Mistake Cost City $288,932 in Gas Bills

For nearly three years, the cash-strapped City of Chicagomistakenly paid gas bills totaling $288,932 for the privately ownedInternational Amphitheatre, city officials admitted.

Law Department spokeswoman Andrea Brands said city lawyers madeno legal effort to recover the payments "because documents needed topursue a lawsuit are missing from the files. They disappeared."

The gas bill payments started in December, 1986, when theDepartment of Streets and Sanitation rented part of the amphitheatrefor overnight parking of snowplows and salt spreaders. Although theparking arrangement ended four months later, the city continued topay gas bills until 1990.

Savings to the amphitheatre from the payments exceeded by$38,000 the $250,000 purchase price paid by real estate investorsLouis Wolf and Kenneth Goldberg when they bought the deterioratingexhibition hall at 4200 S. Halsted at auction in 1984.

But Wolf and Goldberg said they knew nothing of the citypayments. They said the former amphitheatre operator, Sam Frontera,who is in federal custody on drug importation charges in Florida,would have been the one who benefitted from erroneous city payments.

Also, the Streets and Sanitation official who is shown on PeoplesGas Co. records as having given telephone authorization for the citypayments said he never made such a call.

A Cook County grand jury is investigating the payments, aspokesman for State's Attorney Jack O'Malley said.

Brands said the Daley administration "inherited" the erroneouspayments and "put a stop to them as soon as they were discovered. Wewere blameless in all of this."

That was questioned by machinist James Mulligan, a Streets andSanitation Department worker who said he encountered the strangepayments in February, 1990, and attempted to have them stopped. Hesaid that three weeks after he reported the payments to his bossesand pushed hard to stop them, he was removed from his post as acitywide troubleshooter. Mulligan was transferred, withoutexplanation, to the city's North West Incinerator.

Mulligan said that after his superiors repeatedly refused toexplain his transfer and instead targeted him for discipline, he toldthe city inspector general's office that he thought he was beingharassed because he reported the gas bill payments and urgedaggressively that they be stopped.

Terry Levin, Streets and Sanitation spokesman, said Mulligan"doesn't know all the facts" and that his charges of retaliation are"ridiculous."

Levin said Daley administration officials, examining Streets andSanitation expenditures, discovered the gas bill payments in early1990. According to Levin, when no explanation for the payments couldbe found, Mulligan was sent to the amphitheatre to check the gasmeter. But Mulligan said: Nobody explained why he was assigned to check the meter. He saidthat when he learned of the city payments from the gas company andasked Peoples Gas to end them immediately, the Daley administrationalready had been in office for nearly 10 months and had taken noaction. It took his department nearly three weeks, under prodding byMulligan, before a required cutoff letter was sent to Peoples Gas.The gas bill was nearly $20,000 a month at that point.

In explaining the city's decision not to take legal action torecover the money, Brands said that in October, 1990, after Streetsand Sanitation had unsuccessfully asked the gas company for a$288,932 refund, city lawyers began exploring the possibility ofsuing someone to get back the money. But Brands said the city didnot sue because documents from the administrations of Mayors HaroldWashington and Eugene Sawyer, which the city would have needed toprove its case, "couldn't be located anywhere."

She said the only document Daley administration personnel couldfind was a partly illegible copy of the first page of the$15,000-a-month truck parking lease. "With just that, we'd have beenthrown out of court on any claim for repayment. . . . We wouldn'thave gotten to first base," she said.

Levin said a Streets and Sanitation financial control officer,who gas company records show gave permission by telephone for thecity gas bill payments, "denies he ever made such a call. His jobwould have had nothing to do with such arrangements."

He said Streets and Sanitation aides attempted to questiondeparted Washington and Sawyer administration officials about themissing documents and the mysterious payments. "Those inquiries werenot fruitful," he said.

John J. Halpin, commissioner of Streets and Sanitation from 1985until March, 1989, said nobody ever questioned him.

He said he had helped arrange the truck parking lease, "but Idon't remember anything about gas bills, and I had no idea any suchpayments continued after the lease stopped."