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Chicago and New York Payoffs Before FBI Probe, Report Says

January 11, 1986

CHICAGO (AP) _ A national bill-collection agency bribed government officials in Chicago and New York before one of its employees became an FBI informant in an investigation of municipal corruption here, a newspaper says.

Several Chicago aldermen have been questioned in the investigation, and three city officials have been fired in Mayor Harold Washington’s own inquiry of the bribery accusations.

The Chicago Tribune, in Sunday’s editions, quoted unidentified sources as saying the FBI videotaped Bernard Sandow, president of Systematic Recovery Service Inc. of New York, acknowledging that he bribed New York city officials to keep a contract to collect overdue parking fines for that city.

In other FBI videotapes, the Tribune said, Sandow discussed payments to city officials in Chicago made in the spring of 1984 by Systematic Recovery employee Michael Raymond, a convicted swindler and an FBI informant.

The newspaper said Sandow didn’t know Raymond had become an FBI informant until the story first surfaced in the news media last month and also didn’t know his discussions with Raymond in a New York hotel room were recorded.

When The Associated Press tried to contact Sandow in New York on Saturday, Kevin Post, who identified himself as an employee of Systematic Recovery, said Sandow was ″not available.″ Post also refused to give out Sandow’s home phone number, which was not listed in directory assistance for Manhattan.

The FBI entered the case in July 1984, when Raymond was arrested in Nashville, Tenn., on a gun charge that could have sent him back to prison for parole violation, the newspaper said.

Raymond and the FBI struck a deal, with the Brooklyn, N.Y, native agreeing to continue his bribes and to allow hidden government cameras and tape recorders to monitor his activities, according to the Tribune.

Raymond, 57, has a criminal record dating to 1954. And in 1971, he testified before a U.S. Senate committee about organized crime and corruption in securities and banking circles.

Last week, FBI agent Edward Hegarty, in charge of the agency’s Chicago office, denied Alderman Ed Smith’s accusation that Raymond was brought here to ″set up decent folks.″ Hegarty said Raymond ″was brought here by corrupt present and former officials for corrupt purposes.″

Systematic Recovery won a city contract last year to collect water bills. But it was canceled last week because, mayoral spokesman Alton Miller said, the contract was obtained through the use of a bribe.

The Chicago Sun-Times reported Saturday that a federal grand jury had issued a subpoena against former mayoral aide Clarence McClain, who was dismissed after his criminal past came to light. He was handed the suppoena Friday and was ordered to appear before the grand jury this week.

Fired by the mayor Friday were Mel Dubrock, assistant commissioner of the Department of Streets and Sanitation, and Carmen Aiello, a deputy Water Department commissioner, for not cooperating with the City Hall probe, Miller said.

Last week, John Adams, a deputy Revenue Department official, was fired on grounds that he allegedly accepted money from Raymond, officials said.

City officials have likened the FBI bribery probe to the Abscam investigation of the 1970s, when government agents used videotape recorders and posed as Arab sheiks offering bribes to members of Congress.

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