Truck Program Scandal Tied to Allies of Chicago Mayor

Since Richard M. Daley took office as mayor in 1989, his administration’s record for the most part has been squeaky clean. But now a scandal tied to Chicago’s $40-million-a-year private trucking program has exploded, with reports of alleged mob ties and extortion by city officials.

The focus of attention is the Hired Truck Program, which contracts vehicles from 165 outside companies to assist with public works and construction projects. Dump trucks that supplement the city’s own fleet account for much of the hired help.

Public outcry over the program emerged because of a recent investigation by the Chicago Sun-Times that reported that many of these trucking companies were being paid millions of dollars to do no work.

In addition, the newspaper claimed, the people who have profited most under the program have either direct political connections to Daley or to organized crime.

“This has the potential of being the most controversial internal thing Daley’s ever faced,” said Paul Green, a political scientist at Roosevelt University in Chicago and an expert on city politics. “Any time you’re dealing with an issue that has mob connections, it’s a major problem. As mayor, you do not want your administration [mentioned] in connection to people with nicknames.”

The Sun-Times also alleged that some of the people involved with the program in the past have faced FBI scrutiny over reported organized crime connections.

On Wednesday, William Abolt, the city’s budget director who oversaw the management side of the program, quit. In a letter, Abolt said his “continued service could distract [Daley’s] administration from moving forward”; he declined to comment further. There have been rumblings around City Hall this week that the scandal could lead to further shakeups inside the mayor’s office.

The Sun-Times series also has sparked a federal investigation. The U.S. attorney’s office in Chicago recently issued a grand jury subpoena seeking a wide range of records from the city, the mayor’s office said.

Some of the documents requested, according to sources at City Hall, include information about Angelo Torres, former manager of the program. Torres was arrested late last month on extortion charges and is accused of taking nearly $4,000 in bribes from private trucking companies in exchange for city business. Torres, an alleged former gang member, and his attorneys could not be reached for comment Wednesday.

Two of the trucking companies involved in the program are Marina Cartage and MAT Leasing, both owned by Michael Tadin, a longtime friend and political supporter of Daley’s. A third is Karen’s Kartage, which is owned by the wife of Daley friend and political supporter Fred Barbara.

Marina Cartage, MAT Leasing and Karen’s Kartage did not return calls Wednesday.

This is not the first time that controversy has enveloped the program. In 1998, amid rumbles that there were irregularities, city officials hired the accounting firm Ernst & Young to conduct an investigation.

The subsequent report issued that year listed several management lapses, including the need for the city to develop a better way to “control selection and use of trucks.”

In the wake of the Sun-Times stories, Daley has taken responsibility for the alleged problems in the trucking program.

“First of all, I’ll take the blame myself,” Daley said at a news conference this week. “I’m embarrassed, yes. I’m very upset. I’ve given people responsibility. I give them the right to make decisions and hold them accountable.”

But on Wednesday, Daley emphasized that he didn’t know what was happening, and that his staff had failed to keep him apprised of the problems. “As mayor, it’s not for me to make excuses, only to get to the root of the problems,” Daley said.

Earlier in the day, John Daley -- the mayor’s brother and chairman of the Cook County Board’s Finance Committee -- acknowledged that he had benefited from the program when he sold insurance to three of the trucking companies, including the two businesses that gained the most from such contracts.

The mayor has announced that the program will be revamped, and the first step will be to dump all 165 companies currently involved with it. The new system, set to launch June 1, will limit the number of trucks from each company that can be used each day, as well as other, more stringent oversight rules.

Daley has named Robert Benson, the city’s auditor, to oversee the reforms. The city also has requested proposals from consulting and auditing firms. The winning company, to be selected by Feb. 18, will help the city design and develop “rigorous new standards for entry into the city’s Hired Truck Program,” officials said.