After two years of exhaustive pursuit, Chicago Ald. Edward Burke had finally landed “the tuna.”
And then it got away.
That was the story heard in Burke’s corruption trial Friday, where jurors have been shown evidence all week about the then-powerful Finance Committee chairman’s alleged chase of private legal work from the developers in the $600 million makeover of the Old Post Office.
Wiretaps played in court captured Burke referring to getting business from the project’s developer, Harry Skydell, as “landing the tuna.”
Hidden video footage showed Burke’s growing frustration as Skydell repeatedly dragged his feet in hiring Burke’s law firm, even after Burke had used his clout to intervene in several issues Skydell was having with the project.
Finally, in August 2018, two years after Burke first brought up getting Skydell’s business with FBI mole Ald. Daniel Solis, Burke signed an agreement with Skydell’s New York-based company, 601W, to do property tax work for another downtown building, known as the Sullivan Center.
The deal called for a $15,000 flat annual retainer fee plus 20% of any refund “as a result of a reduction in assessed value” of the Sullivan Center property, an 800,000-square-foot, Louis Sullivan-designed building at the corner of State and Madison streets.
Bryan Oyster, an executive with Jones Lang LaSalle, which handled real estate issues for 601W, testified Friday the deal came about shortly after they closed on the building. Skydell asked him to reach out to Burke’s firm and sign them up for tax appeals, even though 601W had been using another firm almost exclusively for its Chicago properties.
“Had you heard of Klafter & Burke before?” Oyster was asked by Assistant U.S Attorney Diane MacArthur.
“I had not,” he said.
Oyster testified that he was stunned when, less than three months after inking the deal, Klafter & Burke abruptly withdrew from representing the Sullivan Center via a letter sent on Dec. 20, 2018.
That was three weeks after Burke’s City Hall and ward offices were raided by the FBI. The search warrant Burke was served on Nov. 29, 2018, showed the feds were specifically investigating his law firm business and connections to official acts as alderman.
Agents were looking for any evidence of “referral fees, fee-splitting, fee-sharing, and consulting agreements” involving Klafter & Burke, a copy of the warrant showed.
Oyster, who was not asked about the raid, testified Burke’s firm never actually was paid any money by 601W because of the firm’s sudden withdrawal.
The testimony came as federal prosecutors wrapped up its evidence in the long saga of the Old Post Office redevelopment, the most significant portion of the racketeering indictment against Burke.
After Oyster’s testimony, prosecutors played a final recording made by Solis on Nov. 9, 2018, just 20 days before the FBI raid of City Hall.
As instructed by his FBI handlers, Solis told Burke in the in-person meeting that he was planning to retire midway through his next four-year term, and then “go off into the sunset.” He also told Burke he had a line in on some big-time developers who were planning on a development near South Clark Street in Solis’ 25th Ward and would steer them to Klafter & Burke for a consulting fee.
“He says that’s gonna go, that would go really quick. And so I’m thinking within the next few months, or whatever, maybe he’s somebody else I can bring you and we can talk about a consulting situation for me,” Solis said on the recording played in court.
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“Sure. As long as you remember me, yeah,” Burke responded. “We come from the old school.”
In reality, Solis was planning to announce his retirement later that month, ostensibly to spend more time with his family. He’d been working undercover for the FBI since being confronted by agents with evidence of his own corrupt deeds in June 2016, and was expecting a deferred prosecution deal in exchange for his cooperation.
Burke, 79, who served 54 years as alderman before leaving the City Council in May, is charged with 14 counts including racketeering, federal program bribery, attempted extortion, conspiracy to commit extortion and using interstate commerce to facilitate an unlawful activity.
Prosecutors have alleged he repeatedly used his powerful office for his own personal gain, particularly in trying to get business for his tax firm.
Also on trial are Burke’s longtime ward aide, Peter Andrews Jr., 73, and Charles Cui, 52, a Lake Forest real estate developer, but neither of them is charged as part of the Old Post Office scheme.
After the Old Post Office evidence concluded, prosecutors moved on to the allegations involving Cui, who is charged with hiring Burke’s law firm in exchange for the alderman’s help securing a pole sign for a Binny’s Beverage Depot that was anchoring his development in the Portage Park neighborhood.
Cui had entered into a lucrative agreement with Binny’s, with a clause saying the liquor store chain would get a significant rent reduction if it turned out it could not use a large pole sign on the property, which had previously housed a bank. Cui claimed he stood to lose $750,000 over the term of the lease, according to an email shown to jurors.
When the city denied Binny’s request to use the pole sign, saying it had been abandoned for years and was now illegal, Cui made a flood of calls and emails in hopes of getting it resolved.
On Aug. 23, 2017, he contacted Burke, saying he needed legal help: “It is such a beautiful pole sign, it is becoming a landmark for the community and it costs lots of money to remove it.”
When Burke didn’t get back to him, Cui emailed a friend the next day, “Maybe he thinks there is conflict of interest, because of his position.”
“I’ll ask (Burke) to represent me for property tax appeal, which will be a big bite, comparing with this,” Cui’s email stated. That day, he emailed Burke again, saying he may want to hire Klafter & Burke for tax work.
About a week later, an attorney at the firm reached out to Cui to start looking into the buildings’ tax situation. And the same day, Burke told his assistant to reach out to the commissioner of the Department of Buildings, according to evidence presented to the jury.
“Ask her to take a look at that situation where this Chinese guy called about the Binny’s liquor store and the pole, see if she’d review it,” Burke said on the Aug. 30, 2017, wiretapped phone call. “See if there’s any way that they can help him.”
The next day, Burke’s assistant emailed Cui to say he could expect a call from the head of the building department.
On cross-examination, FBI Special Agent Eileen McDermott acknowledged that Cui only stood to lose about $183,000 in his 15-year lease, and only up to $600,000 if the lease was extended to 50 years, according to the terms of his agreement with Binny’s.
Ultimately, the matter was resolved in 2019 for just $60,000.
Cui attorney Tinos Diamantatos also noted that Cui is a suburban-based immigration attorney and a developer, and the Portage Park project was his first successful foray into Chicago real estate. He never met face-to-face with Burke or even talked to him directly on the phone, Diamantatos noted.
And Burke’s attorney, Chris Gair, noted that there is no evidence Burke knew about Cui’s lease agreement or Cui’s speculation that the pole sign matter could be a conflict of interest.