For years, it seemed to many that the Leaning Tower of Niles was the only crooked thing in this staid near northwest suburb.
The village, known for its half-size replica of the famous Italian structure, enjoyed an image as an honest and well-run town–due in large part to longtime Mayor Nicholas Blase, who used his office to chase away tavern gamblers and hound purveyors of adult entertainment.
Federal agents arrested Blase at his home in front of his family Thursday–his 78th birthday–and charged him in a kickback scheme that allegedly forced village businesses to buy insurance from a friend of the mayor’s.
The Tribune reported Wednesday that federal agents had raided the Wheeling insurance company, Ralph Weiner & Associates, and that the government had filed court papers outlining Blase’s role in the alleged shakedowns.
Blase and Steven Weiner, the insurance agency’s president and co-owner, were charged with one count of mail fraud and were later released without having to post bail. Additional charges could be added later, authorities said.
Blase’s lawyer, Harvey Silets, vowed to fight the charge, attacked the government evidence as weak and said he was confident that Blase would be vindicated.
Weiner’s attorney could not be reached for comment.
First Assistant U.S. Atty. Gary Shapiro told reporters Thursday that buying insurance from Weiner “was essentially a prerequisite for staying in business” in Niles.
At a news conference, Shapiro charged that since at least 1989 Blase shook down businesses to buy insurance from the Weiner agency to avoid problems over liquor licenses or zoning and building matters.
The criminal complaint filed Thursday alleged that when a Niles business owner tried to switch his insurance from Weiner, Blase called with a none-too-subtle warning, reminding him of some temporary buildings on his property.
“I understand; I won’t switch,” the owner told the mayor, according to the complaint.
Also in the criminal complaint, authorities quoted one Weiner agency employee admitting he pressured local businesses to buy insurance from the firm.
“I felt like I was putting a gun to somebody’s head,” he said.
Two insiders in the Weiner agency as well as an employee in Blase’s law firm have provided crucial help to the FBI, the complaint states. Two of them secretly recorded conversations with the mayor.
The Weiner agency secretly kicked back 20 percent of its commissions from Niles businesses to a shell company effectively controlled by the mayor, the charge alleges.
Bank records show that the shell company, S.M.P. Insurance Service, received more than $280,000 in “commissions” from the Weiner agency between 1997 and 2003, authorities said.
The charge alleges that Blase used this money to pay the salary of an employee at his law firm who worked on personal-injury claims.
Shapiro pointed out that the alleged scheme allowed the mayor to defray tens of thousands of dollars in expenses for his law firm.
Business owners have told authorities that the shakedowns date back at least 17 years.
The charge alleges that the kickback scheme originated with Weiner’s father, Ralph, a close friend of the mayor’s, but that after the father’s death in 2005, Steven Weiner began delivering the monthly kickback checks to Blase.
Ralph Weiner or the mayor himself let businesses know that buying insurance from Weiner won “access” to the mayor if problems arose with liquor licenses, zoning or building matters, the charge alleges.
Authorities said Tuesday’s raid on the Weiner agency uncovered notes from files of at least 10 Niles business clients showing that Blase had performed favors for the customers.
In one recorded call, Blase told a Weiner employee working undercover for authorities to reassure the tavern owner that he “doesn’t need an attorney, just show up [at a hearing] and listen to the mayor.”
The cooperating Weiner employee said that in 2004 Blase mailed him a list of more than 70 new businesses in Niles that he could solicit for insurance.
Attorneys for Blase wouldn’t let him talk to reporters Thursday, but on Tuesday, he told the Tribune and the FBI much the same thing in separate interviews. He said he recommended Weiner as an agent to friends “because I liked the guy” and denied he ever received any commissions or kickbacks.
With the covert stage of the four-year investigation over, Shapiro made it clear investigators soon would begin interviewing customers of the Weiner agency and other Niles business owners.
He warned of the consequences of “being less than candid with federal agents.”
But after the mail-fraud charge had been unsealed Thursday, owners of some of the Niles businesses who bought insurance from the Weiner agency expressed surprise and denied that Blase had coerced them.
“I was falling down in shock; I couldn’t believe it,” said Dimitrios Merageas, owner of Mykonos Greek Restaurant.
Merageas described Ralph Weiner as a former frequent customer at his restaurant and said he persuaded him to buy insurance in 1984. He’s stayed with Weiner since. The mayor, also a frequent diner, never brought up insurance, Merageas said.
Mark Feinmehl, owner of the family-run Avondale Liquors, which operated from 1998 to 2000 in Niles, said an attorney and close friend recommended Weiner.
“We were never strong-armed or pressured,” said Feinmehl, a former board member of the Niles Chamber of Commerce who still uses Weiner to insure his Chicago liquor store.
“All I know is that Mayor Blase is the best thing Niles has going for it,” he said.
Len Reinebach, who tried without success to unseat Blase in the 2001 election, said he had heard rumors about business owners being pressured to buy insurance from a friend of the mayor’s.
He said he relayed the stories to the FBI that year, but never heard back from the agency.
“This was pre-[U.S. Atty.] Patrick Fitzgerald,” Reinebach said. “They said, `You got proof? You got the goods?’ I said, `No, I don’t own a business. I know this from asking around.'”
At Village Hall, officials said the accusations came as a shock.
“We obviously didn’t have any idea what was going on until we picked up the paper yesterday,” said Village Manager George Van Geem. “We pride ourselves on doing it right, so when something like this comes up, it’s a huge surprise.”
He added that in his 14 years with the village, it had not done business with the Weiner firm.
Blase became mayor in 1961 and has rarely faced a serious challenge. He won last year running unopposed.
One resident who led the fight against an off-track betting parlor favored by Blase said he was shocked at the charge facing the mayor.
“I hope this is not true and the mayor is exonerated,” Morgan Dubiel said. “If he’s guilty, we’ll have to pull together and clean up the mess. We’ve been kind of a Mayberry here and this is shocking and painful. We don’t want to become … a laughingstock.”
Trustee Tom Bondi said he didn’t know whether Blase planned to continue in his position. Van Geem said he didn’t know either, but said he hoped Blase would stay.
“In my mind he’s innocent until proven otherwise, so I think he should continue to act as mayor,” he said.
Silets, Blase’s lawyer, expressed disappointment that the longtime mayor was arrested on his birthday “in front of his wife and grandchildren” while Weiner was allowed to turn himself in.
“This technique is certainly not becoming of our government,” he said.
Shapiro said authorities mapped out their plans some time ago before realizing that Thursday was Blase’s birthday.
“We weren’t planning on ruining his day, at least not that way,” he said.
But Shapiro made no apologies for arresting Blase, saying it was an “investigative technique” to send a message to the Niles business community and residents that the shakedowns are “coming to an end, we hope.”
———-
mo’connor@tribune.com
jkeilman@tribune.com
