Federal agents telephoned instructions to FBI informant Michael Raymond during videotaped dinner parties and meetings in his apartment with political figures, according to sources familiar with an investigation into suspected Chicago government corruption.
Close telephone contact during the meetings, which were monitored by videotape and audiotape, allowed FBI agents to direct conversations into specific topics and to keep a rein on Raymond, the sources said.
The instructions came from an FBI monitoring post, set up next door to Raymond`s apartment on the 15th floor of Lake Point Tower, the sources said. The agents worked with federal prosecutors on a daily basis during the 18-month undercover operation.
By exercising strict control over Raymond, a notorious swindler who has been described by a former federal prosecutor as a ”master, master con man,” prosecutors hoped to minimize difficulties in future trials.
They wanted to avoid the kind of charges made by defense lawyers in similar prosecutions that undercover operatives engaged in misconduct, the sources said. Prosecutors also sought to rule out arguments by defense lawyers that Raymond had entrapped defendants, the sources said.
The use of such strict controls has never been disclosed publicly in other federal investigations in Chicago. But in the late 1970s, a similar technique was used in the FBI`s sweeping Abscam investigation of corruption involving congressmen.
Raymond posed as a businessman willing to pay money to get city contracts for Systematic Recovery Service Inc., a New York-based bill-collection company that he represented.
Three city officials have been fired in response to publicity about the investigation, and several aldermen and others in government and business here have been described as having received money from Raymond.
While the tape machines recorded activities in Raymond`s apartment, agents listened to the conversations and, at times, used the telephone in their room to call Raymond next door, sources said.
Raymond, pretending that the telephone calls were personal, would then be given instructions, the sources said. Raymond was described by a federal source as a ”quick study” who responded well to the instructions.
Raymond, for example, would be told that some aspect of a conversation should be developed or that some statement had not been heard clearly because of background noise, the sources said. Based on that information, he could then try to keep a conversation on a particular topic or get someone to repeat a statement, the sources said.
Ald. Perry Hutchinson (9th) was among those taped on several occasions in Raymond`s apartment, the sources said.
Federal authorities used the tapes in an unsuccessful attempt to pressure Hutchinson into cooperating against other targets of the inquiry, sources close to the alderman said.
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Pressure was put on Hutchinson, the sources said, because the government believes he was a middleman who passed money from Raymond to others.
On Dec. 20, the sources said, two FBI agents came to Hutchinson`s home and handed him a letter. The letter told him to accompany the agents immediately to the office of U.S. Atty. Anton Valukas, the sources said.
The agents tried to persuade Hutchinson to go to the office immediately and without a lawyer, but Hutchinson declined, the sources said. The letter, signed by Valukas, told Hutchinson it would ”be in your best interests” to go to the office, the sources said.
Instead, they said, Hutchinson went to Valukas` office three days later. Hutchinson, accompanied by his lawyer, met with Valukas; Vincent J. Connelly, the assistant U.S. attorney handling the investigation; and two other FBI agents, the sources said.
Hutchinson and his attorney sat in the office as an FBI agent played a television videotape, with clips showing Hutchinson and Raymond in Raymond`s apartment, the sources said.
The clips, lasting 10 to 15 seconds each, were from five or six days and showed the men in several rooms of the apartment, including the kitchen, where they were seen eating dinner, the sources said.
After showing the tapes, Valukas and Connelly offered Hutchinson a
”take-it-or-leave-it deal,” the sources said. Hutchinson was told that he would have to plead guilty to undefined charges, which would include at least two felony counts.
The deal would have left the government free to make whatever recommendation it chose at the time of his sentencing, the sources said. That recommendation, Hutchinson was told, would depend on how much he provided to prosecutors in their attempts to make other cases.
Hutchinson was told that he had to make his decision right then, in Valukas` office, and without consulting friends or family, the sources said.
”They wanted a blind plea on the spot,” a source said.
Hutchinson rejected the government proposal, the sources said.
Such pressure tactics have been used by the federal government in Chicago as recently as in the Operation Greylord investigation of corruption in the Cook County Circuit Court system.
In the trial of former Associate Judge John Murphy, attorney Arthur Cirignani testified for the government and described how he was stopped on the street while the investigation was still ongoing. Two FBI agents handed him a letter similar to the one given to Hutchinson, ordering him to the U.S. attorney`s office.
Cirignani agreed to cooperate. He was recently indicted and is expected to plead guilty.
In another development Wednesday, an executive for Datacom Systems Corp. said the company`s business records were subpoenaed late Tuesday by the federal grand jury investigating city collections contracts.
Manuel Valencia, a Datacom vice president, said the subpoena was issued after company officials met with prosecutor Connelly. Valencia said Datacom told Connelly it was willing to cooperate in any fashion in the investigation. Datacom has denied wrongdoing, and Valencia read a letter that he said Connelly gave to company officials in which the prosecutor acknowledged the company`s cooperation. Attempts to verify the letter with Connelly were unsuccessful.
Also Wednesday, officials of the Washington administration released two internal memos they say support their claim that John E. Adams, the former deputy revenue director who has reportedly admitted taking money from Raymond, was fired in September for alleged improprieties.
The administration did not announce the firing until two weeks ago, after news reports began describing the federal investigation.
Because of the delay, the circumstances surrounding Adams` firing have become controversial, with some administration insiders saying the mayor would not have fired him were it not for the recent publicity surrounding Raymond`s activities.
In one memo, dated Sept. 12, Adams asks the mayor for a meeting to discuss the firing. In another, dated Sept. 13, he asks Chief of Staff Ernest Barefield to let him keep his job.
Alton Miller, a spokesman for the mayor, conceded that the administration could not authenticate that the memos, which carry no time-date stamp, were written in September.
Still unresolved is the question of exactly what the administration knew in September about the nature of the reported receipt of money by Adams.
Miller contends that Adams was fired because he borrowed money from controversial businessman Clarence McClain. The administration, Miller says, did not know of allegations that McClain was working with Systematic Recovery, which was competing for a contract from Adams` department.
But other administration officials, including Corporation Counsel James Montgomery, have said the administration suspected then that McClain was linked to Systematic Recovery.
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