CHICAGO -- "Just the facts."
Chicago Alderman Robert Shaw borrowed that famous line from the old television series "Dragnet" in a recent interview, saying he has a duty to dig up the facts on several alleged financial improprieties dealing directly with the city's bond business and directly with banks that work on bond deals.
In January, Shaw began a probe of banks that he suspects of discriminating against minorities. Those banks, Shaw said, should be barred from doing bond business with the city or acting as depositories for city funds.
In February, Shaw called for an investigation into relationship between the family of Chicago Mayor Richard M. Daley and Smith Barney Inc., the senior manager on a number of city bond deals.
And now this week, Shaw plans to call for an investigation into whether the Chicago law firm of Chapman & Cutler overbilled the city for bond counsel work.
In the interview in his 9th Ward office on Chicago's far South Side, Shaw said the complicated nature of the municipal bond business can mask wrongdoings.
"I think we have a cesspool here in terms of this bond business. It's been an area where certain people rewarded their friends and punished their enemies," Shaw said.
In the matters involving Chapman & Cutler and Smith Barney, Shaw said the city has an obligation to provide him with information. If he does not get answers to his questions, he said he is prepared to file Freedom of Information Act requests -- or lawsuits at the taxpayers' expense if necessary.
Shaw's most recent questions center around billing practices by Champman & Cutler. Shaw said he plans on Thursday to introduce a resolution calling for an investigation into whether the law firm overbilled the city for legal fees.
Shaw said that a May 27 Wall Street Journal article led him to call for investigations of city payments to the firm. The article said that Chapman & Cutler partner James E. Spiotto charged his clients for 6,022 hours of work last year, or $2.3 million, which is more than double the billable hours seen at a typical large law firm.
The article did not specifically mention Chicago as one of Spiotto's clients. Nevertheless, Shaw said, the city should determined if the firm overbilled the city.
Since Daley took office in 1989, Chapman & Cutler has served as bond counsel on 11 city bond issues totaling $710.5 million, according to Securities Data Co.
David Williams, a partner at Chapman, said Shaw is "more than welcome" to investigate the issue, nothing that he does not believe the aldermasn will find anything improper on Chapman'spart. Williams said Spiotto has
not done any work for thec city.
"I don't think there is anything for [Shaw] to look at. The comptroller and corporation councel determine the fees and schedule," Williams said.
Williams said Chapman & Cutler bills the city in the same manner as other law firms that handle city business.
Nina Cadasawan, public information officer for Chicago's law department, said the city does not pay bond counsls on an hourly basis and instead negotiates a set fee with law firms.
Shaw also said he has not given up on his February resolution that calls for the city council finance committee to probe the relationship between members of Mayor Daley's family and Smith Barney, which has been the senior manager for more than $2.2 billion of bond work since 1989.
The resolution cited a Nov. 16, 1993, article in The Bond Buyer reporting that Michael Daley, the mayor's brother, has been paid $15,000 a month by Smith Barney for about a dozen years. City officials have said that the mayor and his family have avoided conflicts fo interest and that Michael Daley did not lobby city finance officials.
"I just don't believe that any prudent businessperson would just be giving $180,000 a year to someone who is doing nothing. I just don't believe that," Shaw said.
But Shaw's resolution is currently languishing in the finance committee. Aldrman Ed Burke, chairman of the committee and an ally of Mayor Daley's, said he has not decided whether he will place the resolution on the agenda for discussion, noting that none of the aldermen on the committee has made an issue of the resolution.
Shaw said he has not decided whether he will move to discharge the resolution from the committe so it can go back to the council for discussion. A resolution could be discharged from the committee with 26 votes of the city council, Burke said.
Michael Daley did not return phone calls. A spokesman for Smith Barney declined to comment.
Shaw, who is black, said he is challenging the role of Smith Barney as senior manager on city deals because he believes that minority-owned firms should be given a greater share of senior manager positions on bond deals. He pointed out that minorities comprise the majority population in the city.
"There are African-Americans and other minorities that cna do that and they shoudl be included," Shaw said.
But John Holden, a spokesman for Chicago's finance department, said the city has aggressively sought to include minorities on city bond deals. In fact, Holden said, Chicago was one of the first large issuers in the country to put together an all-minority financing team for a 1989 issue. The city has a 25% goal for minority particpation in bond deals, he said.
As for his banking probe, Shaw said he is still gathering information from 18 banks realted to their community investment activities and affirmative action plans. He said that within about two months he plans to present his findings to the finance committee.
Shaw, who has been an alderman since 1979, acknoweledges that he is at times in the minority on the Daley Administration. But he said he has an obligation to "try to find out what the facts are and act accordingly."
"I believe the administration would concur. I don't believe the administration would be about biking the taxpayer," Shaw said.
Some city officials, who asked not to be identified, challenge the merit of Shaw's questions and say he is using the issue for political gain.
Burke said that Shaw may be attempting to use the issues for a mayoral campaign. The local press has speculated that Shaw may run against Daley for mayor next year.
But Shaw dismissed his critics, saying that he has "no political reasons" behind his questioning. In fact, he said, he probably will seek re-election as alderman onc emore next year and then retire.
Shaw insists has had raised his questions as an advocate of his constituents, many of whom are poor and struggling to eke out a decent living.
"The bottom line of what I want to accomplish is to save taxpayers some money if we can. If any wrongdoing is involved then we can end that, and we have an obligation to end it," Shaw said.