CHA chief's old ward pals cash in

April 11, 2005

Chicago Housing Authority contractors have been generous contributors to the 17th Ward Democratic Organization, with more than 60 CHA-hired firms donating $250,000 to the group over the last three years.

There is no public housing in the South Side ward.

But it does have a key resident: Chicago public housing chief Terry Peterson.

Peterson's continued ties with 17th Ward politics -- before becoming CHA boss in 2000, he was the ward's Democratic alderman -- are sparking questions today from the Better Government Association about pay-to-play politics.

A joint investigation by the BGA and a public housing residents' newspaper, Residents' Journal, found that of the 63 CHA contractors that gave to the 17th Ward Democrats, several wrote checks just before or after winning CHA contracts. One firm, G.F. Structures, won a $3.3 million CHA construction contract the same day it made a $2,500 donation to the 17th Ward group.

The $250,000 from CHA contractors accounts for 37 percent of all contributions to the 17th Ward Democrats over the last three years, according to the probe, which was released to the Chicago Sun-Times.

"What's troubling is that about when Terry Peterson takes up and runs the CHA, you see a dramatic increase in dollars [to the 17th Ward Democrats] from CHA contractors," said Jay Stewart, the BGA's director.

Added Dan Sprehe, the BGA's chief investigator: "We don't see why that much money is flowing to that organization when these contractors don't have a bona fide reason for doing it. There's an awful lot of smoke here."

Denies seeking donations

Peterson lives in the ward, which includes Auburn-Gresham, Englewood and West Chatham, and attends 17th Ward Democratic fund-raisers -- as a resident, not as CHA chief, he said. He's in regular contact with Latasha Thomas, the current alderman and committeeman.

In a statement, Peterson denied asking any CHA contractors to give to the group and says he doesn't decide contract awards. Proposals are scored by CHA departments using a published set of criteria. The top scorer is forwarded to the CHA Board for consideration.

Thomas said she has never asked anyone at the CHA to solicit donations from CHA contractors, but she has asked for donations herself.

When asked about the CHA-tied donations, Thomas said in a statement: "Like other political organizations, we reach out to establishments outside the ward boundaries for donations to the organization. This is especially true in African-American wards."

Since 2000, when the CHA launched its $1.6 billion plan to rebuild public housing, demand for contractors to move residents, rehab buildings and develop mixed-income housing has skyrocketed. Support for the 17th Ward Democrats also has grown dramatically.

Only two other ward organizations, led by powerful Aldermen Danny Solis (25th) and Dick Mell (33rd), raised more money between fall 2001 and winter 2004 than the 17th. A handful of other aldermen, such as Ed Burke (14th), have related funds that have raised more.

The 17th Ward Democratic Organization, dormant since 1996, restarted in September 2001.

Since then, G.F. Structures has given $10,200 to the 17th Ward group. It also has won construction contracts worth nearly $70 million, according CHA records.

As G.F Structures' contract amounts have grown, so have the firm's donations. One month before winning two contracts worth $2.9 million in 2001, the company donated $200. In fall 2003, it won five contracts worth nearly $36 million, federal records show. On Oct. 27, the same day it won the fifth contract, the company donated $2,500.

Spokeswoman Avis LaVelle said G.F. Structures officials "have never, never been asked by Terry Peterson to make a contribution, and there is no correlation between what they give and the work they get," LaVelle said. "If they think a ward or civic organization is doing meaningful things, they contribute."

'Much of it may be perception'

For some CHA contractors, the 17th Ward group is their favored, or only, place to donate political cash in Illinois.

Between 2001 and 2004, H.J. Russell, an Atlanta-based firm that manages CHA properties, gave 68 percent of its Illinois political donations -- $13,000 -- to the 17th Ward Democrats. The biggest contribution came four months before H.J. Russell won its largest contract, worth $8 million, according to CHA records. A company spokesman declined to comment.

Virginia-based Legum & Norman targeted just one political group in Illinois. The property management company gave $3,275 to the 17th Ward Democrats. Its first donation, for $500, came three months before Legum & Norman won its first CHA contract. A company executive told Residents' Journal the timing was coincidental.

Albert Blanchard, chairman of the 17th Ward Democrats, suggested that contractors are the ones driving the influx of money

"I think much of it may be perception," Blanchard, who isn't involved with fund-raising, told Residents' Journal. "Terry Peterson was previously the alderman. People perceive they might be able to gain an inroad."