A company that will receive 25 percent of a controversial multimillion-dollar ash-hauling contract is financially controlled by a top political ally and former business partner of Mayor Eugene Sawyer, records show.
Brunt Bros. Transfer, whose financial decisions are handled by Chicago Transit Authority board member Howard Medley, according to federal court records, has been designated as the 25 percent minority subcontractor by Fred Barbara, a nephew of Ald. Fred Roti (1st).
The Sawyer administration, in the face of opposition from several black aldermen and community activists, has decided to bypass the low bidder and award the contract, which could be worth as much as $10 million, to Barbara`s company, Fred Barbara Trucking Co.
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Administration officials denied that clout had anything to do with the awarding of the contract to Barbara and Brunt Bros. and said the low bidder, Big ”O” Movers and Storage, was disqualified for failing to meet bid requirements.
”I want to make sure the whole thing was done fairly and aboveboard, and it is my understanding that it was,” Sawyer said. ”The investigations were thorough, and they went through each individual.”
Medley, now on trial in federal court on charges of accepting a $25,000 bribe, is a key political ally of the mayor and was also a business partner with Sawyer and Ald. Ronald Robinson (6th) in a 6th Ward land deal.
Records from a federal lawsuit against Medley`s company show that on Jan. 1, 1986, Jesse Brunt agreed to buy 18 trucks from Medley Moving & Storage for $369,000 with only $6,000 down and a monthly payment of $6,000. In a separate agreement, Brunt bought two other pieces of equipment directly from Medley for $77,000 with nothing down and payments of $2,000 a month.
But the agreement states that ”due to the small initial investment of buyer, prior to buyer paying 75 percent of the purchase price, . . . seller`s business decision shall supersede any and all others, including those of buyer.”
That means that under the installment nature of the sale, Medley can still make all the business decisions for the company and that he will benefit financially from the $2.5 million Brunt Bros. could receive from the ash-hauling contract.
The one-year contract calls for the hauling company to remove ash from the city`s incinerator at 750 N. Kilbourn Ave. and deposit it in an approved dump site. City officials contend that when the bids were opened, Big ”O”
did not provide assurances for either trucks or dump sites.
Barbara Trucking bid $28 a ton, $1 a ton more than Big ”O.” City officials estimate that at least 150,000 tons will be hauled during the life of the contract.
Several black aldermen, both allies and detractors of Sawyer, last week vigorously protested the decision to award Barbara`s company the contract and bypass Big ”O” Movers. And a West Side community group threatened ”open war” against City Hall if the decision was not reversed, contending that the decision meant that a black businessman was unfairly losing a contract.
Administration officials quickly defended the decision, saying that Barbara Trucking was more qualified and that an investigation by the city`s Office of Municipal Investigations confirmed that finding.
But officials of the Office of Municipal Investigations said that their investigation is confidential, and there is no indication that they investigated the validity of the two minority set-aside companies being used by Barbara on the contract and whether they are independent companies.
Barbara selected Karen`s Kartage to fulfill a city rule requiring that 5 percent of the contract go a female-owned firm. Lisa Humbert, owner of Karen`s, who was Barbara`s secretary, said she was not questioned by the Office of Municipal Investigations.
The address for Karen`s Kartage, 260 E. Chestnut St., is a Gold Coast condominium owned by Barbara. The firm also stores some trucks at Barbara`s company, 3260 S. Damen Ave.
Humbert maintained that her company is independent. ”I think it`s a shame when everything turns racial, when it is simply a matter of
qualifications,” she said about the ash-hauling contract.
Brunt said that he is good friends with Medley and that Medley approached him in 1985 about selling the business. Court documents show that Brunt also inherited some of Medley`s city contracts, was allowed to continue doing business as Medley Movers and rented the Medley Movers garage at 251 E. 95th St.
Asked why he chose Brunt Bros. to be his minority set-aside company, Barbara said, ”We`ve seen his equipment on the street, and he seems to be a responsible trucker. He is certified by the city.”
Barbara, who has used Medley Movers as its minority company on other city contracts, said he was unaware of any financial tie between Brunt and Medley. ”I was under the impression that Jesse Brunt owns his own equipment,”
he said.
Barbara acknowledged that Humbert is his former secretary and that she stores some of her trucks on his property. But he insisted there was nothing improper about the arrangement. ”I know we haven`t done anything wrong,” he said.
Barbara also said he is getting a bad rap because he is Roti`s nephew, saying the alderman has had nothing to do with his company`s success.
Roti said that Barbara got the contract because he is the most qualified and that Big ”O” Movers, owned by Odis Reams, did not meet the
qualifications.
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”If they investigate, they`ll find he (Reams) lied on his application,” Roti said. ”He said he had trucks he didn`t have, and now he wants to rent trucks from the high bidder.”
Roti said that Sawyer needs to stick to his guns on the contract and not cave into pressure from the West Side community groups.
”He`ll get more respect from the black community if he stands up to them,” Roti said.
But Joseph Banks, executive director of the Midwest Community Council, says his organization is still trying to meet with administration officials to try to persuade them against awarding the contract to Barbara.
”The whole thing is rotten,” Banks said. ”It violates the spirit of set-asides.”
The contract is set to be signed this week unless the administration reverses its decision, something purchasing officials said they have no plans of doing.
”I want to look at the whole thing myself,” Sawyer said. ”It is my understanding that there is some additional documentation that I haven`t seen but will be looking at.”