Top News

by Todd Feurer, cbs2chicago.com
CBS 2's Mike Parker and CBS 2 Political Editor Mike Flannery contributed to this report.
CHICAGO (CBS) ― Federal prosecutors on Thursday announced an indictment against former Chicago alderman and Cook County Democratic leader Edward Vrdolyak, charging him with fraud and bribery as part of a kickback scheme involving Gold Coast real estate.

Vrdolyak, 69, was on the front lines of Chicago politics in the 70's and 80's and is now a private attorney some say has been the power behind the scenes in Cicero town government.

Now, Vrdolyak is accused of scheming with businessman and Republican political insider Stuart Levine to get a kickback for Levine from the 2004 sale of the old Dr. William F. Scholl School of Podiatric Medicine at 1001 N. Dearborn St. for a condo project.

According to the feds, Levine and Vrdolyak schemed to get and then split a $1.5 million kickback from the company that wanted to buy the property for a condo development.

"What we see in this indictment is more of the same, a greedy lust for money by people with positions of influence and deceit," said Robert Grant, Special Agent In Charge of the FBI's Chicago office.

At the time of the alleged scheme, Levine was a member of the board of trustees for the Rosalind Franklin University of Medicine and Science in North Chicago, then known as the Finch University of Health Sciences/Chicago Medical School. Levine was not named as a defendant in the indictment.

"This case exposes the behind-the-scenes manipulation that (Vrdolyak) and Levine allegedly engaged in to reap financial windfalls," U.S. Attorney Patrick Fitzgerald said in a news release. "The alleged scheme to misuse Levine's position and influence deprived the Chicago Medical School of the honesty and integrity that it was entitled to receive from a member of its board of trustees."

Vrdolyak was charged with one count of mail fraud, two counts of wire fraud and one count of bribery, according to Fitzgerald's office. He will be arraigned at a later date.

The charges are part of the "Operation Board Games" probe of influence-peddling and insider deals that have centered around Levine. Levine has pleaded guilty in two separate investigations to using positions on state boards to make crooked deals, and he has been cooperating with federal officials.

The Chicago Medical School acquired the Scholl College building in 2002 and decided to sell the property. Levine was chair of the board of trustees' real estate committee, which managed the sale of the Scholl property.

The indictment alleges that from 2002 to 2006, Vrdolyak agreed to solicit Smithfield Properties to buy the Scholl College building and Levine agreed to use his position on the board to steer the sale to Smithfield.

Levine allegedly abused his influence with the board to influence the Chicago Medical School to negotiate exclusively with Smithfield and to reject all other offers.

In March 2003, Levine convinced the school to negotiate an agreement to sell the property to Smithfield for $9.5 million.

But two months later, competing proposals were submitted to purchase the site for at least $15 million and Vrdolyak later convinced Smithfield to increase its bid to $15 million and the sale to Smithfield was closed in November 2004.

Vrdolyak arranged a fee of 10 percent of the purchase price from Smithfield -- or $1.5 million -- to be paid upon completion of the condo project.

He agreed to split that money with Levine for his help in securing the purchase of the property and the two allegedly planned to conceal the kickback by arranging a sham loan to Levine's wife, by having Vrdolyak repay a loan that Levine would arrange with one of Vrdolyak's business partners, or by having Vrdolyak pay Levine in cash.

Because the feds caught on to the scheme before the condo project was completed, Vrdolyak never received the payment from Smithfield.

The wire fraud and mail fraud charges carry a maximum penalty of 20 years in prison and the bribery charge carries a maximum penalty of 10 years in prison if Vrdolyak is convicted. He could also face a fine of up to $1 million.

Vrdolyak has been ducking reporters all day, letting his attorney do the talking.

"We fully expect that a public trial will expose these allegations for what they are," Monico said. "There was no bribe offer, there was no bribe paid … friends who know him, know him for what he is and for the good man that he is."

Vrdolyak has been called many things over the years, including "Fast Eddie." Former Mayor Jane Byrne called him "va-droll-ee-ak." Harold Washington called him a "scurrilous geek."

Now you can add to that list, "accused criminal."

Vrdolyak one of Chicago's most prominent, powerful politicians

Ed Vrdolyak has faded from the public eye in recent years, but he has a colorful past known to all of Chicago.

Vrdolyak could fire up a crowd. But he failed in repeated attempts to become mayor. Still, he wielded great power for several years. He led a City Council majority hostile to Harold Washington.

Vrdolyak served as the alderman of Chicago's 10th Ward from 1971 to 1987 and led the so-called "Vrdolyak 29," a group, consisting of mostly white aldermen, who regularly opposed Harold Washington, Chicago's first African American mayor, during the infamous "Council Wars" of the 1980s.

Edward Vrdolyak's racially-charged confrontations with Chicago's first African-American mayor led one national publication to dub the city "Beirut on the Lake."

He was also the Cook County Democratic Party chair from 1982 to 1988 and ran unsucessfully against Washington as an independent candidate in 1987, then lost again in 1989, when he ran as a Republican against Richard M. Daley, who has been mayor ever since.

Growing up above a Southeast Side tavern in the rough and tumble 10th Ward, he became a multi-millionaire personal injury attorney, investigated for but not charged with alleged ambulance-chasing.

When he built the ward's biggest house, the feds investigated mysterious donations of free bricks and other building materials; again, no charges.

By legend, "Fast Eddie" survived dozens of federal investigations. "There was an investigation that went on for a couple of years," Vrdolyak once said.

He's been hit with serious criminal charges only once before. He was forced to leave University of Chicago Law School when accused of murder. Vrdolyak beat that rap, as his defense attorney predicts he will this time.

Funny and charming, he had behind-the-scenes relationships with State Supreme Court Justice Charles Freeman and other African-American leaders.

His law firm gave Rod Blagojevich the governor's very first job out of law school, and then he stayed in touch.

That personal connection to the governor hints at the sorts of stories Vrdolyak could tell the Feds.

(© MMVII, CBS Broadcasting Inc. All Rights Reserved.)