Editorial | Unanswered questions

Editorial | Unanswered questions

A Chicago insider's guilty plea doesn't explain why he was getting a piece of the pie from a hefty tobacco settlement.

A longtime Chicago political insider and scoundrel pleaded guilty last week at the U.S. Courthouse in Chicago.

There's nothing new about that. Chicago, after all, is a city with a history of serious, perennial wrongdoing by the power elite.

But there was more to former Alderman Ed Vrdolyak's guilty plea than just an admission of federal income-tax evasion, for which he could be sentenced to 30 months in prison.

The real story, one that probably never will be fully known, is how and why Vrdolyak obtained the income for which he did not pay taxes.

More on that anon, but first things first: Who is Vrdolyak?

The 81-year-old lawyer is now, by his account, mostly retired. But there was a time when he was hot stuff in the Windy City — a powerful alderman, an influential member of the Democratic Party and, most importantly, the leader of a group of white aldermen who opposed the leadership of Harold Washington, Chicago's first black mayor.

He also was, to say the least, ethically marginal. Nicknamed "Fast Eddie" for his slippery approach to business, Vrdolyak pleaded guilty in 2008 to participating in a kickback scheme and was sentenced to 10 months in prison. That case was part of the fallout over the lengthy federal corruption investigation into the administration of the now-imprisoned former Gov. Rod Blagojevich.

The current case against Vrdolyak stems from his 2016 indictment for obstructing an Internal Revenue Service investigation into at least $10 million in legal fees he received as part of the $9.2 billion tobacco settlement Illinois, among other states, negotiated with the major tobacco companies.

Here's what's fishy about the fees paid to Vrdolyak. He played no role in the tobacco litigation or the settlement. Indeed, his name was pointedly omitted from the list of lawyers who received legal fees for their role in the lawsuits.

So why was Vrdolyak among those to get a hefty chunk of $188.5 million in legal fees?

Payments to lawyers in the tobacco case always have been shrouded in mystery and suspicion.

Former Illinois Attorney General Jim Ryan once agreed to pay four law firms 10 percent of the $9.2 billion settlement, an outrageous sum. After considerable litigation over their shares, the fees paid were reduced from $900-plus million to $188.5 million.

For reasons yet to be disclosed, a Seattle law firm that was to share in the payments agreed in 1996 to give Vrdolyak a still undisclosed sum that guaranteed payments of $260,000 a year through 2023.

Vrdolyak insists the payment was above-board and approved by Ryan. The Chicago Tribune reported Ryan denies any knowledge of money paid to Vrdolyak.

Vrdolyak shared those fees with friend and lawyer Daniel Soso, who also has pleaded guilty to income tax evasion. It was the federal IRS investigation of Soso that Vrdolyak attempted to obstruct.

Vrdolyak's plea agreement explains what he and Soso did illegally. But it neglects to explain why they were receiving tobacco cash to which they had no legitimate claim.

From the very beginning, the fees generated by the landmark settlement of states' legal claims against tobacco companies represented an irresistible honeypot in which many wanted to share. So how many more influential bigwigs got in on a deal in which they played no role.

Illinois has many political scandals in his history. It's a sure bet many more would-be scandals never saw the light of day. The story of the tobacco fees and people like Vrdolyak and Soso looks like one of them.

Sections (2):Editorials, Opinion
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