"The Mirage" - Pamela Zekman, Zay N. Smith - Chicago Sun Times
". . .The pair have been suspended pending a dismissal hearing before the Illinois Department of Personnel. The shakedown at the Mirage was described in a Sun-Times story last week. . ."
"The Sun-Times month-long Mirage series documented a litany of misconduct and prompted investigations by city, county, state and federal agencies. "Potentially far-reaching reforms have been implemented and more are promised. Laws are to be rewritten and strengthened. "Payoff-taking public employes have been suspended and fired. New protections against such abuse of power have been ordered . . . "
". . .Some fire fighters admit the on-duty sales take them away from their regular jobs, leaving stations and equipment understaffed. Some with high sales are given time off - while still on the city payroll - that takes them away from work for months at a time. . ."
". . .The price public officials here must pay to help revive public confidence is to set up an unbiased outside commission to investigate the corruption fully documented by The Sun-Times and the Better Government Assn. But the City Council ducked its duty two weeks ago when it voted 39 to 3 to shunt off to committee a plan to do just that. . ."
"Fire protection isn't cheap here. The Fire Department budget - more than $106 million - is the city's fourth largest. But the public isn't getting its money's worth. Mayor Bilandic says he is 'looking into' Fire Comr. Robert J. Quinn's management of the department. Only a thorough investigation and a full report to taxpayers will do. . ."
"Mayor Denies Payoffs, Shakedowns Prevalent"
"The Better Government Assn. Monday urged creation of an ombudsman who would have power to investigate citizen complaints about dishonest or negligent city inspectors. Charging that Chicago is gripped by a 'pervasive system of graft' in which 'small businessmen and the public are the big losers,' BGA Executive Director J. Terrence Brunner said the city needs an ombudsman office to oversee its inspectors. . ."
". . .In the final installment of the Mirage series, The Sun-Times disclosed on Sunday that hundreds of able-bodied firemen are routinely assigned to sell tickets for a charity that supposedly servies widows and orphans. Financial records show that a major beneficiary of the fund for the last seven years has been Quinn's ceremonial marching band. . ."
"A solid strategy to let the state attack tax cheating - as documented in The Sun-Times' Mirage series - is unfolding, thanks to Democratic Leaders in the General Assembly. And top Republicans seem ready to follow up the co-operation given the Mirage series from the outset by Thompson adminstration's Department of Law Enforcement . . ."
"Mayor Bilandic's defense Tuesday of on-duty fire fighters' solicitations of ticketers for charities was absurd. It seems to indicate that he doesn't know the facts, doesn't understand the issues and perhaps isn't even sure who's the boss at City Hall . . ."
". . .The suspensions brought to 15 the number of city, county, or state employes disciplined for misconduct since disclosures of corruption and negligence by public employes began in the Mirage series. . ."
". . .After Sun-Times reporters and BGA investigators reported widespread sales-tax skimming, Houlihan called for a special commission to investigate. He didn't imply corruption in the Revenue Department; he urged help for the department. . ."
"State revenue agents Monday, acting on information uncovered by the BGA and The Sun-Times, raided 21 locations and seized 78 unlicensed pinball and video game machines and jukeboxes. . ."
"The vending machine operators kept warning the Mirage to stay away from the Zenith Vending Corp. ""Once they get an account, they don't lose it' ... "
". . .Though Chicagoans long suspected much of the wrongdoing that The Sun-Times and the BGA found, it's now documented. And it's clear that too few in government could - or wanted to - clean up the mess. . ."
". . .The salesmen each offered to violate or actually did violate various laws regulating kickbacks, the transfer of liquor and credit reporting. . ."
". . .Chicago's reputation is tarnished more and more by too little being done to end shakedowns by city inspectors and others. The Sun-Times and the BGA found bribery common. They found tax skimming common. They found threats to patrons' safety overlooked for a few bucks in an envelope. They found unsafe buildings approved for a payoff. . ."
"The Illinois Department of Revenue Wednesday announced that a special fraud unit had been formed to investigate the widespread tax cheating documented by The Sun-Times and BGA. It was learned that one of the first steps taken by the new unit was to subpena some records of seven accountants or bookkeepers hired by the Mirage. . ."
". . .Edward F. King, assisstant health commisioner, announced that inspectors Robert Hansen and David Weingarten would be off the city payroll for an as yet undetermind length of time. . ."
"Two resolutions urging the City Council to investigate wrongdoing uncovered by The Sun-Times and the Better Government Association at the Mirage were sent Tuesday to the Finance Committee for study. . ."
"Now the test. Will the City Council do its duty and take firm, full steps against the kinds of corruption revealed at the Mirage? Or will it go only part way and adopt measures too timid to spur genuine reform or give the public confidence that it cares? . . ."
"The Mirage was able to learn firsthand about the installation of illuminated signs in Chicago. But it also learned something interesting about a different kind of sign - the nonilluminated variety. There are thousands of these signs across the city. None of them have city permits. The Mirage could not find anyone in City Hall who seems to know why. . ."
". . .The announcements were triggered by weeklong disclosures of payoff acceptances, tax skimming and other misconduct experienced by Sun-Times and BGA investigators while secretly operating the Mirage, a tavern at 731 N. Wells. . ."
"There's still no doubt. Despite Mayor Bilandic's promise Thursday to tighten city licensing and inspection procedures, we call for an independent blue-ribbon commission to investigate the Mirage disclosures fully and stop the corruption that posions the city. . ."
"it's clear now that independent investigations - by both Illinois and Chicago - are needed to tackle the kinds of wrongdoing discovered at the Mirage. Business by bribe here is widespread and involves many millions of dollars. . ."
"Warning that systematic tax cheating by accountants and taverns may be costing Illinois $20 million annually in lost revenue, state Rep. James M. Houlihan Wednesday urged a special legislative investigation. . ."
"James Newbold, new chief of the Chicago Fire Prevention Bureau, said Tuesday that the Fire Department may need to establish an internal anti-corruption unit similar to one in the Police Department."
"Though some departments have moved quickly to suspend four city inspectors after the first stories in The Sun-Times' series detailing payoffs and malfeasance by inspectors, the lack of tougher responses by top officials is alarming. . ."
"Hundreds of city inspectors move through Chicago each day checking everything from electrical wiring to kegs of beer in an attempt to protect health and safety. The state also has at least one group of inspectors charged with maintaining health and safety standards in taverns, restaurants and package-liquor stores. . ."
"In the days and weeks ahead, the Sun-Tiems will tell a vital story of ugly government and private corruption. It will shock some readers and confirm the worst suspicions of others. It will show how the public is threatened by a system -- not just a few bad apples -- in the city that often works better for the crooked than the honest. . . . The first episode begins today."
"Phillip J. Barasch . . . a man who teaches small business proprietors in Chicago how to cheat on taxes, has many colleagues in that activity. Not one or two bad apples but a system of corruption is robbing Illinois of millions of dollars."
"The Mirage's customers sometimes wondered: 'Why did the bartenders run behind the back bar so much?"
"Are city and state officials responding as they should to the corruption documented by the Sun-Times' Mirage series? "Only partly." ...
"It was time for the Mirage to disappear. "The last night came fittingly, on Halloween weekend, when everybody pretends to be somebody else. The Mirage threw a party as its way of saying goodby to the neighborhood. "The neighborhood didn't know it was goodby. All it knew was that the Mirage would be 'closed for renovations.' A new owner would open the place again in a few weeks . . . It had been four months since the Mirage had appeared -- time enough to catch the city in the act of being itself. And time enough, too, for a few close calls. It is that way with any masquerade."
"Hundreds of on-duty Chicago fire fighters solicit funds for a charity that supposedly serves widow and orphans. But a major beneficiary is Fire Comr. Robert J. Quinn's ceremonial marching band."
"The Mirage's customers got along just fine. They drank, joked, gambled and danced to the jukebox. "Then there was the night they all tried to kill one another."
"The Mirage was not in business long enough to have filed a federal tax return. However, each of the accountants advised the Mirage that it would have to submit the same figures to the U.S. government as it had to the state. Otherwise, they said, the tax cheating would be more easily discovered."
"William Cheek - his friends call him Cheeky - seemed harmless enough at first. But the Mirage soon learned he was a dangerous customer. His sideline was gunrunning."
"A tavern has its regulars. It has its irregulars, too."
"The girls live like animals," she said. "And all they want is a chance to live like human beings."
"Norm and Rose Bersch guaranteed they could help the Mirge make as much as $1,000 a night. "All it would take, they said, was three prostitutes and a little know-how."
An Inside Look at a Wells St. Brothel—Suzette's Client List Tops 900
Precede: "To learn about Suzette's, a whorehouse at 701 N. Wells, the Mirage decided to hire one of its prostitutes, supposedly to entertain one of hte tavern's secret backers. Barbara was hired for $200 for three hours by Sun-Times reporters Zay N. Smith (left) and William Recktenwald, chief investigator for the Better Government Assn. 'I was into swinging for a while,' she told them, 'and I met some people, and well, here I am. Kinda crazy, isn't it?'
Nearly One-Third Aware of Payoffs
"Three of every four Chicagoans - 76 percent - believe that government corruption is a widespread, serious problem. Nearly hald contend that high officials are involved in it and that nothing will be done to end it. . ."
"Pinball Wizard was having another bad night on the Evel Knievel machine. "'You scurvy dog! You whore! I don't let no machine do this to me!' "Bernie Delaney worked by day in a camera store near the Mirage. At night, he was Pinball Wizard. He could not resist the machines. It had been that way since he was 14...."
"The unidentified man was the first to lose his job as a result of an investigation by the newly created Office of Professional Review. "The anti-corruption agency was formed by Bilandic Jan. 12 in response to Sun-Times and Better Government Assn. disclosures of misconduct by city workers at the Mirage . . ."
"Every tavern is itw own small community of friends and enemies, hustlers and losers. It is the city come off the street to have a beer. . . . It's time you met the Mirage menagerie."
Reviews Are Mixed for Our Bartender
"But Norty hadn't learned how difficult it is to tend bar in the real world. He would learn that the hard way at the Mirage. "It is a story of shattered glassware, spilled beer and cocktails that were always a surprise -- the story of Norty's life behind bars . . ."
"Governor Thompson said Monday he favored reforms recommended by The Sun-Times and Better Government Association to tighten state tax collection procedures documented in the Mirage series. . ."
"Mayor Bilandic ordered reforms Thursday in city inspection procedures and a potentially far-reaching revision of licensing laws, including the controversial 800-page-thick Chicago Building Code."
"City Buliding Comr. Joseph F. Fitzgerald said Wednesday that there would be a major 'shake-up' in the Building Department as a result of Sun-Times disclosures of negligence and corruption by some city inspectors."
"The Professional Bartenders School, 407 S. Dearborn, teachers more than how to mix Singapore slings and Bahama mamas. It offers a special look at how bartenders mix finagling with fraud when the authorities and customers aren't watching."
"John Yesutis is a former policeman who may be using his vending-machine business to skim nearly $500,000 a year off income before paying taxes."
"The vending machine operators say their produce is pinballs and jukeboxes. But the Mirage discovered they were really trading in illegal kickbacks, tax fraud, political fixes and licence fraud."
"Your tax dollars at work? "Don't count on it. "The Mirage was able to take a firsthand look at how public employes often pass the time. It dealt with them on the street. It got to know them over a cold beer. "It watched them use their jobs to hustle cash, illegally, or on the side. "It watched them loaf...."
"Charlie Williams was part of a city garbage crew that made two illegal pickups at the Mirage last October. He said he was fired several weeks later because he refused to break the law any longer. "I told 'em I wasn't going to make no more stops like this," he said. "And now I'm out of a job." ...
"The beer salesman leaned forward. this was just between him and the Mirage. "I got clout, He said, 'I'll make you happy.' "It was time for the old Chicago sell when the Mirage started shopping for beer and liquor..."
Thursday, January 19, 1978
"The Mirage kept waiting for Lou Cuddy to make his move. "That's how payoffs usually start. The official, the inspector o the copy sallts around and hints that maybe "something can be worked out. . . ."
"Chicago taxpayers spend more than $15 million a year on salaries for inspectors who are supposed to keep business establishments sanitary and safe. The Mirage, through four months, never received an honest and thorough inspection of any kind."
"The Mirage found it couldn't even put up a sign in Chicago without putting in the fix. "'You'll have to wait three months for your sign -- unless you pay off the city inspectors," warned Larry Bryant of Barry Signs."
"Nicholas Zekich, state liquor inspector, said he might have to close down the Mirage. The violations were that serious. But then Zekich grinned. He didn't close down the Mirage. He shook it down. "It was a shakedown that lasted nearly a half hour and finished with a $50 payoff from the cash register. Zekich took the money, forgot the violations and left the Mirage's owner with some free advice . . . "
"Illinois could be losing $16 million a year in sales-tax revenue through systematic tax fraud by tavern owners conspiring with private accountants. "The Mirage - a tavern operated for four months by The Sun-Times and the Better Government Assn. at 732 N. Wells -- discovered the widespread fraud during months of talks with tavern owners and accountants throughout the Chicago area. "The tavern owners and accountants, unaware they were talking to reporters, said taverns routinely skim at least 20 percent off their income before filing tax returns . . . "
"The Mirage's $100 payoff to John Higgins, city ventilation inspector, became a race to beat the clock. "The transaction, arranged so the Mirage could install a food grill wihtout spending $2,000 on required ventilation ductwork, was orderly enough at first. A private contractor carried out cautious negotiations between tavern and inspector. It was shuttle diplomacy, Chicago-style. . . ."
Also -- "Shakeup vowed by city building chief"
"The plumbing contractor walked into the Mirage and presented his bill for $375. "The bill wasn't itemized -- and for good reason. It covered labor, materials and a $50 payoff to the city plumbing inspector.... "
"Building Aide OKs Mirage for $15"
"The Mirage, with its rotting floors and makeshift carpentry, had structural problems that would have cost thousands of dollars to fix. But the Mirage learned it could fix a city building inspector for $15."
"Mirage Clears Fire Inspection - for $10"
"Lt. Benjamin Jungman, a city fire inspector, gave the Mirage its first look at government-by-envelope in Chicago. "It was a cash payoff, passed quiety from tavern to inspeector, so everybody could ignore the city codes. "The system works. "All the time..."
"Philip J. Barasch is a Chicago business broker who teaches his clients how to cheat hte law and grab a buck. "It can be tax fraud. It can be arranging payofs to city inspectors. You name it; he can work it. "As Barasch says: 'I know all the angles, all the shortcuts. You stick with me and you'll save lots of money." "
"But the Mirage, 731 N. Wells St., was never quite what it seemed. "It was a tavern operated by the Sun-Times and the Better Government Assn. "The bartenders were reporters and investigators. The repairmen were photographers headed for a hidden loft. "All were investigating years of complaints from small businesses about the day-to-day corruption they have to endure in Chicago, the city that works if you know how to work it. "The Sun-Times will tell the Mirage's story -- with names, dates and amounts -- in the days to come . . . "