Commissioner questions ethics of two separate Cook County deals

A Cook County Commissioner is raising a stink about several firms in line to get a hefty chunk of county bond business, saying one has a questionable background and the other employs the brother of President Todd Stroger's chief of staff.

Cook County Commissioner Forrest Claypool was referring to Calvin Grigsby and Associates and George K. Baum & Co., respectively.

News accounts show Grigsby was acquitted in 1999 of trying to bribe Miami-Dade County Commissioner James Burke in order to secure a multi-million-dollar bond deal. Burke was convicted.

Claypool said Baum & Co. employs Tony Fratto, the brother of Stroger's chief of staff Joseph Fratto, which makes the deal a conflict of interest.

Both the Baum and Grigsby firms and several other companies are up before the board today to be approved as the firms who will handle the $260 million bond issuance for the county's self-insurance fund. That fund is used to pay out legal judgments against the county.

"I think that the fact that they are proposing to outsource the bond sale to questionable individuals is just one more reason to oppose this deal," said Claypool, referring to Grigsby.

Claypool said his larger argument against the deal, which he aired unsuccessfully last month at a county meeting, is that the bond deal borrows money to pay off a reoccurring expense. He and Cook County Commissioner Mike Quigley, both Chicago Democrats, compared it to a homeowner taking out a loan to buy groceries and gas.

"If [Stroger] can't manage the government and pay the bills with the extra 426 million he received [from the sales tax increase in February], then what does that say about his abilities as chief executive of the county?" asked Claypool.

Joseph Fratto could not be reached for comment Tuesday.

Bill Coughlin, president of George K. Baum & Co., confirmed Tony Fratto is a public finance banker in Chicago and Joseph Fratto's brother, but pointed out the company was doing business with the county long before Joseph Fratto was hired.

"We're hired on our expertise, not on who our relatives are," said Coughlin.

He would not say if Tony Fratto will work on this particular bond deal.

Donna Dunnings, the county's chief financial officer, said all of the companies Claypool is questioning have done business with the county in the past, and that her focus was on qualifications, not relations.

"I didn't have a column checked off on the RFP response 'are you related to any county employees," said Dunnings.

As far as Grigsby is concerned, the fact that he was acquitted says it all, Dunnings said.

"You're guilty and you're always guilty even if you're proven innocent?" mocked Dunnings of the logic of not doing business with Grigsby.

With Grigsby, she said, she looked to the firm's experience and expertise, not past acquittals.

"I look to the legal system to address those issues," said Dunnings.

Grigsby could not be reached for comment Tuesday, but has said in interviews in the past that his troubles in the case stemmed from a crooked competitor, Howard Gary, who was desperate to keep himself out of jail.

The competitor, Howard Gary, was a onetime Miami city manager, and was caught by the feds in an unrelated bribery scheme and agreed to cooperate with prosecutors in a sting of Miami Dade officials, news accounts show.

Grigsby wired $50,000 from his Swiss bank account to Bermuda, where the Miami-Dade County Commissioner, Burke, then picked it up, according to 1999 articles in the Miami Herald and the Sun Sentinel recounting the evidence presented in the trial.

But Grigsby's defense was that the money was intended to go to Gary to keep him from stealing his bond deal with Miami Dade, and that he never intended to deliver on the $350,000 promised to Commissioner Burke and an aide. Grigsby presented evidence at his trial that Grigsby had gone to the feds several years before the Miami Dade deal complaining about county bidding irregularities. The FBI wired him for one phone call before calling the operation off, his attorney said in closing arguments.

His attorneys argued to the jury that, faced with FBI agents unwilling to act when the strong-arm tactics were raised by Gary, Grigsby felt he had no choice but to appear to cooperate or risk being blackballed from county business, according to a Bond Buyer summation of closing arguments at the trial.

Dunnings was asked if Grigsby's actions, although not ruled bribery, might not reflect poorly on his judgment if he was willing to go along just to maintain business.

"I can't speak for Mr. Grigsby," Dunnings replied.