By the fall of 1991, former Oakbrook Terrace Ald. George Dobson had seen enough.
Dobson, 69, who had remained an active observer of local politics after leaving office in the late 1960s, decided to contact the FBI in Chicago to complain about the way Mayor Richard Sarallo was running the city.
Dobson said he turned over notes and information he had compiled as a member of a citizens’ group to federal agents. “I gave them names, and they pretty well contacted all the individuals around here,” he said. “They went down the line, and they talked to all of them.”
Dobson’s call, and the subsequent interviews with other dissatisfied citizens he had listed, led federal investigators into what became an exhaustive three-year probe into municipal corruption.
During that time, dozens of subpoenas were served seeking records, and scores of additional interviews were conducted with city officials, members of the Oakbrook Terrace Police Department, citizens and business people.
Thus far, that effort has resulted in charges against Sarallo and Nicolae Ionescu, the former zoning administrator and city engineer of Oakbrook Terrace.
Ionescu, who was charged in January with extortion and tax fraud, is said to be cooperating with the government in the ongoing probe and indicated in his initial federal court appearance that he would plead guilty at a hearing next week.
For Sarallo, the other shoe dropped Thursday, when a federal grand jury indicted him on racketeering involving acts of bribery and extortion. If convicted, he would face a maximum of 20 years in prison and a $250,000 fine on each of the two counts.
Sarallo is scheduled to be arraigned Thursday before U.S. District Judge James Holderman. Sarallo could not be reached for comment by the Tribune on Friday.
Meanwhile, the investigation of his ties to local developer Robert Krilich is continuing.
A key witness in the government probe appears to be Terrance A. Pearson, a former Krilich employee who pleaded guilty in 1992 to stealing thousands of dollars from Krilich’s company.
Pearson has been identified in court testimony in the Ionescu case as the man who earlier paid the former Oakbrook Terrace official $10,000 to help grease the municipal wheels for a Krilich development.
Attorney Jeffrey B. Steinback, who has been hired by Krilich, said his client “has worked hard” in the past 25 years developing real estate in Oakbrook Terrace. He expressed confidence Krilich would be cleared of any wrongdoing when the investigation was over.
But it was what they perceived as a questionable relationship between Oakbrook Terrace city government and developers including Krilich that bothered Dobson and other members of a local citizens’ group.
“It was a situation where if you couldn’t get zoning anywhere else in Du Page County, you could come to Oakbrook Terrace,” Dobson said of the perception by those activists.
Krilich had proposed one of the biggest developments the city had ever seen in the 1970s. After undertaking other building projects from Florida to California, he came to Oakbrook Terrace looking to build a massive residential and commercial complex that would have tripled the city’s population of 2,300.
Called Royce Renaissance, the project received support from city government in the form of favorable zoning and $135 million in bonds.
As city officials, Sarallo and Ionescu played major roles in moving the project along, although it is now stalled with only an office building and a few apartment buildings completed.
But before that happened, Ionescu guided the development through the maze of zoning laws and tried unsuccessfully to help out when Krilich’s company attracted the wrath of the U.S. Environmental Protection Agency by draining a local park district lake without authorization. The incident led to the government agency fining the developer $185,000.
Sarallo, according to city records, cast votes in favor of issuing bonds on the project. He also ignored a City Council vote and authorized the remarketing of the bonds.
For their assistance, according to federal prosecutors, Ionescu and Sarallo allegedly received payoffs from Krilich’s company.
According to Ionescu’s testimony in federal court, Pearson paid him $10,000 to “expedite” the Royce project and help resolve the company’s troubles with the EPA.
Sarallo, according to the indictment returned against him, received even more, in excess of $40,000 for his help with the bonds.
While the indictment said only that the payment came through one of Sarallo’s sons, sources familiar with the investigation say the payoff was linked to a vintage Cadillac Andrew Sarallo won at a charity golf tournament in June 1985.
At the tournament, hosted by Krilich and billed as a charity event to raise money for the City of Hope National Medical Center in Los Angeles, Andrew Sarallo said he aced his tee shot on one par-3 hole. The car, which he later sold for $40,000 in cash, had been offered as a prize to anyone who hit a hole-in-one on that hole.
Krilich employees, including Pearson, said they witnessed the shot.
Dobson said he had not known about the hole-in-one, but there were enough other questionable activities going on in Oakbrook Terrace to prompt an investigation.
“If you’re going to be in government, be at least honest with it,” he said.
