AP via SJ-R:

Former Chicago alderman indicted
Feds say he schemed with Levine on kickbacks

By MIKE ROBINSON
THE ASSOCIATED PRESS

Published Friday, May 11, 2007

CHICAGO - He became known as the face and voice of aldermen who spent years battling the city's first black mayor - a fight so bitter some began referring to Chicago as "Beirut on the lake."

Former Ald. Edward R. Vrdolyak, also known as "Fast Eddie," found himself in a new fight Thursday as federal prosecutors unveiled an indictment charging him with scheming to get a $1.5 million kickback in a real estate deal.

"What we see with this indictment is the greedy lust for money by people in positions of influence and deceit," Robert Grant, special agent in charge of the FBI in Chicago, said in unveiling the indictment.

The 69-year-old Vrdolyak was known for leading critics of Mayor Harold Washington in the so-called Council Wars that raged at city hall in the 1980s. He fought Washington as the head of a group of white aldermen who also were the remnants of the once-mighty Chicago Machine.

The indictment Thursday accused Vrdolyak of scheming with millionaire political contributor Stuart Levine to get the money from a developer that wanted to be assured of buying a building on Chicago's Gold Coast.

Levine - chairman of the board of Chicago Medical School, which owned the building - sought to freeze out rival buyers in favor of Smithfield Properties, which wanted to redevelop the building for condominiums, the indictment said.

The indictment said Vrdolyak told Levine of Smithfield's interest in the property. It said Levine and Vrdolyak discussed a payment of $2 million in cash by Smithfield to the Northshore Supporting Organization, a charitable trust from which Levine benefited personally.

But when the school initially balked, "Vrdolyak and Levine eventually agreed that Vrdolyak would receive a payment from Smithfield Properties and that Vrdolyak and Levine then would split this payment," the indictment said.

They eventually settled on a scheme under which the payment would be $1.5 million, or 10 percent of the $15 million sale price, and Vrdolyak would receive a portion, apparently for his services as a middleman, according to the indictment.

But a federal investigation called Operation Board Games intervened, and in the end, the money never changed hands.

"This case exposes the behind-the-scenes manipulation that the defendant and Levine allegedly engaged in to reap financial windfalls," U.S. Attorney Patrick J. Fitzgerald told a news conference.

Vrdolyak attorney Michael D. Monico said in a telephone interview that his client "is not guilty of the charges in the indictment."

"The allegations are not true. He did not enter into a scheme with Mr. Levine and never paid him any money or offered to pay him any money," Monico said.

Neither the school nor Smithfield was charged with wrongdoing.

Levine, who has contributed heavily to a number of Illinois politicians, already has pleaded guilty to one count of fraud in connection with his membership on two state boards. In his plea agreement, Levine admitted that he swindled Chicago Medical School through an elaborate kickback scheme.