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Suburban Mayor Accused of Taking Pay-to-Play Bribe

The Securities and Exchange Commission claims in a lawsuit filed Friday that the former mayor of a south Chicago suburb accepted a $75,000 bribe from a construction contractor in exchange for awarding it a lucrative government contract.

CHICAGO (CN) – The Securities and Exchange Commission claims in a lawsuit filed Friday that the former mayor of a south Chicago suburb accepted a $75,000 bribe from a construction contractor in exchange for awarding it a lucrative government contract.

In May, David Webb Jr. retired from his position as mayor of the city of Markham, Ill., at age 69 after serving the Chicago suburb for 16 years.

His retirement was announced about six months after a Chicago Tribune article reported that Markham has done extensive business with donors to the mayor’s campaign fund, paying Webb’s political supporters at least $72 million since 2001.

According to a Securities and Exchange Commission complaint filed against Webb on Friday in Chicago federal court, allegations that the former mayor ran a pay-to-play scheme are well-founded.

In 2012, Markham issued a municipal bond offering for the purported purpose of funding city capital projects.

“Unbeknownst to Markham’s bond investors and Markham’s City Council, Webb engaged in a pay-to-play scheme with a construction contractor by soliciting and receiving a bribe from Contractor A.  In exchange, Webb promised Contractor A that he would steer a multi-million dollar construction project to Contractor A, to be paid for with bond proceeds,” the SEC’s lawsuit states.

The bond offering was intended to pay for a new 9,000-square-foot park district office building with a renovated gymnasium surrounded by landscaping and trees.

Webb chose to hire Contractor A for the work after he solicited and received a $75,000 bribe in the form of a check written to a shell company controlled by the mayor, according to the SEC. He also later allegedly received another $10,000 from the contractor when the park was nearly complete.

The bond offering also funded the purchase of a city roller rink formerly owned by the mother of Markham’s city attorney, which the Chicago Tribune reported was bought for $1.7 million, more than three times its appraised price.

“Markham’s City Council would have considered information regarding Webb’s pay-to-play scheme as important in its deliberations surrounding the authorization of Markham’s bond offering. Moreover, reasonable investors would also have considered such information as important in their investment decision-making process, allowing them to weigh and price the risk associated with Markham’s bonds,” the SEC states.

The federal agency seeks the disgorgement of all Webb’s allegedly ill-gotten gains, plus interest and civil penalties.

Markham shares its eastern border with the city of Harvey, Ill., another scandal-plagued suburb notorious for political corruption and police brutality.

Markham did not immediately respond Friday to a request for comment on the complaint against Webb.

Categories / Financial, Regional

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