Federal prosecutors finished making their case Friday that former Ald. Ed Burke (14th Ward) held up the $800 million renovation of the Old Post Office, the massive building that straddles the Eisenhower Expressway at the edge of the Loop, until the developer hired his private law firm.
Burke faces 14 criminal charges, including racketeering, bribery and extortion, in a case that accuses Burke of using his powerful position at City Hall to force those doing business with the city to hire his private law firm, formerly known as Klafter & Burke.
One day after the jury of nine women and three men on Thursday heard Burke repeatedly express frustration and anger that the firm renovating the Old Post Office had yet to hire his private law firm to handle the property’s property tax appeals, jurors heard Burke eventually signed up New York-based 601 West Companies as a client — but never earned a dime.
Burke pledged to kick back a portion of the spoils to former Ald. Danny Solis in return for his approval of an $18 million subsidy and a tax break worth $100 million, prosecutors alleged in the indictment.
Even as Harry Skydell, who was leading efforts by the New York-based 601 West Companies, told Solis and Burke they already had a law firm to do that work for the Old Post Office, Skydell promised to hire Burke’s firm to handle the property tax appeals for other high-profile downtown properties.
Sydell’s firm hired Klafter & Burke to appeal the property taxes for the building at State and Madison streets known as the Sullivan Center, which is home to a Target store, in August 2018 in return for a $15,000 annual retainer for three years and 20% of any refund from Cook County officials obtained by the law firm.
That agreement was terminated by Klafter & Burke three weeks after FBI agents raided Burke’s City Hall and ward offices, and Burke’s firm never charged 601 West Companies for any tax appeal work.
According to the warrant that authorized those searches, agents were looking for any evidence of “referral fees, fee-splitting, fee-sharing, and consulting agreements” involving Klafter & Burke.
Those raids took place five years ago this week.
In addition, 601 West Companies discussed an agreement with Klafter & Burke to appeal the property taxes assessed against another property owned by the firm at 1 S. Wacker Drive. That agreement was never completed, and discussions did not resume after the raid.
Nevertheless, Klafter & Burke appealed the property taxes for 1 S. Wacker Drive, saving 601 West Companies $12.7 million on its property taxes during a three-year period, according to reporting from the Chicago Sun-Times.
None of the testimony heard Friday was as explosive as what the jury heard Thursday, which included turns of phrase that have become indelible parts of Chicago’s long history of political corruption.
“So, did we, uh, land the tuna?” Burke asked Solis.
But the jury did hear a recording of the final conversation with Burke made by Solis just 20 days before the raids of Burke’s offices would rock City Hall and upend Chicago politics. In that tape, at the request of FBI agents, Solis said his days as a member of the Chicago City Council were numbered and he planned to “ride off into the sunset” — but would send prominent developers to Burke in return for a fee.
“Sure. As long as you remember me, yeah,” Burke responded. “We come from the old school.”
Burke, 79, is being tried alongside his former aide Peter Andrews and Portage Park businessman Charles Cui.
After that tape, prosecutors began presenting evidence in the final scheme Burke is charged with, alongside Cui, who reached out to Burke when he ran into a brick wall when city officials denied his request for a large pole sign outside the former bank building that he redeveloped in Portage Park.
Burke offered to help Cui if he hired Klafter & Burke. Cui did, according to the indictment.
That $14 million redevelopment relied on a $2 million subsidy from the area’s Tax Increment Financing District, which had to be approved by the City Council’s Finance Committee, which was then led by Burke.
That subsidy was backed by former 45th Ward Ald. John Arena, who wanted to transform a defunct movie theater in the building and surrounding space into a cultural center. Arena is expected to testify next week.
Cui leased part of the former bank building to Binny’s Beverage Depot, but that agreement included the use of that large pole sign on Irving Park Road, not far from Six Corners, which funneled thousands of cars and trucks through the Far Northwest Side.
Without that pole sign, Cui told Burke he would experience “extreme financial strain” and would have to give Binny’s a $750,000 break on rent.
Jurors heard recordings of Burke discussing Cui’s issue with his assistant — and referring to him several times not by name but as “the Chinese guy.”
Although Burke reached out to city officials and asked them to look into the matter, the pole sign was never erected.
Prosecutors told U.S. District Court Judge Virginia Kendall they expect to rest their case on Dec. 11. It is not clear how long it will take Burke and his two co-defendants, Cui and Andrews, to present their defenses.