Chicago’s history has been entwined with the Daley family for better or worse for decades, from the moment a young Richard J. Daley landed his first job as a deputy county comptroller in 1936, to the unprecedented political machine he built to the 43 years of iron-fisted mayoral rule that followed.
A new chapter to that legacy was written Monday in a federal courtroom, where a jury convicted Daley’s grandson, Ald. Patrick Daley Thompson, of tax-related crimes stemming from a line of credit he received from a failed bank in his family’s Bridgeport neighborhood.
After a weeklong trial and hours of closing arguments, the jury deliberated about 3 1/2 hours before finding Thompson guilty of two counts of lying to federal regulators about his loans and five counts of filing false tax returns that illegally claimed mortgage interest deductions that he never paid.
The jury’s swift verdict marked the first time a member of the Daley family has ever been convicted of a federal crime, a prospect that would have been unthinkable to many when the family was at its zenith, controlling not only the fifth floor of City Hall but also wielding influence over state and national politics, including the White House.
Under state law, Thompson, who has represented the 11th Ward since 2015, must resign his seat in the City Council due to the conviction on felony charges. Mayor Lori Lightfoot will have 60 days to appoint someone to fill the post for the rest of Thompson’s term.
Each count of lying to banking regulators carries up to 30 years in federal prison, while each count of filing false tax returns has a maximum of three years behind bars. A sentence of probation will also likely be in play for Thompson, who has no prior criminal record.
U.S. District Judge Franklin Valderrama set a sentencing hearing for July 6.
Thompson, 52, dressed in a dark suit and red tie, sat quietly at the defense table as he waited for the jury to enter the courtroom, appearing to rub his right temple with his hand. He stood when the verdict was announced, keeping his hands folded in front of him and showing no outward reaction.
In the overflow room next door, several members of Thompson’s family wept at the verdict, some standing and holding hands. In the hallway outside the courtroom, the alderman’s daughter could be heard crying as she hugged a supporter.
About an hour after the verdict, Thompson strode past a horde of television news cameras and reporters in the lobby of the Dirksen U.S. Courthouse, surrounded by his family. His lawyer, Chris Gair, stopped briefly to comment as the alderman made his way through the revolving doors.
“I’m extremely disappointed with the verdict and extremely disappointed with the U.S. attorney’s office for bringing this prosecution,” Gair said. He also chastised reporters for continuing to yell questions at the alderman on his way out the door.
“Stop shouting at him. He doesn’t have any comment,” Gair said.
A spokesman for U.S. Attorney John Lausch declined to comment.
Thompson kept his hands on the shoulders of a relative in front of him as he walked through another crush of cameras outside the building and got into an SUV.
In addition to being the first Daley convicted, Thompson is now the 37th current or former Chicago alderman to be found guilty of a federal crime since the early 1970s, joining an ignominious club that continues to grow despite a long history of federal prosecutions targeting corruption of elected officials.
Two more current council members, Ald. Edward Burke and Ald. Carrie Austin, are currently awaiting trial on federal charges alleging they tried to use their public office for personal gain.
Former Ald. Daniel Solis, meanwhile, has entered into a deferred prosecution agreement that charged him with bribery for wrongdoing while he was the head of the powerful Zoning Committee. Those charges are in line to eventually be dropped due to Solis’ extensive cooperation against Burke, which included wearing a wire for the FBI.
Thompson was the first sitting Chicago alderman to face a federal jury since then-37th Ward Ald. Percy Giles was convicted in 1999 with taking bribes as part of the Operation Silver Shovel probe.
In a statement after the verdict, Lightfoot said the jury had spoken. She made it clear that the political machinery to replace Thompson was already in the works.
“This week, we will be outlining an open and transparent process to fill the vacancy with a qualified public servant that represents the values of the residents of the 11th Ward and the City of Chicago,” the mayor’s emailed statement read.
Unlike most of the aldermen who have been convicted before him, the charges against Thompson had nothing to do with his position as an elected official, though his membership in one of Chicago’s most storied political dynasties heightened the interest in what otherwise was a routine tax case.
And even though the loss amount to the IRS was pinned at a relatively paltry $15,500, Thompson’s status as an elected official significantly upped the stakes for both sides.
Gair had sought to pin the blame on the bank and its former president, John Gembara, saying Thompson had nothing to do with generating the erroneous tax forms that wound up on his returns. Gembara was found hanged in the home of a customer days before the bank was shuttered, and his death was ruled a suicide.
The defense team has also portrayed Thompson as an honest but “frazzled” man, constantly torn between his duties as alderman, commercial real estate lawyer and father, and admittedly lacking when it came to focusing on the minutiae of his taxes.
Gair began his closing argument Monday by emphasizing a certain political surname and saying prosecutors were bent on finally nailing a Daley.
“It shows you just how desperate the government is to convict Patrick Daley Thompson,” Gair said, raising his voice an octave as he said the Daley name. “This case is full to the brim and overflowing with reasonable doubt.”
In her closing remarks, Assistant U.S. Attorney Michelle Petersen said Thompson, who is an accomplished commercial real estate attorney, knew exactly what he was doing when he tried to hide the full $269,000 in principal and interest he owed from regulators in the wake of Washington Federal’s collapse.
“When he saw the opportunity to lie, to deceive, to pay less than what he owed, he took it,” Petersen said. She said Thompson told his lies in a way that gave him “plausible deniability” when caught.
After receivers for the Federal Deposit Insurance Corp. confronted Thompson with evidence that he’d taken advances of $20,000 and $89,000 from Washington Federal in 2013 and 2014, the alderman feigned surprised, Petersen said.
“That’s part of the act, ladies and gentlemen,” Petersen said. “Lie until you get caught, and when you get caught, act surprised, act confused.”
Over the course of four days of testimony, the jurors saw dozens of pages of Thompson’s tax and loan records and heard often-repetitive explanations of their meaning. At one point late in the week, after he apparently noticed attention waning, Valderrama had to remind certain members of the jury to pay attention to the evidence.
But the trial was not without its dramatic moments. During the second day of testimony, the judge threatened to hold a key government witness in contempt after he was overheard talking about his testimony with other upcoming witnesses during a lunch break — a violation of the court’s orders.
On Thursday, jurors for the only time in the trial got to hear Thompson’s voice when prosecutors played a recorded telephone call he had with a new lender, Planet Home Lending after the FDIC takeover of Washington Federal where he disputed the amount they said he’d borrowed.
“I signed a promissory note … for $100,000 in 2011,” Thompson said on the February 2018 call. “I have no idea where the 269 number comes from. ‘Cause this doesn’t match with anything that I have.'”
In her closing argument, Petersen replayed the call for jurors and said to pay special attention to the alderman’s attempts to press Planet Home to accept his word on what he owed so they wouldn’t find the other loans he received.
“He’s urging them to resolve this quickly,” the prosecutor said. “He knows if he can get them to hurry up they might not dig any deeper.”
FDIC Special Agent Jacob Evans testified it was cold when he and his partner arrived one morning in December 2018 and saw Thompson’s car warming up in the driveway. He answered a knock at the door, and after they identified themselves, Thompson invited them into the immediate entryway, he said.
They talked about his loan with Washington Federal before they served him with a subpoena to testify before a federal grand jury probing the bank’s collapse, Evans said. A copy of the subpoena shown to the jury demanded tax, property and mortgage records pursuant to an official criminal investigation.
On cross-examination, Gair referred to the agents’ confrontation with Thompson as an “ambush interview” designed to catch the alderman off guard.
But Petersen said Monday that Thompson undoubtedly knew the subpoena was serious business and that he could be in trouble.
“They’re asking because you’re in tax trouble, and he knew it. He absolutely knew it,” Petersen said. She said he took a few days and hatched a plan to call his accountant and play dumb. He later filed amended tax returns that no longer included the false mortgage interest payments.
Gair, however, said there was absolutely no evidence of a scheme on Thompson’s part and accused Petersen of making it up out of whole cloth.
“There is a wide gulf, a chasm between lying and making a mistake,” Gair said. “We all make mistakes. If it were a federal crime to make a mistake then we’d all be guilty.”
Gair said the case comes down to an honorable man “who made a mistake and got a whopping $3,000 a year less on taxes due and owed.”
In rebuttal, Assistant U.S. Attorney Brian Netols seized on Gair’s accusation that Thompson was targeted because he’s a Daley relative.
“Nobody targeted this defendant. He did what he did,” Netols said. “He committed all the conduct that he’s charged with before we even interviewed him for the first time. … No one is so big, no one is so important, that they can’t be held responsible for their criminal conduct.”
The Tribune’s Tatyana Turner contributed.