Santos' plunge from grace: Real or backroom revenge?
new city 05.27.99

MAY 27, 1999
It's a black Monday, as far as Chicago's Hispanic community is concerned -- one week to the day that their heroine, one-time rising political star and City Treasurer Miriam Santos, was removed from office by a federal jury's verdict.

State and local pols have gathered at a Humboldt Park taco haven for a prayer service and rally in Santos' honor, offering her condolences and support. But the deposed treasurer is nowhere to be found.

In fact, the usually feisty Santos has yet to make a peep since she was convicted May 3 on charges of extortion and bribery for illegal fundraising efforts. So her political brethren has decided to speak on her behalf.

At first, the TV cameras make them cautious. They say that supporting Santos is not synonymous with bucking the machine -- even though that's exactly what she did for more than a decade.

But then, State Rep. Edgar Lopez (D-Chicago), broaches the subject that's been on everyone's mind since Santos' indictment in January.

"It's very ironic that Miriam was convicted in such a short time. Why is it that the top Hispanic Puerto Rican gets indicted and convicted within a few months?" he asks.

"Daley," heckles a table of Santos devotees.

And in one word, they've summed up the culmination of Santos' often public disagreement with Mayor Richard M. Daley and intimated a revenge that few before have dared to name. They've sowed the seeds of a conspiracy theory by explaining how such a promising career as Santos' can come to such an untimely end: When Daley needs to rid himself of the politically mutinous, he, like his father before him, wields a Machiavellian sword. And does them in.

Of course, City Hall has a different interpretation. "The U.S. Attorney brought the indictment, and she was convicted by a jury. That has nothing to do with this office," says Daley spokesman John Camper. "In fact, the mayor expressed sadness at the time she was convicted."

Perhaps Daley was a bit misty. What's easy to forget is that, at one time, he and Santos were the closest of allies. In 1989, a newly elected Daley brought her on board, first as part of his transition team, and then appointing her city treasurer.

But within that first year, things quickly began to crumble, and the quarreling between Daley and his protégé began. Santos took Daley to task, publicly, after his then-aide, now CTA president, Frank Kruesi, pressured her to hire Daley operative James Stack as a deputy treasurer. She said Stack wasn't qualified, cried patronage and fired him. Stack was later investigated for supervising an admitted ghost payroller in 1987. The public firing didn't sit well with Daley, especially considering Santos' increasing popularity, and the gap between them continued to grow.

In 1991, their breakup was sealed when Santos exposed Daley for trying to remove her from city pension boards and he asked the Illinois Legislature to intervene. From then on they were enemies, and for years after that, she was the voice of Daley opposition, the source reporters would call when they needed to fill in the blank with an anti-Daley quote.

The Daleys have never taken well to opponents -- or potential challengers. And the historical mechanism for keeping contenders down, as detailed by Mike Royko's book “Boss,” was simple -- always to remove or discredit anyone before they rise too high.

"It seems that anybody who has a fight with Daley ends up convicted of something," wrote Tribune columnist and Royko successor John Kass the day after the verdict.

Like the table of hecklers, Kass is one of the few who'll say it out loud. He has covered City Hall for as long as anyone can remember and is quick to note that revenge, Daley style, is frequently served cold, years after it is expected.

Of course, Santos' lawyers didn't miss the chance to use her image as the people's machine-buster of choice to gain credibility with the federal jury.

"She doesn't put up with any nonsense or any people who aren't doing their job," defense attorney Chris Gair argued during opening statements in late April. Throughout her brisk, three-week trial, he harped on that point.

"She's sick and tired of slick politicians... She's not slick."

To a degree, this rabble-rousing persona smells like schtick. Gair continually portrayed her as a self-styled politician, spinning the tale of a young Santos fighting her way through rough neighborhoods with nothing but a metal lunchbox as a weapon.

Santos' background does suggest a kind of up-by-the-bootstraps mentality. She was raised in Gary, Ind., and worked at factory jobs to get through college. The daughter of Puerto Rican transplants, she earned a political science degree from DePaul University, graduated law school there and later snagged an MBA from Northwestern University's Kellogg School of Management. She did legal work and lobbying for several community groups, worked on Democratic stalwart Adlai Stevenson III's failed gubernatorial campaign, served as a Cook County assistant state's attorney under Daley and was a top litigator for Illinois Bell.

Then came the appointment to the treasurer's office, where she oversaw an average yearly investment of $2.5 billion in city revenues.

Considered the next big thing in the Illinois Democratic Party, she even flirted with the idea of replacing Paul Simon in the U.S. Senate when he retired and in 1995 was rumored to be considering a mayoral run. In her three successful re-election bids for treasurer, she campaigned on the conceit that she was independent of Daley.

But by September of last year, during her doomed campaign against incumbent Attorney General Jim Ryan, it all began to crumble. One afternoon, two FBI agents knocked on her office door with the news that they were investigating her for campaigning on city time and for threatening to cut off financial contracts from firms that did business with her office but failed to contribute. And although she maintained her innocence throughout the investigation and the trial, that day in September eventually would mean the end of her career as she knew it.

But Eddie Taylor was not so quick to judge.

A preacher and master's student in evangelism, the jury foreman in Santos' trial was the last holdout for acquittal. Once persuaded, the lone believer in Santos' innocence was forced to read the guilty verdict.

"He was the last one to change his mind, and he was even the foreman," recalls fellow juror Clay Quinn of his colleague's experience. Taylor will not talk about the trial now that it is over. But Quinn, who works for a clipping service, says most of the jury agreed on one thing: “We all thought the people in her office had it in for her,” he says of the nine treasurer's employees the prosecution called to testify against Santos.

How does someone so popular, such a bright political star, fall so far so fast? Well, start with a room full of disgruntled employees.

It's no secret that Santos' was a revolving-door office. In her first two years there, nearly two dozen employees left or transferred. In her testimony, the treasurer's current chief fund manager, Patricia Errera, admitted freely that she despised Santos, calling her a "bitch," a "witch" and "her royal highness" around the office because, plainly, "That's how I saw her."

Errera was one in the seemingly endless parade of Santos employees who testified for the government -- a much longer line of witnesses than that for the defense, which included Adlai Stevenson and U.S. District Judge Blanche Manning.

While Errera admitted on the stand to her own form of corruption -- she receives free, personal business from a broker who has contracts with the treasurer's office -- she served as a key witness in the case against Santos.

With a do-gooder's ire, she testified that she attended a meeting one day in which Santos' first deputy John Henry ordered her to stop doing business with firms that had not donated to Santos' campaign.

She had no doubt that the order had come from Santos, Errera said, and she quickly faxed a complaint to the city's Board of Ethics on June 11, 1998, reportedly jump-starting a somewhat meager but ongoing FBI investigation of Santos' fundraising practices.

Anonymous FBI sources told reporters that someone in the office of the seven-member board -- which is appointed by Daley -- then went to the FBI with Errera's complaint.

Although the ethics board is required to report potentially illegal misconduct, it's very rare that they do, and even then, it's usually only state infractions that are reported, according to one spokeswoman.

But just five days after the board received Errera's complaint, the FBI swooped in on her. She testified that she began taking copious notes on Santos' every move and calculating how much the office was losing by not doing business with the allegedly banished firms.

In other words, she became the FBI's mole, a key city player in bringing down a boss she didn't like.

And while the press has jumped at the chance to kiss some government ass and champion Errera for standing up to an elected official, very few have braved the idea that she forms that palpable link between the city and the Feds.

Not to mention the fact that very first person to alert the Feds to Santos' fundraising practices -- back in March 1998 -- was a Citibank official who Errera admits she knew. She even testified that she vividly remembers having a conversation with him about Santos the very month his lawyers reported Santos to a U.S. attorney.

Now the theory is simple: Disgruntled employee calls city. City calls feds. Feds' investigation -- based on one complaint -- gets needed help. Conspiracy underway, and everybody wins -- except Santos. Daley is conveniently rid of his nemesis and a potential challenger and the Feds save face after the high-profile jury acquittals of two other public officials.

But then, U.S. Attorney Scott Lassar also claims that his office is unfazed by the workings of the city.

So maybe it is just a theory. After all, he was appointed by President Clinton, not by Mayor Daley. Sounds apolitical enough, right?

"Hah!" snorts 28th ward Ald. Ed Smith, as if the question is so ridiculous it doesn't deserve an answer. He continues to laugh, so much that he has to take the phone away from his face. When he returns, all he can muster is a rhetorical, "Is it political? Is water wet?"

Of all the aldermen and state reps who attended the Humboldt Park rally, Smith was the only one brave enough to attend Santos' trial, when it seemed everyone else was keeping a low profile.

Also a longtime Daley detractor, Smith is not afraid to blame what he calls a racially-biased U.S. Attorney's office -- but will stop at claiming that Santos was set up by City Hall.

"I don't know anything about that kind of connection," he says.

And like Rep. Lopez and the Daley hecklers, Smith is quick to charge that the indictment and trial could have been delayed until after the February municipal election, as they were in the case of now-Gov. George Ryan, when allegations of the secretary of state's truck-license scandal surfaced just weeks before statewide elections.

And since when is a trial not political, Smith asks? Actually, it's just like a campaign, he says: The challenger (prosecutors) tries to convince an electorate (jury) that the incumbent (defendant) is not worthy to hold office.

In Lassar's case, he knew that with two recent acquittals of Hispanic aldermen despite their corruption charges, he had to win the campaign (trial) this time, Smith says. So Lassar played his trump and appointed the formidable Jerry Krulewitch, who successfully prosecuted former U.S. Rep. Mel Reynolds and three cops in the Gresham police district corruption case.

Over coffee a week after the Santos verdict, Krulewitch recalls one of his favorite moments in the trial, when his partner, Assistant U.S. Attorney Paul Garcia, likened Santos' testimony to a campaign, replete with spin doctors (character witnesses) and propaganda (her testimony).

But toward the trial's end, the prosecution did a little politicking of their own, raising questions about some business practices that were never mentioned in the original indictment, like whether Santos ended a lending program for low-income women for political reasons.

Krulewitch defends the move. But he concedes that he brought it up because the case was built on "discreet" information, centering on attempted extortion. He had to convince a jury that Santos' threats to the companies with city contracts were implied, not direct.

In the end, the jury agreed with Krulewitch on just one extortion count and five fraud counts. "My boss was not displeased," he says.

While Krulewitch's exacting courtroom presence surely sparked the conviction, a tape of Santos telling a firm to "belly up" with a political contribution also helped seal the deal (see sidebar).

"In the past, I have been more than tolerant of nos and no-shows ... But this is not a choice," she told the firm on the tape. She contends she wanted the firm employee to take her request up with management.

But after the jurors heard it more than a dozen times, they had no choice but to convict, juror Quinn said, although he said he and Taylor had a hard time stomaching a conviction based on someone's tone of voice.

After all, business is booming in Chicago, and anyone with a city contract knows the drill. You grease the politician's hand to get work. One contractor who did not wish to reveal her name -- for fear of losing city business -- describes it this way:

"You go to meet with them about some business they want you to do. The next day, there's a fax asking you to attend a fundraiser. You know you have to write that check. You just know it," she says, debating with her business partner over how much they should give.

So after Santos' conviction, everyone agrees that while fundraising from people with whom you do business is common practice, she pushed it too far. She wasn't savvy enough to just wink and nod, her critics say.

But during the 1995 election for city treasurer, she was accused of the same thing by her then-opponent, former Alderman Larry Bloom (who himself pleaded guilty last year to taking bribes). He said she raised funds from firms that did business with her office. But during her impassioned testimony, she said that then, as now, her own legal expertise tells her she's was acting within the limit of the law.

Even during her bid for attorney general, she says she consulted with other attorneys to assure that her fundraising was above board. One of them testified in her trial, and her lawyer later argued that consulting him was "not the behavior of an extortionist."

She might be hard to get along with, but naive she's not, her supporters contend.

"She's tough as nails. She's going to seek vindication," said attorney Gair after the conviction.

Instead of making a critical fundraising error, the conspiracy theory holds that she might merely have made the mistake of overachievement.

The first Hispanic to hold a city office, Santos rose to power the same time as Daley. The crux of his post-Harold Washington strategy was to embrace Hispanics and secure a new voting bloc.

But they were expected to cede to him, not succeed him. Her error came in bucking power and for that, she got burned, her supporters say in hushed voices.

The only chink in the theory comes in Santos' silence. One has to wonder if she really is recuperating in private or trying to prove the theory herself, perhaps with a new army of attorneys. Either way, she isn't expected to speak publicly until her sentencing on July 27, when she faces up to thirty-three months in federal prison.

Until then, supporters and enemies alike will have to wonder if someone who at one time could have contended for mayor could be so careless, or if she was just another casualty of politics, Chicago style.

Back at the Humboldt Park rally, Santos' brother Rene assures everyone that she's doing fine. "She's going to make it through this," he says, as those gathered talk of protests, rallies and petition campaigns.

Ald. Smith says he's prepared to go "out on the firing line" for her, whatever her next step might be.

Despite their friendship, he, like the rest of the city, awaits word from the sequestered Santos. All he can say is that her family is "hurting" and they need time with her to heal. Yet he doesn't hesitate to cryptically predict her return.

"I don't know how, and I don't know when, but she'll be back."

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