Wednesday, October 3, 2007

It's deja vu over deal for Daley's kin
Vanecko's feeding at public trough takes ethics back to the early '70s

September 25, 2007
BY MARK BROWN Sun-Times Columnist
Much has changed in Chicago since Mayor Richard J. Daley steered city insurance and law business to his sons in the early 1970s and then famously invited anybody who didn't like it to kiss his behind.

These days it's city pension business that's going not to the son but the nephew of Mayor Richard M. Daley, who not only makes no allusions to strategically positioned mistletoe, he says he didn't even know anything about his nephew's good fortune.

We've come a long way, baby.
If that seems overly cynical, sorry, but it's stories like this that tend to make us that way. I hope you caught Sunday's report by our investigative ace, Tim Novak, but if you missed it, here's the gist:

The mayor's nephew, Robert G. Vanecko, is a partner in a real estate venture that has received $68 million from five city-connected public pension funds. The venture is supposed to earn money for the pension funds by investing the $68 million in individual real estate projects of its choosing. The business just got started, so it's too early to say how well it's doing, but no matter how it does, Vanecko and his partner, mayoral ally Allison Davis, stand to collect at least $3 million in management fees from the arrangement. They could make as much as $8.4 million in fees alone over the course of their contract, which runs through 2014. That's aside from any profits they may make on the individual developments, which could include their own projects. In short, it's a nice deal if you can get it, which of course, you can't.

'I'm not on that board'
Naturally, though, everyone acts as if it's just a coincidence that it's the mayor's nephew who landed on this inside track. At an unrelated news conference Monday at Navy Pier, the mayor was asked by the Sun-Times' Fran Spielman if he thought this was a sound investment for the pension funds. "It doesn't matter," the mayor asserted. "They have to make their professional decisions. I'm not on that board. They make decisions. Pension boards do that every day." His comments ignored the fact that mayoral appointees serve on these pension boards and have been known to exert their influence, to put it nicely. The mayor was then asked if he would rather his nephew hadn't gotten involved with the pension funds. "Wait, wait, wait," Daley interrupted. "It could be any business. They could be in real estate. They could be in development. They could be in anything, and he's a professional young man, and he's going to make decisions."

As you probably appreciate, it's not a question of what profession the mayor's nieces and nephews have chosen to pursue, but whether they choose to pursue it while feeding at the public trough. Ever since the embarrassing revelations of the early '70's, the Daley family has seemed to operate under a philosophy that family members are either in government doing the people's business and settling for a public paycheck or they make a living in the private sector. There are exceptions, but unless we've missed something, they've drawn the line at working in the private sector while taking government contracts, a world where you can get rich at the public's expense. The Vanecko deal crosses that line. Vanecko, 42, is the son of the mayor's sister, Mary Carol. He was the first born of the late Mayor Daley's 22 grandkids.

The right people will know
Vanecko said he never told anyone at the pension funds about Uncle Rich.
"As a matter of practice, I don't disclose this relationship," he told the Sun-Times in an e-mail, choosing not to sit for an interview with Novak. "He is my uncle. I don't trade on his name." I'd guess he doesn't need to tell them. Whether he realizes it or not, there's always going to be somebody around to make sure the right people know. You can bet Allison Davis knew he was going into business with the mayor's nephew and understood the potential benefits of such a relationship, especially for a man whose business success is dependent on the continued goodwill of the city's political leadership. One of the projects Davis and Vanecko are eyeing is one of the big CHA redevelopment projects along the lakefront. They're going to need a lot of public subsidies to make that work. Back in the '70's, Richard J. Daley responded to his critics with a quotation from his mother: "There's a mistletoe hangin' from my coattail." Maybe it was my own mother who liked to say: The more things change the more they stay they same.

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