Chicago Inspector Looking into Possible Pension Impropriety

March 20, 2009 ( - Chicago's inspector general is looking into how three city pension funds ended up with investments in a firm co-owned by a nephew of Mayor Richard Daley.

According to the Chicago Tribune, the office of Inspector General David Hoffman has subpoenaed records from the pension funds dealing with their investments of tens of millions of dollars in DV Urban Realty Partners, a real estate investment firm formed by a top Daley ally, Allison Davis, and Daley nephew Robert Vanecko. A source told the Tribune that the pension funds being probed include the funds for municipal employees, police and laborers.

Data that has been subpoenaed suggests investigators are trying to learn how the investment decisions were made and whether they were influenced by Vanecko’s relationship with the mayor, the source said.

Police pension fund executive director John Gallagher said DV Urban Realty so far had drawn $5 million on the fund’s original $15 million commitment, and as of the end of last year, that $5 million investment was valued at $3.5 million, according to the news report. The pension funds have paid the investment group hundreds of thousands of dollars in management or consulting fees, including $225,000 in management fees in 2007 paid by the Municipal Employees’ pension.

The city teachers’ pension fund paid more than $300,000 in management fees to DV Urban Realty in 2007, according to the fund’s annual report, but it is unclear if the inspector general subpoenaed its records, the Tribune said.