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Ald. Patrick Daley Thompson (11th) is “disorganized,” “frazzled” and “sloppy” when it comes to filing his annual tax returns and keeping track of his debts — but the public servant is not a criminal, his attorney said Tuesday during opening statements at the alderperson’s criminal trial.
Representing Daley Thompson, attorney Chris Gair told the eight men and four women selected to serve on the jury in the first criminal trial of a sitting member of the Chicago City Council in more than two decades that they should find the Bridgeport native not guilty — because being a “procrastinator” is not a federal crime.
Daley Thompson faces charges that he lied to federal bank regulators and filed false tax returns between 2011 and 2014, claiming a tax deduction for mortgage interest payments. However, Daley Thompson obtained a personal loan — not a mortgage — from Washington Federal Bank for Savings, a Bridgeport bank that failed in 2017, and should not have taken that deduction on his income tax.
Assistant U.S. Attorney Brian Netols said Daley Thompson signed tax returns he knew to be false and then tried to get out of repaying the $219,000 he owed, betting that the death of bank CEO John Gembara would make that possible.
Gembara died by suicide in 2017, and the bank failed the same year. Daley Thompson hoped that would prevent him from having to pay back the loans, Netols said.
“He decided he was going to lie to them, to take the chance that they wouldn’t find the other payments he’d received,” Netols said.
Daley Thompson personally picked up three loan checks from Gembara starting in November 2011, Netols said. The first, which totaled $110,000, was used to purchase equity in the law firm of Burke, Warren, MacKay & Serritella when he became a partner. The second $20,000 loan, made in March 2013, was used to resolve a tax debt, and the third loan of $89,000, made in January 2014, was used to make repairs to property Daley Thompson owned on Lowe Street, once the epicenter of the Daley political machine, Netols said.
While Daley Thompson promised to repay the $110,000 loan with interest, and signed a promissory note, the additional loans were made without a written agreement signed by Daley Thompson and did not include any interest payments, who was by then a commissioner on the Metropolitan Water Reclamation District board, Netols said. Daley Thompson made just one payment on the initial loan, records show.
After Washington Federal failed, Planet Home Lending attempted to collect on the then-alderperson’s $219,000 debt. On a recorded line, Daley Thompson “expressed shock” when told about the size of his debt, telling them he’d only borrowed $110,000, Netols said. Daley Thompson “simply lied,” Netols said.
Only after Daley Thompson was confronted by federal agents and lied to them did Daley Thompson file amended tax returns, Netols said.
As Daley Thompson, wearing a dark suit and a face mask looked on, Netols only referred to him as Patrick Thompson and made no mention of his role on the Chicago CIty Council or his once all-powerful family. However, Gair used part of his opening statement to the jury to tout his client’s deep roots in Chicago, his love for his wife and three daughters as well as his commitment to public service.
“He’s a straight arrow,” Gair said. “He’s one of the good guys.”
The government’s case is entirely made up of “guesses and conjecture,” Gair said.
Daley Thompson simply made a mistake when he told Planet Home Lending representatives and federal agents that he only owed $110,000, Gair said.
“There is not a shred of evidence that he tried to trick them,” Gair said.
It was not Daley Thompson’s responsibility to ask Washington Federal to collect on his loan, or charge him interest on the additional money he borrowed, Gair said.
When it came to filing his taxes, Daley Thompson trusted his accountant to sort out the documents he provided after putting them in a folder “without rhyme or reason,” Gair said.
Daley Thompson, whose legal work focuses on land use issues and commercial transactions, is a “pretty disorganized” person, Gair said. His office is crowded with “piles of paper,” and Daley Thompson always has to scramble before the deadline to file taxes, he added.
Between his family, his work as an attorney and his obligations as a member of the City Council, Daley Thompson is “torn in a million different directions” and is “always on the run.”
“And he’s a big procrastinator,” said Gair, noting that Daley Thompson’s assistants know they have to remind him of obligations. “He’s frazzled.”
But none of that amounts to criminal wrongdoing, Gair said.
After opening statements, a former loan officer for Washington Federal told the jury the bank recorded the loans made to Daley Thompson as a mortgage because the bank did not make personal loans. Alicia Mandujano said she created false documents showing Daley Thompson had been making regular payments on the loans even when he had not done so at Gembara’s direction.
Mandujano pleaded guilty last month to conspiracy after being charged in the probe of the failure of Washington Federal.
Each false statement count Daley Thompson faces is punishable by a maximum sentence of 30 years in federal prison, while each tax count is punishable by up to three years. However, if convicted, Daley Thompson is likely to serve less time in prison based on sentencing guidelines.
Daley Thompson is one of three sitting members of the Chicago City Council to be charged with federal crimes.
Ald. Ed Burke (14th Ward) has pleaded not guilty to 14 counts of corruption and has been awaiting trial since his indictment in May 2019. Ald. Carrie Austin (34th Ward) was indicted on charges of bribery and lying to federal agents in August and has also pleaded not guilty.
Note: This story was originally published Feb. 8. It has been updated to include our “Chicago Tonight” discussion.