Fraud?? If we are too nieve to think it possible, here is an article showing that Gore 2000 Chief, William Daley is an experienced "operator" who makes things happen in the political arena.
JohnG
past.thenation.com
February 3, 1997
WILLIAM DALEY SEEMS TO FIT RON BROWN'S SHOES--A MASTER OF
'PINSTRIPE PATRONAGE.'
Daley's Commerce
by DOUG IRELAND
On the day Bill Clinton announced the appointment of William Daley as his new Secretary of
Commerce, Washington Post pundit David Broder enthused on CNN that Daley was a "terrific"
appointment because he was a "replication of Ron Brown," an assessment to which Baltimore
Sun columnist and TV growling head Jack Germond instantly belched agree-ment. There in a
televised nutshell is everything that's wrong with the source-coddling Inside-the-Beltway press
corps: Brown, the pricey corporate lobbyist and former Democratic National Committee
chairman, was under investigation by a special prosecutor for multiple money crimes and saved
from almost certain indictment for his boodling by the plane crash in Croatia that ended his life.
And it was Brown who turned Commerce into an adjunct of the Clinton fundraising machine,
stuffing it with cash-collecting D.N.C. apparatchiks and fundraisers like John Huang--all of
which led to the current and ever-widening scandal over Clinton campaign and Democratic
soft-money contributions.
So, if Bill Daley really is Brown's replication, how can anyone who believes in ethics in
government find his selection "terrific"? Daley's spectacular fainting spell at his appointment
press conference dominated the establishment media's coverage. Scant attention went to his
background as a scion of Chicago's First Family: son of the late Mayor Richard Daley, who for
nearly a quarter-century ruled the Windy City and the legendarily corrupt Cook County
Democratic machine with an iron fist; and younger brother of current Mayor "Richie" Daley,
under whose aegis columnists jokingly refer to the scandal-plagued seat of government as "City
Haul" and who was described last year as a "benign dictator" by the Chicago Tribune (which
added that Richie "is by deed and belief, if not by public word, a Republican").
Bill Daley is, in fact, his brother the Mayor's former campaign manager, chief fundraiser and
closest adviser, a highly paid lawyer-lobbyist who is a master of what Chicagoans call
"pinstripe patronage," a walking conflict of interest and behind-the-scenes dealmaker who leaves
few fingerprints.
An affable, nattily dressed charmer whose sentences usually parse, Bill is often contrasted with
his rumpled, dour, volatile and tongue-tied brother. Chicago conventional wisdom labels Bill
"the smart Daley." The truth is somewhat different: Richie is not all that dumb, and Bill is not all
that smart. Bill is a partner in Mayer, Brown & Platt--Chicago's largest law firm--but "someone
with Bill's academic record would never have been made a partner if not for the Daley name and
clout," says a Chicago legal insider.
Even in the undistinguished halls of John Marshall Law School, Bill fared so poorly that his
father got him a tutor; when Bill finally graduated, the late Mayor rewarded his son's tutor with a
seat on the judicial bench. Rob Warden, former editor of Chicago Lawyer, says that "the late
Mel Lewis, Bill's professor at John Marshall, told me that 'If brains were gold and the Pacific
Ocean cost only a penny, Bill could buy approximately a cupful.'" Bill passed his bar exam only
on his third try.
Bill Daley's career began with a forgery and a fix involving his state license to sell insurance.
State insurance examiner Robert Wills was convicted of perjury in 1974 for having lied to a
grand jury when he denied altering young Bill's answers to the test for the license (an exam Bill
had failed the year before). Testimony at Wills's trial revealed that he had forged Bill's test
answers at the behest of State Senate minority leader Cecil Partee, a Cook County Democratic
machine stalwart. When Wills was fired by the state insurance department, Partee secured him an
appointment as the custodian of state archives. At Wills's trial, a Treasury Department
handwriting expert testified that answers had been written by two different people, and Daley
admitted that at least seven of the answers were not in his handwriting. When the director of the
state insurance department's testing office, Gordon Casper--who testified that he had permitted
Wills to alter the test answers and who had then accorded Bill a passing grade--was also fired, a
job was arranged for him by Mayor Daley's spokesman in the Illinois House, Representative
Gerald Shea (an appellate court stacked with Daley-sponsored judges later reversed Wills's
conviction on narrow technical grounds). As soon as Bill passed the exam, he and his brother
John opened an insurance agency, and the Mayor funneled millions in city insurance business to
his sons.
* * *
At Mayer, Brown, Bill Daley has been a rainmaker and lobbyist, not a legal expert. When the
Democrats still controlled Congress, his principal occupation was to service corporate clients
seeking favors from the powerful U.S. House Ways and Means Committee chairman, Dan
Rostenkowski. Says a top Chicago political reporter, "When Bill was in Washington and you
wanted to reach him, you didn't call Mayer, Brown's Washington office, you called the
chairman's office." Another stalwart of the Cook County machine, Rostenkowski is currently
serving a prison term after his conviction on embezzlement and fraud charges involving the
misuse of $636,000 in federal funds--but Bill Daley still keeps a picture of the jailed
Congressman on his office wall.
Bill Daley's firm has profited handsomely since brother Richie became Mayor, but the tactics
used to steer business to the firm often reek of the crassest influence-peddling. To take just one
example, in the two years following Mayor Daley's election in 1989, Mayer, Brown's share of
legal fees from the City Colleges of Chicago--whose trustees are appointed by the
Mayor--jumped from 4.5 percent to 61.5 percent. Milton Lewis, the former vice-chancellor for
human resources at the Colleges, charged that he was fired in May 1990 for refusing to send
profitable employment and arbitration cases to the firm.
The treatment of Lewis typifies the Daley family style in the handling of pinstripe patronage; the
City Colleges affair made the Chicago papers, but many don't. It's a sign of how terrified many
are of the Daleys' punitive exercise of their power that few will criticize the brothers for the
record. One prominent lawyer, a Democrat who is now out of politics, insisted on anonymity
before confiding, "My client says Bill Daley told him that if he wanted to get city business, 'You
need a new lawyer.' So-called honest graft is wildly prevalent in Chicago, and Bill is a
practitioner of it. Unless the Daleys really need you, it's all or nothing--if you're not their friend,
you're their enemy, even if, like me, you're no longer involved. Bill's vengefulness is an abusive
lack of restraint for a public official."
Bill Daley got a taste of national politics in 1984 as an adviser to Walter Mondale's presidential
campaign, and served as political director for Delaware Senator Joe Biden's aborted bid for the
Democratic nomination in 1988. But his reputation soared when he headed Clinton's successful
campaign in Illinois in 1992. However, "Bill was only the face guy, the name, who was
available for quotes and TV interviews. The real work was done by others," according to a
senior reporter on one of the Chicago dailies.
* * *
The team that recaptured City Hall for the Daleys in 1989 has "stuck together as a kind of mutual
admiration society who promote and support each other," says a prominent liberal activist.
David Axelrod is a media consultant who fancies himself Chicago's David Garth, turning his
hand to everything from writing speeches to making political strategy as well as
commercials--and, once the election is won, advising on appointments and policy. David
Wilhelm, who ran the day-to-day operations of the 1989 Daley campaign under Bill's
supervision, was Clinton's titular campaign manager in 1992 and later served as Clinton's first
chairman of the D.N.C., where he lavished more than $400,000 on Axelrod and other Chicago
political consultants (including the Strategy Group, Wilhelm's own firm). Rahm Emanuel, who
began in politics as a bare-knuckles opposition researcher--he won his spurs by engineering the
defeat of downstate Illinois Republican Congressman Paul Findley when he blanketed the district
with pictures of Findley with Yasir Arafat--headed the fundraising staff for Clinton '92 and later
became White House political director.
The most important member of what some political junkies refer to as the Gang of Five--with
Bill Daley as a kind of C.E.O.--is undoubtedly John Schmidt. A wealthy heir to a wholesaling
fortune, Schmidt was a former opponent of the late Mayor Daley, and the legal brains behind the
successful challenge at the 1972 Democratic National Convention that unseated Chicago's
Daley-led delegation and replaced it with one headed by Jesse Jackson and then-Alderman
William Singer. Schmidt, an intellectual who is also politically savvy, was a key financial
backer of Harold Washington, Chicago's first black Mayor, but switched his allegiance to Richie
Daley when Washington died. A partner at Mayer, Brown--where he was Bill Daley's closest
ally and guide--Schmidt became Richie Daley's first mayoral chief of staff. His key role in the
1992 Illinois Clinton campaign and his fundraising later won him a Clinton appointment as
Associate Attorney General (a post he recently resigned to run for governor in Illinois with the
Daleys' backing).
* * *
After Clinton's 1992 victory, Bill Daley was widely expected to be named Transportation
Secretary, only to be aced out on the grounds of diversity by Federico Peña. At least, that's the
account given by the national press corps in the wake of Daley's appointment to Commerce. But
that's not the whole story. In 1992 the Transportation spot was coveted not only by Bill Daley but
by Michigan Governor Jim Blanchard, to whom Clinton was also deeply indebted. Privately,
Blanchard and his advocates started throwing mud at Daley, and it was partly to avoid having to
choose between Daley and Blanchard that Clinton turned to Peña.
Some of the mud-throwing had to do with Bill Daley's presidency of Chicago's scandal-plagued
Amalgamated Bank, a post he held from 1990 to 1993 before returning to Mayer, Brown.
Originally founded by the Amalgamated Clothing Workers, the bank was purchased in 1966 by a
reclusive business tycoon, Eugene Heytow, and his brother-in-law. Teamsters Local 705 owns
14 percent of the Amalgamated Bank, and one of its directors until 1992 was Daniel Ligurotis,
the local Teamster boss, who was ousted from his union post for embezzlement.
With Heytow as chairman, the bank became riddled with nepotism. According to Crain's
Chicago Business, "an air of secrecy prevails" at Amalgamated, where Heytow pays himself and
his associates salaries that are unusually high for a bank of its size. Much of the controversy
surrounding the bank stems from efforts by Heytow to influence the Metropolitan Pier and
Exposition Authority (known in Chicago as "McPier"), which oversees the long-running
development of a new convention center at McCormick Place. Heytow owned the McCormick
Place Hotel, which he wanted to be part of the development. In 1985 the McCormick Place
center's managing director was forced to resign when it was revealed that he got a $390,000 loan
from Heytow's bank toward the purchase of a luxury penthouse, just five weeks after the site
chosen for the new development turned out to be directly opposite Heytow's hotel. In 1984 the
center's treasurer received a $125,000 loan from Amalgamated. And after Richie Daley made
Bill's friend and law partner John Schmidt the chairman of "McPier," Bill became the bank's
president.
The Amalgamated is, in fact, Chicago's most political bank, a sort of solvent version of
Arkansas's Madison Guaranty, making loans to Illinois politicians of both parties. So it was no
surprise that when Bill Daley became its president he aggressively pursued taxpayer-financed
business and the bank received lucrative no-bid contracts, like a $65 million bond issue from the
Chicago Park District, or a $100 million bond issue from the Regional Transportation Authority
(whose chairman was the senior vice president of the Chicago office of Donaldson, Lufkin &
Jenrette, which at the time had received more than $750,000 in underwriting fees from the city
during Richie Daley's mayoralty). Some of the deals were small ones--like when the Cook
County clerk "accidentally" left $6.8 million in a non-interest-bearing account at Amalgamated
after receiving a $150,000 loan as well as campaign contributions from the bank. This little
matter was investigated by Cecil Partee--the Bill Daley insurance-test fixer who by that time had
been promoted to State's Attorney with Mayor Daley's support--but of course he found no
wrongdoing.
When he was passed over for Transportation Secretary, Daley returned to Mayer, Brown with a
nice consolation prize--a Clinton appointment to the board of Fannie Mae, the federal home loan
mortgage agency, which brought him more than $140,000 in compensation for very little work.
And there were other emoluments coming his way, like the more than $40,000 annually in
director's fees he received for serving on the board of Wheelabrator Technologies, a subsidiary
of Waste Management, Inc., which has a hugely profitable garbage recycling contract with "City
Haul."
Daley did return to Washington in 1993 for three months as special counsel to the president for
NAFTA, where he joined his old friend Rahm Emanuel--by now White House political
director--in setting up a "war room" to run the lobbying campaign for the treaty. Emanuel, who
has a prickly, barbed-wire personality, was Mr. Inside, while Daley-the-charmer twisted arms
with a smile as Mr. Outside. A December 1993 study by Public Citizen showed that NAFTA
passed thanks to Clinton Administration vote-buying with special deals that cost taxpayers
plenty: "Some Representatives received goodies totally unrelated to the trade pact--promises to
build billion-dollar military planes, local construction projects, and research centers. Others
obtained protectionist fixes to the trade pact itself to help local economic interests avoid the
trade pain the rest of the country was forced to swallow.... [like] tomato and pepper growers, flat
glass manufacturers, beef, wheat and peanut producers." Public Citizen documented twenty-one
instances of such vote-purchasing deals by the Daley-Emanuel team (with Mickey Kantor brought
in during the final days to help close them).
At Commerce, Daley will be in charge of some $1.5 billion in direct corporate welfare, which
under Ron Brown was often shoveled to contributors to Clinton's campaign and the D.N.C. A
few of the largest awards, documented by a Cato Institute study: Between 1992 and 1994, AT&T
gave $90,000 to the Clinton fundraising machine, and received $34.2 million in Commerce
grants; Boeing gave $127,000 and received $50.9 million; Chevron gave $220,000 and received
$8.1 million; G.E. gave $153,000 and received $14.8 million; Shell Petroleum gave $65,000 and
received $12 million; Texaco gave $22,000 and received $8.1 million.
Furthermore, some of Brown's closest collaborators are still at Commerce, including people
who have admitted sequestering and shredding documents in connection with the campaign
contributions scandal--among them Brown's longtime executive secretary from his days at the
gold-plated lobbying law firm of Patton Boggs and the D.N.C., Barbara Schmitz, and his
confidential assistant Melanie Long.
Will Bill Daley--fundraiser, corporate lobbyist and political fixer--put an end to the
politicization of the Commerce Department? And will he end the Commerce cover-up in the
sordid affair of campaign cash? Well, remember that Daley learned his morality from his father,
the late Mayor, which Mike Royko summarized in Boss, his biography of the old man: "Thou
shalt not steal, but thou shalt not blow the whistle on anybody who does."
Doug Ireland has been a columnist for The Village Voice, The New York Observer, the Paris
daily Libération and New York. His weekly "Clinton Watch" column is syndicated by the
Minneapolis City Pages. |
