The firm that manages Chicago’s privatized parking meters has put an executive who fell under federal scrutiny on administrative leave.
The Chicago Sun-Times first reported that federal agents have been investigating the LAZ Parking executive on allegations he took kickbacks to steer a contract for meters in Chicago to a favored company. The FBI filed an affidavit in February to search two email accounts tied to the executive, who called the allegations “news to me” and declined to comment when a reporter first contacted him.
“The employee has been placed on administrative leave effective immediately while the matter is being investigated internally,” LAZ Parking Chairman & CEO Alan B. Lazowski said in a statement.
The executive allegedly received $90,000 in bribe payments to steer the contract for parking meters in Chicago, which produced gross revenues of $22 million and monthly service fees, according to the affidavit.
The Sun-Times is not naming the executive because he has not been charged.
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The feds say the businessman who paid the bribe is a cooperating witness charged with paying a bribe to an official in another city on another parking meter deal. He is not named in the affidavit, but the feds wrote that he was president and CEO of a company that landed a contract to supply parking meters to Chicago Parking Meters LLC, the consortium that landed the 75-year deal to privatize Chicago’s meters.
Those details appear to fit the case against George Levey, whose Cale Parking Systems USA Inc. provided parking meters to Chicago Parking Meters LLC. Federal prosecutors in Oregon accused Levey last year of bribing a Portland official and paying for his travel, golfing green fees and strip clubs in return for help landing parking meter deals. Levey’s attorneys filed a plea agreement in Oregon in late April.
The feds say the alleged scheme unfolded as Chicago’s plan to privatize its parking meters began taking shape near the end of 2008.
The LAZ executive and the CEO cut a deal in a Florida restaurant, according to the affidavit. The LAZ executive allegedly gave the CEO inside information about the criteria used to pick a supplier for Chicago’s parking meters. A three-member panel that included the LAZ executive then selected the CEO’s company.
In October 2009, the wife of the LAZ executive allegedly created a shell company to receive the “bribe payments,” according to the affidavit. Over three months in 2010, the feds said the parking meter supplier’s company made four payments totaling $90,000 to that shell company. But it apparently wasn’t enough.
In July 2011, the LAZ executive’s wife allegedly wrote an email to the CEO that read: “Hi George. Do you need me to send you an invoice for 2011?”
The CEO believed she was asking for more money, according to the affidavit. But by then, the contract had apparently turned out to be far less lucrative than expected. So the CEO wrote to the LAZ executive, “You and I will need to meet,” according to the affidavit. He allegedly complained that Chicago Parking Meters had “hammered us down in all areas” and eventually concluded, “a fair payout may have already happened.”
The LAZ executive then allegedly tried to set up a meeting. But two weeks later, the CEO wrote back to offer a “reality update” and complain about changes to the original deal, according to the FBI.
“Obviously I am making this statement because the fee issued last year in my opinion is quite fair as a full payment,” the cooperating witness allegedly wrote.
The feds showed up to search his office shortly after he sent that email, according to the affidavit. The raid generated some publicity.
And the LAZ executive did not respond.