Robert Hickman, once one of the most powerful Republicans in state government, was accused Wednesday of defrauding the state’s scandal-plagued toll highway authority of $240,000 while he was its chief.
Hickman, who resigned in April 1994 as executive director of the Illinois Toll Highway Authority, and state Rep. Joseph Kotlarz (D-Chicago), a former Chicago alderman, were indicted Wednesday by a DuPage County grand jury on charges of theft and conspiracy.
The indictments, which also accuse Hickman of official misconduct, resulted from an investigation that began in December 1993, when other toll authority officials asked state police to investigate a real estate commission paid in connection with a tollway land sale.
From the beginning, the probe centered on Hickman, who used his political clout to raise millions of dollars to propel his longtime friend Jim Edgar into the governor’s mansion in 1990, and Kotlarz, a close associate of Hickman’s.
The 1992 land deal involved a 12-acre parcel north of the East-West Tollway at Meyers Road in Oak Brook. When the tollway authority abandoned its plans to build a service center oasis on the site, it offered the parcel for sale to WMX Technologies in 1989. The waste-disposal company wanted the property to improve access for its employees working at its corporate headquarters, which borders the land.
But the two sides failed to come to terms until July 1991, when Hickman approved a proposed sale agreement calling for WMX to pay $3.8 million to the tollway authority for the land. The agreement also called for WMX to pay a $240,000 real estate commission to an Arlington Heights real estate firm.
At the time, Kotlarz was an attorney representing WMX in negotiations with the tollway authority on the purchase of the land, according to WMX spokeswoman Christine Combs. She declined to say what the company paid Kotlarz, who is a licensed real estate broker.
Tollway officials, however, said they did not learn about the commission until 1993. The real estate contract outlining the $240,000 payment was never brought to the board’s attention when it approved the deal in 1992. Board members later questioned why a commission was paid at all, because neither WMX nor the tollway authority had hired a broker.
Prosecutors on Wednesday charged that the tollway authority should have received the $240,000 as part of the land sale. But according to the indictment, $190,000 of that sum was paid to Kotlarz, who has a long-standing friendship with Hickman.
Payment of the fee by WMX to the real estate firm, and allegedly in turn to Kotlarz, “deprived the Illinois State Tollway Highway Authority of the use of the said” funds, the indictments charge.
At a news conference Wednesday announcing the indictments, DuPage State’s Atty. Anthony M. Peccarelli said, ” . . . Robert Hickman and Joseph Kotlarz conspired to divert these funds from this transaction by falsely representing that a real estate firm acted as a broker in the sale of this land.”
Eagle Real Estate, formerly of Arlington Heights, received $50,000 for its part in the transaction. The firm’s attorney, Thomas Breen, declined to comment. Prosecutors said no charges would be filed against the real estate company.
“The general public has a right to be outraged when something like this happens,” said Terrance Gainer, the director of the Illinois State Police, which conducted the probe.
While investigators subpoenaed bank and financial records of Hickman and Kotlarz, the formal charges do not allege that Hickman received any of the money, Gainer said.
Hickman could not be reached for comment. His attorney, William Conlon, proclaimed his client’s innocence.
More Top Picks Hot Tub
“Bob and I look forward to addressing these charges in court. I would say that I would hope what the state’s attorney is saying to the public is that these are merely charges and that Bob Hickman is presumed innocent,” said Conlon.
Kotlarz, who was attending the legislative session in Springfield, had no comment on the charges.
His attorney, David Stetler, said, “I don’t think that Joe Kotlarz did anything wrong. At least now that the charges are publicly made we can assert his innocence.”
Stetler noted that at the time of the land transaction, Kotlarz was an attorney in private practice and had not yet been elected to the state legislature.
Defense attorneys suggested prosecutors might face a tough fight in proving the charges. Some said there were at least two appraisals that set the land price at less than the $3.8 million the tollway authority was paid.
“They (the prosecutors) will have to show that the tollway lost the $240,000, and that’s not going to be easy to do,” said Brian Telander, a Glen Ellyn attorney who represented the authority’s former chief legal counsel, Frank Howard, in the investigation.
Howard, Kotlarz’s former law partner, was not charged in the investigation. He was forced to resign his $95,000-a-year post with the authority in October because of handling outside legal business.
Hickman is the highest-ranking member of Edgar’s administration to be charged criminally in connection with his official duties.
Arriving at a dinner in Chicago Wednesday night, Edgar noted that his administration called for the state police investigation that resulted in the indictments.
” . . . We’re obviously disappointed when someone does something improper. In this case, let’s let justice take its due course,” he said.
Edgar’s relationship with Hickman began in 1974. Hickman, then the mayor of Charleston, Edgar’s hometown, was one of the few Republicans to back Edgar in an unsuccessful bid for the state legislature. Edgar never forgot that early display of loyalty.
A gifted basketball player who attended Kansas University, Hickman was a glad-handing, gregarious fundraiser for Edgar’s 1986 secretary of state race and his 1990 gubernatorial race against Democrat Neil Hartigan.
In the 1990 race, Hickman was credited with almost single-handedly raising $14 million for the campaign, a financial advantage that provided the winning-edge over Hartigan.
Hickman’s fundraising feats landed him a number of starring roles in Edgar’s administrations, culminating in the appointment as executive director of the tollway authority in February 1991. The post is considered a plum because the tollway chief presides over a cache of lucrative contracts to dispense to campaign contributors.
Hickman’s appointment soon proved embarrassing for Edgar. Hickman was constantly criticized for his personal investment in a firm doing state business, for tollway spending practices, for his use of a state helicopter for personal business and for awarding a contract to a firm that employed his son.
During last spring’s primary, Hickman became a favorite political target of Edgar’s eventual opponent, Democrat Dawn Clark Netsch. Shortly after, Edgar put his friendship aside and forced Hickman to resign as the agency’s 12th executive director.
Kotlarz, who earned a reputation as a wheeler-dealer while a Chicago alderman, developed a close friendship with Hickman. The two traveled together to vacation spots, once flying to Martha’s Vineyard aboard a private jet leased by Kotlarz.
Hickman and Kotlarz have agreed to surrender to DuPage County authorities, Peccarelli said, and will be released on $50,000 bonds pending trial.
Meanwhile, Gainer said, authorities were continuing other investigations at tollway authority into allegations of wrongdoing, including scrutiny of a multimillion-dollar contract to install electronic toll-collection systems.
“The Illinois State Police continues to explore leads and other allegations of misconduct by members of the highway authority,” he said.