Mayor Richard Daley's administration illegally doled out city jobs to reward campaign workers for the mayor and other politicians in a "massive fraud" that spanned City Hall for more than a decade, federal prosecutors alleged Monday.
Daley's longtime patronage chief was accused of systematically circumventing a decades-long federal ban on most political hiring by secretly directing top city managers to hire "preselected" applicants favored by politicians and union officials.
Federal investigators said current and former City Hall department heads and personnel chiefs are among more than 30 cooperating witnesses in the ongoing probe.
For the first time, a high-ranking official in Daley's office was arrested and charged in the probe. Cooperating city officials told investigators that Robert Sorich, Daley's patronage chief and a family friend, orchestrated hiring efforts that often favored "goofballs" over more qualified candidates.
U.S. Atty. Patrick J. Fitzgerald, who has charged former Gov. George Ryan and other state politicians on similar allegations of mixing campaign and public payrolls, said he hoped the ongoing probe would shake a City Hall "where people are being scored not on the merits but by who they know or what clout they have."
"That's the world we want to stop," Fitzgerald said.
Daley issued a four-sentence statement Monday pledging cooperation with investigators.
"These are clearly very serious accusations," Daley said. "As I have always said, if there are individuals who have violated the law, they should be prosecuted and held accountable for their actions."
The Daley administration has been trying to overturn the 1983 Shakman federal court decree prohibiting political hiring at City Hall, arguing it was no longer necessary.
But the charges against Sorich and Patrick Slattery, another official with strong ties to the Daley family and its 11th Ward Democratic Organization, challenged the mayor's contention that who one knows does not count for much anymore at City Hall.
The city allegedly passed over equally qualified or more suitable applicants to assure jobs for political campaign volunteers. Prosecutors described situations where a dead man and a soldier serving in Iraq were rated as qualified for jobs with the city even though they could not have been interviewed, as officials had claimed on city documents.
"The hiring system was rigged," Fitzgerald said.
Overseeing the entire operation that tied together street-level Chicago politics and City Hall hiring, prosecutors said, was Daley's Office of Intergovernmental Affairs.
IGA "routinely and consistently" corrupted the hiring process by falsifying test scores and other credentials to benefit the politically connected, prosecutors said. Sorich and other officials in IGA allegedly directed political armies made up of city workers to work for the mayor and other politicians.
Charges focused on hiring had been widely expected since late April, when federal agents raided IGA and two other city departments for personnel records. That move prompted the administration to announce an overhaul of its hiring process.
A long-running investigation of bribes paid to get city work for private trucking firms began to focus on hiring when prosecutors alleged that some city officials ensnared in the Hired Truck scandal built political armies by trading jobs, raises and promotions for campaign help.
The Shakman decree stated that merit, not clout, should be the basis for filling all but about 1,000 policymaking positions from among the 38,000 jobs on the city's payroll.
Michael Shakman, the Chicago lawyer who won the court decree, said the problems in hiring appear to be far more widespread than the mayor has acknowledged. Shakman called the alleged activity by city officials "an appalling betrayal of public trust."
"They describe a widespread, corrupt, phony, illegal hiring system, operating systematically," Shakman said. "That is not a few bad apples."
David Axelrod, a political consultant to the mayor, noted that the Shakman decree settled a civil case and contested the notion that political hiring by the city is a criminal offense.
"Now [Fitzgerald] seems to be criminalizing it in a way that has never been done before," Axelrod said. "This is a new area of law the courts are going to have to look at."
Axelrod also sought to distance Daley from Sorich, saying that "the mayor's contact with Robert Sorich is probably negligible."
Sorich allegedly coaxed a Streets and Sanitation Department official to form a white political group because the "mayor's organization" needed it to complement Hispanic and black groups in the department. Authorities also said Sorich would attend kickoff rallies for political candidates, often delivering the message that "the mayor supports this candidate's campaign."
Sorich, 42, is from Bridgeport, the mayor's native neighborhood, and he has longtime ties to the Daley family. His father was the official photographer for the late Mayor Richard J. Daley. Before joining IGA, Sorich served as 11th Ward aldermanic secretary.
Sorich first served under Timothy Degnan, a trusted Daley strategist from Bridgeport who was the mayor's first IGA head. Degnan was succeeded in the mid-1990s by his protege, Victor Reyes,
Degnan and Reyes nurtured the emergence of an array of pro-Daley organizations. The groups include the Hispanic Democratic Organization, co-founded by Reyes.
Degnan could not be reached for comment Monday. A spokesman for Reyes said he declined comment.
Sorich and Patrick Slattery, also 42 and of Bridgeport, were charged in separate criminal complaints with one count each of mail fraud. Sorich was arrested shortly after 6 a.m. at his home, while Slattery surrendered to the FBI at about 8 a.m. Both were released on their own recognizance after initial appearances in federal court.
Attorneys for both men said they would contest the charges in court.
Sorich was paid $101,100 a year. Slattery's annual salary as director of staff services for Streets and Sanitation was $86,436. The city moved to fire Slattery on Monday, said Matt Smith, a Streets and Sanitation spokesman.
Federal authorities arrested a third high-ranking city official on Monday but kept his name secret because he is cooperating, according to a source familiar with the investigation. A criminal complaint against that man was filed under seal, the source said.
A former high-ranking Streets and Sanitation employee, who is cooperating with the investigation and is expected to be charged at a later time, agreed to secretly record his conversations with Sorich, the criminal complaint shows.
The former employee, who was not identified, visited Sorich's home on June 16 to talk about the federal investigation. According to court records, Sorich suggested they take a walk and told the former employee: "You just have to ... tell the truth because I'm sure they know anyways."
The former employee referred to the government's search in April of Sorich's City Hall office and the fact that agents probably had seized typewritten lists of hires and promotions of politically connected employees.
"You don't know if they [the lists] were destroyed?" the former employee asked. "That leaves us ... wide open on that one."
Sorich allegedly replied, "Yeah," and later added, "I wish I could have been of more comfort to you."
The system detailed by prosecutors involved four existing departments: Streets and Sanitation, Water Management, Aviation and Transportation.
Except for the Police and Fire Departments, the three city departments that employ the most workers are Streets and Sanitation, Water Management and Aviation.
Those departments are rich in well-paid blue-collar jobs. Motor truck drivers, who are mentioned in the criminal charges, are paid $25.90 an hour. Many also get thousands of dollars more in overtime each year for clearing snow.
The idea that clout played a central role in who got such jobs was an open secret for years, Chicago political insiders said. But Ald. Joe Moore (49th) said Monday's charges would "send shock waves through City Hall."
"This will certainly change the way business is conducted in the city," Moore said. "We have had promises by this mayor and his predecessors that the patronage is going to end for the last 30 years. Now we are entering a new phase that has resulted in a criminal case that I think will finally put an end to all of this."
Tribune staff reporters Laurie Cohen, Todd Lighty, Ray Gibson and Delroy Alexander contributed to this report.