Chicago Aldermen Clifford P. Kelley (20th) and Wallace Davis Jr. (27th)
and five other men were indicted by a federal grand jury Friday on a wide range of charges in the first wave of indictments stemming from a 2 1/2-year FBI undercover investigation into alleged City Hall corruption.
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Also charged were Michael Lambesis, chief investigator for the Cook County Circuit Court clerk`s office; Carmen Aiello, a former chief supervisor in the city water department; Herman Mitchell, a former precinct captain in Davis` 27th Ward organization; Raymond Akers Jr., a lobbyist for Waste Management Inc.; and Paul Vesper, an associate of Lambesis who owns an Arlington Heights electronics firm.
Davis, Kelley, and Aiello were charged with accepting payoffs from Michael Raymond, a con man, convicted swindler and undercover federal informant who played a central role in the investigation by functioning as marketing director for a New York bill-collection firm seeking city contracts.
But Friday`s indictments reveal that the inquiry extends far beyond the bill-collection business and that payoffs were far larger than had been known publicly.
The indictments, containing several counts unrelated to Raymond, also display a strategy by prosecutors to de-emphasize the informant, who is charged in Florida with murder and is a suspect in several other deaths. Raymond used the name Burnett while working for the New York collection firm, Systematic Recovery Service Inc.
The array of charges unrelated to Raymond range from several alleged dealings by Kelley with Akers, 32, and Waste Management, the giant Oak Brook- based waste-hauler, to the alleged extortion of West Side businesses by Davis, to several weapons charges involving Lambesis and Vesper.
Kelley, 47, a powerful South Side politician, and Davis, 35, a freshman City Council member from the impoverished Near West Side, both were charged with extortion, racketeering, mail fraud and making false statements to FBI agents.
Kelley was accused of receiving free trips and dinners, free work on his car and money from Waste Management in an effort to influence his official duties. The firm itself was not charged.
The alderman also was charged with failure to file federal income tax returns for 1983, 1984 and 1985.
The grand jury alleged Kelley received at least $6,500 of a $10,000 payoff to help Waste Management obtain an option to purchase property at 65th and State Streets in Kelley`s ward. The site was to be used as a waste transfer station by the company. The transaction had previously been disclosed in reports by The Tribune.
The indictment said that when the seller of the option, Norman Kramer, increased the price of the option by the $10,000, Waste Management gave the $10,000 to Kramer who gave $6,500 of it to Kelley.
Akers is charged with falsifying records to disguise the fact that Waste Management provided a variety of items and services for Kelley.
The indictment lists the goods and services as rental cars, campaign contributions and travel and entertainment, including free transportation and tickets to the 1984 and 1985 Super Bowl football games. Akers also was charged with conspiring in the Kramer option deal.
Kelley accepted ”a cumulative total of approximately $20,000 in cash”
from Systematic Recovery, according to the indictment–an amount far larger than previously disclosed.
The grand jury alleged that Davis received $5,000 from Systematic Recovery in connection with the firm`s efforts to win city business. He also extorted money from three businesses in his ward and $10,000 from his niece, Etta Harris, in exchange for keeping her on his payroll, the indictment alleges.
Davis told Raymond to ”count me in. I`ll be right there with you 100 percent,” after receiving a $5,000 payoff, according to the indictment. This conversation is one of many that were tape recorded by the government, according to a source familiar with the inquiry.
Kelley, who pronounced himself ”not openly pleased” by the charges, maintained his innocence and said, ”I certainly think there is a
misunderstanding relative to what the government has alleged.”
Waste Management issued a statement saying that ”at no time did Waste Management have any knowledge of the activities with which Mr. Akers has been charged.”
Davis` lawyer, Dennis Berkson, said: ”Wallace has maintained all along that he received only $1,500, as a campaign contribution. And he still maintains that.”
Others named in the indictment did not return reporters` telephone calls. Kelley and Davis are members of the City Council bloc allied with Mayor Washington. But they are thought more to be allies of convenience rather than long-time close associates of the mayor, so it is believed that the political fallout for Washington will not be too great as he prepares for a re-election fight.
But others with closer ties to the mayor, including former top aide Clarence McClain and the city`s former deputy revenue commissioner, John E. Adams, still are under investigation, sources close to the case have said.
Washington said he didn`t believe the federal charges would tarnish his reputation, remarking, ”People are not stupid. They know that no mayor can control everybody`s thoughts or actions.”
Moreover, U.S. Atty. Anton R. Valukas, who announced the indictments, stressed that the mayor is not a target of the investigation. He said that the trials of those charged Friday are not expected to begin until after the February aldermanic and mayoral primary elections.
Valukas also suggested that the continuing federal investigation involves another bill collection firm, New Jersey-based Datacom Systems Corp. Joseph Delario, who recently resigned as the firm`s president, has admitted authorizing about $70,000 in payments to officials in New York City, but there has been no evidence made public of any payments by the firm in Chicago.
The grand jury charged that Davis extorted $2,000 from restaurant owners in exchange for a promise to assist them in convincing the city not to condemn the building in which the restaurant was located and to sell them a city-owned lot next to the building for use as a parking lot.
He is accused of illegally receiving a $1,500 campaign contribution from the owner of Vogt`s Wine Shop in his ward in return for his help in enabling the firm to buy the public alley behind the shop.
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The grand jury charged that on Dec. 16, 1985, Raymond offered Davis $10,000 for help in directing city contracts to Systematic Recovery. According to the indictment, Davis asked for $25,000, but accepted $5,000 on Dec. 18.
Aiello, 36, was charged with obtaining two $1,000 payoffs from Raymond, on Nov. 4 and Dec. 3, 1985.
Lambesis, 61, and Vesper, 44, were charged with selling Raymond illegal weapons, including an Uzi submachine gun, automatic pistols and a silencer. The indictment charges that the two knew Raymond was a convicted felon who was not entitled to bear arms when they made the sales. In addition, possession of a machine gun such as an Uzi is illegal.
Lambesis has been on paid ”administrative leave” from his $31,000-a-year job with the court clerk`s office since last March, shortly after his name surfaced in the probe.
Herman Mitchell, 55, a former precinct captain in Davis` ward, was charged with attempting to extort $2,000 from Gus Pappas, Pappas Amusements, Homer Alvarado, and a non-profit Hispanic group, the MEDA Organization.
The FBI secretly recorded Raymond`s meetings and conversations with politicians and businessmen here over an 18-month period that ended when his identity was revealed last December.
Valukas said that disclosure of Raymond`s identity by a magazine in south Florida hindered the investigation during the last 11 months.
When questioned about Raymond`s value as a prospective prosecution witness at upcoming trials, given his past criminal record, Valukas said, ”We are aware of the issue of the credibility of witnesses.”
But he added, ”I don`t expect it will be that big of an issue,” noting that the government has other witnesses and evidence.
While Friday marked the beginning of the Chicago prosecutions, a major federal criminal trial produced as a spinoff of the Chicago investigation was winding down in New Haven, Conn.
In that case, current and former New York City officials, including Bronx Democratic Chairman Stanley Friedman, are charged with receiving hundreds of thousands of dollars in cash payoffs and gifts to influence contracts with companies seeking to collect delinquent parking fines.
Closing arguments in that case were completed Friday. The jury is expected to begin deliberations Saturday and continue through the weekend.
In addition to those indicted Friday in Chicago, a number of Chicago officials and businessmen have been identified as having had contacts with Raymond.
Sources familiar with the case said that Circuit Court Clerk Morgan Finley, Lambesis` boss, accepted $25,000 that had been directed to him by Raymond.
In a written statement, Finley has denied taking any payoff, but has offered no other details.