(CHICAGO) Federal agents have been investigating an executive with the firm that manages Chicago’s privatized parking meters on allegations he took kickbacks to steer a meter contract to a favored company, according to a court record obtained by the Chicago Sun-Times.
FBI agents filed an affidavit for a search warrant in February to search two email accounts tied to an executive of LAZ Parking who allegedly received $90,000 in bribe payments to steer the contract for parking meters, which produced gross revenues of $22 million and monthly service fees.
The Sun-Times is not naming the executive because he has not been charged. When reached Tuesday, he said the allegations in the FBI affidavit were “news to me” and declined to comment further. The FBI declined to comment.
A LAZ spokeswoman said Tuesday that they first learned about the allegations against one of their employees when the Sun-Times contacted them.
“We are a company that is committed to our employees and base our values on integrity, trust and honesty,” LAZ spokeswoman Mary Coursey wrote in an email. “We will fully cooperate with the proper authorities to insure that this matter will be handled in a professional and swift manner.”
The feds say the businessman who paid the bribe is a cooperating witness, who is charged with paying a bribe to an official in another city on another parking meter deal.
The cooperating witness is not named in the affidavit. The feds wrote that he was president and CEO of a company that landed a contract to supply parking meters to Chicago Parking Meters LLC, the consortium that landed the 75-year deal to privatize Chicago’s meters.
The FBI raided his offices some time after July 22, 2011, according to the affidavit.
Those details appear to fit the case against George Levey, whose Cale Parking Systems USA Inc. provided parking meters to Chicago Parking Meters LLC. Federal prosecutors in Oregon accused Levey last year of bribing a Portland official and paying for his travel, golfing green fees and strip clubs in return for help landing parking meter deals. Levey’s attorneys filed a plea agreement in Oregon in late April.
Levey could not be reached for comment Tuesday, and his attorney declined to comment.
The feds allege the scheme unfolded as Chicago’s plan to privatize its parking meters began taking shape near the end of 2008. The LAZ executive and the parking meter company CEO allegedly sat down together at a Florida restaurant.
The CEO wanted his meters in Chicago, so they cut a deal, according to the affidavit. In return for as much as $90,000 in bribe payments, the LAZ executive allegedly helped his Florida restaurant companion land a contract to supply Chicago’s parking meters.
The FBI said the LAZ executive gave the parking meter CEO inside information about the criteria used to pick a supplier. A three-member panel that included the LAZ executive selected the parking meter CEO’s company.
In October 2009, the wife of the LAZ executive allegedly created a shell company to receive the “bribe payments,” according to the affidavit. Over three months in 2010, the feds said the parking meter supplier’s company made four payments totaling $90,000 to that shell company.
But apparently it wasn’t enough.
In July 2011, the LAZ executive’s wife allegedly wrote an email to the parking meter CEO that read: “Hi George. Do you need me to send you an invoice for 2011?”
The CEO believe she was asking for more money, according to the affidavit. But by then, the contract had apparently turned out to be far less lucrative than expected, and the CEO was souring on shelling out any more cash.
So he wrote to the LAZ executive, “You and I will need to meet,” according to the affidavit. He allegedly complained that Chicago Parking Meters had “hammered us down in all areas” and eventually concluded, “a fair payout may have already happened.”
The LAZ executive then allegedly tried to set up a meeting. But two weeks later, the parking meter CEO wrote back to offer a “reality update” and complain about changes to the original deal, according to the FBI.
“Obviously I am making this statement because the fee issued last year in my opinion is quite fair as a full payment,” the cooperating witness allegedly wrote.
The feds showed up to search his office shortly after he sent that email, according to the affidavit. The raid generated some publicity.
And the LAZ executive did not respond.
— Chicago Sun-Times