Daley Brother Made $400,000 Brokering City Contractors’ Insurance for Near North, Group Alleges

A group funded by suburban Chicago mayors who oppose the expansion of O’Hare International Airport says it will release evidence today to show that Cook County Commissioner and mayoral brother John Daley made up to $400,000 in commissions brokering insurance for O’Hare contractors through the beleaguered Near North Insurance Brokerage.

Aviation Integrity Project Director J. Terrence Brunner alleges that firms were rewarded with city contracts at O’Hare and on the Chicago Transit Authority’s Orange Line in exchange for purchasing insurance through Near North and Commissioner Daley.

Daley, brother to Chicago’s mayor, Richard M. Daley, has confirmed that he did broker insurance for Near North but would not confirm the dollar figure. Near North owner Michael Segal is under indictment on federal charges of insurance fraud, mail fraud and racketeering.
More details would be released at a Monday news conference, Brunner said in a statement.

In other Near North news, Crain’s Chicago Business has reported that the proposed purchase of Near North’s brokerage operations by investment Frontenac Co. is “nearing put-up-or-shut-up time.”

Industry sources have estimated the purchase price at $170 million, but profit margins of only 10 to 12 percent as of mid-2002 may make that price too steep, according to analysts quoted in the magazine.

There are also questions about Segal’s willingness to step away from day-to-day management of the company in spite of the two ex-Aon executives Frontenac has hired to take over when the sale is completed, according to the magazine.