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Sheriff's deputies, auditors descend on Harvey's city hall

Friday, March 21, 2014
Chicago Tribune
by Matthew Walberg

Cook County sheriff’s deputies and officials with the state comptroller’s office descended on Harvey’s city hall this morning to comb through financial records in an effort to enforce a watchdog law long-ignored by the scandal-plagued south suburb.

The action comes on the same day the Tribune reported on questionable insider deals in Harvey happening as its appointed comptroller warned that the suburb was heading toward financial ruin.

The deals included $88,000 to a firm tied to the mayor’s son for social media work — the quality of which experts questioned.

That followed a series of Tribune articles in February that documented how Harvey has become arguably the most lawless community in the region, reeling from the effects of high violent crime rates, subpar policing and shaky finances amid ineffectual or non-existent oversight from state and federal authorities.

That included the suburb failing for years to follow a law -- enforced by the state comptroller -- that requires cities and villages to perform yearly audits.  Under state law, if a town doesn’t complete its audit, the state comptroller is allowed to hire auditors to do it and bill the town for the work.

About 10 a.m. today, four sheriff’s vehicles arrived at the south suburb’s aging city hall,  joined by an SUV and a minivan with state plates. About a dozen people from the vehicles entered the city hall and walked into the office of the city clerk, an elected official whose job includes keeping and tracking the city’s records.

Brad Hahn, spokesman for State Comptroller Judy Baar Topinka, told the Tribune that representatives from the comptroller’s office joined the deputies at Harvey’s city hall "to assist the city with its financial reporting."

He would not say whether its office would review any of the insider deals profiled in the newspaper. He said the agency was limited in what additional details it could give, repeating what it had told the Tribune earlier: that there was an ongoing investigation to which they’ve already forwarded some records.

The comptroller’s office has declined to elaborate on the investigation, or say if it is related to an investigation by the U.S. Securities and Exchange Commission on a failed development deal previously exposed by the Tribune that enriched the town’s comptroller while costing taxpayers $10 million.

Mayor Eric Kellogg was seen going into the city hall about 15 minutes after deputies and auditors arrived. Kellogg said through a spokeswoman that officials had a "very productive meeting with the state's Comptrollers Office this morning." "We appreciate the assistance of the comptrollers office in assisting us as it relates to becoming current with our financial reporting requirements," the mayor said.

Deputies and auditors left at about 11:15 a.m. The move by Sheriff Tom Dart and Topinka comes seven years after another high-profile unannounced visit by outside authorities, that time armed with subpoenas. Then, deputies were joined by county prosecutors and state police seeking evidence that had long been ignored by Harvey police to arrest killers and rapists.

But while authorities have previously looked inside Harvey’s police department, none have publicly examined its finances. Dart, long critical of Harvey’s policing, has been looking for a way to get a peek at Harvey’s books.

After the Tribune series in February, he pushed county board members to enact an ordinance that would allow him to act as the inspector general for suburbs that failed to file audits.

But that legislation has run into opposition from suburban mayors and politicians, including Cook County Board President Toni Preckwinkle, who say that it is the state’s responsibility to force audits. It’s unclear what level of access his office will be given to the records reviewed today.

When the state comptroller’s spokesman was asked if the sheriff’s office would also be reviewing the records, the spokesman responded that the comptroller’s office would be using its own accountants.

"Our auditors will be reviewing City financial records and working to bring Harvey into compliance with state reporting laws. If the auditors find financial impropriety, that information will be turned over to the appropriate law enforcement agency," Hahn said in an email.

Harvey is four years behind on the audits, making it difficult -- if not impossible -- for outsiders and residents to get a clear grasp of the city’s financial health. Records obtained by the Tribune suggest the city is nearly insolvent — borrowing big in recent years yet still spending millions more than it took in, while starving its pension funds and stiffing the City of Chicago on water that the suburb purchased and resold.

Chicago has sued Harvey. Records show Chicago is owed $18 million for unpaid water bills, about the same amount Harvey takes in from taxes and fees in an entire year.

But Kellogg has bristled at the idea of outside intervention.

Last year Dart offered to act as the city’s inspector general -- an offer eventually made to other suburbs. The Harvey mayor declined the request, calling it "political posturing."

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