Daley Pension Debacle: Where Did $54 Million Go?
If there ever was any hope that five Chicago city workers pension funds would make any money by investing $68 million with then-Mayor Richard M. Daley’s nephew and one of his key political supporters, it didn’t last long.
Only months after the deals were made a dozen years ago, problems began to emerge.
The nephew, Robert G. Vanecko, and his business partner Allison S. Davis, a developer who gave campaign money to Daley and was appointed by the mayor to head the Chicago Plan Commission, started investing in a series of property deals that, by the time the last of them are unwound by the end of December, will have cost the city workers pension funds 80 percent of the $68 million they put in — $54 million in all.
Vanecko and Davis set up a company, DV Urban Realty Partners, and bought an apartment building that was riddled with code violations.
They invested in a vacant building that once housed the Chicago Defender, even as City Hall inspectors threatened to tear it down unless repairs were made.
They put city employees’ pension money into an old warehouse that sat on land so poisoned with arsenic and lead that the pension funds had to help pay $2.6 million for cleanup just to be able to unload it at a huge loss.
A Chicago mayor's nephew lost $54 million while managing the city's pension funds. Chicago Sun-Times reporter Tim Novak chased this story, finding the money had been spent on misguided real estate deals and management fees.