"O'Hare vendor called minority front"

Wednesday, March 16, 2005

City accuses O'Hare firm of using minority front 
BY FRAN SPIELMAN
The Chicago (IL) Sun-Times


The Daley administration Tuesday accused an O'Hare Airport concessionaire
purportedly owned by an African-American of being a "front" for Panda
Express and its clout-heavy partner: Tony Rezko, a chief fund-raiser for
Gov. Blagojevich. 

Crucial Inc. could lose its certification as a minority-owned business that
gives the company a leg up on city contracts -- and ultimately could be
barred from doing business with the city for the next three years -- if City
Hall can prove its allegation that Panda was calling the shots. Crucial
holds a 10-year concession agreement to operate Panda Express restaurants at
O'Hare. The deal expires May 31, 2009.

Who's really in charge?

Crucial's president is listed as Jabir Herbert Muhammed, former manager of
the fighter Muhammad Ali and son the late Nation of Islam founder Elijah
Muhammad. But City Hall contends it was Panda Express -- and presumably
Rezko, the California company's partner in more than 50 Panda Express
restaurants -- who were really calling the shots.

An affidavit filed by the company in 1997 listed Rezko as chief executive
officer of Crucial Inc. The company's current file with the city shows "some
relationship" between Rezko and Crucial, though it's unclear what role he
now plays, according to First Deputy Procurement Officer Lori Lightfoot.

"The ordinance requires that a minority not just own, but actually control
and operate the business day-to-day. We found evidence in the file that
suggested that was not the case with Crucial. In areas like determining the
cost for services, marketing of goods and services and contract
negotiations, there was information that suggested that another company --
namely Panda Express -- was essentially running the day-to-day operation,"
Lightfoot said.

"In 2003 and 2004, Crucial filed with us a 'no change' affidavit, which in
effect said the ownership as previously indicated to us -- at least 51
percent minority -- was unchanged. Those 'no-change' affidavits contradict
other evidence that's in the file -- like these admissions of who is running
the day-to-day business."

15 days to respond

Crucial Inc.'s status as an Illinois corporation in good standing appears to
have been revoked by Illinois Secretary of State Jesse White, according to
the office's Web site. There was no immediate explanation. 

Neither Muhammed nor any other official at Crucial could be reached for
comment. 

The company has 15 days to supply "written evidence" -- including tax
returns, bank statements and distribution agreements -- to refute the city's
allegations. If the evidence is deemed insufficient or if Crucial fails to
respond within 15 days, the company will be stripped of its minority
certification and could be barred from doing business with the city for
three years.

A spokesman for Rezko Enterprises LLC, who asked to remain anonymous, was
taken aback by the city's broadside.

"This was news to us. Obviously, we're taking this very seriously and will
respond to the city promptly," the spokesman said.

Sun-Times filed for information

Rezko and Christopher G. Kelly are investors in a restaurant company with
ownership in 50 Panda Express restaurants. Panda Express is also part of an
$83 million oasis makeover on the Illinois Tollway, but the oasis
restaurants are owned exclusively by Panda founder Andrew Cherng, his wife
and three daughters. 

Earlier this month, Panda's general counsel, R. Michael Wilkinson, implied
in a letter that Panda was perturbed by insinuations that Rezko's or Kelly's
influence with Blagojevich helped the company land potentially lucrative
oasis restaurants.

The city's action Tuesday comes about three weeks after the Chicago
Sun-Times filed a Freedom of Information request for the city's files on
Crucial. But Lightfoot denied the request prompted the city to act against
Crucial Inc. She insisted the crackdown was part of the "total scrubbing" of
Mayor Daley's scandal-ridden minority contracting program promised by Acting
Chief Procurement Officer Mary Dempsey.

"We've been looking at every single company certified [as MBE or WBE].
That's 2,400 or 2,500 files. We said we would do a top-to-bottom review of
every single company in the program. This was discovered in the course of
our normal review," Lightfoot said.

Crucial is the second O'Hare contractor purportedly owned by a minority or a
woman to be stripped of its certification. 

Billy Goat lost status

Earlier this year, City Hall removed Billy Goat IV's women's business
enterprise certification. Billy Goat owner Sam Sianis initially claimed a
city official told him to scratch out his own name and leave his wife's name
on the O'Hare liquor license to cash in on the city's minority set-asie
program.

One week later, Sianis changed his story. He told the Sun-Times, "Nobody
said that to me: cross my name out. Everything from the beginning was in the
wife's name. She's the owner of the O'Hare Airport [restaurant]. Not me.
Just the wife. Everything in the wife's name. The lease -- everything. The
full responsibility to the wife. She is the real owner."


 Do you have an opinion about this story?
Share it with other readers in our CAA Discussion Forums

http://www.californiaaviation.org/dcfp/dcboard.php


*****************************************