The Chicago Park District’s inspector general has recommended firing 25 employees caught in an investigation of loans they got from the federal Paycheck Protection Program.
In a new report, interim Inspector General Alison Perona said an ongoing investigation by her office has grown from 26 cases involving employees who got the loans to help business owners struggling during the coronavirus pandemic to “sustained findings” against 114 workers as of June 30.
Those employees included:
- Six “who admitted they did not own the businesses claimed in their loan applications.”
- Fifteen who admitted getting PPP loans but “failed to cooperate” with the inspector general’s investigation or “did not validate ownership of the claimed business.”
- Four who refused to cooperate.
Perona recommended firing those 25 employees. As of the end of last month, 11 had been fired, and four more had resigned or retired. The other 10 were awaiting disciplinary hearings.
“Employees are expected to be trustworthy, honest, act as guardians of public property and act in the best interests of the district, the patrons and the city of Chicago,” Perona said in her report.
She wrote that PPP fraud “calls into question the employees’ character, honesty and fitness to serve as park district employees,” even though the investigation doesn’t involve their work for the agency.
Perona couldn’t be reached Thursday. Her deputy inspector wouldn’t comment.
In a written statement, top park district officials said that, among the agency’s 3,000 employees, which includes 500 summer workers, “The actions of a small number of wrongdoers do not represent the majority of our dedicated workforce.”
The inspector general also investigated 83 seasonal park district employees. All have been placed on the agency’s “do not rehire” list or have had a hold placed against any future applications to work for the park district again.
Another six employees who were investigated got valid loans but failed to obtain required approval for outside employment. They were reprimanded.
The investigation began late last year with an anonymous complaint to the inspector general’s hotline.
The “purported” businesses that received PPP funds included “livery, beauty salons, mobile catering, etc.,” the report said.
The park district is one of many Chicago-area governmental bodies with employees who have come under scrutiny over loans from the massive federal PPP initiative.
City Hall inspector general Deborah Witzburg said Thursday she is continuing to investigate possible PPP fraud among police officers, firefighters and other city workers, responding to tips and conducting a “proactive data analysis.” She would not say what she’s found so far.
Earlier this month, interim Cook County inspector general Steven Cyranoski reported that at least 25 county workers, including some high-ranking officials, were found to have stolen more than $700,000 from the COVID-relief loan program. They got loans ranging from about $20,000 to $80,000, which were forgivable, meaning they didn’t have to repay the money in most cases. They spent the money on everything from homes and cars to a wedding, Cyranoski found.
Other pandemic relief programs also have been hit hard by fraud, including Illinois’ unemployment benefits program, which had $5.4 billion in “overpayments” from fiscal year 2020 to 2022, according to a report the state auditor general released Wednesday. The overpayments were due to fraud and mistakes: Some of the money went to dead people, the report said.
The federal $800 billion PPP program was a free-for-all for fraudsters, according to experts.
University of Texas professors studying PPP fraud have found that Cook County was an epicenter for fraud, with a “suspicious loan rate” of more than 35% — far higher than in New York or Los Angeles.
Earlier this year, the Chicago Sun-Times found clusters of people with addresses in homeless shelters were getting PPP checks for businesses that were likely fictitious. And, according to law enforcement sources, gang members used PPP checks to buy guns, believed to have been a contributing factor in the violence during the pandemic.
Dan Mihalopoulos is a WBEZ reporter. Frank Main is a Chicago Sun-Times reporter.
