the Bayrock Group, where Felix Sater was managing director. | Getty Images

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A bill that has support from Democrats and Republicans would prohibit the Internal Revenue Service from ever developing its own online tax-filing service.

Just in time for Tax Day, the for-profit tax-preparation industry is about to realize one of its long-sought goals. Congressional Democrats and Republicans are moving to permanently bar the IRS from creating a free electronic tax filing system.

A week ago, the House Ways and Means Committee, led by U.S. Rep. Richard Neal, D-Massachussetts, passed the Taxpayer First Act, a wide-ranging bill making several administrative changes to the IRS that is sponsored by Reps. John Lewis, D-Georgia, and Mike Kelly, R-Pennsylvania.

In one of its provisions, the bill makes it illegal for the IRS to create its own online system of tax filing. Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system. If the tax agency created its own program, which would be similar to programs other developed countries have, it would threaten the industry’s profits.

“This could be a disaster. It could be the final nail in the coffin of the idea of the IRS ever being able to create its own program,” said Mandi Matlock, a tax attorney who does work for the National Consumer Law Center.

Experts have argued that the IRS has failed to make filing taxes as easy and cheap as it could be. In addition to a free system of online tax-preparation and filing, the agency could provide people with pre-filled tax forms containing the salary data the agency already has.

The Free File Alliance, a private industry group, says 70% of American taxpayers are eligible to file for free. Those taxpayers, who must make less than $66,000, have access to free tax software provided by the companies. But just 3% of eligible U.S. taxpayers actually use the free program each year. Critics of the program say that companies use it as a cross-marketing tool to upsell paid products, that they have deliberately underpromoted the free option and that it leaves consumer data open to privacy breaches.

The congressional move would codify the status quo. Under an existing memorandum of understanding with the industry group, the IRS pledges not to create its own online filing system and, in exchange, the companies offer their free filing services to those below the income threshold.

One member of the Free File Alliance explicitly told shareholders that the IRS “developing software or other systems to facilitate tax-return preparation … may present a continued competitive threat to our business for the foreseeable future.”

The IRS’ deal with the Free File Alliance is regularly renegotiated and there have been repeated, bipartisan efforts in Congress to put the deal into law.

Those efforts have been fueled by hefty lobbying spending and campaign contributions by the industry. Intuit and H&R Block last year poured a combined $6.6 million into lobbying related to the IRS filing deal and other issues. Neal, who became Ways and Means chair this year after Democrats took control of the House, received $16,000 in contributions from Intuit and H&R Block in the last two election cycles.

READ THE WATCHDOGS

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Neal, who describes himself as a longtime champion of the existing Free File program, has argued that it would “would help low- and moderate-income taxpayers.”

The House Ways and Means committee that U.S. Rep. Richard Neal (above) chairs has passed a bill to make it illegal for the IRS to create its own online system of tax filing. Companies like Intuit, the maker of TurboTax, and H&R Block have lobbied for years to block the IRS from creating such a system, which would threaten their profits. | AP

Free File Alliance executive director Tim Hugo called it “a great idea when you can provide a great product — free tax returns — to Americans at no cost to the federal government.” An H&R Block spokesperson said the company believes “Free File should be the subject of ongoing improvement, and we are committed to working with all parties to strengthen and improve Free File on behalf of the American taxpayer.”

Spokespeople for Neal, Lewis and Kelly did not respond to requests for comment. A companion Senate bill with the same provision has been introduced by Sens. Chuck Grassley, R-Iowa, and Ron Wyden, D-Oregon.

While efforts to make the IRS’ deal with the tax-preparation industry permanent have fizzled in the past, critics are particularly worried this year. The Taxpayer First Act also includes a provision that would restrict the IRS’ use of private debt collectors to those above a certain income. A Wyden spokesperson said the current bill is a “bipartisan, bicameral compromise so it includes priorities of both chairmen and ranking members.” Wyden “supports giving the IRS the resources it needs to offer more services to taxpayers,” the spokesperson said.

Justin Elliott reports for ProPublica, an independent, nonprofit newsroom based in New York.

Chicago’s Noble Network of Charter Schools has spent $326,000 for costs related to the sudden retirement in November of its founder and CEO, who said he’d “acted inappropriately” with recent female graduates of the city’s largest government-funded but privately run charter school network, records obtained by the Chicago Sun-Times show.

And the bills keep coming for Noble, which runs 17 high schools and one middle school, all in Chicago, with a total of about 12,000 students, 89 percent of them from low-income families and 98 percent of them from minority groups.

The costs include payments to Michael Milkie, 58, and legal fees, according to records released in response to a public records request.

Noble’s board hired a $695-an-hour labor lawyer last Nov. 6 — the day Milkie announced he was leaving. That was to investigate whether Milkie “engaged in any inappropriate conduct while interacting with females,” according to a Jan. 4 letter from a partner in the law firm that said the scope of the probe was expanding to include whether anyone at Noble knew of improprieties and to make recommendations. The letter also confirmed an increase in the top hourly rate to $725.

The charter network — whose board is peppered with high-profile names — has paid the law firm Bryan Cave Leighton Paisner about $280,000 for the first four months of work, through Feb. 28, of what it says is an ongoing investigation, records show. That includes $10,000 to draw up a contract for Milkie’s successor. Effective March 1, Noble negotiated a discount of about 10 percent on its legal fees.

Noble spokesman Cody Rogers said the money to pay for the law firm’s investigation is being drawn from private money that had been donated to the charter network and that the cost isn’t being borne by taxpayers.

However Noble chooses to account for that expense, government funding covers nearly all of its budget. Only about 10 percent of Noble’s funding comes from private donations. The remaining 90 percent comes from taxpayers through CPS, which state law requires to fund the operations of any Chicago charter school it has authorized.

For the current school year, CPS budgeted $157 million for Noble in local, state and federal funding the public school system receives.

Rogers would not make anyone from Noble available for an interview. A top staffer from the charter network told members of its board of directors, who oversee the schools, not to talk about Milkie or the investigation they authorized.

Milkie, who was paid a salary of about $232,000 a year as chief executive officer, plus bonuses in recent years of $20,000 annually, wouldn’t agree to an interview but said in a written statement: “I have previously offered an apology and continue to feel remorse for behavior that did not meet the standard of my role.”

Milkie made about $8,000 a year less than the $260,000 CPS pays its CEO, Janice Jackson, who runs a far larger school system, with about 361,000 students.

Records show he has begun drawing a government pension of $10,813 a month, or about $129,000 a year, after working first for CPS and then for Noble over nearly three decades — what he said is “the normal public pension based on my 29 years of service in the Chicago school system.”

Mark Hubbard, a spokesman for Milkie, said the one-time CPS math teacher is cooperating with the investigation by the law firm Noble hired and with a second investigation, by the CPS inspector general’s office. Hubbard would not say whether Milkie has been interviewed by either team.

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Milkie announced in early November he would retire at the end of 2018.

At the time, Noble explained his sudden decision to step down with a written statement that said he was “retiring for personal reasons.”

A week later, after two female alums and one anonymous Noble staff member spoke with WBEZ-Chicago about  complaints about Milkie, Rogers expanded on the initial explanation. In a written statement then, Rogers said: “In October of this year, it became clear to Michael Milkie’s direct reports, then-President Constance Jones and Head of Schools Ellen Metz, that he had a pattern of inappropriate behavior across several incidents, including hand-holding and an instance of slow-dancing with an alumna. Based upon this pattern, Ms. Jones and Ms. Metz voiced a lack of confidence in Mr. Milkie’s leadership. When confronted with this information, Mr. Milkie chose to retire.”

In a statement, Milkie also apologized that he “acted inappropriately toward adult women affiliated with Noble.”

The CEO didn’t have a contract, so he wasn’t guaranteed any payments upon leaving Noble. But the charter operator continued to pay him for nearly two months during which Rogers said “he was not allowed on campuses, had no official daily responsibilities, could not have contact with students and could only discuss Noble-related matters through the human resources department.”

Payments for unused “paid time off,” reimbursement for using his own car and his salary covering Nov. 7 through Dec. 31 came to about $46,000, records show.

Milkie said, “I worked on transitioning my expansive experience as leader to the organization.”

His pay accounts for about $35,000, about a quarter of which covered end-of-year holidays when school was closed.

“When serious allegations against an employee come to light, the employee is removed from their workplace and placed on leave at their normal pay rate pending the outcome of an investigation,” Rogers said. “In this case, Mr. Milkie chose to set a retirement date well before the results of any investigation would be delivered, for reasons only he knows.”

Noble paid him $11,000 for unused vacation and other time off he was owed and for driving his car on the job. In previous years, it had leased a $33,000 Honda Pilot sport-utility vehicle for him.

What’s now Noble Street College Prep, 1010 N. Noble St., was one of Chicago’s first privately managed, government-funded charter schools. | Annie Costabile/Sun-Times

Two decades ago, Milkie and his wife, Tonya Milkie, were CPS teachers — he was working at Wells High School in West Town — when they decided to open a high school nearby at 1010 N. Noble St. Opening in 1999, the Noble Street Charter School, now called Noble Street College Prep, was one of Chicago’s first charter schools.

Michael Milkie was its principal, and sometimes coached the pom squad and girls volleyball.

As Noble grew and opened new schools, aiming, according to Milkie, “to give Chicago students a better chance for college success,” he oversaw all of them as superintendent and CEO, but still coached girls basketball and taught gym.

Noble’s decision to hire the law firm came after CPS had hired another firm to investigate CPS’ handling of sexual misconduct allegations involving public school employees and volunteers. The top hourly rate that Noble is paying the firm is more than twice the $295 maximum CPS typically pays for outside lawyers.

After Noble announced that Milkie was leaving and why, Nicholas Schuler, whose office had recently taken over investigations of reports of sexual abuse at CPS schools, opened his own investigation, saying, “We think this needs independent review.”

Among Noble’s 20-member board are parents, philanthropists and business and civic leaders including John Rowe, the retired Exelon Corp. chairman and CEO, who didn’t respond to messages seeking comment about Milkie’s departure.

The board’s president, Allan Muchin, from the law firm Katten Muchin Rosenman, agreed to an interview about Milkie’s exit terms but then was described as indefinitely unavailable after a Noble official instructed board members to refer calls to Rogers.

An assistant to one board member, John Butler, who is chairman of the Iowa insurance firm Cottingham & Butler, said he was “unavailable” and, asked whether he’d be free for an interview later, said, “Nope, not ever.”

Another board member, Troy Ratliff, vice president of the Joseph Kellman Family Foundation, said: “He retired for personal reasons. If they were personal, I decided there was no need for me to know more than they were personal reasons.”

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Contributing: Robert Herguth

They’ve caused hundreds of house fires with millions in damages and figured in last month’s first-ever criminal charges under a federal product-safety law.

But despite a national recall, thousands of dangerous, defective dehumidifiers remain in people’s homes, often running 24/7 in basements where overheating can go unnoticed, experts say.

With the warm weather, the federal Consumer Product Safety Commission is urging consumers to check their make and model against several announced recalls for dehumidifiers made by Gree Electric Appliances, GD Midea Air Conditioning Equipment Ltd. and LG Electronics Tianjin Appliance Co., all in China.

The recalls cover about 6.8 million dehumidifiers that were sold as late as 2013 at major stores including Home Depot, Kmart, Lowe’s, Menards, Sam’s Club, Sears, Ace Hardware, Walmart and Amazon.com.

The defective dehumidifiers have been linked to approximately 500 fires that caused a total of more than $25 million in damage, according to the federal consumer agency. The bulk of those were with Gree dehumidifiers.

The recalls were announced and reissued over the past few years, but fires keep happening. It’s not known how many units are still in people’s homes. In general, consumer response to recalls averages about 6 percent.

“People need to know these things are really dangerous,” says Richard Schuster, a Wisconsin lawyer who has handled numerous insurance cases involving fires with recalled dehumidifiers, including several in Illinois.

Many consumers don’t know about the recalls and are running defective units continuously during warmer weather, causing fires, Schuster says. “It’s not going to stop,” he says. “There’s going to be more and more claims unfortunately.”

To check your dehumidifier, search on CPSC.gov for “dehumidifier” to bring up information on the recalls.

Gree also has its own recalls site, as does Midea.

“It is troublesome that we are continuing to see fires with recalled dehumidifiers because what that means is people are unaware about the recall,” CPSC spokeswoman Patty Davis says.

Even if their unit is not on a recall list, consumers should turn off dehumidifiers whenever they leave the house or go to bed, Davis says.

“Never turn on a dehumidifier and forget about it,” she says. “Keep your eye on it just like you would any other small appliance.”

Damage caused by a fire caused by a recalled dehumidifier. | Consumer Product Safety Commission

Leon Jackson of downstate Normal and his family were lucky to survive last September, when a dehumidifier they didn’t realize had been recalled caught fire, causing extensive damage to their home. His family was asleep when the unit, in the basement, apparently overheated and caught fire sometime before 5 a.m.

The home is being gutted and rebuilt. Jackson says he hopes they will be able to return in mid-May — eight months after the fire.

“We haven’t been back since the fire,” Jackson says. A smoke alarm was “pretty much the only thing that kept it from being a tragedy.”

Normal Fire Chief Mick Humer says the units can smolder out of sight in a basement for hours before fire spreads.

“It just looks like a molten glob when it’s all over,” he says. “It does an incredible amount of damage through the house because of the smoke.”

The dehumidifiers were sold under about 60 names, adding to the confusion. Some were familiar brands like Frigidaire, GE, Kenmore and Sunbeam. Others were essentially the same product but sold under a different brand.

In March 2016, Gree agreed to pay a $15.45 million civil penalty for failing to report known problems with the dehumidifiers to the U.S. government.

Last month, the Justice Department announced federal charges against two executives of a company that imported and distributed the defective Gree dehumidifiers, accusing them of failing to report known defects and continuing to sell unsafe units to retailers.

After a dehumidifier fire last August killed her dog Bubba and caused extensive smoke damage to her family’s home, Sophie Meranda of Cedarburg, Wisconsin, started a Facebook group — “Bubba Barks Back” — to spread the word about dehumidifier recalls.

Meranda says her family’s dehumidifier ignited one morning when everyone was out of the house, but the dog was still inside. The fire was contained to the basement, but smoky dust carried by the air-conditioning spread through the home, even covering items inside drawers and cabinets.

Her father was the first one home. “He was calling and calling for Bubba, and no response,” Meranda says. “That was so devastating.”

The family found out after the fire that their dehumidifier had been recalled. After Meranda started the Facebook page to honor her dog, she says about 45 people have told her they’ve checked their dehumidifiers and found they’d been recalled, too.

A top lieutenant in the drug cartel led by Joaquin “El Chapo” Guzman Loera pleaded guilty to a drug conspiracy Wednesday in federal court in Chicago.

Jesus Raul Beltran Leon, 35, admitted his role in the sale of 46 kilograms of cocaine sold in Los Angeles between June 8 and June 10 in 2013.

Beltran Leon now faces a maximum penalty of life in prison. He admitted his guilt in court after signing a written plea declaration, meaning he did not reach a deal with the government.

Sentencing in federal court in Chicago was set for July 10, but it could take multiple hearings to decide his fate.

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Prosecutors asked for time to bring in witnesses to testify. Defense attorneys said they want that testimony to happen before the sentencing hearing.

Beltran Leon’s guilty plea scuttles a trial set for next month that appeared to be on track until last week, when Wednesday’s hearing was announced. It would have followed a three-month blockbuster trial in Brooklyn that ended earlier this year with the conviction of “El Chapo,” the infamous Sinaloa kingpin.

Guzman now likely faces a lengthy, if not permanent, visit to the federal supermax prison in Florence, Colorado.

Unusual security also surrounded the hearing Wednesday in the 25th floor courtroom of U.S. District Chief Judge Ruben Castillo in Chicago. Observers had to walk through a metal detector before entering Castillo’s courtroom to watch Beltran Leon plead guilty, and the general public was not allowed to bring in electronic devices.

Federal prosecutors say Beltran Leon once worked with Guzman’s sons, Alfredo and Ivan Guzman, to smuggle massive shipments of drugs into the United States. Beltran Leon is related to “El Chapo” by marriage. And he once allegedly bragged he was “one of the first people” to see Guzman after Guzman escaped from a Mexican prison in 2001.

Guzman got out of the prison by bribing guards and supposedly hiding in a laundry cart. He was captured in 2014 but escaped from prison again in 2015, only to be recaptured in 2016. He was brought to the United States a year later to stand trial.

Beltran Leon was captured in Mexico in 2014 and extradited to Chicago in 2017. He has accused U.S. Drug Enforcement Administration agents of watching as Mexican soldiers tortured him after his capture in November 2014. Castillo acknowledged the allegations were disturbing, but he refused to dismiss the case over it.

The wanted poster in Mexico for Jesus Raul Beltran-Leon. | Mexican government

The case against Beltran Leon dates back to a far-reaching indictment the U.S. attorney’s office in Chicago obtained against Guzman and his reputed associates in 2009. Key evidence from that case made its way into Guzman’s trial in Brooklyn.

Had Beltran Leon gone to trial, prosecutors planned to call high-ranking members of the Sinaloa cartel and others to testify about the movement of millions of dollars in drug proceeds, about an attempt to smuggle drugs into the United States through a tunnel, about close calls with law enforcement and about the greeting party that followed Guzman’s 2001 prison break.

Beltran Leon allegedly told one member of the Sinaloa cartel he had been with Ivan Guzman when “El Chapo” called with instructions to pick him up. Beltran Leon said he came along for the ride.

Another Sinaloa member had been expected to testify that he’d invested in a two-ton marijuana load in Mexico headed for the United States. The plan had been to smuggle it across the border through a tunnel, but law enforcement found the tunnel first.

Three years later, Beltran Leon suddenly darted into that cartel member’s car. He explained he had just been at a restaurant with Alfredo Guzman, Ivan Guzman and others. A waiter then warned, “the government was coming,” prosecutors said.

Beltran Leon said they swapped clothes with some waiters and made a break for it.

Yet another potential witness worked as a money courier for Beltran Leon in 2012 and 2013. That courier was expected to testify about deliveries of drug proceeds that occurred at least 10 times a month, for an estimated total of up to $6 million per month.

Beltran Leon let the courier keep one half of 1 percent of the money, prosecutors said. But if the courier brought the drug money down to Mexico, the courier received 1 percent.

Contributing: Frank Main

With construction underway on another O’Hare Airport runway, the Chicago Department of Aviation has been taking extra steps to keep contractors unfamiliar with the airfield’s labyrinthine layout of takeoff and landing strips, taxiways and tunnels from accidentally driving onto where planes are arriving or departing.

Among the safety measures: stationing city workers in trucks at key airfield intersections to block ground vehicles from blundering onto an active runway.

One of the workers assigned to ensure runway safety was involved in a runway mishap on April 2, when he drove a city vehicle onto a runway as an American Airlines jetliner was landing. Officials say the plane was slowing, and no one was hurt.

But it was another in a string of potentially serious runway mishaps at O’Hare. It happened days after the Chicago Sun-Times reported there have been 62 runway “incursions” in fiscal years 2017 and 2018 and so far in 2019.

A dozen of those incidents involved city workers subsequently accused of violating safety protocols by driving vehicles into active takeoff and landing zones, according to records obtained by the Sun-Times and interviews that also revealed the workers typically faced little punishment.

Chicago Aviation Commissioner Jamie Rhee initially would not say whether the April 2 mishap involved one of her employees. Later, Rhee — a Mayor Rahm Emanuel appointee whose department oversees Midway Airport in addition to O’Hare — acknowledged the driver works for her agency.

The worker was handed a five-day suspension, his airfield driving privileges were suspended, and he was ordered to undergo additional training, records show.

Rhee wouldn’t provide details about what happened, saying it remains under investigation by the Federal Aviation Administration.

But a source knowledgeable about the situation told the Sun-Times the foul-up occurred when the worker was driving to relieve a colleague parked on a taxiway north of Runway 27-Left — an active east-west strip north of O’Hare’s terminals.

The parked city vehicle was there in part to keep out traffic from workers involved in a $95 million construction project that includes repaving nearby Runway 4-Left, which is closed to planes during the work.

It’s not clear where the relief driver entered Runway 27-Left. But he did so without permission from air-traffic controllers and soon found barricades kept him from getting from Runway 27-Left to his colleague on the taxiway, the source said.

“He drove out, then realized, ‘Holy s—, I can’t get through,’ ” according to the source, who said the driver tried to find another way off the runway.

The American Airlines jet, coming in from Atlanta, touched down from the east and at one point was rolling toward the city vehicle. The plane “was on the runway at the same time as the city vehicle,” the source said.

READ MORE

• More than 60 runway mishaps at O’Hare Airport in past 2 1/2 years, March 31, 2019
• Close call at O’Hare: Plane turns into path of 2nd jet, forcing evasive action, March 1, 2019
• Chinese cargo plane strayed dangerously close to departing United jet at O’Hare, Jan. 11, 2019
• Despite O’Hare safety boasts, FAA slammed city’s handling of winter operations, March 9, 2018
• 90 airfield mishaps at O’Hare Airport since 2015, Aug. 23, 2017

Asked about the incident, FAA spokesman Tony Molinaro said: “A vehicle was observed at the intersection of Runway 27L and closed Runway 4L after a flight had landed. The aircraft had already slowed down, and no evasive action was required by the flight crew.”

American spokeswoman Leslie Scott said: “It was after landing, and the aircraft had already greatly slowed its rate of speed. No evasive action was taken, and the aircraft proceeded to the gate normally.”

The driver couldn’t be reached. His Teamsters union representative, contacted by phone, said, “I don’t talk to no reporters,” then hung up.

Rhee, aviation commissioner since last summer, said runway mishaps are taken seriously: “Our goal is none — less than none.”

She said she has “launched a comprehensive review of all safety and security protocols,” including “dissecting . . . every which way” incursions have occurred.

When they have happened, city workers who were involved typically have received suspensions of five days or less, records show.

Rhee’s agency is aiming to “standardize the disciplinary review process” and perhaps “impose higher fines on citations for city as well as non-city employees.”

In a 2016 incident, a worker for a private company that contracts with airlines to load cargo at O’Hare drove a van across a runway where a flight had been cleared for takeoff and begun its “departure roll,” crossed another airstrip, on which another plane had landed, and apparently cut in front of a taxiing jet, records show.

Nobody was hurt. The driver was ticketed and fired.

Embattled Ald. Edward M. Burke, who won re-election in February despite facing federal corruption charges, boasted during his campaign about how he brought home the bacon — literally — to his Southwest Side ward.

Even as Burke stood accused of leveraging his clout as Chicago’s most powerful alderman to shake down a businessman for legal business, his campaign played up his effectiveness at landing big economic development projects for his 14th Ward.

Among them was a $25 million Amigos Foods warehouse and plant to process pork, beef and other meats on 10 acres of former railroad property at 51st Street and St. Louis Avenue. It topped the list of Burke-led development initiatives the alderman touted on his campaign website and also sent to the Chicago Sun-Times and Chicago Tribune editorial boards in seeking endorsements.

The Amigos project also paid off for Burke’s law firm, which handles property tax appeals, according to a Better Government Association investigation that found he benefited from this and other development projects.

The company hired his law firm, Klafter & Burke, months after the alderman, who was then the chairman of the Chicago City Council’s finance committee, shepherded zoning changes through the council for the project in the fall of 2017.

For years, 14th Ward businesses seeking approval for city zoning changes, tax breaks and other matters have hired his law firm for their property tax appeals.

Burke’s firm has financial ties to nearly every development project he touted during his latest campaign, the BGA found. In addition to the Amigos development, the list includes a shopping center, medical facilities, a charter school, an apartment complex, a distribution center for home-delivered retail goods and even the relocation of the Chicago Park District’s headquarters from a Streeterville high-rise to his ward.

Ald. Edward M. Burke’s appearances at groundbreakings and a ribbon-cutting in the 14th Ward in 2018. Clockwise from top left: Esperanza Brighton Park health center at 4700 S. California Ave.; Amigos Foods facility at 51st Street and St. Louis Avenue; DaVita Dialysis Center at 4737 S. California Ave.; Last Mile Logistics Center at 3507 W. 51st St. | Burke campaign websites

These revelations come amid an ongoing federal investigation of Burke, who federal prosecutors accused in January of trying two years earlier to shake down the owner of a Burger King franchise in his ward. According to the criminal complaint they filed against Burke, he was caught on secretly recorded wiretaps pushing to play “hardball” to get the fast-food franchise owner to hire Klafter & Burke in exchange for his greenlighting a proposed renovation.

The FBI was listening in on the alderman’s cellphone for at least eight months, during which at least 9,475 calls were made or received on the phone. Citing the complexity of the corruption case they continue to investigate, prosecutors on Thursday asked for a 35-day extension of what had been a May 3 deadline for a grand jury to determine whether Burke will face additional charges as part of a federal indictment.

Though authorities haven’t said what the grand jury is looking at, key milestones in several of the economic development projects highlighted by his re-election campaign came during the period when federal agents were monitoring Burke’s calls.

Burke and the lawyers representing him in the criminal case didn’t respond to calls seeking comment or to questions emailed to them.

Previously, one of his lawyers, Charles Sklarsky, has called the accusations against Burke “false.”

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In highlighting his accomplishments in response to newspaper candidate questionnaires ahead of February’s election, Burke, 75, said this about why he deserved re-election to a record 13th term: “Over the past two years, I have worked to increase the economic development opportunities for those that live and work in the 14th Ward.”

The Amigos project was one of two multimillion-dollar warehouse developments on old railroad property in Burke’s ward that the city council approved in the fall of 2017, when federal agents were recording the alderman’s calls.

Burke’s law firm has ties to the developers of both warehouses.

Amigos had spent $2 million to buy land from the Grand Trunk railroad and needed the city council to rezone the property to allow its development.

“His willingness to guide and support us shows he truly cares about the success of Amigos Foods and the betterment of the community,” Manny Rangel, Amigos’ chief financial officer, said in a testimonial posted on Burke’s campaign website.

Within months of the November 2017 rezoning vote, Burke’s law firm began representing Amigos, records show. Prior to the vote, Amigos had another lawyer handle tax matters for property it already owned in Burke’s ward. By 2018, that tax work was going to Klafter & Burke.

Weeks ago, the council approved a resolution paving the way for a tax break for the new Amigos plant. Burke voted in favor of it, according to council records, even though he had done legal work for the firm months before.

Rangel said his company had no comment.

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Records show three of the projects Burke’s campaign highlighted involved the sale of properties in his ward that were owned by developer James Avgeris, a client of Klafter & Burke since at least 2008. Avgeris was paid nearly $7.7 million for the three sites after Burke, as the local alderman, approved rezoning and provided official support that enhanced the properties’ value.

The Noble Network of Charter Schools bought one of those sites, 5.5 acres at 47th and Richmond streets, for $3.7 million in 2016, according to Noble spokesman Cody Rogers. It’s now home to Noble’s Mansueto High School, which opened in 2017.

Burke supported the school despite some neighborhood opposition.

In March 2016, with Burke recusing himself from the vote, the city council approved the rezoning Noble was seeking for the school. Three months later, Noble and Avgeris closed on the sale.

Rogers said the charter-school operator wouldn’t have bought the property if it had not been rezoned to allow a school there. Rogers said Burke was critical to the rezoning, which he said was the only matter for which Noble sought his support.

“We did not know that Alderman Burke was the tax lawyer for the property until reading about it in this email,” Rogers wrote in response to questions. “We have not been contacted by the FBI, U.S. attorney’s office or any other law enforcement agency regarding Ald. Burke.”

Avgeris did not respond to questions about the Noble property sale or two others in Burke’s ward. Records show he continued to use Burke as his tax lawyer for another property elsewhere in the city.

Another Avgeris-linked deal touted by Burke’s campaign was the $17 million Esperanza Brighton Park health clinic at 47th Street and South California Avenue, where a ribbon cutting is scheduled next month. Avgeris was paid nearly $3.2 million in 2017 by the clinic’s parent for 3.7 acres, according to Esperanza CEO Daniel Fulwiler who said he had not been contacted by authorities about Burke.

That deal also closed soon after getting a zoning change from the city council on a vote that Burke recused himself from.

Fulwiler said he wasn’t aware Burke had done property tax work for the seller of the property.

Fulwiler said his medical group approached Burke about the zoning change and that “we met with the alderman or his staff on at least three occasions, either in his ward office or downtown.”

The list of accomplishments Burke campaigned on also included the opening of the DaVita Dialysis Center also on California Avenue near the Esperanza clinic. Developers of the project, Clark Street Real Estate, paid Avgeris $802,000 for a one-acre lot in May 2017, records show. That was after Burke wrote to state regulators on council stationery the previous October to urge they approve the center.

Burke’s firm continued as the tax attorney for the property after its sale, records show, though the owners switched to a different lawyer for tax work in 2018.

“Patient-need is the number one driver in identifying new center locations,” Abby Domenico, a spokesman for DaVita, wrote in response to questions. “We ensure all policies and procedures are adhered to in our work with local community and government officials in all our locations.”

Clark Street representatives declined to comment.

Burke’s re-election campaign included ads showing the transformation of a once-troubled slice of his ward into a shopping plaza.

“This vacant lot & hub for crime at 4200 S. Pulaski…became the $34 million Pulaski Promenade,’’ the ads said. “Alderman Burke led the fight to transform vacant property into an economic center.”

The project was built with $8 million in tax subsidies approved first in 2012 by Burke’s finance committee and then by the full council. He also wrote a letter supporting the subsidies.

Burke’s firm then began doing legal work for the property, records show. In 2014, when the council revised the funding deal for the plaza, Burke recused himself from the vote. In 2015, Burke’s firm filed the first in a series of tax appeals for the Pulaski site.

Neither the lead developer of the project, Chicago-based IBT Group, nor IRC Retail Centers, the majority owner and manager, responded to questions about Burke’s involvement.

At an event last September, Mayor Rahm Emanuel announced the park district would move its headquarters from the old Time-Life Building in Streeterville to a long-vacant, 17-acre industrial site in Brighton Park. Emanuel hailed Burke as “the driving force and a partner” in the deal, which got $8.5 million in city tax subsidies to buy the land from Lexington Homes, which had planned to build as many as 1,500 homes there until the housing market collapse of the Great Recession.

When Emanuel made the announcement, Burke called the project “a big, big effing deal” and credited Lexington for helping to make it happen.

Burke’s law firm had worked for Lexington since at least 2009, records show.

The tax-subsidy deal to buy the land from Lexington was approved by Burke’s finance committee and the full city council in December, with Burke recusing himself.

Lexington officials did not respond to questions.

Burke’s campaign website also featured a photo of him at the groundbreaking last year for a sprawling logistics center on the site of a former railroad freight yard across 51st Street from the Amigos Foods project.

In October 2017 Burke wrote a letter supporting a rezoning request for nearly 20 acres sought by the project’s developer, Conor Commercial Real Estate. And he voted with the rest of the council that November to approve the change. The next month, he wrote another letter backing a tax subsidy to underwrite the project and introduced a council resolution to make it happen, though the alderman recused himself from the vote, records show.

Why Burke refrained from one vote and not the other isn’t clear.

With the city tax help in hand, Conor closed on its $4 million purchase of the land.

At Chicago Park District announcement of new headquarters in the 14th Ward in September 2018, Mayor Rahm Emanuel shakes hands with Ald. Edward Burke as city Planning Commissioner David Reifman and parks Supt. Michael Kelly look on. | Burke campaign website

Dan McShane, Conor’s general counsel, said Burke’s firm did not represent it on property tax work for the warehouse project. Records show Klafter & Burke had done tax work in 2014 in the suburbs for a sister company of Conor.

“It predates any development work we ever did in the city and doesn’t even relate to real estate located in Chicago,” McShane wrote in response to questions.

State campaign records show Conor contributed $7,000 to political committees controlled by Burke since 2017 and bought more than $7,200 of food for a campaign fundraiser last year for Illinois Supreme Court Justice Anne Burke, the alderman’s wife.

“We weren’t given a hard sell on these fundraisers, nor were we ever asked (let alone pressured) to use Ald. Burke’s law firm,” McShane wrote.

He said his firm hasn’t been contacted by federal agents about its dealings with Burke.

Another 14th Ward project hailed by Burke’s campaign was the 2017 opening of the Park Place Apartments, a 78-unit affordable family rental complex at 50th Street and Lawndale Avenue.

City records show Burke recused himself from voting in 2013 on a rezoning request for the property from the prior owner, Park Place Venture. He also recused himself in March 2015 when the council approved a $6.6 million taxpayer-subsidized affordable housing loan to developer Brinshore Development to build the complex. That was before Brinshore closed on the $1.78 million purchase of the land.

“I am not sure why he recused himself,” said David Brint, chief executive officer of Brinshore. “We never hired his firm and we never paid his firm anything. Believe me when I say I was waiting for it but it never came.”

Burke’s law firm had represented the seller, Park Place Venture, and prior owners of the property dating to at least 2007, records show.

Burke helped an earlier ownership group secure up to $7.4 million in taxpayer subsidies for developing the site. That group included Ted Mazola, a former alderman whose ward covered downtown.

Though Brinshore didn’t keep Burke’s firm on when it bought Park Place, the seller of the property still uses Burke on tax matters involving other land in the 14th Ward.

Brint said Burke never solicited Brinshore but “I know our property manager was asked to use his firm but no pressure was applied and he was not hired.”

Asked whether he had been contacted as part of the federal investigation of Burke, Brint said: “You know that even if I were contacted I couldn’t answer.”

Chuck Neubauer and Sandy Bergo are reporters for the Better Government Association.

Early one morning last May, a city of Chicago electrician who works at O’Hare Airport was driving on the airfield and crossed Runway 22-Left.

That turned out to be a problem. The runway was “live” — open for departing or landing planes. And he hadn’t gotten permission from air-traffic controllers to be there, according to records obtained by the Chicago Sun-Times that say the electrician “completely failed to adhere to standard required protocols.”

A top city official later wrote the Federal Aviation Administration to say this was the electrician’s second runway “incursion” and that the Chicago Department of Aviation “is recommending his termination.”

But he wasn’t fired. Not only did the electrician keep his job, he ended up with just a one-day suspension — and continues to draw a six-figure salary from City Hall.

That’s not at all unusual, a Sun-Times investigation has found. Even when they are involved in runway mishaps that violate safety regulations and in some cases could pose a deadly hazard, city workers routinely escape serious disciplinary action, despite city officials’ contention that they are tough on safety violations.

According to city records, none of the 13 city workers involved in serious runway foul-ups over the past few years was fired, not even after lying about the circumstances of what happened.

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In an incident last Nov. 5, a city truck driver drove onto Runway 27-Left as a plane was preparing to land, and the aircraft was forced “to execute a go-around” — scratch the landing and circle around until the runway was clear, records show.

The truck driver was cited for “criminal or improper conduct,” violating city regulations, “conduct involving job performance or substandard work performance” and “misrepresentation,” according to the records, which say the employee’s “written statement does not fully corroborate the supporting evidence.”

The punishment for all of that? A five-day unpaid suspension, which is typical for city workers who breach active runways, the Sun-Times found.

None of the runway incursions involving city employees resulted in crashes or injuries, according to aviation department records.

Seven employees were given five days off, four got one-day suspensions, and records don’t specify what happened to two others. City officials won’t say whether they escaped discipline altogether and, if so, why.

One of the one-day suspensions came after negotiations between the city and the Teamsters union that represents city truck drivers at O’Hare and has been a sizable contributor to Mayor Rahm Emanuel’s campaigns.

On March 2, 2017, a city truck driver was “escorting an aircraft” being towed on the airfield and “failed to ask for clearance and receive clearance” to drive onto a runway, records show. He was written up for infractions including “violation of city policy or rule” and given a five-day suspension.

The Teamsters challenged the punishment. In June 2018, city officials settled the union grievance by cutting the suspension to one day and paying the driver for four days of lost wages since he’d already served the penalty.

Last year, he was paid about $107,000, including overtime, according to the aviation department.

Most of the city workers involved in the runway troubles made more than $90,000 in 2018, with one making $137,000.

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• Close call at O’Hare: Plane turns into path of 2nd jet, forcing evasive action, March 1, 2019
• Chinese cargo plane strayed dangerously close to departing United jet at O’Hare, Jan. 11, 2019
• Despite O’Hare safety boasts, FAA slammed city’s handling of winter operations, March 9, 2018
• 90 airfield mishaps at O’Hare Airport since 2015, Aug. 23, 2017

Aviation Commissioner Jamie Rhee, an Emanuel appointee, wouldn’t discuss specific cases. Rhee said in a written statement the department “employs discipline based on the severity of the situation/infraction — including up to termination,” though officials couldn’t point to any cases of a city worker being fired in recent years over a runway-related mistake.

“Discipline is recommended by the supervisor, which normally includes 5 days suspension for incursion violations, however we will move to terminate staff when they demonstrated a pattern of behavior causing serious incidents,” Rhee’s statement said. “Any and all discipline applied for union-represented personnel is done pursuant to the collective-bargaining agreement.”

City officials say they employ “progressive discipline,” with bigger penalties for repeat violators.

Teamsters leaders wouldn’t comment or didn’t return calls.

Rhee says she’s working with city lawyers to “ensure standardized discipline.”

She also took the unusual step of referring an April 2 incursion involving one of her employees to City Hall’s inspector general.

That employee and all other city workers involved in runway incursions in recent years are still working for the aviation department or the Department of Streets and Sanitation, according to Lauren Huffman, Rhee’s spokeswoman.

The electrician given a one-day suspension for the 2018 incursion was involved in another runway incident in 2016, when he drove onto an active airstrip where planes were cleared to depart, records show. He was given “verbal counseling” for that incident‚ which happened about two weeks after he attended a training session on airfield safety that emphasized:

• “Never assume a runway is closed.”

• And only the control tower “can give you permission to go out on a runway.”

Two years ago, city of Chicago inspectors showed up at the Daley family’s longtime political headquarters, a stout brick structure in Bridgeport that houses offices for Cook County Commissioner John P. Daley, his nephew Ald. Patrick Daley Thompson and the 11th Ward Regular Democratic Organization they control.

Spurred by a neighbor’s complaint about loose bricks, the inspectors discovered code violations at the building at 3659 S. Halsted St. that required costly repairs including exterior brickwork, new drywall and the removal of plumbing fixtures and wiring, city records show.

To pay for that, Thompson turned to a neighborhood bank, Washington Federal Bank for Savings. He got an $80,000 loan, unsecured by any collateral, that was deposited into the 11th Ward campaign fund that’s controlled by Daley.

Thompson got the loan in October 2017, as federal regulators were turning up financial irregularities at Washington Federal.

Within two months, the bank president would be found hanged at a customer’s home in a death ruled a suicide. And authorities would shut down the bank over millions of dollars in unaccounted-for loans — losses that now total at least $80 million, according to the Federal Deposit Insurance Corp.

Thompson’s loan is now part of a broadening federal investigation that began with the missing money — including loans made without any collateral — and also includes the death of bank president John F. Gembara 12 days before the bank was ordered closed, the Chicago Sun-Times has learned.

Thompson is the third sitting alderman who is under federal investigation. The two others — Ald. Edward M. Burke (14th) and Ald. Danny Solis (25th) — are involved in a separate investigation in which Burke has been charged with trying to shake down a Burger King operator for legal business.

Thompson, 49, refused interview requests and would not answer questions about the terms of the loan — including the interest that would be charged, when the money needed to be repaid and why there was no collateral.

Daley told the Sun-Times he would try to provide those answers but didn’t.

The 11th Ward Regular Democratic Organization headquarters at 3659 S. Halsted St. | Kevin Tanaka / Sun-Times

Through records and interviews, the Sun-Times also found that:

• The 11th Ward organization made no payments to Washington Federal before it was shut down in December 2017. The bank’s collateralized loans were taken over by another Chicago bank, Royal Bank for Savings. That didn’t include unsecured loans like the one Thompson got for the party’s ward headquarters. That $80,000 debt later was taken over by Royal under a five-year loan at 5 percent interest. It’s unclear if those were the same terms Thompson got from Gembara’s bank. The 11th Ward Democrats started repaying the money last June. It has repaid about $8,000 and made $5,100 in interest payments, campaign records show.

• Bansley & Kiener, an auditing firm that has long worked for the Daley family’s political funds, did the books for Washington Federal. It gave the bank a clean financial bill of health during annual reviews — the most recent completed five months before the bank was shut down. The firm also handles 11th Ward finances and has made campaign contributions to the Daleys. A federal judge recently ordered the company to turn over its records on the failed bank to the FDIC.

• Thompson also has faced personal financial troubles involving bank loans. He was an elected board member of the Metropolitan Water Reclamation District of Greater Chicago in January 2014 when he was sued by another Bridgeport lender, North Community Bank, which said he failed to repay an $88,000 loan on a home he and his wife owned in the neighborhood. The loan was overdue for three years when the bank sued, saying Thompson owed $88,000 in principal, $17,208 in interest and $1,738 in late fees. The bank dropped the lawsuit a month later but kept a lien on the house until the Thompsons sold it 2017.

• Over the past five months, Thompson and his wife Kathleen have gotten $704,000 in mortgages from Morgan Stanley Private Bank. A day before last Thanksgiving, they refinanced the Bridgeport bungalow where they now live — the home where Mayor Richard J. Daley, his late grandfather, raised his family. The Thompsons got a $454,000 mortgage on that house. Two weeks later, they got a $250,000 mortgage from Morgan Stanley on their second home, in New Buffalo, Michigan. According to the loan documents, Thompson’s wife “is not assuming liability for payment” of either mortgage.

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• After Bridgeport banker found dead, top debtor tries to avoid repaying $20M, April 8, 2018
• Feds find massive fraud at shuttered Bridgeport bank whose president was found dead, Nov. 9, 2018

John F. Gembara. | Provided photo

Washington Federal was founded in 1913 by Gembara’s grandfather to serve his fellow Polish immigrants. It focused on residential mortgages, with a few commercial loans. Its main office was in Bridgeport, at 2869 S. Archer Ave., with a branch at 1410 W. Taylor St. in Little Italy.

On Dec. 3, 2017, Gembara was found dead of what’s been ruled a suicide inside the million-dollar Park Ridge home of a contractor, Marek Matczuk, a friend and bank customer with five outstanding loans from Washington Federal totaling about $1.8 million. U.S. Bank, which holds the first mortgage, has been trying to foreclose on Matczuk’s house for the past two years.

Gembara was discovered with a rope around his neck seated in a chair in Matczuk’s master bedroom. Park Ridge police and the Cook County medical examiner’s office concluded he killed himself.

Twelve days later, regulators shut down Washington Federal for “unsafe or unsound” practices that the FDIC continues to investigate.

Authorities have zeroed in on at least $80 million that’s unaccounted for because Gembara issued loans without documentation or collateral, part of a scheme that federal regulators failed to detect for years, according to an audit by the U.S. Treasury Department’s inspector general released last November that found “massive fraud” at the bank.

The inspector general found that inexperienced federal bank examiners were assigned to examine the bank and overlooked numerous “red flags.”

An attorney for Gembara’s widow previously has told the Sun-Times, “It looks like your garden-variety bank fraud — except this one involves a banker.”

Investigators also are scrutinizing Robert M. Kowalski, a longtime Gembara associate who got at least $27 million in loans from Washington Federal. After the FDIC contacted Kowalski about his outstanding loans — many of them for apartment buildings that rely on government-subsidized Section 8 housing vouchers — he filed for bankruptcy.

The FDIC has accused Kowalski of failing to disclose all of his assets to the bankruptcy court.

He and his sister Jan Kowalski have been in federal custody for several weeks for failing to abide by a bankruptcy judge’s order to turn over $250,000.

Robert M. Kowalski.

Kowalski also has been indicted for bankruptcy fraud.

In an interview last year, he told the Sun-Times he believes Gembara was killed by a Washington Federal loan recipient worried that the fraud scheme was unraveling and that authorities would get Gembara to talk.

Park Ridge police wouldn’t comment on Gembara’s death but released a letter showing they’ve been in touch with the FBI.

Some of Gembara’s relatives also suspect he was killed.

The FDIC has filed a $14.5 million claim against Gembara’s estate to try to recover money it says he improperly distributed to five customers it identifies only by their initials.

Washington Federal’s former board members, including Gembara’s sister Janice Weston, have hired lawyers as authorities examine the board’s oversight of the bank.

Another of the former board members, William Mahon, is a top official in Chicago’s Department of Streets and Sanitation and was a political ally of former Mayor Richard M. Daley, another uncle of Thompson. In 2013, Mahon was suspended from work for 45 days for his role in Daley’s fraudulent hiring scheme, for which the mayor’s patronage director went to prison.

Mahon’s sister is married to a brother of former 11th Ward Ald. Patrick Huels. Mary Ann Mahon-Huels is acting president of the South Loop Chamber of Commerce, where Thompson is secretary. Bansley & Kiener does accounting work for the nonprofit.

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