Feds had corrupt suburban mayor in their sights for decades before charging him, records show

In 2008, longtime Niles Mayor Nicholas Blase pleaded guilty to muscling business owners in the suburb into hiring an insurance agency in Wheeling that secretly gave him hundreds of thousands of dollars in kickbacks.

Now, newly obtained FBI records show authorities were onto Blase, who was also a power in the Democratic Party, long before that.

According to federal authorities, the corruption scheme that Blase went to prison for dated to about 1974 — when Blase already had been mayor for more than a decade and a couple of years after he ran unsuccessfully for Congress against longtime U.S. Rep. Abner Mikva, a liberal icon.

The FBI had Blase on its radar for bribery going back nearly that far, according to Blase’s FBI file, obtained by the Chicago Sun-Times through a public records request.

Few of the 274 pages of documents released by the FBI discuss specifics of that case involving Blase, who died in 2019 at 91.

And some details are blacked out — with the FBI citing reasons for the redactions that included privacy concerns and protecting confidential government sources.

One document, dating from nearly three decades before Blase’s guilty plea, shows agents seeking permission to begin secretly recording conversations they described as being related to “soliciting bribes for the mayor and/or other village officials.”

FBI

“Thirty day authority is requested to utilize an electronic device to record private conversations between [REDACTION] Village of Niles, in connection with a Hobbs Act, corruption of village officials case, in which [REDACTION] is believed to be in a position of soliciting bribes for the mayor and/or other village officials,” according to the document, dated June 6, 1979.

According to the Justice Department, the Hobbs Act “was enacted in 1946 to combat racketeering in labor-management disputes” but ended up being “frequently used in connection with cases involving public corruption.”

Records show the recordings weren’t fruitful at times.

According to an FBI memorandum dated July 10, 1979, “an electronic device was utilized to record one conversation between [REDACTION]. Information obtained from this recording was of no value and did not produce any direct evidence concerning this violation.”

Another document that’s undated but apparently from the late 1970s or early 1980s indicates at least one aspect of the investigation “involves the alleged payoff of Village of Niles officials by individuals seeking the assistance of the village to direct businesses to the shopping centers owned by the individuals paying the bribe.”

Blase wasn’t charged in that case, which was closed with an Aug. 4, 1982, letter to then-U.S. Attorney Dan K. Webb, according to a memo sent by the Chicago FBI’s special agent-in-charge to the FBI director.

FBI

Dated Aug. 25, 1982, the document also says, “Specifically, the Bureau is reminded that Chicago file 194C-161 is a duplicate file which was opened on 10/26/81, as a result of the original file being officially reported to the Bureau as missing.”

“Subsequently, several interviews pertaining to this matter were conducted which failed to develop any further allegations concerning the above subjects.”

Blase is listed in the heading of the memo with others whose names are obscured.

The document says that, on July 27, 1982, a federal prosecutor whose name is blacked out “declined prosecution due to a [REDACTION] and agreed that no further investigation regarding this matter was warranted.”

Blase drew FBI scrutiny again starting in 1996.

According to an FBI document: “The complainant in this matter alleges that Mayor Blaise [sic] supplies” the principal of the Wheeling insurance agency with “a list of new businesses starting in Niles and that a representative . . . solicits business from these companies.”

The customer “gets the picture that they better get their insurance” that way “if they want to avoid problems with different city agencies.”

The insurance agency “sends commission checks to a company controlled by” Blase, according to the 1996 document.

That case was closed in 2001 “for lack of evidence” but reopened either later that year or in 2002 after a Niles restaurant owner complained he was being shaken down by Blase over insurance, the records show.

That was the investigation that led to criminal charges being filed against Blase in 2006, his conviction in 2008 and his serving less than a year in prison.

He resigned as mayor of Niles in 2008 shortly before pleading guilty to mail fraud and tax charges.

Blase was accused of using his power as mayor to punish or reward business owners based on whether they complied with his demands, with one business owner having been threatened with the revocation of his liquor license if he didn’t hire the right insurance agency, records show.