The wide-ranging targets of the federal corruption investigation known as Operation Silver Shovel include at least eight former or current aldermen, other city and suburban officials, mobsters and union officials, sources close to the investigation said Sunday.
Ald. Jesse Evans (21st) and former Ald. Lawrence Bloom (5th) have acknowledged they are targets, while Thomas Fuller, president of the Metropolitan Water Reclamation District, and Ald. Allan Streeter (17th) said Sunday they have been interviewed by federal agents.
At the heart of the investigation are video and audio tapes made by a government mole, John Christopher, a former convict and waste hauler who worked for the feds for four years.
The first arrest from the wide-ranging investigation occurred Friday when federal agents charged a Chicago construction company owner with selling a kilo of cocaine to Christopher. Marco A. Morales, 50, is being held in the Metropolitan Correction Center pending a hearing later this week.
“We hope to get bond as soon as possible, and we expect to be vindicated at trial,” said Terence Gillespie, Morales’ lawyer.
Christopher recorded the alleged one-time drug deal with Morales, whose business, Polmex Construction Inc., employs up to 100 workers.
How Christopher curried favor with politicians and how he cut his deals can be glimpsed in the seemingly mundane transactions of the 37th Ward.
The alderman of that ward, Percy Giles, declined to comment Sunday. But according to public records and investigative sources, Giles’ dealings with Christopher date to at least 1992, and some of those dealings are being investigated by the federal government.
Sources said that Christopher was a business associate of the operator of an illegal dump in the 37th Ward. The dump was operated by the Niagara Group, and its president is listed as Leonard D. Falcone of Chicago. He couldn’t be reached for comment.
Records in the Illinois attorney general’s office show that shortly after Niagara began operating in the ward, it began contributing to a new charitable fund–the 37th Ward Improvement Fund–set up by Giles in 1992.
Giles registered the charity with the attorney general and named himself president and his son, Calvin, as the treasurer.
In 1992 and 1993, the charity received about $64,000, at least $37,000 of which came from Niagara, according to public records and published accounts. The charity reported using the cash to sponsor a youth baseball program in the ward and create a scholarship fund.
While Niagara was contributing to the Giles fund, Giles was trying to help Niagara avoid city sanctions for illegal dumping, according to city officials.
Henry Henderson, the commissioner of the city’s Department of Environment, said that Giles met on several occasions with city officials, urging that Niagara be allowed to continue its operations, despite the fact that its dump didn’t have a permit and wasn’t properly zoned. Each time Giles intervened, he only asked whether there was some way to operate the dump under city codes, Henderson said.
The commissioner said that Giles told him, ” `I don’t want any hazardous waste going here, but I want some economic development done.’ ” Henderson said city officials cited the firm for illegally operating a dump and sued the firm in Cook County Circuit Court.
Henderson compared the site with a similar one created by Christopher just a few miles away. Like Christopher’s operation, Niagara’s owners portrayed their business as a recycling center for construction debris.
When Niagara first came into the neighborhood, where abandoned industrial warehouses surround a still-active distribution center for a makeup manufacturer, company officials were promising jobs and new businesses.
“I don’t know that they ever hired anybody from the community,” Henderson said. “I don’t think they had any economic benefit to the community.”
The secret 4-year investigation became public Friday when federal agents descended on the offices and homes of Chicago aldermen and other local officials.
Fuller said Sunday that FBI agents had interviewed him for about 2 1/2 hours last week, but he said they did not say he was a target or accuse him of a crime.
FBI agents took documents from water reclamation district files pertaining to two contracts that involve subcontracting work by two firms linked to Christopher, Fuller said. He said agents also took his appointment books for 1992 and 1994.
“I have not been accused of any wrongdoing,” Fuller said. “Why should I say I’m innocent? I haven’t been accused of anything.”
Streeter said he was questioned by agents about whether he had any dealings with Christopher and illegal dumping in his ward.
Agents also have questioned Joseph Gardner, a water reclamation district commissioner and a former Chicago mayoral candidate. It is not known whether Gardner is a target of the investigation, and attempts to reach him were unsuccessful.
In another aspect of the case, authorities said that part of the investigation focuses on whether Christopher made illegal payoffs to officials of a union local to avoid paying thousands of dollars in union health and welfare funds for members of Teamsters Local 786.
Members of the local operate trucks used to haul building materials and scrap items such as old concrete. Some of them were employed by Christopher in at least three companies linked to him. The companies were identified as Marlboro Inc., Crush-All and Krisjon.
In addition to visiting the offices of several public officials on Friday, FBI agents have been at the offices of Local 786 in Teamsters City on Ashland Avenue. Local 786 records reflecting payments to its health and welfare funds were obtained by FBI agents with grand jury subpoenas.
Local President Walter Hoff was reported to be out of town at the time, but aides said that he would be available this week for questioning about the funds.
Sources said Christopher operated the three companies between 1991 and sometime in 1993. Under federal law, employers must pay into union health and welfare accounts of their employees.
Another phase of the investigation is focusing on Christopher’s mob ties.
The undercover mole is known to have met on several occasions with reputed mob figures in connection with an illegal money-laundering scheme. Investigators are attempting to learn how tens of thousand of dollars in old bills, most of them issued by the Federal Reserve Bank in San Francisco in the 1950s, may have been laundered through currency exchanges under the control of the mob.
Reputed mob loan shark James Inendino is suspected of using Christopher to launder the money–that is, wash away any illegal taint and show that the money came from legitimate sources. Christopher and Inendino reportedly have been acquainted for a number of years going back well before the corruption investigation.
Investigators believe that the cache of old money came to light after the 1992 death of Chicago mob kingpin Anthony Accardo and that the money may have served as a slush fund for mob bosses.
