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Alderman's veto power within his ward costs city $800,000

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By Hal Dardick, Chicago Tribune reporter

January 17, 2013

A single Chicago alderman exercising his traditional right to have final say on decisions in his own ward racked up taxpayer-funded legal costs of more than $800,000 in the past four years, records show.

The tab includes legal fees and settlement payments in two federal lawsuits filed against Ald. Robert Fioretti, 2nd, some of his colleagues and the city, as detailed in court and Law Department records. The suits challenged Fioretti's use of aldermanic privilege to stand in the way of two businesses seeking permits in his ward.

Both businesses — the venerable Congress Plaza Hotel and the now-defunct Felony Franks hot dog stand — got their permits in the end, but only after lengthy delays they attribute to Fioretti's decisions.

The city lost the case focusing on Fioretti's refusal to sign off on a sidewalk cafe permit for the Congress Hotel. A judge's ruling in that case for the first time acknowledged the tradition and power of aldermanic privilege, which is neither mentioned nor defined in city code.

And the city is in the final stages of settling the case brought by Felony Franks, which centered on Fioretti's refusal to back a sign permit.

Fioretti, an independent Democrat who often bucked former Mayor Richard M. Daley and frequently votes against Mayor Rahm Emanuel, defended his actions in both cases. The alderman accused the Law Department, where he once worked as a young attorney, of doing too little to defend him and the city.

"For the Law Department to settle the lawsuit the way they did just sells out the taxpayers," Fioretti said of the Felony Franks settlement. In the Congress Hotel case, "they didn't even consult me," he said.

The city paid for attorneys to represent Fioretti in both cases, and took the Congress case to trial. The legal bills for Fioretti alone accounted for $187,000 of the overall costs.

While defending aldermanic privilege, Ald. Joe Moore, 49th, questioned Fioretti's use of the power. "I think my friend and colleague may have pushed the envelope a little too far, and as a result the taxpayers are footing the bill," Moore said.

"I think all of us in the City Council have to be careful when we exercise the powers that are granted to us," Moore added. "Unless those issues pertain to land use or public safety, we need to set aside the beef we might have with regard to particular issues."

The Congress Hotel sued in July 2007 after Fioretti refused requests to go along with a permit for a sidewalk cafe on South Michigan Avenue across from Grant Park. At the time, Fioretti was a new alderman elected with strong backing from unions during an ongoing strike by workers at the hotel.

Before the suit was filed, Fioretti was warned by hotel representatives that blocking the permit because of his alliance with the union was "improper and illegal," according to testimony. Daley also issued a warning of sorts in January 2008, when his planners endorsed a hotel expansion in opposition to Fioretti's wishes — a rare break with aldermanic privilege.

In court, attorneys for the hotel alleged that Fioretti was illegally exercising aldermanic privilege by refusing to sign the permit because of the labor dispute. Federal law barred local officials from interfering with the collective bargaining process, they said.

U.S. Judge Ronald Guzman agreed. He only ordered $1 in damages, however, saying he could not calculate the hotel's loss. But because the city lost the case, it ended up paying legal fees to defend Fioretti, as well as those racked up by the hotel. Those bills totaled $564,175.

Although the city argued that one alderman did not control the process, Guzman concluded that aldermanic privilege had prevailed.

"The City Council had delegated its final policymaking authority to approve or deny these applications to the 2nd Ward alderman via the custom or policy of aldermanic privilege," Guzman wrote, becoming the first judge to acknowledge the privilege.

Fioretti contends he opposed the permit because of the poor condition of the hotel, but Guzman concluded that "the union's desire to end the strike was the primary, if not the only, factor Fioretti considered in deciding to oppose the hotel's sidewalk cafe permit applications." Guzman described Fioretti's testimony in the case as a "smoke screen."

Just a few months before that case ended, small businessman Jim Andrews opened Felony Franks, "home of the misdemeanor wiener," on the Near West Side. At the business, which did not survive, he gave second chances to ex-cons by giving them jobs, a concept Fioretti said he supports.

But the name of the stand did not amuse Fioretti, who said it glorified crime. "It was clear the community did not want Felony Franks" because of the name, he said. "All the churches contacted us to fight that."

Andrews said the alderman told him he would not get permission to put up a sign unless the name was changed. The business owner refused, and after being open nearly two years, he hired a lawyer and figured out how to take his request directly to a council committee.

At a committee meeting in May 2011, Fioretti spoke against the sign permit, laying out his concerns about the name. Although a city lawyer told aldermen that denying the sign because of the name would violate Andrews' right to free speech, Fioretti rallied enough aldermen to prevent approval.

But within a month, after Andrews filed suit, the committee approved the sign on the advice of city lawyers.

The Law Department has since agreed to settle the case with a payment of $50,000 to Andrews and his attorney's fees. Those costs, plus the cost of an outside attorney for Fioretti and the other aldermen who voted against the sign, now stand at $239,491.

Fioretti contends the city was too quick to settle, that Andrews always had the option of going directly to the council with his request. He also said the sign did not fit in with a larger plan for the type of signs in the area, along Western Avenue, where the city has spent $4.5 million to upgrade the streetscape.

Although Fioretti said he told Andrews he could go directly to committee, Andrews says he had to learn that on his own, and only did so long after he suffered significant financial losses that he says were caused in large part by the lack of a sign. Fioretti's opposition, he added, was focused on his restaurant's name.

As part of that settlement, the city crafted new sign permit applications that require an alderman to either approve or reject an application with 60 days. If the alderman doesn't, the request will be submitted by the mayor to the council. Applicants also will be told they can submit requests directly to the council.

Whether that puts limits on aldermanic privilege remains to be seen.

hdardick@tribune.com Twitter @ReporterHal