From Wednesday’s print edition:
Daley secretly questioned by FBI in 2008 over real estate controversy
Galewood Yards project now at the center of developer Calvin Boender’s federal bribery trial
By Todd Lighty and Robert Becker, Tribune reporters
Mayor Richard Daley was secretly interviewed in 2008 at a downtown
hotel by FBI agents who questioned him about the politicians who pushed
for a Chicago real estate project now at the center of a federal
bribery trial, the Tribune has learned.
The interview focused on the Galewood Yards project, an old industrial
rail yard on the West Side that was rezoned for commercial and
residential buildings over the objections of city planning staff.
Daley had trouble recalling any controversy surrounding Galewood Yards
during the March 2008 interview and could not remember participating in
City Hall meetings about three years earlier with his planning staff,
an alderman and a congressman about the project, the Tribune has
learned.
There has been no suggestion that Daley did anything improper.
The interview came early in the federal investigation that led to
bribery charges last year against then-Ald. Isaac "Ike" Carothers,
29th, and developer Calvin Boender. Carothers pleaded guilty to
accepting a bribe from Boender, who is now on trial.
"The mayor cooperated with a request for an interview during the course
of the investigation," said Jennifer Hoyle, spokeswoman for the city’s
Law Department, in an e-mail response to Tribune questions. "There is
no indication that he was or is anything other than a witness."
Hoyle declined to elaborate, saying, "At this time, given the fact that
a jury continues to hear evidence in the Boender trial, we do not think
it would be appropriate to respond with additional details."
Carothers, who had been an important Daley loyalist at City Council, is
cooperating with the government. The mayor has repeatedly insisted he
never exercised his influence in the development.
Daley has not previously disclosed his interview with the FBI, which is
only the second time in his tenure it has been revealed he was
interviewed by federal authorities. Daley was accompanied by the same
private lawyer he used in 2005, when federal authorities interviewed
him amid a hiring investigation that led to corruption convictions of
former aides.
Carothers resigned in February after pleading guilty to accepting
$40,000 in home improvements from Boender in 2004 to support rezoning
Galewood Yards. Federal authorities say the improvements included new
air conditioners, new doors and windows, and a fresh painting inside
and out.
Boender and his partners developed a 14-screen movie theater and a
nearly $60 million residential project of 187 single-family homes, town
houses and condominiums. Prosecutors claim the zoning change meant an
extra $3 million in profits for Boender.
The Tribune in 2008 chronicled how Boender overrode the opposition of
city planners to Galewood Yards after enlisting the support of
Carothers and U.S. Rep. Luis Gutierrez, D-Ill. Gutierrez, who had just
received a $200,000 loan from Boender for his own real estate
investments, personally lobbied Daley.
Daley’s name surfaced last week during the trial when a former city
planning commissioner testified she attended a meeting with Boender,
Gutierrez and Daley in the winter of 2004-05 at which Boender brought a
model of his 50-acre project. Denise Casalino did not testify about
what Gutierrez said during the meeting but indicated Daley had a short
response. "He said, ‘Thank you.’ That was about it," Casalino said.
The city’s corporation counsel, Mara Georges, last week issued a
statement in which she characterized Daley’s meeting with Gutierrez and
Boender as routine, adding that the mayor meets with thousands of
people throughout the year. Georges disclosed that City Hall earlier
had turned over to federal prosecutors information about Daley’s
meeting schedule.
Georges’ statement, however, made no mention of the FBI and other federal authorities interviewing the mayor in 2008.
The city opposed efforts by Boender’s lawyers to have Daley testify at
the corruption trial. The lawyers on Monday dropped their requests for
his testimony.
The Tribune has previously reported Gutierrez’s unusual role in
lobbying Daley for Galewood Yards, which lies outside his congressional
district. Gutierrez wrote a letter in July 2004 to Daley on U.S. House
stationery backing the plan and vouching for Boender’s character.
In his letter, Gutierrez defended Boender from criticism by city
planning staff. "I would ask for any support that you can give him at
this time," the congressman wrote.
After initially telling Daley of their opposition to Boender’s
proposal, city planners over more than a year worked out a compromise
with the developer.
The congressman previously told the Tribune there was no connection
between his loan from Boender and his lobbying of Daley. Gutierrez
downplayed his role, saying his involvement was "extremely minimal" and
"entirely appropriate."
Gutierrez, who is seeking re-election this year, has not been charged
with any wrongdoing. He has said he has not been interviewed by federal
authorities.
This was not the first time federal authorities have interviewed Daley
about City Hall corruption. He was questioned in August 2005, about a
month after FBI agents made arrests in a massive hiring fraud scheme
centered in the mayor’s office.
Daley’s lawyer then — as well as in the more recent interview — was
John Villa, a Washington lawyer whose firm represented former President
Bill Clinton when he faced an independent counsel investigation and an
impeachment trial.
Daley held a news conference after his 2005 interview.
"When there is wrongdoing in my government, I take responsibility for
it," Daley said then. "I am committed to root it out and do everything
I can to prevent it."