Patrick Daley Thompson singled himself out for federal prosecution
He should have known he shouldn’t be playing in certain sandboxes. Washington Federal Bank for Savings was such a sandbox, a playpen for scoundrels.
Ald. Patrick Daley Thompson’s defense lawyer Chris Gair never outright said in his closing argument Monday that he believes his client was singled out for federal prosecution because he’s a member of the Daley family, although he definitely left that impression.
It would be understandable if he believed it, even understandable if Thompson and all the other members of the Daley family believe it. I can’t discount the possibility.
But being a Daley, with all that means, both good and bad, Thompson also should have known he shouldn’t be playing in certain sandboxes.
Washington Federal Bank for Savings was such a sandbox, a playpen for scoundrels. As a result, Thompson is now the first member of his august family with a federal criminal conviction — handed down by a jury Monday afternoon.
Washington Federal was the odd bank where its since-deceased president John Gembara had the unusual habit of giving out money with no paperwork and no apparent expectation of seeing it repaid, with the eventual result that the Federal Deposit Insurance Corporation had to step in with public funds to clean up the $90 million mess.
As a result, federal investigators didn’t need to target Thompson. They dug into a failed Bridgeport bank and found him there with the rest of the people with their hands in the cookie jar. Pardon me for switching metaphors. A person can get their hands dirty either way.
In addition to a $110,000 loan on which Thompson had only ever made one payment in seven years, investigators discovered he had received separate payments from the bank of $20,000 and $89,000, money that the alderman claims to have forgotten about even though he needed one check to pay off an IRS lien and the other to clear up a foreclosure on a loan from another bank.
They also found he was claiming tax deductions each year for the interest payments he wasn’t even making on his “loans.”
And yes, no doubt the Daley family name caught the eye of those investigators, too, as well as the fact Thompson is an elected official.
The larger picture of the bank failure was not at issue in Thompson’s trial, but it provides important context for the rest of us, just as the rest of us are allowed to take note of the reasons Thompson needed the money from Washington Federal even though the judge believed it would be too prejudicial to bring out at trial.
Banks like Washington Federal pop up on the Chicago scene every decade or two. The insiders find out about them first with the wise guys often at the front of the line for the loans that never get repaid. Sometimes the politicians also catch the scent of easy money.
I’m most familiar with the scandal at Cosmopolitan Bank, now three decades old, where bank President James Wells ran a once-thriving bank into the ground with loans to his hoodlum friends, also making a loan to the trucking business of then-state treasurer Jerry Cosentino, who happened to have placed state deposits in Wells’ bank. They both earned federal convictions.
Failed banks don’t always prompt such a vigorous response from federal prosecutors, and so I am appreciative that this one has.
Fourteen other people have been charged so far in connection with the failure of Washington Federal, which regulators shut down in 2017. More cases are expected, hopefully exposing more of the individuals who like Thompson took advantage of the situation.
For all the great investigative reporting work done on this story by the Sun-Times’ Tim Novak and Robert Herguth, there’s still so much we don’t know about what was going on at that bank, such as what the pressures were on Gembara that caused him to make such poor business decisions.
I wasn’t in the courtroom during the Thompson trial as I would normally have preferred, instead following it from afar via news reports. From that distance, I will concede that Gair, the defense attorney, raised some doubts about Thompson’s intent, even if I didn’t find them persuasive.
Whatever his alleged inattention to detail, I don’t believe for a second Thompson didn’t know he owed the larger amount of money or that he merely overlooked the fact he was taking a tax deduction to which he was not entitled. Sure, the amounts were relatively small. That will be a factor in his favor at sentencing.
When Thompson was indicted last April, I wrote that it was the end of the Daley political dynasty, or at least the beginning of the end, which in retrospect was jumping the gun. I do that on occasion.
Now that he’s convicted, all I can predict for sure is that he won’t be making good on his aspirations to follow in the footsteps of his grandfather Richard J. Daley and uncle Richard M. Daley. Be grateful for that.