The following was reported in the press a few hours ago.
tnovak@suntimes.com Jan 6, 2011 07:14PM
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File: Daley's son's secret deal City Hall hired a minority-owned trucking company to clean and inspect sewers south of 63rd Street, but the owner secretly farmed out the multimillion-dollar job to a company owned in part by Mayor Daley’s son and nephew, according to a federal indictment Thursday.
The mayor’s son, Patrick R. Daley, and nephew, Robert G. Vanecko, were not charged with any wrongdoing. But their former business partner, Anthony Duffy, was charged with three counts of mail fraud for allegedly participating in the latest minority-contracting scheme to hit City Hall.
Duffy was president of Municipal Sewer Services, a Chicago company in which the mayor’s son and nephew had a hidden ownership stake, which the Chicago Sun-Times revealed in December 2007.
The Sun-Times report led to an investigation by the city’s inspector general and federal authorities that resulted in the criminal charges Thursday.
The grand jury also indicted Jesse Brunt and his company, Brunt Bros. Transfer, Inc., on three counts of mail fraud. The indictment seeks $3 million from Brunt, his company and Duffy for the amount of money the city paid Brunt’s certified minority-owned company to clean and inspect sewers.
Duffy, 46, of Bartlett, declined to comment. Brunt, 74, of Chicago, couldn’t be reached.
Brunt, a longtime city contractor who also took part in the Hired Truck Program, had worked on city sewer-cleaning contracts as both a contractor and a subcontractor since 2000, getting paid more than $3 million.
Starting in 2000, Brunt was a subcontractor to Kenny Industrial Services, which had two city contracts to clean and inspect sewers north of 63rd Street. The city gave Brunt the contract for the sewers south of 63rd Street, but Brunt didn’t own the video equipment needed to inspect the sewers so he subcontracted the work to Kenny, whose sewer cleaning business was run by Duffy.
Three years later, Kenny went bankrupt. Its sewer cleaning equipment and city contracts were taken over by Municipal Sewer Services, a company Duffy formed with Robert Bobb Jr. and Joseph M. McInerney, the principal operators of Cardinal Growth, a Chicago venture capital firm when the mayor’s son was an intern. Patrick Daley and his cousin formed a separate company, MSS Investors LLC, that invested $65,000 with Municipal Sewer Services, an ownership stake that wasn’t disclosed on documents the company filed with City Hall to take over Kenny’s contracts — in violation of city rules.
Municipal Sewer Services also took over Kenny’s role as a subcontractor to Brunt Bros., cleaning and inspecting sewers south of 63rd Street.
While the mayor’s son and nephew had hidden ownership stakes in the company, it got more than $4 million in no-bid contract extensions from City Hall. The mayor said he never knew his son and nephew had a stake in the company until the Sun-Times uncovered it.
