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    Finance Committee OK’s $205K Settlement, Asks to See Video Footage

    Some time before Wednesday’s monthly City Council meeting, Finance Chairman Ed Burke (14) will hold a private screening for aldermen to show video footage purporting to show Chicago police officers conducting an illegal search and seizure in Morgan Park. The footage, captured from a witness’ cell phone, is part of a settlement case the full City Council is scheduled to vote on this week. The Finance committee considered the settlement on Friday.

    The City’s Law Department is asking aldermen to approve a $205,000 settlement from a May 2013 incident involving eight 22nd District Chicago Police officers who allegedly conducted an unlawful strip search of Caprice HalleyTevin Ford, and Robert Douglas.

    According to Jane Notz, First Assistant Corporation Counsel for the city’s Law Department, who testified at Friday’s meeting, eight officers were traveling in a convoy patrolling the Morgan Park area when officers saw what they suspected was the sale of drugs by the driver of a maroon car to a pedestrian. As the officers approached to investigate, the maroon car drove away, she said. The pedestrian told the officers he had just purchased heroin from the car’s driver. The pedestrian was arrested and the officers proceeded to search for the maroon car.  

    Notz said two officers located and then stopped the maroon car, both officers state that they saw Douglas, who was the driver, quickly hand something to Halley who was in the front passenger seat, but, according to Notz, the plaintiffs deny that occurred.

    The third plaintiff in the suit, Ford, was in the back seat. According to Notz, Officers told Ford and Douglas to get out of the car, and told Halley to stay in the car and keep her hands on the dashboard, while the officers radioed for a female officer to pat her down.

    “A neighbor captured what happened next on a cell phone video. As shown on the video, while the officers waited for the female officer to arrive, they performed multiple pat downs of Mr. Douglas and Mr. Ford. They also asked Mrs. Halley to exit the vehicle and they put her in handcuffs while they searched it,” Notz explained to aldermen. Three of the officers took Douglas to a gangway and handcuffed one of his wrists above his head to a burglar bar, she added. “As the officers talked to Mr. Douglas, he pulled down his pants and undergarments and bent over. After one of the officers looked at his naked buttocks, Mr. Douglas pulled up his pants and began speaking with the officers.”

    “Shortly afterward, the officers noted they were being recorded. Two of the officers then relocated Mr. Douglas and Mr. Ford to an alley nearby. They state that they did this because they were impeding traffic where they were. Other officers waited with Mrs. Halley until the female officer arrived, and then they relocated to the alley as well. None of the events in the alley were captured on video.”

    The city wants to settle the case because one of the plaintiffs, Douglas, died in an unrelated incident a month later before he could be deposed for testimony, and because, according to Notz, the plaintiffs will rely on the video to argue that the officers improperly instructed Mr. Douglas to remove his clothing, although officers deny giving this instruction.

    Ald. David Moore (17) asked about the officer’s conduct history. Notz said seven of those officers have between one and four complaints each, but “none of those complaints have resulted in a sustained finding.”

    “So one of the officers had four complaints,” Ald. Moore followed up.

    “One of the officers has four complaints against him, yes,” Notz replied.

    When Ald. Moore followed up to ask what those complaints are, Notz referred to Deputy Chief Eddie Welch with the Police Department’s Bureau of Internal Affairs, naming the officer in question on mic. Ald. Tom Tunney (44) quickly interjected that he didn’t think it was “appropriate” for her to name the officer.

    Deputy Chief Welch then testified that the officer in question has “one open investigation at this time.” Then he proceeded to say that he had five complaints over the past five years. “I don’t have all the facts,” he said.

    “So you don’t have with you any of those four cases?” Moore responded.

    “We have two IPRA cases, and one is involving the allegation, or the execution of a search warrant. One is searching a vehicle without justification. Those are IPRA investigations. And there is one is 2013, issuing a false citation, which is also closed an exonerated in 2013.”

    None of the officers involved in the suit have been disciplined for the event in question, Welch added, when asked by Ald. Roberto Maldonado (26). Welch said none of the plaintiffs were made available for questioning to pursue an investigation into possible disciplinary action, but, “it is a good likelihood that this case will be reviewed and be continued. Yes, sir.”

    Ald. Roderick Sawyer (6) asked for clarity on what the video purports to show. “It was taken from an upstairs apartment in a building across the street,” Notz added.

    Ald. Moore (17) then asked if aldermen could watch the footage before approving the settlement Wednesday. Chairman Burke said he would arrange something for this week.

    The committee also approved another settlement, a $625,000 payout to Marlon Pendleton, who was wrongfully convicted in 1993 of a sexual assault. He was exonerated and released from prison in the fall of 2006, after DNA testing proved he was innocent.

    Homebuyer’s Assistance Program

    The Finance Committee approved Mayor Emanuel’s plan to create a program aimed at better connecting new home buyers with financing for a down payment or closing costs associated with buying a new home.

    “One of the number one impediments to families purchasing homes is coming up with the down payment… Many of them spend more in rent on a monthly basis than they would on a mortgage on a home because they can’t come up with the upfront payment,” said Carole Brown, the city’s Chief Financial Officer.

    The Homebuyer’s Assistance Program will provide a grant of up to 7% of the total loan amount based on an applicant’s income, and all mortgage loans will be a term of 30 years at a fixed interest rate.

    According to CFO Brown, the city will put $1 million toward launching the program, with the expectation that it will “become self sustaining over time.”  The Chicago Infrastructure Trust (CIT) will oversee the program, and work with “authorized lending institutions” to shore up capital for applicants.

    George K. Baum, which CFO Brown characterized as a “nationally acclaimed company with over 80 years experience in the housing finance community,” will assist in reviewing loan information and reporting monthly to the CIT. The city plans to bring in two other financial firms to “broaden the group of lenders,” Brown noted, including Cabrera CapitalMartin Cabrera, a founder, currently serves as Chairman of the Chicago Plan Commission, which wasn’t mentioned at the meeting. Melvin and Company, an African-American-owned firm, will also serve as a lender, and Amalgamated Bank will serve as an escrow-agent in charge of dispersing the funds.

    The details of how the program will be funded and who will be liable for any loan defaults was a main issue of concern for Ald. Tom Tunney (44) and Ald. Roberto Maldonado (26).

    After much back and forth, Brown offered up this example to help explain how the program will playout: Say a person wants to buy a $100,000 home and they take out a $90,000 mortgage with a lender. If the homebuyer qualifies for this program, they could get a grant from the CIT for up to $10,000 to help pay off their down payment or closing costs. The lender then has 30 days to give that $10,000 back to the CIT, so it can lend it to another homebuyer, and thus the program, in theory, will become self-sustaining.

    “If the homebuyer stays in their home for five years, pays the principal and interest on their loan on time, participated in the training each year, 20% of that loan becomes a grant and they don’t have to pay it back. So at the end of the 5th year, they don’t owe the city or the lender the full amount,” Brown said.

    Borrowers will also have to pay an administrative fee of no more than 2.5% of the total loan amount. That fee, which is subject to change based on market conditions, Brown said, will be amortized over the 30 year mortgage, and the proceeds will be split between the servicer, Cabrera, Melvin, and the CIT.

    In the example mentioned above, the borrower will end up paying an additional $25,000 in service fees over the life of the loan. Ald. Tunney found this concerning, saying he didn’t want the city to be in the business of making money off of low-income residents. But CFO Brown said that’s not the reason the fee is in place, nor is it the purpose of the program.

    In order to qualify for the program, the home buyer must have an annual income between $87,000 and $133,000, which is based on a percentage of area median income for a family of four.

    As for potential defaults, the bank that lends the money will put a subordinate lien on the home for the grant amount until it’s forgiven. Neither the CIT nor the city has exposure to the borrower. CFO Brown added that the borrower education programs the homebuyer must attend in order to get the loan will help “mitigate issues of people trying to purchase a home they can’t afford.”

    As for why the trust, not the city, is running the program, CFO Brown said the city wants to “leverage their resources” and “further the mission of the trust.”

    The ordinance authorizing the new homebuyer program also includes a provision increasing the amount of money of another city-run homebuying assistance program: the Mortgage Credit Certificate program. That program will get an additional $5 million for a total $80 million budget.  

    The MCC program, which the Department of Planning and Development oversees, provides certificates that allow a taxpayer to claim a tax credit for a portion of the interest paid on a mortgage.

    “The Department of Planning and Development is seeing a potential increase in interest, particularly that may coincide with the homebuyer assistance program in people wanting to obtain mortgage credit certificates,” James McDonald, Deputy Corporation Counsel for the city’s Law Department testified, after Ald. Tunney had noted the change in the substitute ordinance introduced at the meeting, “does more than fix scrivener’s errors, which is what Chairman Burke said when it was adopted.”

    Other Highlights:

    • Tampon Tax Exemption: The committee approved this ordinance from Chairman Ed Burke (14) and Ald. Leslie Hairston (5) that would exempt feminine hygiene products from the city’s sales tax.
    • Smokeless Tobacco Ban: Under the ordinance the committee approved, the use of smokeless tobacco, would be banned at Wrigley Field and U.S. Cellular Field, as well as other sporting venues across the city. Three major U.S. cities–Los Angeles, San Francisco, and Boston–already have rules on the books outlawing chewing tobacco at sports venues. If adopted by the full City Council on Wednesday, the measure would become law 90 days from that vote. Violators of the new rules would face fines up to $250 for the first offense, $500 for the second offense, and up to $2,500 for each additional offense that occurs within one year of the first violation. Chairman Burke directly introduced the ordinance at Friday’s meeting, and had U.S. Sen. Dick Durbin on tap to testify in support. It passed without objection or concern from aldermen, unlike Mayor Emanuel’s tobacco reforms, which have been an uphill battle for the Mayor. The Chicago White Sox issued a letter of support.
    • Ald. Jason Ervin (28) held his ordinance in committee that would remove J.P. Morgan Chase from the list of banks the city holds its money. Ald. Ervin introduced the ordinance after the bank said it would be closing down its only branch in Ervin’s ward.
    • Garbage Fee Collection Clarification: The committee approved a direct introduction from Budget Director Alex Holt. The item is in reference to the new garbage fee the City Council approved with the 2016 budget. According to Holt, the ordinance made “a technical correction” to “codify billing and collection policies” associated with the new fee since it’s collected on the water bill. Holt said the amendment clarifies the revenue collected from residents will be properly allocated among the water, sewer and garbage fee funds.

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