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Ald. Arena Cleared After Investigation Into Improper Campaign Contributions

By Heather Cherone | October 22, 2013 6:37am
  A businessman will not face a $500 penalty for exceeding the city's campaign finance limits.
Ald. Arena Cleared After Investigation into Improper Campaign Contributions
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JEFFERSON PARK — The Chicago Board of Ethics took no action against Ald. John Arena (45th) for accepting improper campaign contributions from three companies owned by a Jefferson Park businessman who has several contracts with city agencies.

Aleksander Peric’s companies contributed $4,700 to Arena — $3,200 more than allowed by city law, according to an advisory opinion issued by the board of ethics Oct. 2 that closed its investigation into the matter.

The board “decided against” asking a judge to impose a $500 penalty on Peric for violating the city’s campaign finance ordinance, the only sanction allowed by the law in effect when the campaign contributions were made starting in July 2011 and ending in June 2012.

Instead, the board said it had decided to use the probe prompted by Legislative Inspector General Faisal Khan's July semiannual report as a “teachable moment” in an effort to assist Khan and Inspector General Joseph Ferguson in enforcing the city’s new campaign finance law, which went into effect Nov. 1, 2012.

Steve Berlin, the executive director of the board of ethics, said Monday that Khan’s report was “incomplete and misleading” because it implied that Arena could be held responsible for accepting the improper campaign contributions.

“I applaud [Khan’s] work,” Berlin said. “But there was a misunderstanding of the old campaign finance ordinance.”

In fact, Arena faced no penalty for accepting the excessive contributions under the city’s campaign finance ordinance in effect at the time Peric made the contributions, according to the advisory opinion signed by Board of Ethics Chairman Stephen W. Beard.

Because Arena returned the campaign contributions, and Peric’s companies promptly deposited the money into an account, Peric was back in compliance with the law and the board decided not to seek a $500 judgment against him, the advisory opinion stated.

However, the board “admonished [the companies] to exercise greater diligence to avoid future violations,” according to the advisory opinion, which the board sent to all 53 Chicago elected officials and their political committees as well as Ferguson and Khan.

Khan said in a statement Monday he was disappointed by the board's decision, adding that the matter should not be considered a "teachable moment since this is not the first time a company or entity has improperly donated monies to an elected official.

"Any action by the [board of ethics] short of real and actual penalties is akin to a slap on the wrist or no punishment at all," Khan said. "[It] essentially reaffirms the message to the constituents of this city that campaign finance violations are not taken seriously."

Khan said his office's investigation of the matter "was complete and accurate," adding that the board of ethics agreed with his report's findings and conclusions.

After Khan’s report, Arena returned $3,700 in campaign contributions from Peric’s firms, Arlington Glass and Mirror Co., Chicago Metro Construction Co. and AGAE Contracting, all located at 4547 N. Milwaukee Ave.

However, Berlin said Peric contributed $3,200 more than he was allowed — not $3,700 — and that the entire amount of the excessive contributions had been returned and the board considered the matter closed.

Arena, who in July said his staff did not realize Peric had exceeded the campaign finance limit because of a change in how campaign contributions were reported, could not be reached for comment Monday.

While neither the legislative inspector general’s report nor the board of ethics’ advisory opinion identifies Arena or Peric’s companies, both Arena and Peric acknowledged they were the subjects of the investigation in July.

“I just got an education” on the city’s campaign finance ordinance, Peric said Monday. “Obviously, I was not up to date.”

Peric said he was relieved the matter was over.

At the time it contributed to Arena's political campaign, Arlington Glass had contracts in excess of $10,000 with the Chicago Transit Authority and the Chicago Public Schools, according to the advisory opinion.

In addition, AGAE Contracting had contracts with several city departments in excess of $10,000, according to the advisory opinion. That includes part of a $24 million construction and maintenance contract with the City Colleges of Chicago that could have earned the company as much as $3 million, according to college records.

Because Peric’s companies were doing business with the city and several city agencies, he was limited to giving no more than $1,500 to any one candidate from June to July of each year, according to the city’s campaign finance ordinance.

Under Chicago’s campaign finance ordinance in effect from 1987 to Oct. 31, 2012, only the person making the improper contributions could be held responsible, according to the advisory opinion.

However, under the law now in effect, both the person or firm making the contribution as well as the elected official who accepted it would face “severe” penalties of between $1,000 and $5,000, or three times the amount of the excessive contribution, whichever was greater, according to the advisory opinion.

The city’s current campaign finance law is tougher and will be more effective, said ethics board chair Beard.

“It will strengthen safeguards against improper campaign contributions playing a role in city elections,” Beard said.

Companies and people doing business with the city are still limited to contributing $1,500 to any one candidate per year, according to the new law.

In addition, the current law allows the board of ethics to publicly identify those who violate the city’s campaign finance limits.

Chicago's elected officials should use the advisory opinion issued in this case as a “comprehensive primer” on the implications of the city’s year-old campaign finance ordinance, Berlin said.

Khan’s investigation and the ethics board’s probe were prompted by a complaint filed under oath by the owner of a business in the 45th Ward who told DNAinfo Chicago in July he wanted to expose Arena for requiring businesses to make contributions "to get things done."

Arena said in July that he and his office did not engage in “pay-to-play” politics.