FEDS’ BIG GET
Why ex-Teamsters boss John T. Coli’s guilty plea could rock state’s political landscape
When longtime Chicago Teamsters boss John T. Coli realized in 2016 the secret cash payments he’d been pocketing from Cinespace Chicago Film Studios might stop flowing, he didn’t mince words.
He threatened the home of hit TV shows like “Chicago Fire” and “Empire” by angrily telling Cinespace president Alex Pissios, “We’ll shut it down tomorrow. We’ll shut it down within an hour . ... I will f------ have a picket line up here and everything will stop.”
Pissios had warned him that other executives at the clout-heavy West Side studio were becoming suspicious about the money. Coli told him, “there’s gonna be time-to-time unique things that are gonna come up that you’re gonna have to deal with … you can’t have a f------ rat in a wood pile. You can’t have a whistleblower here.”
But Pissios, it turned out, was the one working with law enforcement. And in a remarkable turn of events Tuesday, Coli officially joined him in cooperating with federal prosecutors. It’s a move likely to increase anxiety in a city already rocked by ongoing investigations deep into Illinois’ halls of power — and straight to the heart of classic Chicago corruption.
That’s because the feds have now enlisted a longtime labor leader with ties to several prominent politicians, including Michael J. Madigan, Richard M. Daley, Rahm Emanuel and Pat Quinn. Coli has agreed to “fully and truthfully cooperate in any matter in which he is called upon to cooperate” by the U.S. attorney’s office.
That’s according to Coli’s 26-page plea agreement, released Tuesday as Coli pleaded guilty in an extortion case revolving around $325,000 in cash payments he received from Cinespace between 2014 and 2017. Coli officially pleaded guilty to receiving a prohibited payment as a union officer and making a false income tax return.
Though he faces up to eight years in prison, his full cooperation could land him a sentence of less than two years. U.S. Chief District Judge Rebecca Pallmeyer agreed Tuesday to hold off on sentencing Coli until that cooperation is complete.
Coli, 59, retired from his role with the Teamsters around the time of his indictment in July 2017. But his plea deal lists a smorgasbord of free benefits he received from various businesses as a Teamster official, including meals in Las Vegas, tickets and box seats at professional sporting events, the use of a yacht and two-person crew around the United States and for “an excursion in and around Italy,” as well as additional cash payments.
Combined with the Cinespace scheme, Coli illegally received more than a half-million dollars in money and benefits while managing to cheat the state and federal government out of $117,500 in taxes, according to the plea agreement.
The document also shows Coli tried to get Pissios to fire Mark Degnen, Cinespace’s chief financial officer. Degnen’s wife, Bridget Degnen, won a seat to the Cook County Board of Commissioners last fall. Coli told Pissios he should “get rid of” Degnen before Coli made his comment about rats and whistleblowers on Oct. 13, 2016.
Degnen had been a top official for Ryerson Steel. He helped the company sell the former steel mill site to Pissios and his family, who formed Cinespace there. The studio then hired Degnen to serve as CFO.
Pissios told the feds he would direct Degnen to withdraw cash from the studio’s safe to make extortion payments to Coli. It’s unclear if Degnen knew why Pissios needed the money.
Pissios began cooperating with the feds after they accused him of bankruptcy fraud for failing to disclose a loan he received from his late uncle so he could get the studio up and running. Degnen also is cooperating with the federal investigation, according to his attorney, Patrick Blegen.
Degnen’s wife defeated ex-Commissioner John Fritchey, whose ex-wife, Karen Banks, works for the movie studio and notarized many of the petitions Bridget Degnen gathered to run for the seat.
Banks is the sister of one of the city’s top zoning attorneys, James Banks, who is chairman of the Belmont Bank & Trust that helped finance Cinespace. The studio received $27.3 million in state grants under then-Gov. Pat Quinn, depositing the money in Belmont Bank. The final $10 million grant came shortly before Quinn left office, but the studio returned the money under orders from Quinn’s successor, Bruce Rauner.
Already, the Coli investigation has threatened several power players around Illinois. For example, a diamond engagement ring that Quinn’s campaign manager bought for Quinn’s press secretary has become part of the probe, the Sun-Times has learned.
In August 2018, the grand jury that indicted Coli issued subpoenas to the governor’s office. It sought personnel files for Quinn’s campaign manager, Lou Bertuca, Quinn’s press secretary, Brooke Anderson, and another Quinn administration official, John D’Alessandro.
The grand jury also issued a subpoena in February for the personnel file and other records of state Sen. Thomas Cullerton, D-Villa Park, a cousin of Illinois Senate President John Cullerton, D-Chicago.