The New York developer that resurrected Chicago’s abandoned main post office now finds itself in the middle of two blockbuster political corruption cases.
Three years ago, the Chicago Sun-Times reported the developer, 601W Companies, was cooperating in the federal investigation of Ald. Edward M. Burke, who authorities later said had bullied the company to hire his law firm to lower the property taxes on what’s been branded the Old Post Office, which straddles the Eisenhower Expressway downtown.
601W also plays a role in this month’s indictment of former Illinois House Speaker Michael J. Madigan, who’s accused of pressuring the company to hire his law firm to win property tax cuts on other properties it owns in Chicago.
The two Southwest Side Democrats — once among the most powerful politicians in Illinois – have been charged in related but separate cases with using their political muscle in efforts to enrich their law practices.
In court filings, federal authorities have identified the developer only as “Company A.” But the Sun-Times confirmed that 601W is at the center of both cases.
According to court records, authorities say Burke and Madigan each leaned on former Ald. Danny Solis — who was secretly making audio and video recordings of their conversations while working as an FBI mole — to pressure the New York developer to hire their firms.
601W, which hasn’t been accused of any crime, says it didn’t know that.
“601W Companies and its representative were completely unaware of the alleged secret scheme between former Ald. Solis and Speaker Madigan to steer property tax work to Madigan’s law firm in exchange for a salaried appointment to a state board for Solis,” a written statement from the developer says. “The company and its representative have and will continue to fully cooperate with federal law enforcement authorities.”
It says it never paid Burke or Madigan for any tax work on any of its buildings in Chicago.
After the Burke indictment was made public nearly three years ago, 601W said it was the victim of a corrupt solicitation by Burke.
Prosecutors and Madigan’s lawyers won’t comment. Burke’s lawyers didn’t return calls.
On the same day — Oct. 9, 2018 — Solis spoke with the developer on behalf of both Madigan and Burke, according to court records.
According to investigators, Madigan asked Solis to call the developer that day, and Solis also ended up talking about Burke, who wasn’t satisfied with representing only one of the developer’s Chicago properties.
“So then Burke called on, he’s looking at both of them now,” Solis said, according to an FBI affidavit documenting the phone call.
“That’s my understanding,” said a 601W representative whose name was blacked out in the court documents.
The developer’s representative said he had agreed to hire Burke for one of the buildings, prompting Solis to say, “And he wants another one, wow, wow.”
It’s unclear from the records whether Burke and Madigan were aware of each other’s efforts to solicit legal work from 601W.
Less than two months after that call, federal agents raided Burke’s City Hall offices, seizing records including a file on the Old Post Office.
Then, in January 2019, the Sun-Times broke the story that Solis had been wearing a wire on Burke and others at City Hall.
According to prosecution court filings, Burke sent the developer an agreement calling for his law firm Klafter & Burke to be paid $5,000 a year for three years to try to lower the property taxes on a Chicago building. Which building it was has been redacted in the records.
On Oct. 26, 2018, Solis told Madigan that 601W had agreed to hire his Madigan & Getzendanner law firm, according to the records, but Madigan’s firm never ended up getting work from the company.
During that meeting, Madigan was recorded saying he would help Solis get an appointment to a state board.
The developer’s Chicago portfolio includes the Aon Building as well as other major downtown buildings, including the former Carson Pirie Scott department store designed by famed architect Louis Sullivan.
Madigan and Burke had represented some of those properties before 601W bought them. The company has used other firms to appeal its taxes, county records show.
601W’s main claim to fame in Chicago is the revival of the old main post office, a seven-story Art Deco building whose 2.5 million square feet remained vacant for two decades. Now, the building is home to offices for Uber and companies including Ferrara Candy Company and Walgreens.
That was made possible by $118 million in tax breaks authorities say Burke threatened to block unless 601W hired his law firm to handle property tax appeals for the building.
The company had hired another law firm, but prosecutors said Burke pushed until 601W hired his firm for one of its other Chicago properties and that he voted to give 601W the tax breaks without disclosing his ties to the company on the “statements of economic interest” he filed with the Chicago Board of Ethics.
