Barroom Sting

Bribes flowed like beer

Everyone wanted to help the new owners of the Mirage bar, a sleazy little tavern on Chicago's Near North Side. For just $10, the fire inspector was willing to ignore the exposed electrical wiring. For $50, the plumbing inspector "fixed" the leaky pipes, and for $100, the ventilation inspector overlooked $2,000 worth of necessary duct work. Jukebox and pinball purveyors not only offered kickbacks but showed the new management how to skim off profits.

Their helpfulness was rudely repaid. The Mirage was indeed a mirage, a bar operated by undercover journalists to document widespread corruption in Chicago. Exposed in a 25-part series of Sun-Times articles that began last week, four inspectors have already been suspended, and others fooled by the Mirage will surely feel the sting. In response to the revelations, Mayor Michael Bilandic also initiated a thorough reform of the inspection system.

Chicago reporters have traditionally spent as much time hanging around bars as they have muckraking. But not even in The Front Page did any of them ever combine both pastimes so ingeniously. Last January Sun-Times Reporter Pamela Zekman (who has shared two Pulitzer Prizes for investigative reporting) got Editor-in-Chief James Hoge's O.K. to buy and operate a bar. In May, having joined forces with the Better Government Association, a local citizens' group that works with journalists and others fighting corruption, the Sun-Times made a $5,000 down payment on a seedy tavern near by.

By August, EGA Chief Investigator William Recktenwald, 36, an ex-cop, and Zekman, 33, were at the Mirage, serving up beer (and bribes). Also staffing the bar were Sun-Times Reporter Zay Smith, 28, who boned up for the story with a five-day stint at bartending school, and EGA Investigator Jeff Allen, 28. Sun-Times photographers, posing as repairmen, filmed the payoffs from a concealed loft.

Though face lifting the Mirage with a few Marimekko prints and some hanging plants, the new owners purposely left, as the Sun-Times put it, "more code violations than barstools." But when the building inspector showed up, he spent eight minutes looking around, slipped a proffered $10 bill into his inspection papers and exclaimed, "Beautiful day!" Such self-over-public interest, the Sun-Times found, proved to be "the rule rather than the exception."

Cheating was not restricted to public officials. Six local accountants taught the proprietors how to save taxes by hiding income. But the best teacher was a "Mr. Fixit" named Philip Barasch. Unaware of the investigators' true identity, Barasch, a big Chicago landlord and self-styled "business broker," guided them every step of the way, telling them the hour inspectors would show up and the exact amount to give them (with Barasch's business card enclosed). The only officials he did not advise bribing were police because, he said, "if you pay off a cop, they keep coming around every month, like flies, looking for a payoff." As for tax fraud, explained Barasch: "Everybody chisels down." A squat man with a nervous twitch who calls himself "the second largest tax accountant in the Midwest after H & R Block," Barasch has done more chiseling, says the Sun-Times, than Michelangelo.

His reward, he told his friends at the Mirage, has been "lots of sex and lots of Vegas." It may also be a jail sentence, but when confronted by CBS Reporter Mike Wallace, who filmed a 60 Minutes segment on the Mirage expose, Barasch said, "I'm not very worried about it. This has been going on for years. From the very beginning."

Whether it will continue to go on so brazenly in Chicago after the Sun-Times series remains to be seen. In November, their investigation complete, the Sun-Times sold the Mirage, warning the new owner to fix the building-code violations. After all, they might actually be enforced.

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