CHICAGO (CN) — Attorneys read their opening arguments Tuesday morning in Chicago in the trial of Patrick Daley Thompson, the Chicago City Council member who stands accused of tax fraud and other federal crimes.
The federal government has accused Daley Thompson, alderman for Chicago’s 11th Ward, of two counts of lying about how much money he owed to the since-failed Washington Federal Bank for Savings and five counts of fraud for knowingly filing bogus tax returns for years.
Prosecutors say Daley Thompson falsely reported to creditors and the Federal Deposit Insurance Corporation that he only owed $110,000 to Washington Federal when he actually owed about $269,000 in loans he solicited, received and never paid back. He was also indicted for low-balling his taxable income between 2013 and 2017, and falsely reporting that he payed over $170,000 in mortgage interest payments in the same time period.
According to Daley Thompson’s attorney Chris Gair, it’s all just a series of honest, if careless, errors on the part of the bank, Daley Thompson’s accountants and the alderman himself.
“He did what a lot of people do with his taxes,” Gair said in court Tuesday. “He threw them all in a big folder with a lot of other stuff and he sent his accountant to sort it out. … It’s not a crime to make a mistake.”
Assistant U.S. Attorney Brian Netols offered the jury a different interpretation of the evidence.
“He knew the person who gave him the money was dead,” Netols said, referring to Washington Federal CEO John Gembara’s death by suicide in 2017. “So what he did is he got on the phone and told [debt collectors] that he was shocked at the mortgage [note] he got.”
The courtroom was full of reporters, whose attention was drawn not only for the white-collar crimes Daley Thompson is accused of, but also for the “Daley” in his name. The Daleys are one of Chicago’s most politically powerful families.
The defendant’s grandfather, Richard J. Daley, and his uncle, Richard M. Daley, both served as mayors of the Windy City. His other uncle John Daley currently serves as a Cook County Commissioner, and they all have served in local and national offices of the Democratic Party.
The Daleys are also connected to decades of accusations of corruption and political strong-arming. Since the 1950s, the family has sat at the center of a white Democratic political bloc and patronage network dating to the 1800s, known colloquially as the “Chicago machine.”
Patrick Daley Thompson is the first of the family to ever face a federal criminal trial.
"It’s a major historical event,” said Dick Simpson, University of Illinois at Chicago political science professor and former Chicago City Council member. “No other Daley … has gone to trial like Thompson.”
Daley Thompson’s series of alleged under-the-table personal deals pales in comparison to the police brutality and multimillion-dollar corruption scandals that haunted his grandfather and uncle.
Though he’s also connected to a yearslong, $31 million embezzlement scandal surrounding Washington Federal, which the FDIC closed in December 2017 after Gembara was found dead in the million-dollar home of one of the bank’s customers, his direct involvement in that case is limited. The presiding judge of Thompson’s case, U.S. District Judge Franklin Valderrama, barred direct testimony about the embezzlement case from Daley Thompson’s trial.
To hear Simpson tell it, Daley Thompson facing criminal charges over the relatively small amounts of money — charges punishable by up to three decades in prison — marks a sea change in Chicago’s political landscape. It’s a sign that “the old machine is beginning to fall apart,” he said.
In his research work, Simpson has detailed how Chicago politics and corruption have changed over the decades. He credited current Chicago Mayor Lori Lightfoot with helping grind down the machine’s gears, praising her efforts to reform ethics in City Hall through tactics like limiting city alderpersons’ outside employment opportunities.
"She has had a hard time implementing her progressive agenda because of the pandemic and economic changes, but has made some pretty major changes,” Simpson said. “[Richard] M. Daley created his own patronage army … but Lori Lightfoot is taking apart the patronage network.”
Professor Evan McKenzie, head of UIC’s political science department, is not as optimistic as Simpson about what Daley Thompson’s trial augurs for Chicago politics. He notes that it was telling that it was the federal government — not the city, county or state — that brought the charges against the alderman.
“That’s the lesson here: local prosecutors aren’t willing to go after the Daleys,” McKenzie said, adding that he thinks local lawyers and politicians may fear retaliation for provoking the well connected family. “It takes the federal government to step in.”
One thing both academics agreed on was that Daley Thompson’s trial bodes poorly for the survival of Chicago’s centrally located 11th Ward in its present form.
The ward is the long-time seat of the Daley family and one of the few areas of the South Side that remains majority-white as of 2015, but the ward’s Asian and Latino populations are also growing quickly. A proposed redrawing of the city’s ward map by the civil rights group Coalition for a Better Chinese American Community would create a new, Asian-American majority 11th Ward that incorporates the entirety of Chicago’s Chinatown neighborhood, gutting the Daleys’ home turf.
“The 11th Ward is in danger of being carved up,” Simpson said. “It’s not clear the old 11th Ward will be able to hold on to power.”
The City Council has been deadlocked on redistricting since last December, when a new ward map was supposed to have been finalized. The council members have until May 2022 to finally accept a new map before the matter goes to voter referendum.
Should the current 11th Ward lose its current political prominence, and should the Daleys likewise begin to slip from relevance, Simpson predicted that the new political power balance in the city would be split between those areas represented by leftist alderpersons like Byron Sigcho-Lopez and Jeannette Taylor, and those that support the centrist liberal camp that Lightfoot currently leads.
Daley Thompson isn’t the only Chicago alderman currently in trouble with the law. Ed Burke, the city’s longest-serving council member and alderman for the Southwest Side’s 14th Ward, is currently facing his own federal criminal trial over 14 bribery and extortion charges. Burke, another veteran of the Chicago machine, also walked into the federal courthouse on Tuesday for a pretrial hearing in his case.
Simpson said both men’s trials, along with several others involving statewide corruption in Illinois, “are going to be carefully monitored” by lawyers and politicians eager to know which way the political winds are blowing.
“The Roman Empire fell,” McKenzie said. “I guess the Daley machine could fall too.”
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