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Today’s must-read: “Daley pension debacle - Where did $54 million go?”

Thursday, Dec 6, 2018

* Tim Novak has done an extraordinary job on this story

If there ever was any hope that five Chicago city workers pension funds would make any money by investing $68 million with then-Mayor Richard M. Daley’s nephew and one of his key political supporters, it didn’t last long.

Only months after the deals were made a dozen years ago, problems began to emerge.

The nephew, Robert G. Vanecko, and his business partner Allison S. Davis, a developer who gave campaign money to Daley and was appointed by the mayor to head the Chicago Plan Commission, started investing in a series of property deals that, by the time the last of them are unwound by the end of December, will have cost the city workers pension funds 80 percent of the $68 million they put in — $54 million in all. […]

And somehow they even lost money — more than $11 million on the deal that built a busy Mariano’s supermarket in the North Side neighborhood of East Lake View, a location that has 90,000 people living within a one-mile radius.

Take some time and go read the whole thing. What a mess.

- Posted by Rich Miller        

33 Comments »
  1. - perry noya - Thursday, Dec 6, 18 @ 4:21 pm:

    I’m hearing rumbles, as Sneed says, that Chicago has had its fill of the Daleys, just as the country has had enough of the Clintons.


  2. - Chicagonk - Thursday, Dec 6, 18 @ 4:21 pm:

    Great reporting and really just the tip of the iceberg when it comes to ongoing machine corruption. Hopefully something comes out of the Burke investigation.


  3. - Nearly Normal - Thursday, Dec 6, 18 @ 4:23 pm:

    This is sickening!! These two had no business with investing. They clearly did not know what the H they were doing.


  4. - Blue Dog Dem - Thursday, Dec 6, 18 @ 4:30 pm:

    I never ceases to amaze me that Chicago is predominantly a one party town.


  5. - Deadbeat Conservative - Thursday, Dec 6, 18 @ 4:31 pm:

    3,2,1 …. Time for the IPI types to blame the employees.


  6. - West Wing - Thursday, Dec 6, 18 @ 4:55 pm:

    Underscores the need to have a strong financial and business background in that office … Bill Daley is the Daley with that expertise and experience to lead effectively.


  7. - Rich Miller - Thursday, Dec 6, 18 @ 4:58 pm:

    West Wing, that was pretty funny. It was snark, right?


  8. - Homer Simpson's Brain - Thursday, Dec 6, 18 @ 4:59 pm:

    Wow, truly sickening. Machine politics at its worst.


  9. - DuPage Saint - Thursday, Dec 6, 18 @ 4:59 pm:

    I hope the Burke investigation is just the start of something really big.
    If Quinn is looking for another tilt at windmills, how about a petition to reduce the size of the city council. Cut it in half


  10. - OneMan - Thursday, Dec 6, 18 @ 4:59 pm:

    I am sure it would have played out the same way if he was just someone with the last name of Jones.


  11. - NeverPoliticallyCorrect - Thursday, Dec 6, 18 @ 5:20 pm:

    But does anyone in the public really care. Did they care about all the enablers in the city council? Did they care about all the public interest groups that supported the Daleys? Did they care about the unpaid pension obligations? I don’t think so. Now we’ll see if they care.


  12. - Oswego Willy - Thursday, Dec 6, 18 @ 5:24 pm:

    ===But does anyone in the public really care. … I don’t think so. Now we’ll see if they care.===

    If elections all thru 2017 and 2018 taught me one thing, it’s that people are starting to care to vote.

    After 2016, it’s been tough to say the voters are lazy.


  13. - The fake OW - Thursday, Dec 6, 18 @ 5:26 pm:

    =Underscores the need to have a strong financial and business background in that office … Bill Daley is the Daley with that expertise and experience to lead effectively.=

    Now that’s FUN.


  14. - Huh? - Thursday, Dec 6, 18 @ 5:50 pm:

    I knew I had seen something similar in past few months. This is an expansion of what was reported on 09/14/2018.
    https://chicago.suntimes.com/news/city-worker-pension-fund-loss-political-deal-richard-m-daley-robert-vaneko-allison-davis/


  15. - Anonymous - Thursday, Dec 6, 18 @ 5:51 pm:

    A 9 million fee to handle 68 million? Why did the pension fund give these losers that kind of money? It would cost less to put it in a diversified ETF.


  16. - Anonymous - Thursday, Dec 6, 18 @ 5:57 pm:

    “There doesn’t appear to have been any attempt to collect on the personal guarantees made by O’Malley and O’Connell and recover money for the pension plans.”"
    And why not?


  17. - Sue - Thursday, Dec 6, 18 @ 6:13 pm:

    Tim should do a story on David Wilhem’s Fund in which some of the State Plans invested during the Blago reign if you want to see returns /losses and fees and you will see why we need more oversight


  18. - Just Me - Thursday, Dec 6, 18 @ 6:24 pm:

    It’s amazing how someone from the Daley family can make money on projects that waste taxpayer dollars.

    I won’t vote for the new Daley unless he pledges that all family members are barred from any city or sister-agency work. This nonsense has to stop.


  19. - ArchPundit - Thursday, Dec 6, 18 @ 6:27 pm:

    The Daley family being family with the Vaneckos has really worked out well for the Daleys.


  20. - Anyone Remember - Thursday, Dec 6, 18 @ 7:11 pm:

    Blue Dog Dem -
    The reason Chicago is a one party town? The last GOP mayor of Chicago is in the last pic from this link on the ground level. His political partner is on the balcony, His name? Alphonese Capone. Even this immigrant to Illinois can understand why Chicago voters won’t elect a GOP Mayor. https://www.thechicagosyndicate.com/2009/05/historic-photo-links-al-capone-to.html


  21. - Steve - Thursday, Dec 6, 18 @ 7:49 pm:

    Another great column from Tim Novak. He should have won a Pulitzer Prize at least four times if not more for the work he’s done uncovering important facts. This is real journalism. Real journalism not only costs money but is worth it.


  22. - wordslinger - Thursday, Dec 6, 18 @ 8:00 pm:

    –I never ceases to amaze me that Chicago is predominantly a one party town.==

    Yeah, it’s a real brain-teaser, that urban (and increasingly, suburban) America just doesn’t go wild for that inclusive happy warrior GOP message.

    Especially because Republicans in Illinois have really worked it. Just look at the bright sunshine Dan Proft has spread.

    And c’mon — who doesn’t want to shoot tear gas at dark lil’ toddlers in diapers down in Mexico. I know the Trump-rally crowd loves it.

    Thoughts and prayers on your head injury. See you in church.


  23. - Steve - Thursday, Dec 6, 18 @ 8:43 pm:

    - wordslinger

    Chicago: great local public schools, low crime, low business costs, low sales taxes, and financially secure public pension system. Those bad Republicans are at the forefront of success in Chicago’s political system.


  24. - wordslinger - Thursday, Dec 6, 18 @ 9:44 pm:

    Yo Steve, you got me, playa. The GOP really hustles to win Chicago votes — those people just don’t know what’s good for them. Sad.

    Sadder to see all those billions from private international investors financing the cranes putting up all those new towers. Who knew that one city needed so many new towers to serve the welfares?

    Sorry to interrupt your TV box time, dude. I’m sure Hannity is building up to a truth-bomb on the sinister intentions of those caravan-diaper-toddlers that will be orgasmic.

    Happy trails, see you in church.


  25. - Blue Dog Dem - Thursday, Dec 6, 18 @ 10:08 pm:

    Anyone who thinks one party has the solutions is a buffoon. In fact, i am pretty sure the two parties running things have gotten this state into the mess we are in.


  26. - Anyone Remember - Thursday, Dec 6, 18 @ 10:22 pm:

    Blue Dog Dem -
    Things work with 2 parties. But when 1 is in bed with Alphonse Capone …


  27. - Keyrock - Thursday, Dec 6, 18 @ 10:47 pm:

    Anyone Remember. As somebody once said, that’s just silly, silly, silly.

    Remember Operation Gambat? (I don’t know how recent an immigrant you are.) I suggest you read Bob Cooley’s book. The Democratic Machine long had deep connections with the Outfit,

    I agree that two healthy, competitive parties would be good. But a mayor who has been gone for close to a century isn’t why this big city doesn’t like Republicans.


  28. - Anon - Thursday, Dec 6, 18 @ 11:29 pm:

    ===Where did $54 million go?”===

    I’m sure some of it’s going to wind up back in the Daley for Mayor campaign fund this cycle.


  29. - NorthsideNoMore - Friday, Dec 7, 18 @ 7:14 am:

    They had no idea what they were doing besides trying to make a quick buck flipping and banking on the family name to get deals done. Pension oversite team ought to go hard after thier lost money.


  30. - Blue Dog Dem - Friday, Dec 7, 18 @ 8:05 am:

    Anyone. Maybe for the states first 175 yrs. Times have changed. Here. There. Everywhere. It takes a lifetime to build ones reputation. It only takes seconds to destroy it. I am afraid that has happened to us.


  31. - Keep in mind - Friday, Dec 7, 18 @ 8:22 am:

    Most pension funds have a board. If you are on the board and they get sued you are responsible. Which means the people dying can go after your house, savings, etc


  32. - @misterjayem - Friday, Dec 7, 18 @ 8:54 am:

    “I am afraid that has happened to us.”

    Serious question: Who’s “us”?

    – MrJM


  33. - Downstate - Friday, Dec 7, 18 @ 8:57 am:

    Keep in mind,
    The board members likely have some D&O insurance which will cover any decisions.
    BUT, either the board should resign, or should not be reappointed.


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