Feds probe LAZ executive for possible parking meter bribe
CHICAGO — The FBI is investigating whether an executive at the firm that manages Chicago’s privatized parking meters was paid $90,000 in bribes to steer a contract to install and maintain the controversial meters across the city.
The alleged kickback scheme was laid out in an FBI search warrant affidavit filed in February seeking access to two email accounts tied to the vice president of government services at LAZ Parking, the Atlanta-based firm hired by a Morgan Stanley-led business consortium in 2008 to manage the privatized meters in Chicago.
According to the 17-page filing that was made public recently, the LAZ executive met with the president and CEO of another firm, identified only as Company A, at a Florida restaurant in late 2008, as the city’s much-maligned $1.2 billion deal to lease the meters for 75 years was being finalized. At the meeting, the CEO offered to give kickbacks to the LAZ executive in exchange for steering the installation contract to Company A, according to the affidavit.
They also made a “side agreement” for additional bribes if other business, such as extended warranties on the meters, was given to the company in the future. The LAZ executive later gave the CEO inside information about the bidding requirements and helped select Company A for the job as part of a three-member panel assembled to find a vendor, according to the affidavit. In October 2009, the LAZ executive’s wife set up a shell company in Florida called Landmark Sales and Marketing to receive the bribe payments, according to the affidavit.
Over a three-month span in 2010, Company A made four payments totaling $90,000 to Landmark Sales as kickbacks for winning the $22 million contract, the filing stated.
The CEO, who is not named in the filing, pleaded guilty earlier this year to bribing an official in another city and is cooperating with authorities, the FBI said in the affidavit. He told the FBI that because of unforeseen costs imposed by the consortium, the contract was not nearly as lucrative as he expected. In 2011, the CEO balked when the LAZ executive appeared to be hitting him up for more money.
“You and I will need to meet,” he wrote to the executive, according to the affidavit. “Our friends have hammered us down in all areas. … A fair payout may have already happened.”
Later that year, he wrote another email to provide the LAZ executive with a “reality update” on the request for more kickbacks, according to the affidavit.
“In a normal deal, once a deal is done, one would believe, short of an unforeseen problem, margins would be clear to calculate,” the CEO wrote, according to the filing. “… Obviously I am making this statement because the fee (bribe) issued last year is quite fair as full payment.”
Shortly after the email was sent in July 2011, federal agents raided the CEO’s office in connection with the unrelated parking meter bribe scheme in another district, according to the filing.
The Tribune is not naming the LAZ executive because he has not been charged. Contacted by the Tribune at his Atlanta office Wednesday morning, the executive said he had no comment and hung up.
The FBI and the U.S. attorney’s office in Chicago also declined to comment. While the CEO cooperating with the federal investigation was not named, details from the court filing appear to confirm he is George Levey, who heads Tampa, Fla.-based Cale Parking Systems USA.
In April, Levey pleaded guilty to bribing a Portland, Ore., official by paying for his travel and entertainment at casinos and strip clubs, as well as golfing greens fees, in return for help landing parking meter deals, federal court records show. Levey is awaiting sentencing in that case.
His New York attorney did not immediately respond to messages Wednesday for comment. Last month, a federal judge sentenced Portland transportation official Ellis McCoy to two years in prison for taking bribes to steer contracts to Levey’s company and a second business, records show. Levey’s attorney, David Zornow, said Wednesday that he could not comment on the affidavit.
by Jason Meisner, Chicago Tribune.