2. Corruption and Fraud in Chicago's Racial Quota Programs

Since 1999 no fewer than three massive federal enforcement agencies had investigated the Duffs and their businesses:  The FBI, the IRS, and the U.S. Department of Labor.           It turns out that one Duff business, Windy City Maintenance, was not really owned and controlled by 75-year old Patricia Green Duff and was therefore not entitled to participate in Chicago's 5% woman-owned business set-aside program.           It also turns out that another Duff business, Remedial Environmental Manpower, was not really owned and controlled by a black man named William Stratton and was therefore not entitled to participate in Chicago's 25% minority set-aside program.

          No one has alleged that the Duffs' workers weren't capable and competent, nor has anyone alleged that Chicago wasn't happy with their work.

          It's just that the Duffs are white and male and they obtained the contracts under the greatly relaxed bidding requirements of Chicago's set-aside program.  Shame on them!

          And, oh, yes, when the FBI, IRS and Dept. of Labor got their teeth into the Duffs they also dug up numerous money laundering charges, insurance fraud charges, mail fraud charges and a host of other charges related and unrelated to their having faked being "disadvantaged" minorities.

A. Tales of Political Influence

          "Over the years, Duff family members have held at least two fundraisers for [Mayor Richard] Daley and family members, its businesses and a union it controlled have contributed about $32,000 to Daley's campaigns." (1)

"... Daley has accepted campaign contributions and political foot soldiers provided by the Duff family. The mayor severed his ties to the Duffs after the federal investigation began." (2)           "[Mayor Daley would] show up at the Duff Christmas parties at the Como Inn, legendary affairs, glad-handing and back-slapping, letting political Chicago know the Duffs were his guys.  The parties were Daley declarations, that the Duffs were Daley's, so watch it. And everybody who's anybody got the message." (3)

          "The family patriarch, John Duff Jr., is a savvy former union boss and a regular at the mobbed hang out, the Como Inn on Chicago's Northside.  Duff is also a former city investigator, who in 1960 testified on behalf of mob boss Anthony Accardo..." (4)

           "Although he denies it, as soon as Richard M. Daley, Jr., the son, was elected to office in 1989, he allegedly instructed a top aide to make sure that the Duffs got a share of the city cake.   Shortly afterwards, the Mayor's Office of Special Events handed Windy City Maintenance [a Duff business] a no-bid contract in 1990 to clean up after Taste of Chicago.  They still have the contract [as of 2001], which now covers most of the major in-city festivals and brings the Duffs about $500,000 a year." (5)

          "... the Tribune reported [in July 1999] that Windy City got a boost from Mayor Richard Daley shortly after he took office a decade before.  Bruce DuMont, president of the Museum of Broadcast Communications, told the Tribune at the time that Daley personally instructed DuMont's wife, then a top City Hall staffer, to make sure that the Duffs got a share of city work. DuMont declined to comment Thursday [09-25-03, the date the indictments were handed down].   ... documents reviewed by the Tribune showed that the city in 1991 expedited Windy City's application for woman-owned status, approving it in about one-third the normal time.  City investigators gave Patricia Duff advance warning before visiting her at Windy City and didn't seek a detailed resume for her or call a reference listed by the company until after it was certified." (6)

          "In comments to reporters Thursday night [9/25/03, the day the indictments against the Duffs were handed down], Mayor Richard Daley denied any involvement in the awarding of contracts to the Duff family and said the city had toughened the laws on women-owned businesses after [Duff's] Windy City Maintenance was decertified.  In the last two years, more than 880 companies were denied certification by the city, [Daley] said."  (7)

B. The Indictment against the Duffs

          In addition to discovering that the Duffs bent Chicago's racial quota rules, it seems the feds' uncovered a few other unsavory business practices.  The additional charges included insurance fraud (misrepresenting their workers as clerical rather than manual labor in order to get lower workers' compensation premiums), money laundering, and the ever-popular mail fraud.  Mail fraud is the feds' equivalent of the "kitchen sink" -- whenever they need to nail your coffin tightly, they will throw in charges of mail fraud if your crime(s) were carried out in any part by sending, eg., fraudulent documents through the U.S. mail.

       Here's a list of the charges against the Duffs as reported by the Chicago Tribune:

• "James M. Duff, 45, of Burr Ridge: Head of the Duff family businesses. He is charged with racketeering conspiracy, money laundering conspiracy, wire fraud, mail fraud and money laundering involving both the contract fraud and the insurance fraud schemes.

• "Patricia Green Duff, 75, of Chicago: Mother of James M. Duff. She is charged with mail fraud in the contract fraud scheme.

• "William E. Stratton [black], 62, of Olympia Fields: Longtime Duff family friend and confidant, and employee for more than 18 years of Local 3 of the Liquor & Allied Workers Union, a union run by members of the Duff family.  He is charged with racketeering conspiracy, money laundering conspiracy, wire fraud, mail fraud and money laundering in both the contract fraud and insurance fraud schemes.

• "John J. Leahy, 48, of Westchester: President of Leahy & Associates, an insurance brokerage in Westchester. He is charged with mail fraud and wire fraud in the insurance fraud scheme.

• "Edward Wisniewski, 55, of Niles: An insurance agent and later vice president of commercial insurance sales at Leahy & Associates. He is charged with mail fraud and wire fraud in the insurance fraud scheme.

• "Starling Alexander, 46, of Crete: Operations manager at Remedial Environmental Manpower Inc. He is charged with one count of wire fraud in the insurance fraud scheme.

• "Terrence Dolan, 52, of Hinsdale: He is an officer and director of Windy City Maintenance. He is charged with mail fraud in the contract fraud scheme." (8)

Down: Index

Footnotes:

END:  2. Corruption and fraud in Chicago's Racial Quota Program