Chicago Boss John Coli Hit with Superseding Indictment

John Coli is feeling a heavier load than usual these days. On September 21, Coli (in photo), until recently the most powerful Teamster in the Chicago area, was slapped with a 13-count superseding federal indictment for obstruction of commerce; concealment of facts on reporting forms; and income tax fraud. He previously had been charged in July on six counts of extortion related to his exacting payments from a Chicago TV production company. Prosecutors now estimate his take at $325,000, up from the original sum of $100,000. Coli, who resigned on the day of the original indictment, chose not to plead guilty. He might change his mind given that the IRS and the Labor Department are seeking full forfeiture of related assets. For a once-dominant figure in labor and politics, the fall has been swift.

Union Corruption Update has summarized the saga of John T. Coli Sr. more than once (here and here). He was a union man his entire career, rising to head the Park Ridge, Ill.-based International Brotherhood of Teamsters Local 727 and Teamsters Joint Council 25, the latter consisting of over two dozen IBT affiliates representing more than 100,000 workers in metro Chicago and northwest Indiana. He was a reliable ally of Teamsters General President James Hoffa and a force to be reckoned with in state and local politics. An early backer of current Chicago Mayor Rahm Emanuel, he also forged close ties with former Democratic Governor Pat Quinn and current Republican Governor Bruce Rauner. Indeed, Rauner named him to an unpaid position on the state labor advisory board where Coli’s brother Michael also sits.

But Coli also had a reputation for shady dealings. In November 2011, a Chicago-area funeral parlor owner-operator, SCI Illinois Services Inc., sued Coli, several family members and Local 727 itself, alleging the defendants had created “a scheme to defraud and extort” SCI. The case looked convincing. But in January 2014 a federal judge dismissed it. In a separate case, a Cook County, Ill. judge in July 2015 ruled that Coli and Teamsters Local 700, of which Coli was a benefit plan trustee, were jointly liable for $2.3 million for breaking the lease of an office building in suburban Des Plaines, Ill.

John Coli managed to ride out these storms. But his luck ran out this July 12 with the unsealing of a six-count federal grand jury indictment accusing him of extorting quarterly cash payments totaling $100,000 from a film and television production facility, Cinespace Chicago Film Studios. During July 7, 2016-April 4, 2017, read the indictment, Coli told a company representative that there could be labor unrest, including a strike, if payments were not forthcoming. Cinespace, which produces NBC’s Chicago Fire, Chicago P.D. and other popular TV shows, became a force in the entertainment world largely on the strength of having received $27.3 million in state grants during the tenure of Gov. Quinn, plus state and local tax breaks. Coli had lobbied hard for these incentives. But when the July indictment came down, he read the tea leaves and announced his retirement, though without making reference to his legal troubles.

As it turned out, Coli may have gotten a bigger cut of the action than most people had suspected. On September 21, the U.S. District Court for the Northern District of Illinois unsealed a superseding 13-count indictment finalized in July charging that the extortion scheme actually dated back to 2014 and that Coli extorted $325,000 from Cinespace, more than triple the original stated amount. The new indictment states that Coli used “fear of economic loss from threatened work stoppages and other labor unrest unless such cash payments were made.” It also accuses him of failing to report this income and seeks forfeiture of assets “which constitutes and is derived from proceeds traceable to the offense(s).” If Coli cannot come up with the money, the government may seize his Lakeview home in North Side Chicago, currently listed on the market for nearly $1.3 million.

If Coli decides to fight, he’s got a rough battle ahead. According to a story appearing this August in the Chicago Tribune, federal agents had recorded a number of conversations between Coli and Cinespace President Alex Pissios. A source familiar with the investigation said that the recordings began last year. Coli’s attorney, Joseph Duffy, said in court that prosecutors had turned over material evidence that included “many discs containing electronic material.” It would be difficult to deny that the recordings likely contain incriminating evidence.

It should be noted that the Coli probe grew out of a court-supervised Teamster internal cleanup program called Respect, Integrity, Strength, and Ethics, or RISE. The union, monitored by the Independent Review Board (IRB) set up after a 1989 federal racketeering settlement, agreed to cooperate with chief investigator Edward Stier to root out corruption. Among the trouble spots identified in the final 2002 RISE report was Local 727. Though Stier and his staff abruptly resigned in April 2004, believing Hoffa and his people were uncooperative, the FBI months later initiated a probe of Local 727. The bureau concluded that the local benefit plans were permeated with waste and abuse. That led to additional probes and ultimately Coli’s indictment and resignation. All of this suggests that the IRB, set to expire over five years as part of a January 2015 agreement with the Department of Justice, may have a few missions left in it after all.