Cost of Chicago Hiring Corruption: $12 Million

Published June 1, 2007

The City of Chicago has announced a $12 million settlement to pay damages for illegal hiring practices that rewarded political insiders and workers who helped with the campaigns of Mayor Richard M. Daley and candidates he supported.

The settlement is in addition to $1.65 million already paid by the city to an attorney appointed by a federal court to monitor city hiring practices to correct years of corrupt hiring.

The attorney, Noelle Brennan, will also manage payouts from the $12 million settlement to claimants who can document they were denied a job or promotion or harmed in some other way as a result of the city’s corrupt practices. Individual payouts could go as high as $100,000.

Despite the settlement and last year’s convictions of several high-ranking city officials for hiring corruption, criminal charges continue.

New Charges Filed

One day after the March 21 announcement of the settlement, a former top aide to Daley was charged with nine counts of mail fraud in a federal indictment alleging the former aide had rigged city hiring to reward campaign workers for the Daley-created Hispanic Democratic Organization (HDO).

That former aide, erstwhile Streets and Sanitation Commissioner Al Sanchez, allegedly spent more than a decade rigging city hiring for Daley. He quit Daley’s cabinet in 2005 after becoming a target of federal investigators.

A former Chicago police officer and HDO coordinator was also charged with Sanchez for perjury, for allegedly lying to a federal grand jury investigating Chicago’s hiring fraud.

Critics say the $12 million settlement is not nearly enough to compensate thousands of qualified job applicants who have been passed over for jobs or promotions because they did not have politically connected sponsors or because they declined to do political work for Daley-backed candidates.

Case Dates to 1969

The settlement is the result of the “Shakman case,” first brought by attorney Michael Shakman in 1969.

Shakman challenged the city’s legendarily corrupt patronage hiring system and won, but the city has been shown to have engaged in massive politically sponsored hiring despite court rulings to end the practice and assurances from city officials that the federal court decrees have been followed.

Daley has spent most of his administration fighting the federal Shakman decrees and continued the fight even after federal prosecutors last year won the convictions of four aides who allegedly rigged hiring to favor pro-Daley political workers.

Daley has managed to avoid being directly linked to corrupt hiring practices that have benefited his political campaigns and political allies.

Avoids Direct Response

Daley was out of the country as the most recent events in the Sanchez case unfolded. Upon returning he told reporters at a news conference that he would not directly respond to the charges against Sanchez.

“He’s being charged, and he’ll have to answer those charges,” Daley said. “That accusation will be heard in court. I’m not going to be commenting on that.”

Two years ago Shakman, who still practices law in Chicago, went to federal court to ask that the city and Daley be held in contempt of court for repeatedly trying to void the federal court orders despite a raft of indictments, guilty pleas, and criminal convictions related to the city’s hiring practices.

In response, in August 2005 Federal District Judge Wayne R. Andersen appointed Brennan as the court’s monitor to “ensure future compliance” with the Shakman court decrees and to study Chicago’s “existing employment practices, policies and procedures for non-political hiring, promotion, transfer, discipline and discharge,” according to the court order.

The court also ordered the monitor to propose a “mechanism for ensuring future employment actions [by the City] are in compliance with the Court’s previous Orders.”

Settlement Could End Case

Shakman said the settlement is a good one “because it gives the plaintiffs–including City employees and job applicants–as much [as] or more than could be expected if the civil contempt case against the City had been tried.”

Shakman added, “If the City is serious about ending patronage abuses, as Mayor Daley has said it is, then he and the City will have to prove to Judge Anderson that clout has been eliminated in City employment practices in order to end federal court supervision. Plaintiffs hope that day will come soon, since it will mean that the City has in fact complied with its obligations and has dismantled the illegal patronage system.”

In a news conference in response to the settlement, Shakman told reporters the settlement could end his quest to have Daley and the city held in contempt, as well as the rest of his decades-long legal fight against the city.

Steve Stanek ([email protected]) is managing editor of Budget & Tax News.