Mayor Harold Washington`s administration Saturday identified John E. Adams, the fired deputy revenue director, as the city official who allegedly took a bribe from a company seeking a city contract to collect delinquent water bills.
In a remarkable statement Friday night, the administration announced it was canceling the contract with Systematic Recovery Service Inc. of New York because it was ”the result of a payoff to a city official.”
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Adams was identified as the alleged bribe recipient Saturday by Alton Miller, the mayor`s press secretary. Adams was fired Thursday from his position as the No. 2 man in the revenue department, which collects money owed to the city.
Miller provided no further details, but a high level administration source has said that Adams acknowledged accepting $10,000 from Michael Raymond, an FBI informant who posed as a representative of Systematic Recovery. The source said Adams claims the money was a loan to buy commercial real estate.
Adams declined comment Saturday. Earlier in the week, he had said, ”I would never accept a loan from a person I knew had a contract with the city. That would be totally unethical.”
Friday`s announcement and the allegation Saturday that Adams received a bribe mark the first time the Washington administration has acknowledged that a city official might have violated the law in transactions being investigated by federal authorities.
Despite last week`s action, the Washington administration concluded four months ago that Adams may have taken a questionable payment from a contractor, other officials said. But the administration disclosed the payment only in its frenzied reaction to the federal investigation, the officials said.
This turnabout was just one of a series of public relations counteroffensives taken last week to offset what is rapidly becoming the first major scandal of the Washington administration.
The administration also relieved Department of Revenue Commissioner Charles Sawyer, Adams` boss, of his duties and suspended Carmine Aiello, a deputy water commissioner who, city officials say, will be fired if he doesn`t cooperate with an internal investigation.
But through the weeks since news of the federal investigation surfaced
–even as the mayor`s staff seemed to be responding to embarrassing disclosures–the mayor and his allies still were criticizing the investigators and their motives. Early Thursday, the day the shake-up was announced, Washington had hinted that he believed the federal investigation was racially motivated.
Some of the mayor`s allies, pointing out that most officials named so far as subjects of the inquiry are black, have gone even further.
Ald. Ed Smith (28th), aligned with the mayor, contended last week that the FBI investigation is ”purely an attack against black political figures for political purposes.”
Smith`s attack prompted the first official response from federal investigators, with Edward Hegarty, the special agent in charge of the FBI`s Chicago office, contending that corrupt politicians solicited Raymond`s help, and that the government had no choice but to investigate.
Beyond this war of words, the Adams case, as described by top city officials, shows how the administration shifted from a willingness to tolerate apparent irregularities to a frenetic effort to stay a step ahead of disclosures about the federal inquiry.
The administration took a public action against Adams based largely on information that it already knew. By most accounts, the Adams case would never have come to light had it not been for the FBI undercover operation, which received its first publicity in newspapers on Christmas Day.
The case began in September when Sawyer told the administration he suspected that Adams had taken money from Systematic Recovery, which was competing for a contract to collect overdue parking fees, according to Ernest Barefield, the mayor`s chief of staff. The contract is administered by the revenue department.
When administration officials confronted Adams, he told them he had borrowed money from businessman Clarence McClain, a close friend and former top aide of the mayor, Barefield said. Adams said he planned to invest the money in commercial real estate.
At the time, some city officials suspected that McClain was working on behalf of Systematic Recovery, according to Corporation Counsel James Montgomery.
Barefield said he was not aware of a relationship between McClain and Systematic Recovery. But he said he still thought it improper for a top city official to take money from McClain, the most controversial figure connected to the administration.
”There would not ordinarily be anything wrong with an employee taking a loan from anybody,” Barefield said, ”but McClain is a figure who has been represented as being involved in influence peddling, so it appeared to be an inappropriate action.”
But top administration officials decided to keep Adams on until Jan. 1, Barefield said.
Barefield said he decided to give the 30-year-old Adams four months to resign ”because he was a young person and his wife was pregnant. It was a judgment call, and I made a judgment.”
At that time, Barefield said, he also stripped Adams of authority over collections contracts.
Last Tuesday, Barefield said, Adams told administration officials he had taken money from Raymond, not McClain.
”At that point, it was clear that he had lied,” Barefield said. ”Upon learning that this was the source of the funds, we moved right away.”
It is still not clear whether Adams told his superiors that he directly took money from Raymond or whether it came through McClain.
Montgomery said the payment to Adams ”was clearly linked to something to do with the collections contract” for overdue parking tickets and that it was ”totally inappropriate” for Adams to take the money.
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Bernard Sandow, president of Systematic Recovery, said Saturday that his company has ”done an excellent job for Chicago, and we`re not doing anything wrong as far as the way we`re handling the account.”
McClain refused to comment when reached by telephone Friday.
Before his undercover activities became known, Raymond told reporters he had given money to McClain, though he did not provide details. The minority contractor for Raymond`s company has told reporters he was introduced to Raymond by McClain.
Another high-ranking administration official disputed Barefield`s account, charging the administration knew the full story of Adams`
relationship with Systematic Recovery as early as the beginning of September. On March 1, 1985, Adams criticized the company`s chief local competitor, Datacom Systems Inc., in a memo to mayoral aide Ira Edelson.
The memo said that other cities had had problems with Datacom, which has the Chicago contract for collecting overdue parking fines, and that the city should investigate the company`s record.
Just three months after arguing for Adams` dismissal for accepting money, Revenue Commissioner Sawyer himself accepted $2,500 from Raymond in November, according to sources close to Sawyer.
Those sources said Sawyer has characterized the money as a campaign contribution for his brother, Eugene, the 6th Ward alderman.
Adams was named to the No. 2 position in the revenue department in June, 1984, three months after losing a hard-fought primary election for state representative to incumbent Larry Bullock (D., Chicago). Adams was supported in the election by Washington, who has feuded repeatedly with Bullock.
Raymond, who used the alias Michael Burnett in his meetings with Chicago politicians, was the central figure in a year-long FBI investigation into city government, according to sources familiar with the operation.
As part of the inquiry, Raymond wined and dined Chicago politicians at expensive restaurants and in his luxury Lake Point Tower apartment, on the city`s lakefront.
Four aldermen–Perry Hutchinson (9th), Clifford Kelley (20th), Wallace Davis Jr. (27th) and William Beavers (7th)–reportedly have acknowledged that the FBI has questioned them about their relationships with Raymond and his firm, which eventually won the contract to collect delinquent water bills.
Davis has acknowledged that he took $1,500 from Raymond, but he described the money as a campaign contribution.