Palumbo’s East Dundee project at center of new bribery charges
Joseph Palumbo went to federal prison two decades ago for fraud involving his family’s century-old construction business, which at the time had a hand in building virtually every major expressway in Chicago.
Now another firm connected to Palumbo is at the center of federal bribery charges filed this week as part of a sprawling political corruption probe, the Chicago Tribune has learned.
According to the indictment, political operative William Helm paid off thenDemocratic state Sen. Martin Sandoval in 2018 in exchange for his help advancing a development in East Dundee on behalf of a construction firm referred to only as Company A.
The company was seeking approval from the Illinois Department of Transportation for a traffic signal and road construction as part of the project and hired Helm, a former IDOT manager, as a consultant, the charges alleged.
Helm then paid at least $5,000 in bribes over five months to Sandoval, who at the time was chairman of the Senate Transportation Committee, to help win IDOT approval for Company A, the charges stated.
While the two-page indictment does not name the company, sources told the Tribune it is controlled by
Palumbo. Business and land records show Palumbo controls two firms involved in the development. Palumbo Management LLC oversees the development while PAL LLC owns the land.
Palumbo, 68, has not been accused of wrongdoing. An employee who answered the phone at the company Friday said Palumbo was “on the other line” and would call back, but he did not.
The charges involved the Terra Business Park along Route 72 and Christina Drive in East Dundee, a mixed-use development that includes an office building and a planned Speedway gas station.
East Dundee Village Administrator Jennifer Johnsen confirmed Friday that she and Village President Lael Miller were subpoenaed last month by a federal grand jury seeking information about the development, specifically “activity related to the planned intersection improvements and signalization of Route 72 and Christina Drive.”
Prosecutors told her and Miller that they were not targets of the inquiry, Johnsen said. They both “willingly participated in brief interviews with investigators” and later appeared before a grand jury to “provide information and documents relevant to the government’s investigation,” Johnsen’s statement read.
A copy of the subpoena supplied to the Tribune through an open records request showed it was dated Feb. 19 and requested that Miller and Johnsen testify before the grand jury on Feb. 27. Helm was indicted a week later.
Johnsen said in her statement neither she nor Miller “were aware of any potential criminal activity associated with the project.”
Palumbo and his family have been a central — and controversial — part of road construction in Illinois going back to the late 1800s.
In 1991, the Palumbo family and two companies under their control came under investigation.
Investigators discovered that the companies had falsified weight tickets to cover the fact that they were putting less construction material into the roads than they had reported, according to Tribune accounts.
In a plea deal with prosecutors, the companies admitted overbilling by millions of dollars for construction material in 60 Chicagoarea road projects.
Palumbo Brothers Inc. also admitted to bribing an IDOT engineer to overlook the fraud.
Joseph Palumbo and his brother, Sebastian, each were sentenced in 1999 to the maximum of 21 months in prison and ordered to pay fines totaling half a million dollars. Their father, Peter Palumbo, was sentenced to a year behind bars.