A Chicago Real-Estate Scandal That Deserves National Attention [UPDATE]

25Mar/1023

A Chicago Real-Estate Scandal That Deserves National Attention [UPDATE]

Nothing that belongs to the public is not convertible into payoffs for the criminal class of politician that has metastatized out of Chicago and onto the national scene. My friend Tom Bennett, who visited with the B-Cast, brings us the latest (not block indented). Read it in the light of the recent revelations regarding Arne Duncan's favored list of folks whose kids "deserved" to get into the best Chicago area schools:

This past Thursday, March 18th, a federal jury found a Chicago developer -- Calvin Boender (pronounced Boon-der) -- guilty of all five counts against him including bribery, federal election law violations and obstruction of justice charges.

While personally observing portions of the federal jury selection process as well as both the opening and closing statements in their entirety during the Boender trial, the following question came forcibly to mind: When is the local U.S. Attorney going to indict the parties involved with the steering of the Chicago Housing Authority?

With respect to relevant background on the Boender trial, here's what I can tell you ---

In early 2000’s, Mr. Cal Boender was developing Galewood Yards – a 50-acre parcel of industrial land that he initially intended to redevelop as a continued industrial use. After an initial tenant that Mr. Boender recruited terminated their lease due to City Hall-imposed construction issues, Mr. Boender attempted to recruit another industrial user; however, after a number of years of many failed attempts toward luring an industrial-user to the site---in large part because the vast numbers of industrial/manufacturing companies have been leaving the City of Chicago in droves---Mr. Boender became resigned to the marketplace reality that he needed to reposition the property to alternate uses like residential or retail.

In layman’s terms, Galewood Yards didn’t have a snowball’s chance in hell of remaining industrial, as the industrial users that do remain in Chicago are most interested in immediate access to expressway interchanges (they tend to be logistical users as opposed to manufacturers per se), and Mr. Boender’s property was 2 miles from the nearest interchange!

In fact, most real estate professionals and non-professionals alike would clearly agree that the "best and highest use" for Galewood Yards was no longer industrial, but some type of mixed-use residential and retail as Galewood Yards is surrounded on all sides by residential homes and park land.

Mr. Boender did what any prudent entrepreneur/real estate investor with capital-at-risk would do. He petitioned City Hall to “re-zone” Galewood Yards to allow for residential and retail users as the marketplace was clearly void of industrial users. While most municipalities would presumably comply with a developer’s logical request, it's not such a straightforward undertaking to “re-zone” a property at Rich Daley’s City Hall.

In fact, after Mr. Boender personally petitioned City Hall and Rich Daley to allow for an appropriate re-zoning of Galewood Yards, Daley had one simple response for his Planning & Development Department: “PMD him.”

In layman’s terms, Rich Daley directed his staff to “brick” Mr. Boender’s property as a PMD (stands for Planned Manufacturing District)---the most uber-super-restrictive zoning classification in Chicago. Once a property is PMD’d, it can never again be petitioned for a re-zoning of its PMD/industrial restriction. Again, in a marketplace like the City of Chicago where industrial users are leaving the City in droves, a PMD is pretty much a death sentence without appeal, as the property is assured to remain vacant and unprofitable. The PMD classification was invented by Rich Daley upon his ascension at City Hall in the early 90’s.

Upon being informed that Rich Daley was “bricking” the Galewood Yards project, Mr. Boender than began an intensive lobbying effort of Rich Daley by securing the support of his Alderman, Isaac “Ike” Carothers (now a convicted felon), and Congressman Luis Gutierrez (a former Chicago alderman and personal friend of Mr. Boender). As an aside, Congressman Gutierrez has very strong ties to Antoin “Tony” Rezko.

Ike Carothers and Cal Boender were both indicted last May 2009 for crimes involved with the Galewood Yards lobbying effort. In fact, per Assistant U.S. Attorney Brandon Fox's opening statement, “Mr. Boender ---a wealthy developer---corrupted Alderman Carothers in this process” by giving Alderman Carothers close to $40,000 worth of home improvements, in addition to other benefits such as campaign contributions to Alderman Carothers’ relative and White Sox tickets, in return for Alderman Carothers’ lobbying support.

As a native Chicagoan and real estate professional, I am inherently skeptical of the image that AUSA Fox portrayed Ike Carothers as being corrupted by Cal Boender. Until recently, Mr. Carothers was the leader of Rich Daley’s black caucus in the City Council, Chairman of the City’s powerful Police Department & Fire Department Committee and a longtime Daley Family loyalist. Carothers played-the roles of both the Ward Boss and Rich Daley enforcer quite well. He was no shrinking violet. Nor was his father, former Alderman William Carothers, convicted of conspiracy and extortion in the early 1980’s under circumstances similar to those of his son Ike's. He accepted $15,000 worth of improvements to his campaign office in return for not blocking the expansion of a neighborhood hospital. Again, it sounds eerily similar to his son’s transgressions.

Back to the trial. Bbefore jury selection began, Cal Boender’s attorney subpoenaed Rich Daley and ten current and former aldermen to testify at his federal trial; however, Boender’s attorney released both Daley and the ten aldermen from subpoena midway during the trial. Further, the U.S. Attorney’s Office did not have Ike Carothers testify at the Boender trial, which is somewhat odd given the circumstances. Moreover, a couple days before closing arguments began, the Federal Government leaked to the Chicago media that Rich Daley was interviewed at a Chicago Hotel under shroud of secrecy by FBI Agents in 2008 related specifically to the Boender/Carothers investigation.

Again, the 2008 FBI interview of Daley was a very odd revelation during the trial. This information has resulted in a substantial amount of speculation regarding the Boender Trial just being the tip-of-the-iceberg in a more extensive Federal Investigation. In fact, a former Alderman informed me that there is substantial speculation among City Hall types that Carothers---acting as an FBI informant---has a number of City Hall types engaging in illegal activity including accepting cash bribes. Further, given Ike Carothers’ close relationship to Rich Daley, there is also a substantial amount of speculation related to Daley’s ongoing involvement/exposure in the Boender/Carothers Federal investigation as Rich Daley is the only person in a position to establish PMD-type zoning.

Lastly, after getting a front-row view of the Boender/Carothers trial, I am still surprised that the local U.S. Attorney's office hasn't so much as lifted a finger, it seems, relating to the Marty Nesbitt/CHA quid-pro-quo/Obama campaign contributions matter. Again, it appears that Nesbitt & Company are being provided a MAJOR hall pass, which in itself is egregious. The Boender trial was somewhat convoluted with a “number-of-dots-to-connect” and yet the U.S. Attorney still brought an indictment and the federal jury, in turn, convicted Mr. Boender on all five (5) counts. Given the credibility issues involved with both Ike Carothers and another witness, I was very surprised with the jury’s verdict. It appears Mr. Boender got a raw deal.

On this note, I’d be interested to understand the U.S. Attorney’s interpretation of the material difference between Ike Carothers accepting a "bribe/kick-back" worth $37,000 in home improvements in exchange for the alderman's lobbying of Richard M. Daley related to an uber-super-zoning designation that only the mayor himself could change and Marty Nesbitt accepting a $28,500 Obama Victory Fund campaign contribution after providing developers with a close to $1.3M discount on the sale of the former Chicago Housing Authority headquarters.

It appears the only difference is that Marty Nesbitt is BFF with Barack Obama.

Stay tuned.

UPDATE: Many thanks to Michelle Malkin and Glenn Reynolds for tweeting and linking.

Dan Collins

Dan Collins is a dude who blogs. He used to blog elsewhere. Now he blogs here.

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Comments (23) Trackbacks (11) ( subscribe to comments on this post )

Buelldawg
March 25th, 2010 - 11:40

Mr. Boender did get a raw deal. I think that is evil that the mayor of a town can have that much authority to make your investment worthless. What a corrupt state. I would be very curious as to why Nesbitt hasn’t been charged with anything. Why is the US Attorney not acting? But, why not the AG of IL? Is the whole state tied to Obama? Just awful. And, why should Boender not be able to fight his prosecution by calling the Mayor to the stand? That is interesting…like his atty didn’t work on his behalf. Air all the dirty laundry!

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Cris
March 25th, 2010 - 15:06

Wow, good job Dan-very interesting read. I live in NY and am not familiar with the intricate connections of the players in Chicago’s cesspool. Please fill me in on this Marty Nesbitt character. Who is he? What is his story, connection etc. Thanks

Cris

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- Dan Collins
  March 25th, 2010 - 15:13
  
  Nesbitt is one of Obama’s two Chicago BFFs who are often photographed with him at pro basketball games and the like. He’s well connected in Chicago. He helped to snatch away a building that was going to be sold for $9+ million, and to get the sale awarded to another investor for $1.3 million less. The author of this piece is the guy whose bid was overridden.
  
  The best way to get that background is to watch the B-Cast segment.
  
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Korla Pundit
March 25th, 2010 - 20:03

First thing the coming GOP majority House needs to do:

Impeach the most corrupt Attorney General in this nation’s history, and expose the criminals that now infest the halls of the Justice Department.

Second: drain the swamp in Chicago. Let the career prosecutors who have been shut out by the Chicago mob work with a special prosecutor to drag every last Obama crony out into the light of day, and then down in the darkness of prison.

Third: Impeach the crook in the White House.

Fourth: Decriminalize light bulbs.

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John Palmer
March 25th, 2010 - 20:36

Illinois has a problem.
the two major political parties are
1) Far Leftists caucusing with the Democrats
2) Combine, that is combined Democrat and Republican (only differentiated by National identity politics).
As local power politics come first (even before re-election) there isn’t any impetus for “reform”.
the Greylords (one and Two) stings (investigation and eventual conviction of Crook County traffic court judges) were just deliberate deflection to the low hanging fruit so as not to disturb the real corruption here.

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Augustus
March 25th, 2010 - 20:56

I don’t know Boender and never heard of the guy before. However it sure seems like the guy got a screw job in this case. He’s got a fairly large city tract of land that would have cost a goodly amount of money. He wants to put it to use in a way that would seem to benefit the area, certainly improves and increases the city’s tax base. The crooks at city hall will screw him forever. What is the guy to do? It is not much different from the dirty governments that run the African countries. You can land the supplies for your project, just cannot get them moved off the dock. Let the supplies and your incomplete project rot or make the payoff? Of course, the real problem is letting them create such a rule in the first place, giving any group of pols the power.

It is just the very same scheme that they ran with turning on the water for a few of the farmers in California. People using the water for generations to farm and to make a moderate living for themselves and employing a lot of part time workers. Shut the whole thing down with one judge’s ruling in favor of a fish. Turn the land into a dust bowl and send everyone to the welfare line – thank you for my daily bread oh Great One.

How much longer will people stand for it?

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Mike LaRoche
March 25th, 2010 - 21:21

My comments aren’t posting for some reason. I give up.

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- Dan Collins
  March 25th, 2010 - 21:28
  
  Geez, Mike. I’m sorry. I’ll go look in the spam trap.
  
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  - Mike LaRoche
    March 25th, 2010 - 21:37
    
    Okay, thanks Dan.
    
    Like or Dislike: 0 0
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  - Enoch_Root
    March 25th, 2010 - 22:07
    
    Dan – how many others are being SPAM trapped?
    
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JEFF
March 26th, 2010 - 10:52

How can any of this surprise anyone? The Mayor’s brother married into the Outfit. Enough said!

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Abbotsford Real estate
March 26th, 2010 - 19:14

That’s terrible…Pure corruption. These are the kinds of events that makes the real estate market look like a big scandal.

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- Chris
  May 10th, 2010 - 11:46
  
  Plausable Deniabilty! They Own You and every voter Lock Stock & Wallet$$. The built in Corruption Tax in Chicago/Illinois is or tops $5oo,ooo,ooo million per year in actual “Street Tax” costs, not to mention the accruded loss in all they claim to achieve with built in waste, fraud and abuse of processes,creating in the clearest terms the Honored Title “Chicago’s Very Own” “Criminal Racketeering Enterprise” Of La Cosa Nostra America!Pin Striped Suits minus the Capone Spats and all.
  
  Don’t Forget “Vote Twice & Vote Often” including the “Dead”.
  
  Certifable Foooooooools!
  
  Ya all get what ya vote for, keep pulling that same lever for the same “Family” of Crook County/Chicago/Illinois for the last 50 years, expecting a different results is the definition of insanity!
  
  Now ya know where ya all stand in Chicago Illinois, your all nuts, paying that “Street Tax” cost for a Great Reputation of the Federal Prosecuting Attorney’s Revolving Door.
  
  The Feds should put the Entire Crook County/Chicago City Hall/Council entities in Trusteeship and put the taxpayers out of their self inflicted misery. They put “Mobbed-Up” Unions in “Trusteeship” Teamsters,Laborers-[Chicago District Council] and others. See;bio on John Flood and all the links of Laborer’s websites.
  
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1389AD
March 26th, 2010 - 20:53

Don’t EVER move to Chicago. Don’t do business there. Don’t do business with, vote for, or lend political support to, anybody associated with the city of Chicago or with the University of Chicago.

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