'Fast Eddie' escapes again: Vrdolyak gets five years' probation, fine

According to U.S. District Court Judge Milton I. Shadur, Former Chicago Alderman and judicial kingmaker Eddie Vrdolyak is not an insider.

And when Vrdolyak agreed to act as a "finder" for a crooked land deal in which he knew the fix was in and he would have to split that finder's fee with a crooked school board member who would steer the sale to Vrdolyak's client, that was not a "kickback," Shadur said.

When the school board, because of the crooked board member, passed up a $15.5 million bid for its property and instead took the $15 million crooked bid, that did not represent a tangible, calculable loss to the school of $500,000, Shadur said.

After finding all of that, Judge Shadur then called Eddie Vrdolyak "a good man" and let him go free.

With no prison time, and not a penny in restitution to the school.

Instead, he sentenced Vrdolyak to five years of probation, a $50,000 fine and 2,500 hours of community service.

The U.S. attorney's office almost immediately issued a statement saying it was considering an appeal

"We believe a sentence of incarceration was appropriate for a defendant who schemed to share a $1.5 million fee with a corrupt insider involving the sale of a nonprofit university's valuable real estate asset," the office said in a prepared statement.

As for the former alderman known as "Fast Eddie," the usually loquacious former lawyer walked out of the court without comment, leaving the talking to his lawyer, Mike Monico, who praised the judge for his wisdom in the sentencing.

Thursday's sentence stemmed from federal investigators' tape recordings of Vrdolyak with Stuart Levine, the now-infamous Blagojevich administration insider who secretly turned on Vrdolyak to save his own skin when feds caught up to him.

Levine's and Vrdolyak's crooked deal stemmed from Levine's membership on the board of Finch University of Health Sciences/Chicago Medical School, now known as Rosalind Franklin University.

The school was selling its Gold Coast property, and Levine called up Vrdolyak with an offer to make some money: If Vrdolyak would find a buyer and take a commission for the sale, Levine would steer the sale to Vrdolyak's client and the two would split the finder's fee.

Vrdolyak agreed.

Initially, Levine was prepared to let the school take $10 million or less for the property, which Smithfield wanted to develop into luxury condos.

But when other interested buyers, such as Loyola University, got wind of the sale, they upped the ante, even bypassing the school's lawyer and going straight to board members to make their offer known.

It was then Smithfield came back with the $15 million offer. Vrdolyak's lawyers contend that he had Smithfield up the ante so that he would get more money, saying his commission was based on percentage of final sale. The government contends he didn't particularly care what the amount was, as long as he got paid. And with other bidders doing 50 percent better than his client, he knew he could lose the sale, they contend.

Oddly enough, Vrdolyak was the one pleading that he was greedy, and wanted the higher Smithfield bid to enrich himself, because that was key in Shadur's finding that the school suffered no loss. Just like an actual, non-rigged bidding process, Shadur said, the price had continued to rise to the fair market value and thus Vrdolyak's conduct cost it nothing.

"Vrdolyak had every incentive to maximize the price to the medical school," Shadur said.

Assistant U.S. Attorney Chris Niewohner had argued that the school lost, at minimum, $1.5 million - the size of the finder's fee. If Smithfield was willing to pay $1.5 million on top of its $15 million bid price, that represented money that the developer had been willing to pay for the property had an honest bidding process gone on, he said.

Further, Niewohner argued, while Loyola's bid was only marginally higher, deception toward Loyola by Levine and others had led the university to believe it was not submitting a final bid. Had university representatives known they were being asked for their best and final bid, they would have offered much, much higher, he said.

But Shadur, who noted he had 30 years as a lawyer in real estate transactions, said there was nothing unusual in such a finder's fee, and that the money came from Smithfield, not the school, so it was not a loss to the school, the victim in this case.

"It's not a kickback," Shadur said.

The judge went on to say that, despite Loyola offering $500,000 more for the school, the board again did what any non-influenced board would do: it took the lower bid because it had fewer contingencies. Loyola's offer included loopholes whereby it could get out of the deal if zoning was not approved or the property proved not to be suitable, Shadur noted.

But, countered Assistant U.S. Attorney Chris Niewohner, all the bids had contingencies, and Loyola's was far superior in that it offered cash upfront, whereas Smithfield's was for structured payments over time.

Shadur didn't buy it, calling the government's calculation of loss to the school "overkill - and serious overkill, and really quite greedy."

After back-and-forth on the loss, which Shadur eventually ruled was zero, he went on to cite 50-plus letters supporters had written on Vrdolyak's behalf. The letters were not made part of the public record.

Citing Vrdolyak's good works with charities and kindness to friends, he said he was "surprised" that he had concluded Vrdolyak did not deserve prison time.

Prior to finding the calculation at zero and reading the letters, Shadur said, "I would not have dreamed of imposing a noncustodial sentence."

Vrdolyak, before being sentenced, apologized to the court. "I know what I did was wrong," said Vrdolyak. "I did it because Stuart Levine was my friend."