In the midst of a secret negotiation in August 2016, Dixmoor’s former mayor warned a developer that a key property in Harvey had “a zillion taxes owed on it,” according to the FBI.
“Those taxes ain’t gonna go away,” Donald Luster allegedly said that day. “But I can get those taxes to go away. See, this is how I make money.”
In fact, the feds suspect Luster — who worked at the time as an “administrative consultant” to Harvey Mayor Eric Kellogg — agreed to take a $100,000 bribe to convince Kellogg to condemn that property, wipe its taxes and offer it to the developer’s client.
That allegation is contained in a 49-page search warrant application unsealed Wednesday in federal court. Filed last July, it reveals that an embattled former Harvey comptroller, now deceased, agreed to cooperate with the FBI and record conversations with Luster and others between March and August of 2016.
The ex-comptroller is not identified by name, but information in the affidavit points to the late Joseph Letke, whose suicide may have tipped Luster and others off to the ongoing investigation, which also involved surveillance of the Harvey municipal complex.
In a statement, Harvey’s law department said it had not seen the document but it takes “all allegations seriously. The mayor will fully cooperate.”
Luster could not be reached, and a developer named in the document declined to comment. No criminal charges appear to have been filed against Luster, Kellogg or the developer.
Representatives of the FBI and the U.S. Attorney’s office also declined to comment.
The document notes that Luster left office in Dixmoor in 2004 after a conviction for state benefits and income tax fraud.
It quotes Luster at length bragging about his sway at Harvey City Hall. He allegedly called it “influence” — and stopped short at one point of calling it “control.” An FBI agent also wrote that even though Luster’s company, Real Municipal Solutions, was paid $200,000 in 2015 and 2016 as a consultant by Harvey, Luster sought bribes that were thinly veiled as consultant fees.
“I’m in this to make money,” Luster allegedly told a developer. “I don’t have a problem helping you guys make money and giving you guys your incentive, but that’s one of the benefits of being able to utilize the skill set that I have . . . is if I can save you three million in taxes, that should be worth something to you.”
Much of the document revolves around attempts to turn a property along South Dixie Highway into a paintball park or a transportation hub. In a May 2016 conversation, one developer was told that Luster had the city’s ear. The developer allegedly replied, “What do you want to kick him?”
After the comptroller’s death, the feds say they received a voicemail from a family member who said she knew he had been working with the FBI. And as of last summer, an agent wrote that investigators “have not seen any actions taken” on the property.
They suspected there was “a fair probability” that development stalled when people learned about the FBI investigation.