CHICAGO, ILLINOIS (April 26, 2019) — Embattled Chicago Alderman Edward M Burke won re-election in February despite facing federal corruption charges, and one way he did it was boasting about how he brought home the bacon — quite literally — to his Southwest Side ward.
Even as Burke stood accused of leveraging clout in a shakedown scheme, his campaign played up the effectiveness of his aldermanic powers to land big economic development projects for his 14th Ward. Left unsaid was his involvement also tracked in significant ways with the line-blurring tactics that have landed him in legal peril.
Topping Burke’s list of accomplishments was a new $25-million combination warehouse and plant to process pork, beef, and other meats for Amigos Foods on former railroad property at 51st Street and St Louis Avenue. He was on hand for last year’s groundbreaking ceremony.
The 10-acre project topped a list of Burke-led development-initiatives his campaign highlighted on its website and distributed to the Chicago Sun-Times and Chicago Tribune editorial-boards in seeking their endorsements.
The Amigos project also paid off for his law firm, Klafter and Burke, which specializes in property tax-appeals work. The firm was hired by the company months after the then-powerful finance-committee chair made the deal viable by shepherding zoning-changes through the Chicago City Council in the fall of 2017, a Better Government Association investigation found.
It was hardly an isolated occurrence for Burke, who for years has benefited from a frequent pattern in which many 14th Ward businesses that seek approval for city zoning, tax breaks, and other matters also hired Klafter and Burke.
Indeed, Burke's firm has financial ties to at least one end of nearly every development-project his re-election campaign highlighted during the recently-completed campaign, the investigation found.
In addition to the Amigos development, the list includes a shopping-center, medical-facilities, a charter-school, an apartment-complex, a distribution-center for home-delivered retail-goods, and even the relocation to the 14th Ward of the Chicago Park District headquarters from a Streeterville high-rise.
The revelations come amid a mounting federal investigation of Burke, who federal prosecutors alleged in January tried to shake down the owner of a Burger King franchise in his ward two years earlier.
Prosecutors said in a criminal complaint filed against Burke that he was recorded on wiretaps pressing to play “hardball” with the fast-food owner to hire Klafter and Burke in exchange for greenlighting a renovation project. Citing the complexity of the corruption case against Burke, prosecutors on Thursday sought a 35-day extension of what had been a May 3 deadline for a grand-jury to determine whether the alderman will face additional charges as part of a federal indictment.
An earlier investigation by the BGA and WBEZ, published late last year, underscored a decades-long intersection between Burke’s public office and private fortune, one deeply rooted in his power to make things happen behind the scenes for private tax-clients.
Over an eight-year time span, Burke recused himself from City Council votes a startling 464 times due to potential conflicts of interest he was not required to explain, that investigation found. All other 49 aldermen combined recused themselves only 108 times.
The criminal complaint against Burke suggests the Burger King accusations could foreshadow even more legal problems. The FBI had the alderman’s cell-phone tapped for at least eight months and during that time at least 9,475 calls were made or received on the phone.
The scope of Burke activities the grand-jury may be looking at is not publicly known. However, key milestones in several of the economic-development projects highlighted by his re-election campaign coincided with the time-frame during which federal agents were monitoring Burke’s phone-calls.
Neither Burke nor the lawyers representing him in the criminal case responded to phone calls and questions emailed to them by the BGA. One of those lawyers, Charles Sklarsky, has publicly attacked as “false” the federal charges filed against his client.
A hidden dimension
In highlighting his accomplishments in newspaper candidate-questionnaires prior to February’s municipal elections, the 75-year-old Burke made this boilerplate-response to why he deserved re-election to a record 13th term:
“Over the past two years, I have worked to increase the economic development opportunities for those that live and work in the 14th Ward.”
But the success-stories he pointed to also had a hidden dimension.
The Amigos project was one of two multi-million-dollar warehouse-developments on former railroad property in Burke’s ward that the City Council approved in the fall of 2017, around the same time federal agents were recording Burke’s calls.
Burke’s law-firm has links to the developers of both warehouse-property deals.
Amigos had earlier spent $2 million to buy land from the Grand Trunk railroad, but the council-vote to rezone the property was required to pave the way for its development.
“His willingness to guide and support us shows he truly cares about the success of Amigos Foods and the betterment of the community,” read a testimonial posted on the home-page of Burke’s campaign website from Manny Rangel, Amigos’ chief financial officer.
Within months of the November 2017 rezoning-vote, Burke’s law-firm began representing Amigos, records show. Prior to the vote, Amigos had used a different attorney to handle tax-matters for property it already owned in Burke’s ward. By 2018, that tax-work for Amigos was being handled by Klafter and Burke.
Just weeks ago, the council approved a resolution paving the way for a tax-break for the new Amigos plant. Burke voted for the resolution, according to council-records, even though just months earlier he had done legal work for the firm.
In an e-mail, Rangel said his company declined to answer BGA questions about the project. “We are not planning to respond,” he wrote. “Best of luck on your investigation.”
Noble Charter School
At least three of the projects highlighted by his campaign involved the sale of properties in the 14th Ward that were owned by developer James Avgeris, who records show has been a client of Klafter and Burke since at least 2008. Avgeris was paid nearly $7.7 million for the three sites after Burke, as alderman, approved rezoning and provided official support that enhanced the properties’ value.
One 5.5-acre site, at 47th and Richmond streets, was bought for $3.7 million in 2016 by the Noble Network of Charter Schools, according to Noble spokesman Cody Rogers. It is now home to its Mansueto High School, which opened in 2017.
Burke backed the school despite some neighborhood opposition, according to news reports.
In March of 2016, the City Council, with Burke recusing himself, approved the rezoning sought by Noble for the school. Noble and Avgeris closed the sale three months later.
Rogers said the charter-network would not have bought the property if it had not been rezoned for school-use. In an e-mailed response to questions from the BGA, Rogers said Burke, by virtue of his position, was critical to the rezoning and it was the only matter where Noble asked for his support.
“We did not know that Alderman Burke was the tax-lawyer for the property until reading about it in this e-mail,” Rogers wrote. “We have not been contacted by the FBI, US Attorney’s office, or any other law-enforcement agency regarding Ald Burke.”
Avgeris did not respond to BGA questions about the Noble property sale or the other two sales in Burke’s ward, though records show he continued to hire Burke as his tax lawyer for another property elsewhere in the city.
Esperanza Health Clinic
Another Avgeris-linked deal highlighted by Burke’s campaign was the $17-million Esperanza Brighton Park health-clinic at 47th Street and South California Avenue, which is scheduled for a ribbon-cutting next month. Avgeris was paid nearly $3.2 million in 2017 by the clinic’s parent for a 3.7-acre site, according to Esperanza CEO Daniel Fulwiler.
That deal also closed shortly after the City Council approved new zoning, with Burke recusing himself from the vote.
Fulwiler told the BGA he was not aware that Burke had done property tax-work for the seller of the property, adding that Esperanza had not been contacted by federal agents about its dealings with Burke.
Fulwiler said his medical-group initiated the approach to Burke about changing the zoning. “We met with the alderman or his staff on at least three occasions, either in his ward office or downtown,” Fulwiler said.
Dialysis Center
Burke’s list of accomplishments also included the opening of the DaVita Dialysis Center, also on California Avenue near the Esperanza clinic. Developers of the project, Clark Street Real Estate, paid Avgeris $802,000 for a one-acre lot in May 2017, records show. That occurred after Burke penned a letter of support the previous October to state-regulators on council-stationery seeking their approval for the center.
Burke continued as the tax-attorney for the property after its sale, records show, though the owners switched to a different attorney for tax-work in 2018.
“Patient-need is the number-one driver in identifying new center-locations,” wrote Abby Domenico, a spokesman for DaVita in response to e-mailed questions. “We ensure all policies and procedures are adhered to in our work with local community and government officials in all our locations.”
Clark Street declined to comment on its dealings with Burke.
Pulaski Promenade
Among the features of Burke’s re-election campaign were ads showing the transformation of a once-troubled slice of his ward into a shopping-plaza.
“This vacant lot & hub for crime at 4200 S. Pulaski... became the $34 million Pulaski Promenade,’’ the ads declared. “Alderman Burke led the fight to transform vacant property into an economic center.”
The project was built with $8 million in tax-subsidies approved first in 2012 by Burke’s finance-committee and then the full City Council. At the time he also wrote a letter of support backing the subsidies.
After using his office to help launch the Promenade, Burke’s firm then began doing legal work for it, records show. In 2014, when the council acted to revise the funding deal for the plaza, Burke recused himself from the vote. Then, in 2015, Burke’s firm filed the first in a series of tax-appeals for the promenade site.
Neither Chicago-based IBT Group, the lead developer of the project, nor IRC Retail Centers, the majority-owner and manager of the Promenade, responded to questions posed by the BGA about Burke’s involvement.
New Park District Headquarters
At a ceremony in Burke’s ward last September, Mayor Rahm Emanuel announced that the Chicago Park District would be relocating its headquarters from the old Time-Life Building in Streeterville to a long-vacant, 17-acre industrial-site in the Brighton Park neighborhood.
Chicago Park District announcement of new headquarters in the 14th Ward in September 2018. Mayor Rahm Emanuel shakes hands with Ald. Edward Burke, 14th, as city Planning Commissioner David Reifman and Park District Supt. Michael Kelly look on. (Ald. Burke campaign website)
Emanuel hailed Burke as “the driving force and a partner” in the deal, which relied on $8.5 million in city tax-subsidies to purchase the land from Lexington Homes, a developer that had planned to build up to 1,500 homes before the housing-market collapse of the Great Recession.
In his remarks at the event, Burke called the project “a big, big effing deal” and gave a shout-out to leaders of Lexington for helping to make it happen. What Burke didn’t say was that his law-firm had worked for Lexington since at least 2009, records show.
The tax-subsidy deal to buy the land from Lexington was approved by Burke’s finance-committee and the full City Council in December, with Burke recusing himself.
Lexington officials did not respond to questions from the BGA.
Last Mile Logistics Center
Burke’s campaign website also prominently featured a photo of him at a 2018 groundbreaking for a sprawling logistics center on the site of a former railroad freight yard across 51st Street from the Amigos Foods project.
Burke in October 2017 wrote a letter of support for rezoning nearly 20 acres for the project’s developer, Conor Commercial Real Estate, and voted along with the rest of the council in November of that year to approve the change. The next month he wrote another letter of support for a tax subsidy to underwrite the project, and introduced a council-resolution to make it happen even though Burke recused himself from the vote, records show.
It’s not clear why Burke refrained from one vote but not the other. But with city tax-help in hand, Conor swiftly closed on its $4-million purchase of the land.
Dan McShane, the general counsel of Conor, said Burke’s firm did not represent it on property tax work involving the warehouse project. Records show, however, that Klafter and Burke had done tax-work in 2014 in the suburbs for a sister company of Conor.
“It predates any development work we ever did in the city, and doesn’t even relate to real estate located in Chicago,” McShane wrote in an emailed response to BGA questions.
State-campaign records also show Conor made $7,000 in donations to political committees controlled by Burke since 2017 as well as more than $7,200 worth of food purchases for a 2018 fundraiser for the campaign of Burke’s wife, Anne, to remain a justice on the Illinois Supreme Court.
“We weren’t given a hard-sell on these fundraisers, nor were we ever asked (let alone pressured) to use Ald Burke’s law-firm,” wrote McShane, adding that his firm has not been contacted by federal agents about its interactions with Burke.
Ald Edward Burke's appearances at groundbreakings and a ribbon-cutting in the 14th Ward in 2018. Clockwise from top left: Esperanza Brighton Park health center at 4700 S California Ave; Amigos Foods facility at 51st Street and St Louis Avenue; DaVita Dialysis Center at 4737 S California Ave; Last Mile Logistics Center at 3507 W 51st St (Ald Burke campaign websites)
Park Place — Lawndale and 50th
Yet another ward project hailed by Burke’s campaign was the 2017 opening of the Park Place Apartments, a 78-unit affordable family-rental complex at 50th Street and Lawndale Avenue.
City records show Burke recused himself from voting in 2013 on a rezoning request for the property from the prior owner, Park Place Venture. He also recused himself in March 2015 when the council approved a $6.6 million taxpayer-subsidized affordable-housing loan to developer Brinshore Development to build the complex. That was before Brinshore closed on its $1.78 million purchase of the land.
“I am not sure why he recused himself,” said David Brint, CEO of Brinshore in an e-mail. “We never hired his firm and we never paid his firm anything. Believe me when I say I was waiting for it but it never came.”
However, the BGA and WBEZ previously reported that records show Burke’s law-firm had represented the seller, Park Place Venture, and even prior-owners of the land in a relationship that dated back to at least 2007.
It was then that Burke helped an earlier ownership-group secure up to $7.4 million in taxpayer-subsidies for developing the site. That group included Ted Mazola, a former alderman whose ward covered the downtown area.
Though Brinshore did not continue using Burke’s firm when it bought the land for Park Place, the seller continues to use Burke on tax-matters involving other land it owns in the 14th Ward.
Brint said Burke never solicited Brinshore but “I know our property-manager was asked to use his firm but no pressure was applied and he was not hired.”
Asked if he had been contacted as part of the federal probe of Burke, Brint said: “You know that even if I were contacted I couldn’t answer.”
Authors: Chuck Neubauer is a special contributor for the Better Government Association. Sandy Bergo is a special contributor for the Better Government Association.
