Chicago Teamster Boss John Coli Indicted for Extortion; Resigns

Among union officials on the corruption radar screen, John T. Coli Sr. long has ranked among the most prominent. But the powerful Chicago-area Teamster boss’s luck finally appears to have run out. Last week, on July 12, Coli, now 57, was indicted by a federal grand jury on five counts of extortion and one count of attempted extortion from a local film production company. During July 2016-April 2017, allege prosecutors, Coli (in photo, on right), as head of Teamsters Local 727, received cash payments from the firm totaling $100,000, threatening economic retaliation if the money was not forthcoming. By no coincidence, Coli announced his retirement from Teamster activity that day, though without mentioning the indictment. A bench warrant for his arrest has been issued, but the date of his arraignment has yet to be set.

Teamsters Local 727 is a longtime Coli family business, a reality that Union Corruption Update explored at length in September 2015. And that business should be seen in the larger context of corruption at the International Brotherhood of Teamsters. Back in March 1989 the IBT settled a civil RICO suit with the Justice Department. The feds had charged that the Teamsters for decades under a succession of general presidents operated as a racketeering enterprise, shot through with embezzlement, fraud, assault and murder, and with enforcement by mobsters. The agreement placed the Teamsters under strict court-approved federal monitoring, and three years later, established a three-person entity, the Independent Review Board (IRB), which would investigate allegations of corruption, issue rulings, and replace guilty officials. Under the microscope were various Teamster affiliates in the Chicago area. That included the Park Ridge, Ill.-based Teamsters Local 727, headed by John Coli Sr., who had inherited his job as secretary-treasurer from his brother, James, who had been removed from office by the feds in 1992. Their father, Eco James Coli, who had amassed an impressive arrest record in his younger days, headed the local until his death in 1982.

Sometime in late 2004 the FBI initiated an investigation of Teamsters Local 727. The action was based on allegations contained in a lengthy report on corruption within the entire union prepared by court-approved IBT ethics overseer Edwin Stier. The audit concluded that the local benefit plans had racked up grossly excessive administrative costs and diverted dental reimbursement funds to racketeering suspects. The FBI probe indirectly led to a private civil RICO suit in November 2011 against Coli, certain family members and the local itself. The plaintiff, SCI Illinois Services Inc., a provider of funeral services, alleged that officials of Local 727 created “a scheme to defraud and extort” money from SCI by wildly inflating the value of scheduled benefit contributions. The evidence looked convincing, but in January 2014 a federal judge dismissed the suit. In a separate case, a Cook County, Ill. judge in July 2015 ruled that Coli and Teamsters Local 700, of which Coli was a trustee, were jointly liable for $2.3 million for breaking the lease of an office building in suburban Des Plaines, Ill.

John Coli has been much more than a local boss. For more than 15 years he also served as president of Teamsters Joint Council 25, which represents more than two dozen Teamster affiliates (including Local 727) and more than 100,000 workers in metro Chicago and northwest Indiana. He also for a while was Teamsters international vice president for the Central Region. Coli owed his power in large measure to his cultivation of friends in high places including Teamsters International President James P. Hoffa, Chicago Mayor Rahm Emanuel, former Illinois Governor Pat Quinn and current Illinois Governor Bruce Rauner, the latter of whom in 2015 appointed Coli to the state’s labor advisory board. Regardless of party, Coli had real political skills that served union interests. Candidates for public office in the Chicago area knew that a Teamsters endorsement could deliver victory. And the union paid him well; in 2014, Coli received around $347,000 in total compensation. Yet as much as such connections have helped him in the past, they are unlikely to save him this time around.

According to last week’s indictment handed down by a Chicago federal grand jury, Coli used the threat of economic harm to extract quarterly payments of $25,000 from a local company, Cinespace Chicago Film Studios. Cinespace provided sites for the principal photography of a pair of hit NBC television shows, Chicago Fire and Chicago P.D. During the Quinn administration, the company received five state grants totaling $27.3 million, including one for $10 million in December 2014, to buy seven industrial properties near its North Lawndale campus. Not long after, in March 2015, the Chicago Sun Times reported that the property actually wasn’t for sale. Cinespace, rather embarrassed, returned the grant, though it did keep the rest of the money. According to a reliable source, Coli “lobbied for all the state money to get Cinespace to build” in Chicago in the first place. The indictment also cited an unnamed enterprise affiliated with Cinespace whose employees are represented by Teamsters Local 727.

Specifically, prosecutors are alleging that Coli demanded and accepted cash payments from Cinespace totaling $100,000. Those payments were transacted on the following dates, listed with their corresponding sum: July 7, 2016 ($25,000); October 4, 2016 ($15,000); November 29, 2016 ($10,000); December 22, 2016 ($25,000); and April 4, 2017 ($25,000). If Cinespace failed to make quarterly payments of $25,000, noted the indictment, Coli threatened to create unspecified economic damage to the studio; evidence suggests this was a strike threat. From any camera angle, the payments looked like a shakedown.

The indictment effectively has ended John T. Coli’s career as a union leader. He saw the handwriting on the wall. Even if he could beat the rap, he almost certainly would have to yield his Teamsters leadership following an IRB probe. The RICO oversight, though eventually in the process of being phased out as part of a January 2015 Teamsters-Justice Department agreement, remains in force. Governor Rauner already has indicated that he will remove Coli from the Illinois labor advisory board. Coli at least gave himself a nice bon voyage during his resignation announcement. “It is with tremendous reflection and a big heart that I announce my retirement from the Teamsters – the greatest union in the world,” Coli said in a prepared statement. “After more than 40 years of membership and service to my fellow Teamsters, it’s time to begin the next chapter.” One hopes this chapter will feature better business practices.