Chicago mayoral candidate releases tax returns, shows unstable financial condition

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The candidate, who first said on Monday that she wouldn’t make public her tax returns like the two other candidates “because I don’t want to,” on Tuesday provided them to the Chicago Tribune. It’s now a bit easier to understand why she wouldn’t want to.

She initially refused to release her income tax returns in the race for mayor of Chicago.

Carol Moseley Braun, the former U.S. senator from Illinois and former ambassador to New Zealand, showed income of $15,000 in 2009 and a loss of $225,000 in the previous year. She only provided a portion of the returns, making it difficult to understand how the numbers were derived.

Moseley Braun paid no income taxes in either year.

In running for mayor of Chicago, Moseley Braun has frequently touted her business acumen, even though it appears that she is struggling to operate the small coffee and tea import business, Ambassador Organics, which she started in 2005. A spokesman for the business, Kevin Lampe, said that Moseley Braun has been a hands-on manager.

Moseley Braun’s financial troubles were also recently reported in the Tribune, which reported that she had paid her property taxes late, and had taken out an additional mortgage on her home to do so.

She is now attempting to sell the house. Braun, in a statement said that the tax returns “are one measure of the fight I have waged to keep my business running. It is not unlike what many small business owners and regular Chicago families are going through.”

The other two candidates, former White House Chief of Staff Rahm Emanuel and Chicago City Hall insider and lobbyist Gery Chico, have already made their returns public.

According to records released by Emanuel, he and his wife made nearly $2 million over the last five years and paid more than $300,000 in taxes. The bulk of his earnings came from a blind trust.

Chico’s returns showed an even larger amount of income than Emanuel. In 2009, he and his wife, a school consultant, made $2.6 million; in the previous year, they earned $2.9 million. According to their tax returns, they paid taxes of $830,000 in 2009 and $900,000 in 2008.

The Chicago Tribune

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Chicago mayoral candidate refuses to release tax returns because “I don’t want to”

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Update: After a wave of sharp criticism from the public, press and opponents, on Monday evening Carol Moseley Braun backtracked on her earlier statement refusing to release financial records,  and agreed to make public two years of tax returns.

The candidate suggested earlier that she may have delayed paying some taxes, as a result of financial difficulties with a company she runs, Ambassador Organics, a small coffee and Tea company. Moseley was previously ambassador to New Zealand from 1999 to 2001.

Original story:

Carol Moseley Braun, a leading candidate for mayor of Chicago, said today that she won’t make her tax returns public, after both other candidates already did so. Asked why she wouldn’t release them before the Feb. 22 election, she simply said “Because I don’t want to” according to the Chicago Tribune.

She refused to release her income tax returns in the race for mayor of Chicago.

Braun made the statement at a press conference where she blasted the 2008 deal to lease the city’s parking meters for 75 years to a private company for an upfront payment of $1.2 billion. She claims that the city was ripped off and promised to undo the deal if elected mayor.

“There is law, casebook law up the wazoo about what happens when you get ripped off like that,” Moseley Braun said.

The other two candidates, former White House Chief of Staff Rahm Emanuel and Chicago City Hall insider and lobbyist Gery Chico, have already made their returns public.

According to records released by Emanuel, he and his wife made nearly $2 million over the last five years and paid more than $300,000 in taxes. The bulk of his earnings came from a blind trust.

Chico’s returns showed an even larger amount of income than Emanuel. In 2009, he and his wife, a school consultant, made $2.6 million; in the previous year, they earned $2.9 million. According to their tax returns, they paid taxes of $830,000 in 2009 and $900,000 in 2008.

Moseley Braun said she won’t release the return unless she makes it to the April 5 runoff election.

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Detroit grand jury indicts former mayor Kilpatrick’s fraud and corruption ring

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A 17-member federal grand jury indicted former Detroit Mayor Kwame Kilpatrick, his father Bernard Kilpatrick, former mayoral aide Derrick A Miller, Kilpatrick close friend Bobby Ferguson and former Detroit water chief Victor Mercado.

The U.S. Attorney’s Detroit office announced the 38-count indictment, charging the group with racketeering conspiracy and accusing them with extortion, bribery and fraud. “Tens of millions of dollars of municipal contracts” were steered to Ferguson using coercion exerted by Kilpatrick’s office.

Kwame Kilpatrick, Detroit's mayor from 2002 through 2008, is currently serving time in a federal prison for violating parole in another case.

Ferguson is a close friend of Kwame Kilpatrick and a hauling and construction contractor. He was previously indicted in September on charges of bid-rigging a $12 million contract connected to a HUD affordable housing project in the Detroit area.

The government brought charges under the Racketeer Influenced and Corrupt Organizations Act which makes it easier to sue interconnected entities in complex cases. A RICO case, often used in instances of organized crime, also provides harsher sentencing provisions and recovery of triple damages.

The FBI said that it has been investigating the case for six years, and alleges that some of the corruption can be traced back to when the younger Kilpatrick was a state representative, prior to his election as mayor in 2001. The FBI says that its investigation of the Kilpatrick-era city hall corruption is not over.

Besides the FBI, other agencies involved in the investigation include the criminal division of the IRS, the U.S. Environmental Protection Agency and Department of Housing and Urban Development.

Bernard Kilpatrick was involved in the corruption schemes through a consulting firm, Maestro Associates LLC, that he started around the time his son was elected mayor. He was part of the team including Kwame Kilpatrick, Derrick Miller and Victor Mercado that regularly extorted monies from legitimate contractors involved in city sewer and water main work, often steering a portion of the contract to pal Bobby Ferguson. In some cases, Ferguson received big fees for doing no work at all.

The government alleges that Ferguson kicked back over $420,000 to Kilpatrick and his father Bernard, and said Bernard Kilpatrick deposited more than $600,000 in cash into his personal bank accounts while his son served as the mayor of Detroit from 2002 through 2008.

Most of the contracts were valued in the tens of millions of dollars, although the men tried to extort a company into giving Ferguson a large piece of a $140 million contract for a new pumping station. The group also worked together in instances of rig-bidding, so that Ferguson would be guaranteed contract wins by manipulating the bidding process.

Kilpatrick resigned from office in 2008 after being charged with 10 felonies, including perjury, misconduct in office and obstruction of justice. He pleaded guilty to lesser charges and served 99 days in jail, but was sent back for violating the terms of his parole.  He is currently serving time in federal prison in Milan, Michigan.

The Detroit News

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CA mayor arranged secret $500,000 finder’s fee for himself on sale of state buildings

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Update: After the Los Angeles Times ran the story Monday evening on its website, Mayor Miguel Pulido made a quick retraction and said, “I now believe there’s no hope that I will receive any money for this transaction under any circumstances.”

The consortium that is in the lead to buy the buildings, California First LLC, said through a spokesman “”I have spoken to a number of principals, none of whom are aware of this mythical fee that he speaks of. I don’t know what he could have done to earn $10 much less half a million.”

Pulido had contended that he was acting as a “private citizen” in the transaction, and was “proud” of his involvement in the transaction. His attorney, Frank Barbaro, had told state Treasurer Bill Lockyer that Pulido was expecting the $500,000 fee, and Lockyer had disclosed it in a deposition.

Los Angeles Times

The latest troubling news to surface in connection with the proposed sale of 24 state-owned buildings that the State of California is looking to sell is that the mayor of Santa Ana is expecting a $500,000 finder’s fee in connection with the transaction. According to Mayor Miguel Pulido, the prospective buyers came to him for help because, in his words, “I just know a lot of folks.”

It’s not clear who is paying the fee, but Pulido has confirmed its existence and said that he was entitled to it because he introduced some of the parties in the transaction to each other.

This state-owned property, the Ronald Reagan building, is part of the proposed sale, that would cash in long-term assets, to solve immediate budget problems. Critics say the move is shortsighted, and would cause the state to lose money on the deal.

The sale of the properties has been controversial since it was announced earlier this year. The reason for selling off the state buildings, including the one that houses the California Supreme Court, is that the monies would help with the currents year’s budget deficit. Opponents of the plan call it shortsighted, in that over the long run, the state would be much better off owning the buildings. Critics also feel that the buildings are being sold for less than what they are really worth.

Only three days ago was the finder’s fee first publicly disclosed. A lawyer representing Pulido inadvertently told State Treasurer Bill Lockyer about its existence, and Lockyer revealed it in a deposition for a lawsuit seeking to halt the sale. Pulido’s lawyer confided in Lockyer that his client was worried that he might not receive the fee if the deal was derailed.

Information regarding the terms of the sale has been kept secret, and opponents filed the lawsuit in San Francisco Superior Court to compel the state to reveal the transaction details. The sale has been championed by outgoing governor Arnold Schwarzenegger. According the non-partisan state Legislative Analyst’s Office, the net loss to the state over 35 years would be about $1.4 billion.

Robert Stern, president of the Center for Governmental Studies, said the fee was an “inappropriate” payment for a public official. “He shouldn’t be paid for his connections as a public official,” Stern said. “That sounds like an extraordinary fee. For $500,000, he should have done more than introduce people.”

Los Angeles Times

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